Latest / The Financial Exchange Show / Why are American companies stocking up ahead of Trump's second term?

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Why are American companies stocking up ahead of Trump's second term? · The Financial Exchange Show

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Speaker 1: Veterans Development Corporation. This is the Financial Exchange with Chuck
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Speaker 1: Zutta and Paul Lane.
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Speaker 2: Kicking off hour two.
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Speaker 3: Here, it's Chuck, Paul, and Tucker with you, and markets
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Speaker 3: remain just kind of stuck in neutral. It's just kind
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Speaker 3: of chopping from day to day. The Dow is off
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Speaker 3: seventeen points, the S ANDP is down thirty, the NASDAK
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Speaker 3: down one fourteen, so about a half percentage point on
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Speaker 3: the S and P and Nasdaq, and we continue to
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Speaker 3: see the nasdam Sorry, the S and P just fluttering
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Speaker 3: right around fifty eight to seventy five where look that's
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Speaker 3: where it got to back in mid October. So we've
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Speaker 3: just kind of been clumping around the same place for
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Speaker 3: the last month month and a half now and no
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Speaker 3: real clear direction. We had a couple days in early
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Speaker 3: November where the market fell a couple percent, we had
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Speaker 3: a couple days after the election where the market rose
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Speaker 3: by a couple percent, and other than that, we've been
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Speaker 3: sitting between like fifty seven fifty and fifty eight eighty
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Speaker 3: five eighty six on the S and P five hundred,
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Speaker 3: so just not a whole lot of movement there. As
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Speaker 3: markets are trying to figure out what the plan is
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Speaker 3: from the incoming Trump administration and how to position itself.
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Speaker 3: We've just not found a clear direction either up or down.
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Speaker 3: Tenure US Treasury has had a clear direction. Yields have
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Speaker 3: been moving up in anticipation of either greater growth or
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Speaker 3: greater inflation. And so you've been seeing those yields moving
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Speaker 3: up a little bit the ten years now at four
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Speaker 3: point four to one percent. Yeah, not a huge move,
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Speaker 3: maybe a quarter percent or so, but you've seen a
2:41
Speaker 3: little bit more of a definitive move there. Oil West
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Speaker 3: texts Intermediate also not going anywhere. We're just chopping around.
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Speaker 3: Seventy dollars a barrel, up thirty eight cents today to
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Speaker 3: sixty nine to seventy seven. The TRIPAA national average for
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Speaker 3: gas prices up three tents of ascent from three oh
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Speaker 3: six and three tenths to three h six and six tenths.
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Speaker 3: Still can't get that number below three dollars on a
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Speaker 3: national level yet. And gold today up nineteen eighty ounce
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Speaker 3: to twenty six fifty and eighty cents. Paul Piece in
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Speaker 3: the Wall Street Journal today it's titled American companies are
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Speaker 3: stocking up to get ahead of Trump's China tariffs. Big
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Speaker 3: thing is, Hey, if the incoming president says he's going
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Speaker 3: to raise tariffs on Chinese imports significantly, you say, I'm
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Speaker 3: gonna buy all the stuff I can before he comes
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Speaker 3: into office.
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Speaker 2: It's not entirely surprising.
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Speaker 1: No.
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Speaker 4: In terms of what we saw from a numbers perspective perspective,
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Speaker 4: outbound shipments from China rose thirteen percent in the month
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Speaker 4: of October from a year earlier. That percentage in the
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Speaker 4: month of September was only two point four percent, so
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Speaker 4: really significant uptick there. Americans buy about four hundred and
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Speaker 4: thirty billion of Chinese goods. Though the share of US
3:53
Speaker 4: imports that are coming from China it has dropped over
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Speaker 4: the last five or six years from all of the
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Speaker 4: disputes and tension between China and the US. The share
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Speaker 4: of US imports that was from China in twenty seventeen
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Speaker 4: was twenty two percent. That figure sits at about fourteen
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Speaker 4: percent as of twenty twenty three. A lot of companies,
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Speaker 4: particularly the bigger ones Chuck I would imagine, are relatively
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Speaker 4: well positioned for any tariff impact. I think Walmart or
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Speaker 4: another CEO I was reading their earning transcript call where
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Speaker 4: they had mentioned, Listen, we've been in this trade war
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Speaker 4: chatter for five six years. This isn't new to us.
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Speaker 4: So I would imagine the ones with significant size and scale,
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Speaker 4: they have contingency plans in place. And you read a
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Speaker 4: lot that Vietnam and other countries in Southeast Asia have
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Speaker 4: been utilized from a manufacturing standpoint. They're still not as
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Speaker 4: strong in terms of the prowess that China has in manufacturing,
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Speaker 4: but these bigger companies are going to be prepared, I
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Speaker 4: would imagine with alternatives. The problem is, and it's highlighted
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Speaker 4: here in this Wall Street Journal piece for the small
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Speaker 4: business there was one in particular that's to me here
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Speaker 4: that I just thought encapsulate. It's kind of what we're
4:59
Speaker 4: taught came out when we talked about the impact of tariffs.
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Speaker 4: It's this business you know out of Charlotte, North Carolina,
5:05
Speaker 4: that is called Fine Fits Sisters. It's two sisters that
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Speaker 4: sell a body oil for thirteen bucks, largely advertise over TikTok.
