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Why the Economy Still Isn’t Slowing Down · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike Armstrong.
1:17
Speaker 2: Chuck, Mike and Ben here and as we get things
1:21
Speaker 2: all spooled up for you, we got all your major
1:25
Speaker 2: indices in the green. As we go through the day.
1:29
Speaker 2: So far, the S and P five hundred is up
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Speaker 2: fifty seven big points point seven eight percent, the Dow
1:35
Speaker 2: Jones Industrial Average is up fifty points point one percent,
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Speaker 2: and the NASDAK composite is up three hundred and forty
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Speaker 2: four points one point three four percent despite stocks being up.
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Speaker 2: Interesting thing to note, it's a Friday and b uh, well,
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Speaker 2: just b uh. It's a Friday and the VIX is up,
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Speaker 2: which is kind of unusual. There's a calendar feature where
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Speaker 2: typically on Fridays, even if that thing's going on, you
2:00
Speaker 2: see the VIX fall. So my antenna always go up
2:03
Speaker 2: when I see stocks moving up, in the VIX moving
2:05
Speaker 2: up along with them, especially on a Friday. It's a
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Speaker 2: little bit unusual. And we'll see if somebody knows something
2:12
Speaker 2: about something. Uh dollar index is I'm sorry. The Tenure
2:17
Speaker 2: Treasury down three point six basis points to four point
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Speaker 2: three five eight percent. Mortgage rates from Mortgage News Daily
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Speaker 2: flat overnight at six point four to four percent on
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Speaker 2: the thirty year, national average dollar index down point one
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Speaker 2: six percent to ninety seven to seventy nine, gold up
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Speaker 2: seventeen twenty and ounce to forty seven to twenty eight.
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Speaker 2: And we got crude oil up sixty two cents barrel
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Speaker 2: to ninety five forty triple a. National average for gas
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Speaker 2: prices down one point two cents overnight to four fifty
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Speaker 2: four and six tenths. So no major moves on the
2:48
Speaker 2: oil side at this point.
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Speaker 3: Uh.
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Speaker 2: Yes, Michael.
2:52
Speaker 4: Jobs report this morning at eight thirty am. Yeah, some
2:56
Speaker 4: people had jobs, some people didn't. About one hundred and
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Speaker 4: fifteen thousand and new jobs created during the month of April.
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Speaker 4: Some slightly revisioned for the last two months, but nothing
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Speaker 4: that changed the overall narrative, and the overall narrative remains that,
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Speaker 4: in spite of the stories I keep hearing from young
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Speaker 4: college grads about the difficulty in finding work, in spite
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Speaker 4: of the conversations I keep hearing from people that have
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Speaker 4: been out of work for a while and finding new jobs,
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Speaker 4: the unemployment rate remains low. The pace of hiring remains
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Speaker 4: by our own guess above above, what the economy can
3:28
Speaker 4: we stand without seeing the unemployment rate drop?
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Speaker 1: Again?
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Speaker 4: Two different surveys here, so don't want to mix the
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Speaker 4: two here. But really nothing that I can see that
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Speaker 4: detects a signal of a problem in the labor market.
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Speaker 4: The most significancy is a slight uptick in the unemployment rate,
3:46
Speaker 4: where you know, on an unrounded basis, it moved.
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Speaker 5: Up a little bit.
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Speaker 4: But overall, when you speak, especially to businesses that are
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Speaker 4: responsible for reporting this stuff, the pace of hiring remains
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Speaker 4: pretty strong.
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Speaker 2: I think it's something well, no, the pace is not strong.
4:03
Speaker 2: The pace is low. The pace of firing is low.
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Speaker 2: Like you look at the JOLT report and you look
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Speaker 2: get indeed like that, the pace is low. There's just
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Speaker 2: not much firing going on, and it's just a low
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Speaker 2: turnover labor mark.
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Speaker 6: Yeah.
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Speaker 2: I think the big thing is that we've stabilized in
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Speaker 2: the last three to four months now, whereas in the
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Speaker 2: second half of last year we were declining, and there
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Speaker 2: are some green shoots. Again, like it's it really depends
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Speaker 2: where you are in the economy. Interestingly, enough, again with
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Speaker 2: how the with how the Jobs report categorizes this like
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Speaker 2: different industries, it's not the most specific we have like
4:40
Speaker 2: jobs in information okay, so that's like you know, tech broadly,
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Speaker 2: but not just like Apple and Amazon.
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Speaker 6: It includes Hollywood.
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Speaker 2: So yeah, we've seen three straight months where we've had
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Speaker 2: negative numbers there for the information category. Financial activities down
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Speaker 2: for the last two months. Yeah, okay, But then you
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Speaker 2: take a look at transportation of warehousing, which is you know,
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Speaker 2: positive to the tune of fifty thousand combined for the
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Speaker 2: last two months. There's absolutely something happening there. Retail up
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Speaker 2: forty thousand for the last two months. There's there's something
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Speaker 2: on that side. So I think that you have some
5:16
Speaker 2: of these green shoots that are showing up in the
5:18
Speaker 2: labor market right now, whether they turn into you know,
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Speaker 2: a full blown what comes after green shoots? Is it?
5:26
Speaker 2: Do you have a flowers a plant?
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Speaker 6: Yeah?
5:29
Speaker 5: Is the budding flowers?
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Speaker 1: Yeah?
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Speaker 2: Do you are we gonna get buds after these green shoots?
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Speaker 2: And then do we eventually get some flowers? Maybe we do,
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Speaker 2: But we'll have to see how the economy evolves now
5:41
Speaker 2: that we have these higher gas prices in place, and
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Speaker 2: it's obviously also going to be depending on how long
5:46
Speaker 2: these prices stay here and whether they move up as well.
5:49
Speaker 2: You know, that's that's a possibility too.
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Speaker 6: Yeah.
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Speaker 4: Look, I think plainly higher gas prices and high inflation
5:56
Speaker 4: is difficult for a consumer. The reality is that for
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Speaker 4: the last quarters, the consumer is not what's been driving
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Speaker 4: this market and economy forward. It hasn't been detracting significantly
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Speaker 4: from it. Yeah, and that can shift. But this kind
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Speaker 4: of is being driven forward by massive spend on artificial intelligence,
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Speaker 4: and the only thing that's going to slow that down
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Speaker 4: is a lack of availability of the stuff needed to
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Speaker 4: drive that move forward in artificial intelligence, which by the way,
6:21
Speaker 4: could occur if the strait doesn't reopen, but it's not
6:24
Speaker 4: occurring right now.
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Speaker 2: Yeah. If you look at the if you look at
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Speaker 2: the data that we have from the Bureau of Economic
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Speaker 2: Analysis on GDP, and you go through and you're like, okay,
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Speaker 2: Like where is the growth actually coming from? What you
6:45
Speaker 2: see is okay, Housing's kind of a modest drag the
6:48
Speaker 2: last couple of years. Consumer spending is a modest uplift.
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Speaker 2: And yeah, the tech side of things has provided the
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Speaker 2: rest of the impulse there. And again that's fine, like
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Speaker 2: not everything has to be all humming all at once.
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Speaker 2: But I think the question for businesses is going to
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Speaker 2: be does inflation ever get to the point where the
7:08
Speaker 2: FED feels like it has to has to act because
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Speaker 2: that's when you start seeing, you know, the negative consequences
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Speaker 2: up from a business investment standpoint, And we're not there yet.
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Speaker 2: Do we get there at some point? Maybe? I don't know,
7:22
Speaker 2: but this is where we are today speaking of the
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Speaker 2: Middle East. All kinds of reports for the last twenty
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Speaker 2: four hours now that there have been just these sporadic
7:30
Speaker 2: exchanges of fire, you know, with various parts of the
7:33
Speaker 2: straight offoe moves, a few different things that have popped
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Speaker 2: up here and there. The big thing I'll tell you, like, look,
7:39
Speaker 2: regardless of whether or not the ceasefire is an effect
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Speaker 2: or not, again, I feel like words just have no
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Speaker 2: meaning anymore at this point, Like the English language is
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Speaker 2: kind of useless. When the firing has not ceased but
7:52
Speaker 2: the ceasefire is in effect. It's clear that both sides
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Speaker 2: are just kind of probing where the lines are for
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Speaker 2: what the other will permit right now. But here's the thing.
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Speaker 2: If I am a shipping captain, which you're all very
8:06
Speaker 2: likely you're very thankful I'm not, because if I were,
8:09
Speaker 2: you wouldn't believe how many boats I could get stuck
8:11
Speaker 2: in the Suez Canal. Yeah, lots of that if I
8:15
Speaker 2: were a shipping captain, the absolute last thing that I
8:19
Speaker 2: would be doing with my thousand foot long boat is
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Speaker 2: being like, hey, there's some US destroyers getting you know,
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Speaker 2: attacked by you know, a bunch of Iranian fast attack
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Speaker 2: boats and firing back at them. Yeah, let's let's try
8:35
Speaker 2: to pass by and see what happens at you know,
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Speaker 2: twelve knots and you know, without the ability to turn quickly.
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Speaker 2: So what I do know is, regardless of whether the
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Speaker 2: ceasefire is holding not holding, this that the environment in
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Speaker 2: Hormuz at this very moment is not conducive to a
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Speaker 2: lot going through there. And as such we continue to
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Speaker 2: see production shut ins costing the world oil supply twelve
8:59
Speaker 2: million barres a day.
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Speaker 4: Yes, it's so impossible to know whether or not that
9:05
Speaker 4: can turn on it.
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Speaker 6: Obviously, the oil.
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Speaker 4: Production and resupply of global oil cannot turn on a dime.