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Speaker 4: They source all of their product from China, and they
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Speaker 4: were just mentioning that if these tariffs were in to
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Speaker 4: go into effect, the sixty percent one that's been mentioned,
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Speaker 4: they would likely just pivot away from selling the product
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Speaker 4: in general because people buy it because it's so cheap,
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Speaker 4: the thirteen dollars, but the sixty percent tariff would just
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Speaker 4: lead them to really not have the manufacturing capability like
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Speaker 4: a Walmart, to pivot to another country.
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Speaker 5: They would just kind of close up shop.
5:37
Speaker 3: And part of this again, look, we don't know exactly
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Speaker 3: what's going to be implemented. Still, it's going to be
5:43
Speaker 3: two months before we do, maybe even longer because again
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Speaker 3: this might not go in, you know, on day one.
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Speaker 3: But there's also a chance even for those larger companies, Okay,
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Speaker 3: you pivoted to having you know, your goods produce in
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Speaker 3: Vietnam or India, you could potentially see tariffs increased on
5:59
Speaker 3: those countries as well. So, hey, maybe there is a
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Speaker 3: sixty percent one on China and twenty percent on Indian
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Speaker 3: and Vietnam and Thailand. Like we we just don't know,
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Speaker 3: and ultimately we're not gonna know for a couple months.
6:13
Speaker 3: But what we do know is the behavior that we're
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Speaker 3: seeing both from businesses and from consumers, which is, hey,
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Speaker 3: I'm gonna try to buy as much stuff as I
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Speaker 3: can in the next couple months because the price might
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Speaker 3: go up later. The interesting thing as a result of
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Speaker 3: that is, hey, if it costs companies more to speed
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Speaker 3: that process up, they might have to raise prices even
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Speaker 3: before tariffs, because they're saying, look, normally, I have, you know,
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Speaker 3: two shipments a month that are coming in. I'm now
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Speaker 3: paying for six shipments to try to you know, frontload
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Speaker 3: a few months of this. But my shipping rates went
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Speaker 3: up because everyone's doing this, and so I have to
6:51
Speaker 3: raise my prices anyways, because my shipping costs are upper.
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Speaker 3: My manufacturer said, hey, if you want to buy that
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Speaker 3: many more, I've got to you know, pay people extra
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Speaker 3: in order to come back to the factory for four hours,
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Speaker 3: and so I've got to charge you more. So even
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Speaker 3: before tariffs hit, this stuff may end up resulting in
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Speaker 3: some higher costs in the short term because supply and demand.
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Speaker 3: If the supply is the same but demand is higher,
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Speaker 3: usually that pushes prices up even absent a tariff.
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Speaker 4: And that dovetails into another piece that we have here
7:20
Speaker 4: with inter Stack from CNBC, where at the same time
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Speaker 4: that these companies are looking to front load orders from China,
7:27
Speaker 4: you have a potential for another strike on the Gulf
7:31
Speaker 4: coast or on the East coast ports that could transpire
7:34
Speaker 4: in early January.
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Speaker 2: Good it's been a couple months since we've had to
7:37
Speaker 2: cover one.
7:37
Speaker 4: Of those, so we could have a real mixture of
7:42
Speaker 4: a front loading of a lot of goods coming from
7:43
Speaker 4: overseas combined with potentially another strike coming January fifteenth, that
7:49
Speaker 4: is at least the deadline that they would have to
7:50
Speaker 4: strike a new deal. The International long Shoreman's Association had
7:55
Speaker 4: went on strike for three days back in what was
7:58
Speaker 4: that September. I'm all the blur days blur together, but
8:02
Speaker 4: that was a three day strike that was resolved where
8:05
Speaker 4: you did see five ships initially at port. It got
8:09
Speaker 4: congested to fifty four during that three day period and
8:11
Speaker 4: it took a couple of weeks to shake out. So again,
8:13
Speaker 4: this is months off, but something that could be a
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Speaker 4: potential issue on top of the front loading of orders
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Speaker 4: from overseas.
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Speaker 2: Why do they call them long shoreman? I do not
8:24
Speaker 2: know what about short shoreman?
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Speaker 5: Well, they're covering a lot of territory.
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Speaker 2: Well maybe, but maybe not.
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Speaker 3: I know the one that I did cover on the
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Speaker 3: show back when we were covering the dock workers strike
8:37
Speaker 3: a little a little while ago was steve adoor, which
8:40
Speaker 3: is another term for a dock worker, and that actually
8:44
Speaker 3: comes from a Portuguese or Spanish origination, which is a
8:49
Speaker 3: Steve adore, which the direct translation is man who loads
8:52
Speaker 3: ships in stow's cargo. So that's where Steve ador comes from.
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Speaker 3: But long shortman, We've got an answer.
8:59
Speaker 5: I'm seeing.
8:59
Speaker 6: The term longshore is a shortened version of a longshore,
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Speaker 6: which means along the shore.
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Speaker 2: There you go, love it. This is no That's why
9:10
Speaker 2: I'm here. This is why.
9:12
Speaker 3: Look when whenever I go home every night, I ask
9:14
Speaker 3: my daughter, I say what you learn today? And she says,
9:17
Speaker 3: you know, whatever she says, and I always have to
9:19
Speaker 3: have something that I learned today as well. Now I
9:21
Speaker 3: can explain to her why they're called long shortman, and
9:25
Speaker 3: it makes perfect sense, it does.
9:27
Speaker 2: This is great.
9:28
Speaker 3: This is my favorite segment is a year and a half.
9:33
Speaker 3: I don't see the problem. You know, you gotta start
9:36
Speaker 3: with these contents jeopardy before we know it. You've got
9:39
Speaker 3: to start with these concepts early. I'm a big believer
9:42
Speaker 3: in that.