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Speaker 4: But the idea of traffic flowing through the straight up
9:13
Speaker 4: form most could turn on a dime and then turn
9:15
Speaker 4: right back in the other direction. It is really difficult
9:19
Speaker 4: to know what comes next.
9:21
Speaker 2: Let's take a quick break. When we return, let's do
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11:12
Speaker 2: Pierce in The New York Times is titled when You're
11:15
Speaker 2: fired from retirement and specifically talking about, Hey, the people
11:20
Speaker 2: that have to return to work because the financials didn't
11:25
Speaker 2: actually make sense the way they thought they didn't retirement.
11:28
Speaker 4: I thought it was when you really misbehaved in the villages,
11:32
Speaker 4: they fire you and send you out. I don't think
11:34
Speaker 4: you can misbehaving.
11:35
Speaker 2: I think you gotta do a lot to get kicked
11:37
Speaker 2: out of the village.
11:38
Speaker 3: We did the Costanzas get fired in retirement from Bulta Vista.
11:41
Speaker 2: Yeah, the barons did also in uh and everybody loves Raymond.
11:47
Speaker 4: So what they're talking about here is a phenomenon that
11:50
Speaker 4: we've covered before, and you do see this showing up
11:54
Speaker 4: in some of the data, which is uh. Overall, while
11:57
Speaker 4: we as society are getting older, people who are working
12:01
Speaker 4: past the age of sixty five continues to grow. And
12:04
Speaker 4: while I'd love to believe it's because they're all passionate
12:07
Speaker 4: about their work and just really love what they do,
12:10
Speaker 4: the reality is not so much the case. It is
12:12
Speaker 4: that people are unfortunately woefully underprepared for retirement and a
12:17
Speaker 4: lot of cases underestimate things like is are covered in
12:21
Speaker 4: this New York Times piece about you know, just higher
12:25
Speaker 4: than expected medical costs. For instance, in retirement, one woman
12:28
Speaker 4: is talking about how Medicare only covers a small portion
12:31
Speaker 4: of her diabetes medication, and so the planning she had
12:34
Speaker 4: done between Social Security and the pension she had don't
12:36
Speaker 4: quite cover it. I think where this lands for me
12:42
Speaker 4: is in I guess both directions of the fired from
12:44
Speaker 4: retirement story. As many of those situations that I have
12:49
Speaker 4: seen of people needing to make changes to their retirement lifestyle,
12:53
Speaker 4: I'll say that I've seen an equal number of people who.
12:57
Speaker 5: Regret having worked longer than.
13:00
Speaker 6: They needed to.
13:01
Speaker 4: Because I've never met anybody on their deathbed who's like, oh, man,
13:05
Speaker 4: I wish I had just put in a few more
13:07
Speaker 4: years of work. It's always been my only regret is
13:11
Speaker 4: I wanted to spend more time doing than the you know,
13:13
Speaker 4: the great things that I was able to do when
13:16
Speaker 4: I was finally done working. It does cut both ways,
13:19
Speaker 4: but the real answer, as terrifying as the idea of
13:23
Speaker 4: retiring and the needing to go back to work is
13:26
Speaker 4: for people, the focus should also be on, hey, you know,
13:30
Speaker 4: can I get to a place where I'm able to
13:32
Speaker 4: retire early or earlier than I anticipated and focus on
13:38
Speaker 4: that exciting new part of life. It's a lot of
13:40
Speaker 4: complexities between how Medicare works and social security, your future
13:44
Speaker 4: required minimum distributions, taxes.
13:47
Speaker 6: And retirement.
13:48
Speaker 4: They're all really complex subjects, but you can't possibly assess
13:51
Speaker 4: the answer until you do the groundwork and ask the question.
13:56
Speaker 4: Don't work longer than you have to call Armstrong Advice
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14:32
Speaker 2: The US and China are scheduled to get together, with
14:35
Speaker 2: President Trump and President g meeting next week in China.
14:41
Speaker 2: I believe it is. I think it's the fourteenth to
14:43
Speaker 2: the sixteenth that the summit is scheduled. It's kind of
14:48
Speaker 2: taken a back seat given the broader geopolitical things swirling
14:52
Speaker 2: over the last couple of months. I mean, heck, it
14:54
Speaker 2: was delayed, right, This was originally supposed to be a
14:56
Speaker 2: month ago. Yeah, So I think it's it's interesting to
15:00
Speaker 2: me that they are still scheduled to meet. Obviously, the
15:06
Speaker 2: US is going in if you look at the typical
15:08
Speaker 2: asks from the US during either of the Trump terms,
15:12
Speaker 2: the US is going in saying, hey, we want you
15:14
Speaker 2: to buy more US products. China is going to be saying, hey,
15:20
Speaker 2: we want you to stop tariffing US yep. And I
15:24
Speaker 2: think expectations are fairly low. I think for this this meeting,
15:31
Speaker 2: I don't think anyone's expecting some giant grand breakthrough or
15:35
Speaker 2: anything like that, and other.
15:38
Speaker 4: Things that are you know, undercurrents in the conversations always Taiwan.