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10:07
Speaker 3: Delta today coming out with projections for twenty twenty five growth.
10:13
Speaker 3: They are expecting to, you know, basically see continued mid
10:17
Speaker 3: single digit growth in terms of their revenue, you know,
10:21
Speaker 3: somewhere in the five to six percent range. They're going
10:24
Speaker 3: to expand the number of seats they have by three
10:26
Speaker 3: to four percent, and they're hoping in the long term
10:29
Speaker 3: to be able to grow adjusted learnings by ten percent
10:32
Speaker 3: per year over the next three to five years. Your
10:35
Speaker 3: thoughts on what they announced here.
10:37
Speaker 4: Paul, Delta is an example of a company that has
10:40
Speaker 4: done really well in the airline space. Of the course
10:43
Speaker 4: of the last year or so, the shares were up
10:45
Speaker 4: about sixty percent through Tuesday's close. United has also fared
10:49
Speaker 4: well also. Of course, we've talked about on the show
10:52
Speaker 4: Spirit and its struggles and some of the other airlines
10:55
Speaker 4: that have really struggled. But Delta's real focus strategically has
10:59
Speaker 4: been on going after the more affluent customer or the
11:03
Speaker 4: business traveler, and really leaning on their partnership that they
11:07
Speaker 4: have with American Express to satisfy the demand for pricier seats.
11:12
Speaker 4: They are mentioning that in terms of what they're seeing
11:15
Speaker 4: from their revenue makeup fifty seven percent of it is
11:18
Speaker 4: generated by premium seats and their loyalty program. So it's
11:22
Speaker 4: a real big revenue driver to have those upgrades that
11:26
Speaker 4: it targets for their more premium seats. And as a result,
11:30
Speaker 4: the company has fared well. They're going to expand the
11:33
Speaker 4: amount of people flying from twenty twenty four heading into
11:37
Speaker 4: twenty five, they're anticipating four percent year over year expanded capacity.
11:42
Speaker 4: So overall, it seems like they're relatively well positioned in
11:45
Speaker 4: what is just a really difficult business to run effectively.
11:49
Speaker 2: Yeah, I would agree they're kind of the leader in
11:52
Speaker 2: the clubhouse. Paul.
11:53
Speaker 3: We got two tax stories to cover here. I kind
11:56
Speaker 3: of want to go to this property tax one first,
11:59
Speaker 3: just because I think there's a little bit.
12:03
Speaker 2: Of juice there to talk about.
12:04
Speaker 3: And it's a piece from Connerson in Bloomberg Opinion, and
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Speaker 3: the title of it gets right to the point to
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Speaker 3: get the housing market moving, raise property taxes, and immediately
12:18
Speaker 3: everyone driving was just like, Oh, I gotta pull over.
12:21
Speaker 3: I can't believe Chuck said that you want to write.
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Speaker 3: First of all, I didn't write the piece. Second, I'm
12:26
Speaker 3: not even saying it's right or not. I'm just saying
12:28
Speaker 3: that that's what the piece is talking about. But here's
12:32
Speaker 3: something that's really interesting California. If you're not familiar with
12:37
Speaker 3: how California property taxes work, it's basically written into the
12:43
Speaker 3: state constitution in California that your property taxes effectively don't
12:48
Speaker 3: change as long as you live there. There can be
12:51
Speaker 3: small adjustments, but they're really small. This is how you
12:53
Speaker 3: end up with places that are valued at like five
12:56
Speaker 3: million dollars in California paying two thousand dollars a year.
12:59
Speaker 2: In property taxes.
13:01
Speaker 3: And what we see is the California is one of
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Speaker 3: the lowest property turnover rates in the country because, hey,
13:07
Speaker 3: once you get this great subsidy from the state effectively
13:11
Speaker 3: saying your property taxes are staying low, you look around.
13:14
Speaker 3: You're like, well, I might want to move, but my
13:16
Speaker 3: cost of home ownership is going to go through the
13:18
Speaker 3: roof because my property taxes go up. Even if I'm
13:22
Speaker 3: buying a place that's the same value and I don't
13:24
Speaker 3: need a mortgage. Still, my property taxes might quintuplar, you know,
13:29
Speaker 3: go up tenfold because of where property tax rates are
13:32
Speaker 3: with current valuations. Texas, on the other hand, has really
13:36
Speaker 3: high property taxes, and you see lots of turnover. Texas
13:41
Speaker 3: also has you know, lower taxes in other areas of
13:44
Speaker 3: the state tax, no state income tax, but you see
13:47
Speaker 3: much more turnover in the housing market because people aren't
13:50
Speaker 3: kept in place by low property taxes. And so I
13:55
Speaker 3: think there is some merit to this in parts of
13:58
Speaker 3: the country, most notably freaking California, whose property market is
14:04
Speaker 3: as broken as anyone that I've ever seen, where you literally,
14:07
Speaker 3: I mean, you'll hear people say, hey, I moved here
14:10
Speaker 3: fifty years ago, and my property taxes are under one
14:13
Speaker 3: thousand dollars, and I can't move because if I move
14:15
Speaker 3: to a place that's the same value, my property tax
14:18
Speaker 3: would go from like seven hundred to thirty thousand dollars.
14:21
Speaker 2: And that's just.
14:23
Speaker 3: That's not right because it distorts the market because you're
14:28
Speaker 3: effectively saying, hey, any of those new people that are moving,
14:32
Speaker 3: you're picking up the tax bill for those who are
14:34
Speaker 3: still sticking around.