15:43
Speaker 4: You know, China will always be pushing for something on
15:47
Speaker 4: Taiwan and they continue to view it as their territory
15:52
Speaker 4: that you know, would also have the nice side benefit
15:55
Speaker 4: of being the only place that produces semiconductors in the world.
15:58
Speaker 5: There's also been a lot of men of you know,
16:01
Speaker 5: the AI arms.
16:02
Speaker 6: Race between these two countries.
16:05
Speaker 4: When we talk about the AI build out, it's really
16:07
Speaker 4: only about two countries, the US and China, or the
16:11
Speaker 4: US versus China, And you know, there could be some
16:14
Speaker 4: low hanging fruit there I think, for if not written agreements,
16:19
Speaker 4: then at least stated understandings of how it's used or
16:22
Speaker 4: not used in military applications and things along those lines.
16:26
Speaker 4: But yeah, I too hold pretty low expectations for where
16:31
Speaker 4: this goes because frankly, it's just not the priority of
16:35
Speaker 4: the day for the Trump administration.
16:36
Speaker 2: I don't think it's the priority of the day for
16:37
Speaker 2: China either. Yeah, I think there. I think both before
16:42
Speaker 2: the Iran conflict, we're looking towards the shows. Hey, is there, like,
16:46
Speaker 2: can we build towards something bigger. But I think there's
16:50
Speaker 2: just so many complicating factors right now. Yeah, that it's
16:54
Speaker 2: just tough for me to see anything huge coming out
16:56
Speaker 2: of this. But look, as always, when you're thinking about
16:59
Speaker 2: the things, it's it's not binary, and it's not yes
17:03
Speaker 2: or no, one hundred percent either way, it's okay along
17:05
Speaker 2: the spectrum, how can things potentially move and just be
17:08
Speaker 2: aware that, you know, there is the possibility that maybe
17:12
Speaker 2: something larger does come together. But yeah, we'll see.
17:15
Speaker 4: One thing that's definitely true here is the US has
17:20
Speaker 4: certainly seeded a lot of influence in Asia over the
17:23
Speaker 4: course of the last year or so, between trade, terrif
17:28
Speaker 4: fights and now with the events in Iran. I mean,
17:31
Speaker 4: I know we tend to be very domestic, focused on
17:33
Speaker 4: on this program and talking about higher gas prices here,
17:36
Speaker 4: but what phenomenon has occurred in you know, Southeast Asia
17:40
Speaker 4: has been China exceptionally well prepared for the events in
17:46
Speaker 4: Iran and certainly impacted.
17:48
Speaker 2: But I don't know, now, I think sometimes we give
17:52
Speaker 2: China a little too much credit, like they're not infallible.
17:55
Speaker 6: They're they're not infallible.
17:57
Speaker 4: Is there any Asian nation you can point to that
18:00
Speaker 4: is more energy independent right now than China.
18:02
Speaker 2: No, but their economy is also a mess.
18:04
Speaker 6: Yeah, agreed.
18:05
Speaker 4: But I think one thing that's clear is a number
18:07
Speaker 4: of those countries that are in a bigger mess right
18:11
Speaker 4: now have turned to China as a relief out. I
18:13
Speaker 4: don't know that they're getting it, but they are going
18:16
Speaker 4: to China and saying, Hey, can we get some jet fuel,
18:18
Speaker 4: can we get some sort of relief on energy infrastructure?
18:21
Speaker 4: And I would imagine that the Chinese are saying, yeah, absolutely,
18:26
Speaker 4: just plan on taking a bunch of our solar panels
18:29
Speaker 4: and cars and other things that we have overproduced over
18:32
Speaker 4: the last few years in exchange for it. So I
18:34
Speaker 4: think this moment, the last year especially, but the last
18:37
Speaker 4: few months too, have probably been a lot about China
18:41
Speaker 4: trying to expand their influence in the region, and I'd
18:43
Speaker 4: imagine they've been somewhat successful with it.
18:46
Speaker 2: Mike, You know how sometimes we have those you see
18:50
Speaker 2: those quotes where it's like, hey, if you invested like
18:53
Speaker 2: five thousand in Microsoft forty years ago, you'd be worth
18:56
Speaker 2: like ten million dollars today. Yeah, I just saw a
19:01
Speaker 2: new one here. If you invested thirty thousand dollars in
19:06
Speaker 2: sand disc twelve months ago, you'd be a millionaire now.
19:11
Speaker 2: I wish I had known again, It's just wild, Like
19:14
Speaker 2: what would.
19:15
Speaker 4: I be worth if I invested thirty thousand dollars in
19:17
Speaker 4: Verizon ten years ago?
19:21
Speaker 6: Don't answer that question.
19:26
Speaker 2: Still working on. Let's take a quick break. We got
19:29
Speaker 2: the trivia answer Wall Street Watching mail bag.