14:35
Speaker 5: Who've got that great grandfather deal?
14:36
Speaker 3: And it's also look, you get a bunch of freeloaders,
14:38
Speaker 3: then oh, I don't have to pay my property taxes
14:42
Speaker 3: like and I don't have to pay but hey, I
14:44
Speaker 3: don't have to pay more like this is how it's written. Well, okay,
14:47
Speaker 3: but you're still using services and just not paying for them.
14:49
Speaker 3: Basically you're a freeloader. So I think there are certainly
14:55
Speaker 3: markets where this is the case. But when you look
15:00
Speaker 3: at the areas that are seeing the biggest gaps in
15:04
Speaker 3: inventory right now, it's not California actually compared to pre pandemic.
15:08
Speaker 3: It's a lot of New England states, a lot of
15:10
Speaker 3: mid Atlantic states that have really low inventory compared to
15:14
Speaker 3: twenty nineteen and before.
15:16
Speaker 2: And I don't think.
15:17
Speaker 3: Anyone looks at, you know, the Connecticut housing market or
15:20
Speaker 3: the New Hampshire housing market, New Hampshire which has very
15:22
Speaker 3: high property taxes and says, hey, you know what the
15:24
Speaker 3: answer is here higher property taxes.
15:27
Speaker 2: So I think this could.
15:28
Speaker 3: Fix you know, some stuff in states that have broken
15:31
Speaker 3: property markets, like California. But ultimately the answer everywhere is, guys,
15:38
Speaker 3: we need to build more housing.
15:41
Speaker 1: Right.
15:41
Speaker 5: It always comes back to that.
15:42
Speaker 3: And until we do that, we're gonna have some problems
15:47
Speaker 3: and specifically building it where people.
15:49
Speaker 2: Want to live.
15:51
Speaker 3: It's it's not enough to be like, well, we found
15:54
Speaker 3: a bunch of land out in the forest eighty miles
15:58
Speaker 3: from the nearest large Nuh, that's kind of useless. How
16:03
Speaker 3: do you make it so that commuters can get to
16:05
Speaker 3: their jobs, whether they are you know, accountants, dunkin donuts, employees, teachers,
16:13
Speaker 3: garbage people, whatever they whatever they're doing, they got to
16:16
Speaker 3: be close enough that they can get to work. And
16:18
Speaker 3: that's the problem that we're seeing in a lot of
16:19
Speaker 3: cities also. And it's why when you hear about the
16:23
Speaker 3: the problems with hey, you know, labor force shortages, which
16:26
Speaker 3: aren't as prevalent today, it was mostly around cities because
16:29
Speaker 3: people like you just don't have enough people that live
16:31
Speaker 3: in close proximity to be able to work in those
16:33
Speaker 3: areas because it's too expensive. So expensive, yeah, it is,
16:36
Speaker 3: So that's kind of what we're seeing on that side.
16:39
Speaker 3: Any other thoughts covered in that piece that that you
16:41
Speaker 3: wanted to touch on, Paul.
16:43
Speaker 5: No, I think those those hit on some good posts.
16:45
Speaker 5: I was trying to think of.
16:45
Speaker 4: There are any other states that have that unique structure
16:48
Speaker 4: that that California does in terms of property taxes. It
16:51
Speaker 4: seems like something that is just just out of this
16:56
Speaker 4: realm of possibility to be able to have such low
17:00
Speaker 4: property taxes sustain for such a long period of time.
17:04
Speaker 3: Yeah, and this, by the way, again it dates back
17:06
Speaker 3: to Proposition thirteen, which passed in nineteen seventy eight. It's
17:09
Speaker 3: part of the state constitution there, and it effectively prevents
17:15
Speaker 3: any kind of large scale changes to the property taxes
17:21
Speaker 3: that you have there. I'll just quote here in terms
17:23
Speaker 3: of like what it basically does. But it again, I'm
17:30
Speaker 3: not finding that the best quote for it. I thought
17:31
Speaker 3: I had one, and then it turned out to not
17:33
Speaker 3: be there. But it pretty much was taxpayers saying no,
17:37
Speaker 3: we don't want any more property tax increases if we're
17:40
Speaker 3: not moving, and it's completely broken the state's housing market
17:44
Speaker 3: over the last fifty years.
17:45
Speaker 1: Now.
17:47
Speaker 4: The other proposition that they have, which is really unique
17:49
Speaker 4: that I've heard about is Proposition six, which has passed
17:52
Speaker 4: in nineteen sixty where basically golf courses are just deemed
17:57
Speaker 4: nonprofits and that they can't bear the assessment of the
18:01
Speaker 4: property taxes in that area. So you have the Los
18:04
Speaker 4: Angeles Country Club, which is this three hundred acre country
18:07
Speaker 4: club that the land alone is worth eight billion dollars
18:11
Speaker 4: and they're assessed at eighteen million for tax purposes. But
18:14
Speaker 4: they don't have to pay that. They don't have to
18:16
Speaker 4: pay that level. Bob Hope had passed that back in
18:19
Speaker 4: been part of passing that in nineteen sixty.
18:22
Speaker 2: Yeah, golf courses are a nonprofit.
18:24
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18:52
Speaker 3: All right, Paul, let's talk a little bit here about
18:55
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18:59
Speaker 2: In twenty twenty five.
19:02
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19:10
Speaker 4: Naples, Florida. M your thoughts, Paul, Naples. The one thing
19:18
Speaker 4: I was trying to research during the break here. They
19:22
Speaker 4: while certainly get impacted by hurricanes, what I've heard and
19:26
Speaker 4: someone here can correct me if I'm wrong, is that
19:27
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19:31
Speaker 4: getting really brutally impacted by.
19:34
Speaker 2: Oh I got hit pretty hard by these ones this year.
19:36
Speaker 4: Yeah, I know, so I just I pause briefly when
19:39
Speaker 4: they got the number one spot because of the hurricane impact. Now,
19:42
Speaker 4: I think there was a period of time from Irma
19:46
Speaker 4: through Hurricane Wilma where there was a period ten twelve
19:49
Speaker 4: years that they weren't directly impacted based on my quick
19:52
Speaker 4: searching here, but certainly that's something that based on what
19:55
Speaker 4: we saw with Harricane Helene, that was a that we
20:02
Speaker 4: want to think about if you're looking into retirement because
20:05
Speaker 4: of the impact that it's only going to get worse
20:07
Speaker 4: over time.
20:08
Speaker 6: Here's the sorry I was just gonna say. My mom
20:10
Speaker 6: actually has had a condo in Naples for years now.
20:13
Speaker 6: We've had family in Fort Myers and they have had
20:16
Speaker 6: to flock to Naples her place for safety, and not
20:19
Speaker 6: really a huge impact, Like, yes they were impacted, but
20:22
Speaker 6: not like to the extent of Fort Myers or whatever.
20:25
Speaker 3: So here are they ranked one hundred and fifty cities
20:28
Speaker 3: because I guess they couldn't be bothered to do more
20:30
Speaker 3: than that. Naples number one, Virginia Beach, Virginia number two,
20:35
Speaker 3: New York City, the number three place to retire. That
20:38
Speaker 3: one was so confounding, a little bit confusing. Now we
20:42
Speaker 3: can get into the reasons why Sarasota, Florida Okay, Boise, Idaho, Sure, Raleigh,
20:47
Speaker 3: North Carolina, Okay, Jacksonville, Florida, Fine, Huntsville, Alabama.
20:52
Speaker 2: Number eight.
20:55
Speaker 3: Just just put it out there, like you don't really
20:57
Speaker 3: hear a lot of people talk about Huntsville is like
20:58
Speaker 3: a burgeoning retire reed destination, but maybe it is. Charlotte,
21:02
Speaker 3: North Carolina, Sure, Fort Wayne, Indiana. And the next one
21:09
Speaker 3: really gives you pause. Green Bay, Wisconsin. Now here's the thing.
21:14
Speaker 3: This is not to say like anything bad about Wisconsin
21:17
Speaker 3: or Indiana. I actually really like Wisconsin. Only been there twice,
21:21
Speaker 3: great time each time. Great cheese, great beer, great people,
21:24
Speaker 3: everything I want in the place.
21:25
Speaker 2: Love it. Fort Wayne, Indiana. Never been there.
21:28
Speaker 3: I don't know, you know what I would think, Quite honestly,
21:31
Speaker 3: I just don't know if it's for me. Green Bay
21:34
Speaker 3: is freaking freezing in the winter. It's not quite Minneapolis,
21:40
Speaker 3: but it's freezing. And one of the major things that
21:44
Speaker 3: retirees talk about when they say, hey, like here's what
21:47
Speaker 3: I want to do in retirement, it's finding ways to
21:51
Speaker 3: get out of the cold weather, specifically hot weather. We
21:55
Speaker 3: figured out, hey, you know what you do, you sit
21:58
Speaker 3: inside with the air conditioning on, or you got your
21:59
Speaker 3: screen pool in Florida and stuff like. We figured the
22:04
Speaker 3: cold stuff absent just doing nothing outside at all, which
22:08
Speaker 3: is kind of impossible.
22:10
Speaker 2: It's it's kind of hard.
22:11
Speaker 3: So some of these I wonder about, but overall, this
22:15
Speaker 3: is the list that they've put together.
22:17
Speaker 2: New York.
22:17
Speaker 3: The biggest problem that I have with it cost of living. Right,
22:20
Speaker 3: it's really expensive to live in New York, and a
22:23
Speaker 3: lot of retirees are on fixed incomes that can't get
22:25
Speaker 3: anywhere near affording a New York City you know, studio
22:30
Speaker 3: apartment let alone a one or two bedroom, and so
22:33
Speaker 3: I think it's tough for me to be like, well,
22:36
Speaker 3: New York City makes it up with, you know, good
22:39
Speaker 3: health care and lots of stuff to do. Yeah, but
22:42
Speaker 3: you got to pay like five times the national average
22:44
Speaker 3: and rent to be able to do that.
22:46
Speaker 4: Not to mention, you have most retirees coming from owning
22:50
Speaker 4: some sort of home for the most part, and not
22:52
Speaker 4: to overly generalize, but you accustomed to let's say at
22:55
Speaker 4: least two thousand square feet dropping down to New York.
22:58
Speaker 4: You're going to have to cut down your square footage
23:00
Speaker 4: significantly to make that transition. It's interesting the factors that
23:04
Speaker 4: they list out here, happiness, affordability, healthcare, retiring taxes, desirability.
23:08
Speaker 4: You do have to have weather, I think in there
23:10
Speaker 4: it has to be part of the calculation. And then
23:13
Speaker 4: they have job market.
23:14
Speaker 5: Which to me seems a little counterintuitive. But retired the.