19:31
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20:04
Speaker 3: All our markets are still green right now as they're
20:07
Speaker 3: reacting to the positive news from this morning's jobs report
20:09
Speaker 3: that came in better than expected. The Dow Jones just
20:12
Speaker 3: barely holding on to positivity. It is up point zero
20:15
Speaker 3: two percent, or just under ten points. The S and
20:17
Speaker 3: P five hundreds up over fifty three points or three
20:19
Speaker 3: quarters of a percent. The Nasdaq is up over three
20:22
Speaker 3: hundred and thirty four points or one point three percent.
20:26
Speaker 3: Gold is still holding strong, up a tenth of a percent,
20:30
Speaker 3: and silver is up point seven seven percent. Cloud infrastructure
20:36
Speaker 3: company core Weave is seeing its share price drop twelve
20:39
Speaker 3: and a half percent as its second quarter revenue guidance
20:41
Speaker 3: disappointed Wall Street Core We've sees revenue ranging from two
20:45
Speaker 3: point four to five billion to two point six billion.
20:47
Speaker 3: The midpoint of two point five three billion fell short
20:51
Speaker 3: of the two point six to nine billion consensus. Upwork
20:54
Speaker 3: shares are tumbling twenty percent after the company announced a
20:57
Speaker 3: restructuring plan that includes reducing its work force by twenty
21:01
Speaker 3: four percent. Upwork said it was doing this to make
21:03
Speaker 3: sure the company remains profitable as work evolves. It also
21:07
Speaker 3: reported first quarter earnings and revenue that came in slightly
21:09
Speaker 3: lower than expected. Expedia shares are down seven percent after
21:13
Speaker 3: the online travel agency called for second quarter revenue of
21:16
Speaker 3: four point one to one billion to four point one
21:18
Speaker 3: nine billion, compared to the four point one two anticipated
21:22
Speaker 3: by analysts. Booked room nights in the first quarter missed expectations,
21:26
Speaker 3: landing at one hundred and thirteen point nine billion dollars
21:28
Speaker 3: versus the consensus of one hundred and seventeen and finally,
21:33
Speaker 3: Wendy's stock is up four percent after reporting better than
21:36
Speaker 3: expected revenue of five hundred and forty point six million
21:38
Speaker 3: dollars in its first quarter financial report. Analysts polled estimated
21:43
Speaker 3: revenue would be five hundred and eighteen million. Earnings also
21:47
Speaker 3: came in above estimates, and the company also announced it
21:50
Speaker 3: planned to build up to one thousand restaurants in China
21:53
Speaker 3: over the next decade. I am Ben Kitchen and that
21:56
Speaker 3: was Wall Street Watch and let's pay off a little
21:58
Speaker 3: bit of our trivia here. Today's question was which US
22:01
Speaker 3: city is Popolio. The fourteenth from the answer is Chicago.
22:05
Speaker 3: Jim from Roachdale, Mass is our winner. He'll be taking
22:08
Speaker 3: home at Financial Exchange Show t shirt. We play trivia
22:11
Speaker 3: every day here on the Financial Exchange. See complete contest
22:14
Speaker 3: rules at Financial Exchange Show dot com.
22:20
Speaker 2: For mails here here's the mail.
22:22
Speaker 3: Then for mails it makes me one the wag my
22:25
Speaker 3: tail when it comes to Wanta whil mail.
22:29
Speaker 1: You've got questions, We've got answers. It's time for the
22:32
Speaker 1: money matters mailback. We are tackling your calls and emails
22:36
Speaker 1: on everything from economic policy to global markets and everything
22:40
Speaker 1: in between. Leave us a voicemail at three three nine
22:42
Speaker 1: three nine nine four three three three and you might
22:45
Speaker 1: hear it on the show. You can also email your
22:47
Speaker 1: question to TFE Show at gmail dot com. Now it's
22:52
Speaker 1: time for the Money Matters mail bag.
22:57
Speaker 2: All right, first question up here.
22:59
Speaker 3: The Money Matters mail Bag currently twenty nine years old,
23:02
Speaker 3: and I make twenty six dollars and thirty five cents
23:05
Speaker 3: at my job, which is fifty five thousand ish per year.
23:10
Speaker 3: My job contributes fifty percent up to eight percent. My
23:13
Speaker 3: question is should I sign up for a standard four
23:15
Speaker 3: oh one K through my work a roth ira or
23:18
Speaker 3: split it between both?
23:21
Speaker 4: Okay, So first thing I have to acknowledge here that
23:24
Speaker 4: we don't have enough context answer this question.
23:27
Speaker 2: There's a few more pieces of.
23:28
Speaker 4: Information we would want to know, and as we've talked about,
23:31
Speaker 4: we don't give specific investment or planning advice when we
23:35
Speaker 4: do all this. But I want to think through the
23:37
Speaker 4: context of how I would assess this question were I
23:41
Speaker 4: do we.
23:41
Speaker 6: Have a name, no name, we're called him Dan?
23:45
Speaker 4: Were I Dan in this situation earning around fifty five
23:48
Speaker 4: grand a year and deciding what to do with the money.
23:52
Speaker 4: So first of all, I want to acknowledge a piece
23:54
Speaker 4: that you know, he grew up poor and just starting
23:57
Speaker 4: it sounds like a four oh one K, and there
24:01
Speaker 4: is a match attached to that four oh one K
24:03
Speaker 4: contribution here which sounds pretty generous. First things first would
24:08
Speaker 4: have to be understanding that at twenty nine years old,
24:10
Speaker 4: any money that you put into this thing you are
24:12
Speaker 4: not really able to access without some extreme scenarios before
24:18
Speaker 4: fifty nine and a half. So first things first, before
24:21
Speaker 4: you even consider putting the money in, make sure you
24:23
Speaker 4: can afford to do so. You know, if you're living
24:25
Speaker 4: paycheck to paycheck, you need to have enough money to
24:27
Speaker 4: afford a car repair if it happens. You need to
24:30
Speaker 4: have enough money to pay the rent if something happens
24:33
Speaker 4: to your income, So start there. Raindy Day fund has
24:36
Speaker 4: to be covered first, We've talked about it before. Between
24:39
Speaker 4: three and twelve months of expenses, depending on your specific
24:42
Speaker 4: scenario is kind of where we start. Beyond that, how
24:45
Speaker 4: would you go about assessing the traditional versus roth as.
24:48
Speaker 4: I mean, we check those boxes and we're concluding, yeah,
24:51
Speaker 4: there's money on the table here we should be contributing
24:53
Speaker 4: to retirement.
24:54
Speaker 5: Yeah.
24:54
Speaker 2: The big one is a tax bracket analysis. What tax
24:57
Speaker 2: bracket are you in today and as you get towards retirement,
25:01
Speaker 2: because remember you're not touching that money until, uh, you know,
25:04
Speaker 2: you're after age fifty nine and a half. Ideally, Hey,
25:07
Speaker 2: what tax bracket do you expect to be? And then
25:09
Speaker 2: now look, if you're what was it twenty six years old,
25:12
Speaker 2: twenty nine, twenty nine. Let's be honest, none of us
25:15
Speaker 2: know exactly where tax brackets are gonna be in thirty years, right,
25:18
Speaker 2: don't know Assume current ones just for the sake of argument.
25:23
Speaker 2: And hey, if you think your tax bracket's gonna be
25:25
Speaker 2: higher in the future, then you're typically better off putting
25:28
Speaker 2: the money in a row today. If you think your
25:30
Speaker 2: tax bracket's going to be higher today, you're typically better
25:33
Speaker 2: off putting the money in an IRA. If you don't know,
25:38
Speaker 2: then you can hedge and say, Okay, I'll do fifty
25:40
Speaker 2: to fifty because I don't know exactly what things are
25:41
Speaker 2: gonna look like.
25:42
Speaker 4: Other factors that are pretty unique to New England. Right,
25:44
Speaker 4: If you live in California, you're probably not gonna be
25:46
Speaker 4: commuting to another state here in New England. Right, Like,
25:50
Speaker 4: let's say you live in New Hampshire and you're currently
25:52
Speaker 4: working in Massachusetts, but you don't think you will for long.
25:55
Speaker 4: That means your income that's from Massachusetts is getting an
25:58
Speaker 4: extra five percent income tax. Maybe it makes sense to
26:01
Speaker 4: defer more of that into the four oh one k,
26:03
Speaker 4: because you're saying, hey, by the time I pull it out,
26:05
Speaker 4: I'm certainly not going to be paying that extra five
26:07
Speaker 4: percent over to mass. So there are a number of
26:10
Speaker 4: different factors, and again that's pretty unique to the New
26:13
Speaker 4: England area where we have such small geographic states and
26:16
Speaker 4: a lot of people commute to other states. But it
26:19
Speaker 4: is a factor to consider too when you're making those
26:21
Speaker 4: retirement contributions. Hey where am I physically going to live
26:24
Speaker 4: when I retire?
26:25
Speaker 2: What else we got? Ben? All right?
26:26
Speaker 3: Julia and Gloucester says, I have fifteen thousand dollars of
26:29
Speaker 3: inheritance to invest for my one year old son, but
26:32
Speaker 3: I know pretty much nothing about finance. What can I
26:35
Speaker 3: do to maximize the amount of return he will receive
26:38
Speaker 3: when he's an adult.
26:40
Speaker 6: Hmm.
26:41
Speaker 2: It's a tough one because again there's nothing that you
26:44
Speaker 2: don't know what's going to maximize it. Because you don't
26:47
Speaker 2: know whether stocks the S and P five hundred is
26:50
Speaker 2: going to be great over the next twenty years. You
26:52
Speaker 2: don't know if international markets are going to be better,
26:55
Speaker 2: Like you just don't know what the situation's going to
26:59
Speaker 2: look like.