23:17
Speaker 3: Retiree job market, you know, like, what does that even mean?
23:20
Speaker 3: Because we all have different things that we want to
23:22
Speaker 3: do as retirees. Paul, what's your dream retirement job?
23:27
Speaker 5: Sitting on the beach?
23:28
Speaker 4: No, No, like actually doing a job. Yeah, I thought
23:31
Speaker 4: this is a good question. Lifeguard, lifeguard. I think everyone says, like, God,
23:37
Speaker 4: this is not my retirement. I haven't even thought about
23:40
Speaker 4: that because I just would think I'm not working.
23:41
Speaker 2: You ever thought about this once.
23:43
Speaker 5: I don't plan to work in retirement.
23:45
Speaker 2: You don't even want to do something just to get
23:46
Speaker 2: out of the house.
23:46
Speaker 6: I need something to keep me busy.
23:50
Speaker 2: No, okay, Tucker, what about you? What do you got?
23:53
Speaker 6: I don't know, like running a small coffee shop or
23:56
Speaker 6: a diner or something or something like that.
23:58
Speaker 2: I want something keep me busy.
24:00
Speaker 3: I want to scoop ice cream in the summer and
24:02
Speaker 3: drive a school bus in the winter.
24:04
Speaker 6: No, yeah, I want to be pouring coffee at a
24:07
Speaker 6: diner and just right, like, you don't shoot in the
24:09
Speaker 6: s right, what do you have to worry about with
24:11
Speaker 6: that shot?
24:12
Speaker 3: The breeze with people, there's no stress. You're not trying
24:14
Speaker 3: to make it anywhere. You're just like, hey, I'm good
24:17
Speaker 3: with this me. I want to scoop ice cream a
24:20
Speaker 3: few months out of the year, a couple of days
24:21
Speaker 3: a week, and I want to drive kids to and
24:23
Speaker 3: from school in the school bus like and you know,
24:25
Speaker 3: honk the horn and stuff like that.
24:27
Speaker 5: Ah.
24:28
Speaker 4: Yeah, I'm not not with you, guys. Yeah, I find
24:31
Speaker 4: my other ways to fill time. Okay, there you go.
24:34
Speaker 4: In any case, retirement different for everyone exactly.
24:36
Speaker 3: And this dovetails nicely into something that I'd like to
24:40
Speaker 3: tell everyone about the Armstrong Advisory Group, and that the
24:43
Speaker 3: arm Strong Advisory Group is specifically built to help answer
24:46
Speaker 3: the questions of hey, what do you want to do
24:49
Speaker 3: in retirement and how do you actually get there? This
24:52
Speaker 3: is what our advisors work on, day in, day out
24:55
Speaker 3: with people is figuring out how to make your retirement
24:59
Speaker 3: dream actually happen, and so whether you're thinking about moving
25:04
Speaker 3: to a different city and trying to figure out what
25:06
Speaker 3: the cost of living is or how you're gonna make
25:07
Speaker 3: ends meet there, whether you're thinking about retiring next year
25:11
Speaker 3: and trying to figure out do you have enough money
25:14
Speaker 3: in order to retire.
25:15
Speaker 2: These are the.
25:16
Speaker 3: Questions that the Armstrong Advisory Group focuses on every single day.
25:22
Speaker 3: To schedule an appointment called eight hundred three nine three
25:26
Speaker 3: four zero zero one, that number again is eight hundred
25:31
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25:34
Speaker 3: all throughout New England. And again, if you're trying to
25:37
Speaker 3: figure out what to do in retirement, if your retirement
25:39
Speaker 3: can work for you, that number is eight hundred three
25:43
Speaker 3: nine three for zero zero one.
25:46
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
25:48
Speaker 1: registered investment advisor. Nothing in the ad or in any
25:51
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
25:54
Speaker 1: your own financial, tax into state planning advisors before making
25:57
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
26:00
Speaker 1: advisory services.
26:01
Speaker 3: Comcast announcing early this morning they are moving forward with
26:04
Speaker 3: a plan to spin off their NBC Universal cable networks.
26:10
Speaker 3: So this is talking about MSNBC, CNBC, USA E, Sci Fi,
26:16
Speaker 3: Golf Channel, like there's some properties on there that have
26:18
Speaker 3: some you know, interesting content, but ultimately they're just not
26:22
Speaker 3: making much money from them, because well, it's a situation
26:27
Speaker 3: where you've got people dropping cable and the bundles are
26:30
Speaker 3: falling apart in this and that, and so Comcast is
26:35
Speaker 3: trying to figure out what to do.
26:36
Speaker 2: With this.
26:39
Speaker 5: Go ahead.
26:40
Speaker 4: No, it's just an interesting strategy shift that you see
26:43
Speaker 4: that really very clearly delineating that they see the cable
26:48
Speaker 4: business as a dying a dying breed, which has been
26:52
Speaker 4: known for a while, but they're putting money behind it.
26:55
Speaker 3: So I think there's another possibility here, okay, and this
26:58
Speaker 3: is one of them. And this is similar to what
27:00
Speaker 3: we saw from AT and T, which remember tried to
27:02
Speaker 3: buy up you know, Direct TV, as well as Warner
27:06
Speaker 3: Brothers Discovery and figuring out like, hey, we want to
27:08
Speaker 3: own the way the pipes going into the house and
27:10
Speaker 3: the content on those pipes.
27:12
Speaker 2: That was the whole thing.
27:13
Speaker 3: And now companies are like, this is actually kind of bad.