27:00
Speaker 4: Other stuff would be you know, I would ask myself, Okay,
27:03
Speaker 4: I've got this inheritance. I know you want to build
27:06
Speaker 4: something for your son's future. Yeah, what do you want
27:09
Speaker 4: to build for your son's future? Is this so he
27:11
Speaker 4: can go out and buy his first home at thirty?
27:15
Speaker 4: Is this so he can afford to, you know, get
27:18
Speaker 4: a good education and you know, find a solid job
27:22
Speaker 4: in his early twenties. Because there's gonna be different types
27:25
Speaker 4: of investments that you use for one versus the other.
27:28
Speaker 4: I will say, you know, generally speaking, when I hear
27:31
Speaker 4: about very young children and you know, tools that can
27:35
Speaker 4: be used for their investing future, college savings plans always
27:39
Speaker 4: come to mind.
27:39
Speaker 6: For me. These are commonly known as five twenty nine plans.
27:42
Speaker 4: Sure, there are very simply very few other tools out
27:47
Speaker 4: there that give you the special tax treatment that a
27:50
Speaker 4: college savings plan will. I'll also say, for a one
27:55
Speaker 4: year old, those new Trump accounts, you may have a
27:58
Speaker 4: potential like government check, they can come your way for that.
28:01
Speaker 4: So something to look into there with the Trump accounts,
28:04
Speaker 4: but not for a significant sum. But the college savings
28:07
Speaker 4: plans again, if you think it's likely that it could
28:10
Speaker 4: be used for that purpose. With the flexibility that they
28:13
Speaker 4: now offer between high school, college and then maybe even
28:17
Speaker 4: a roth down the road. It's uh, it's pretty important
28:21
Speaker 4: to at least consider that as an option for you know,
28:26
Speaker 4: for the future.
28:27
Speaker 2: Let's take a quick break. Here, we got Paul Amonica
28:30
Speaker 2: from Barons, Who's going to be joining us next ben.
28:34
Speaker 2: If if anyone does want to get a question in
28:36
Speaker 2: for next week's mail bag, what are the ways they
28:38
Speaker 2: can do so?
28:39
Speaker 3: They can email us at TFE Show at gmail dot
28:42
Speaker 3: com or call us at three three nine three nine
28:45
Speaker 3: nine four three three three Quick break. Paul Amonica is next.
28:51
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28:55
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29:00
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29:16
Speaker 1: the Financial Exchange. Ladies and gentlemen the weekend.
29:33
Speaker 2: Alrighty as promises, as promised, I've got echo as promised,
29:45
Speaker 2: You've got got me talking to myself. I think we've
29:49
Speaker 2: got Paul Monica on here.
29:52
Speaker 7: I'm here and hopefully.
29:53
Speaker 2: Not echoing Ben Paul, do you hear two of me?
29:57
Speaker 6: I do?
29:58
Speaker 2: Okay, Paul, here's two of me?
30:00
Speaker 7: Now I don't.
30:01
Speaker 2: Oh look we've got one. There we go fantastic. The
30:04
Speaker 2: last thing that we need is two of me. Paul,
30:06
Speaker 2: appreciate you joining us today. Earlier this week, game Stop
30:12
Speaker 2: announced that they were trying to buy eBay. The CEO
30:17
Speaker 2: of game Stop, Ryan Cohen, went on CNBC and had
30:22
Speaker 2: one of the more memorable interviews that we've seen in
30:24
Speaker 2: terms of, you know, being asked, Hey, how is this
30:26
Speaker 2: deal going to come together? From a dollars and cents perspective?
30:31
Speaker 2: Can you talk just a little bit about the structure
30:33
Speaker 2: of the deal and what some of the questions are
30:35
Speaker 2: surrounding it.
30:37
Speaker 7: Yeah, there was no echo during that conversation, but there
30:40
Speaker 7: might as well have been, because I think Cohen repeated
30:44
Speaker 7: almost response to every question.
30:46
Speaker 2: It's a mix of cash and stop. Half cash, half stock,
30:51
Speaker 2: you know.
30:51
Speaker 7: Half cash half stock, you know, over and over again.
30:54
Speaker 7: But that begs the question, you know when you do
30:56
Speaker 7: the math, and this is why I think Wall Street
30:58
Speaker 7: is a little confused.
31:00
Speaker 1: Used.
31:01
Speaker 7: GameStop is worth about eleven billion and change. Obviously that fluctuates.
31:07
Speaker 7: They have about nine little more than nine billion in
31:10
Speaker 7: cash in the balance sheet, so it's a healthy amount
31:12
Speaker 7: of cash. So that gets you to twenty. Then there's
31:16
Speaker 7: a financing commitment tentatively of twenty billion from TV Securities.
31:22
Speaker 7: That's forty billion, but they're offering fifty six billion to
31:27
Speaker 7: buy eBay. So where does that sixteen billion come from?