27:16
Speaker 3: It's it's not working the way we thought. So no,
27:18
Speaker 3: get rid of the pipes and get rid of the content.
27:22
Speaker 3: Here's another thought that I had. Though they're saying, look,
27:25
Speaker 3: we want to spin these assets off, they're still generating
27:29
Speaker 3: seven billion dollars in revenue. Comcast isn't the only company
27:33
Speaker 3: that has these assets. What if this is actually a
27:37
Speaker 3: signal to other companies that might have similar ones. Hey,
27:42
Speaker 3: you know what, you could sell these to us and
27:43
Speaker 3: then we'll figure out how to spin them off. I'm
27:47
Speaker 3: just wondering if Comcast actually wants to acquire more of
27:51
Speaker 3: this in order to you know, either a keep them
27:56
Speaker 3: and have better economies of scale with all of the
27:58
Speaker 3: content for or maybe a streaming platform that can actually
28:03
Speaker 3: make money now that Disney's figuring out how to do
28:05
Speaker 3: it as an example, Or do they really want to
28:08
Speaker 3: get rid of them, because just trying to get rid
28:11
Speaker 3: of them, I don't I'm still not quite buying that
28:16
Speaker 3: they're just like abandoning it right away.
28:18
Speaker 4: So give me an example as to what Comcasts would
28:21
Speaker 4: be looking to do in that situation. So you're saying
28:24
Speaker 4: that they would create others in the industry to spin
28:27
Speaker 4: off channels that they would then acquire back.
28:31
Speaker 3: I'm saying, what if Comcast doesn't actually want to spin
28:34
Speaker 3: this off, but they're pretending to want to spin it
28:36
Speaker 3: off so they can actually acquire more channels.
28:39
Speaker 4: Outside of the ones that they just spun off. Here
28:42
Speaker 4: he spun them off yet, Well that they've mentioned spinning off.
28:45
Speaker 3: I'm saying, what if they don't actually want to do
28:47
Speaker 3: the spin off that they're saying they do. Oh So
28:50
Speaker 3: it's just a it just seems to be And granted
28:54
Speaker 3: I might just be reading too far into this, but
28:58
Speaker 3: I'm just wondering if there's something else there, especially you
29:02
Speaker 3: look at some of these like USA just as an example.
29:06
Speaker 3: I mean, like again, USA, You've got freaking Law and
29:10
Speaker 3: Order reruns on all day every There are people who
29:13
Speaker 3: like you go into some people's houses and there's just
29:14
Speaker 3: Law and Order SVU going all day every day. CNBC
29:19
Speaker 3: go into any financial advisor's business, it's on all day
29:22
Speaker 3: every day. The Golf Channel, you go into Tucker's house
29:25
Speaker 3: all day every day.
29:28
Speaker 2: So there is a way to make money off this.
29:32
Speaker 3: They're still generating seven billion in revenue, it's just they're
29:35
Speaker 3: not monetizing the assets well. And part of me is like, hey,
29:39
Speaker 3: is it maybe just that they actually want more consolidation
29:42
Speaker 3: in this space, which I'm not saying would be good
29:44
Speaker 3: for us overall. But I'm wondering if that's another option
29:47
Speaker 3: that they're considering.
29:48
Speaker 4: So more so a signaling to the market that hey,
29:50
Speaker 4: we're game to start merging some of these assets with Perhaps.
29:54
Speaker 2: Maybe we could do something more with this.
29:56
Speaker 3: If you guys are all thinking about spinning your stuff off,
29:58
Speaker 3: maybe we could actually be the And if it doesn't
30:00
Speaker 3: work for us, great, we'll still spin it off.
30:02
Speaker 2: But maybe we could make it work.
30:04
Speaker 5: I don't know, we'll create a new cable.
30:05
Speaker 3: I'm probably just reading too much into it. Let's take
30:08
Speaker 3: a quick break here. We got stack Roulette coming up next.
30:11
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31:14
Speaker 2: Paul, what do you have for me for stack Roulet.
31:19
Speaker 4: Employers are getting pressure to pay for drugs drugs like Wigovie, Eli,
31:24
Speaker 4: Eli Lilly and Nova Nordis. Representatives are going out and
31:28
Speaker 4: trying to pitch companies on covering the much popularized weight
31:32
Speaker 4: loss drugs. Eli Lilly is is Manjerno and wigovie is
31:37
Speaker 4: the regular prescription or ozembic one, which was more for diabetes.
31:42
Speaker 4: But these drugs have become really popular and they're really expensive.
31:45
Speaker 4: They cost one thousand bucks a month, and so the
31:48
Speaker 4: focus of Eli, Lilly and Nova Noordis now has been
31:51
Speaker 4: going to employers to try and get them on board
31:54
Speaker 4: with covering the weight loss plans for their employees. There's
31:57
Speaker 4: a huge subset of the United States population that could
32:01
Speaker 4: be covered or could go on these drugs, but there's
32:05
Speaker 4: a huge hesancy from these employers because of the costs
32:08
Speaker 4: associated with them. Right now, only about half of large
32:10
Speaker 4: employers cover anti OBC medications, and across smaller employers you
32:15
Speaker 4: really don't see much of it at all. So this
32:18
Speaker 4: is truly the next fight that Eli Lilly and Nova
32:22
Speaker 4: noors have to fight in order to continue to get
32:25
Speaker 4: the sales growth that they've seen from these really popular
32:28
Speaker 4: weight loss drugs.
32:29
Speaker 3: And look, it's still early with these I mean they've
32:33
Speaker 3: been they've been utilized for pure weight loss and not
32:36
Speaker 3: just treatment of diabetes for only a couple of years now.
32:40
Speaker 3: But the studies that we've been seeing are and I
32:43
Speaker 3: don't really throw this word around too often, but they're
32:46
Speaker 3: nothing short of miraculous in terms of the potential improvements
32:50
Speaker 3: and all cause morbidity.
32:53
Speaker 2: It's just it's unbelievable what you are seeing out there.
32:57
Speaker 2: It really is.
32:58
Speaker 4: They have they're testing on other uses for these drugs.
33:02
Speaker 4: It's it's really powerful what's coming out from them. But
33:05
Speaker 4: obviously there I was trying to recall, there's some sorts
33:08
Speaker 4: of lawsuits that have banded together I believe for o zempic,
33:12
Speaker 4: and so there's going to be trials and tribulations, I guess,
33:15
Speaker 4: is what I'm getting at. Without knowing the specificities of that,
33:17
Speaker 4: that lawsuits there and understandably, given the cost and the
33:22
Speaker 4: potential you know, litigation risks, as an employer, you have
33:27
Speaker 4: the right to be a little bit hesitant on the
33:29
Speaker 4: widespread use of this.
33:31
Speaker 3: Yeah, I can get it from that perspective. The counter is, Hey,
33:36
Speaker 3: the stuff that actually, you know, raises costs for us
33:39
Speaker 3: when it comes to us healthcare. A lot of it
33:43
Speaker 3: is obesity related, it's heart disease, it's you know, cancers
33:47
Speaker 3: that have strong correlations with weight and things like like,
33:50
Speaker 3: it's it's all that stuff that is, you know, tied
33:54
Speaker 3: pretty closely to weight. And the potential long term savings
34:00
Speaker 3: out of more widespread usage of these drugs.
34:05
Speaker 2: Is potentially huge.
34:07
Speaker 4: Yeah, the employers kind of ruthlessly want to kick that
34:10
Speaker 4: can down the road to medicare just to have them
34:13
Speaker 4: cover it, you know what I mean.
34:14
Speaker 5: Yeah, Like, I get.
34:15
Speaker 4: It too, but it is it's not the right thing
34:18
Speaker 4: to do. But that's that ruthless employer mentality is, Hey,
34:21
Speaker 4: I only care about Chuck Zada from age you know,
34:24
Speaker 4: thirty five to sixty or whenever he retires, and then
34:29
Speaker 4: how any of the long term issues he deals with,
34:31
Speaker 4: you know, Medicare can figure out the rest.
34:32
Speaker 3: The other thing that you do have to remember patents
34:35
Speaker 3: on US drugs, they're twenty years and we're I don't
34:38
Speaker 3: know how long exactly into this, but sometime in the
34:40
Speaker 3: next you know, fourteen fifteen years, you're going to have
34:42
Speaker 3: generics of these as well. Right, And and the cost
34:46
Speaker 3: curve even on you know, blockbuster drugs is bent significantly
34:50
Speaker 3: through generics. You go back, just as an example, when
34:53
Speaker 3: it first came out in the nineteen nineties, viagra.
34:56
Speaker 2: Was like eighty dollars a pill.
34:59
Speaker 3: It's like who now you talk about You're talking about
35:01
Speaker 3: like a ninety percent reduction in cost. You're gonna see
35:04
Speaker 3: similar things with this as well, just because that's what
35:09
Speaker 3: happens when you get generic versions that come out. Now,
35:13
Speaker 3: that doesn't mean the answer is just well, if you're overweight,
35:17
Speaker 3: now just wait fifteen years. Like, no, that's not really
35:19
Speaker 3: a good thing, because the data also shows the sooner
35:21
Speaker 3: that you drop the excess weight, the better you like it.
35:24
Speaker 3: It's a multiplier effect. It's not just lose it and
35:28
Speaker 3: you're you're good, it's how early and how soon can
35:30
Speaker 3: you lose it because it stresses.
35:31
Speaker 2: Your body during that that extra time.
35:33
Speaker 3: So I look at this and granted, we still don't
35:38
Speaker 3: have long term studies on potential side effects, and there
35:41
Speaker 3: are some significant ones that can that can.
35:43
Speaker 2: Crop up with this.
35:44
Speaker 3: So it's it's not like these drugs are for everyone, hm,
35:49
Speaker 3: but man, for the people that it works for, the
35:52
Speaker 3: potential change and the outlook for their long term health
35:55
Speaker 3: is just huge, and it's it's it's it's it's mind
36:00
Speaker 3: blowing stuff that we're seeing. Taking a look at markets
36:02
Speaker 3: as we had towards the middle of the day in
36:05
Speaker 3: the top of the hour, s and P five hundreds
36:08
Speaker 3: down eighteen points, Nasdaq down seventy three, but the Dow
36:11
Speaker 3: is peeking up into positive territory up six points at
36:17
Speaker 3: the moment here, So we'll see where things go. Remember,
36:20
Speaker 3: we've got Nvidia reporting after the bell. We're just about
36:23
Speaker 3: out of time now, but we're gonna be back tomorrow.
36:25
Speaker 3: We'll tell you everything that happened with in Vidia. And look,
36:31
Speaker 3: we got a couple hours of show, so I'm sure
36:33
Speaker 3: we're gonna talk about other things too, but all the
36:35
Speaker 3: Invidia that you can ask for tomorrow, and a whole
36:38
Speaker 3: lot more on the financial exchange