31:31
Speaker 7: If that part is the stock part, and you're issuing
31:35
Speaker 7: all these new shares, that's going to massively dilute your
31:40
Speaker 7: current shareholder base, and I think that's why investors are skeptical.
31:43
Speaker 7: There's also the fact that you know eBay is doing
31:47
Speaker 7: reasonably well. They're not a company that potentially is in
31:51
Speaker 7: dire straits and in need of being acquired. So if
31:56
Speaker 7: you're eBay, who you know put out the requisite you know,
31:59
Speaker 7: we're reviewing the proposal type of statement, it does beg
32:04
Speaker 7: the question of, you know, why does eBay think it
32:08
Speaker 7: should merge with game Stop? Does Ryan Cohen really have
32:13
Speaker 7: this magical way to turn an eBay GameStop combination into
32:18
Speaker 7: another Amazon. That's what he's hoping, but I don't think
32:21
Speaker 7: wal Street believes it.
32:22
Speaker 2: What do you think the vision is in terms of
32:24
Speaker 2: you know, put yourself in code shoes. What's the thing
32:27
Speaker 2: that he looks at and says, this is why the
32:31
Speaker 2: combination of these two companies can get me to where
32:33
Speaker 2: I want to be.
32:35
Speaker 7: Yeah, I mean, I think there's a fair argument to
32:38
Speaker 7: be made that you know, game Stop, you know, which,
32:41
Speaker 7: which is obviously more than just a video game retailer.
32:44
Speaker 7: There's a certain amount of collectibles, you know that those
32:48
Speaker 7: stores sell that that could be the types of things
32:53
Speaker 7: that you would see people put up on eBay. So
32:56
Speaker 7: maybe there is this notion that a combined you know,
32:59
Speaker 7: Game Stop eBay could be a rival to Amazon. The problem, though,
33:07
Speaker 7: I think with that argument, is that you know, Amazon
33:10
Speaker 7: already has a fair amount of competition for other brick
33:14
Speaker 7: and mortar retailers that are you know, much stronger, namely
33:19
Speaker 7: that little one in Arkansas named Walmart. So that I
33:23
Speaker 7: think is posing a challenge. You know, I spoke to
33:26
Speaker 7: one shareholder of eBay who's skeptical that a deal go through.
33:30
Speaker 7: But you know, he said, you know that eBay is
33:33
Speaker 7: kind of like the New York Stock Exchange of pre
33:35
Speaker 7: owned items. So if you buy that argument, you can
33:39
Speaker 7: see why Ryan Cohen would you know, covet eBay as
33:43
Speaker 7: something that could enhance Game Stops earnings power.
33:47
Speaker 2: Is there any chance that this is kind of, you know,
33:50
Speaker 2: declared open season for you know, other companies to look
33:54
Speaker 2: at eBay and would anyone else be interested? Or is
33:56
Speaker 2: this just kind of a one off? Do you think I.
34:00
Speaker 7: Would be surprised that this opens up the door to
34:06
Speaker 7: other strategic bidders coming in for eBay. Maybe it changes
34:11
Speaker 7: if Cohen goes hostile with his offer, but you know,
34:15
Speaker 7: if you're eBay right now, I'm not so sure that
34:18
Speaker 7: you're necessarily thinking we need to really reach out to
34:22
Speaker 7: other potential strategic acquirers. Because again, the stock was already
34:26
Speaker 7: up this year before the Game Stop announcement, and it's
34:29
Speaker 7: had a very solid run in the past twelve months.
34:33
Speaker 7: I think investors recognize that this is, you know, a
34:36
Speaker 7: company that's doing quite well. Its valuation is also higher
34:39
Speaker 7: than its historical average, too, which might dissuade other buyers
34:43
Speaker 7: from coming in and saying, hey, eBay's a great bargain
34:46
Speaker 7: right now.
34:47
Speaker 2: Very good, Paul. I appreciate you joining us today and
34:50
Speaker 2: I hope you have a fantastic weekend.
34:54
Speaker 7: Thanks Andy.
34:54
Speaker 2: You guys, that is Paul Monica from Baron's talking about
34:59
Speaker 2: game stop, end eBay Mike, what else we got today?
35:04
Speaker 4: I'm hosting the show with two people that know a
35:06
Speaker 4: lot more about sports than I do, So I want
35:08
Speaker 4: to talk about Rupert Murdoch's high stake blitz against the NFL,
35:12
Speaker 4: and maybe you guys can explain to me what's going on,
35:14
Speaker 4: because all that I see is a large group of
35:17
Speaker 4: equally dislikable parties fighting each other when it comes to
35:21
Speaker 4: rights over the NFL, and I'm not really sure what
35:24
Speaker 4: to do about it. But apparently Fox is pretty nervous
35:27
Speaker 4: about the NFL being able to really push further and
35:32
Speaker 4: further into all these deals they're making with Netflix and
35:35
Speaker 4: Amazon and everybody else, and they want the government to
35:38
Speaker 4: go take another look at the anti trust protection under
35:41
Speaker 4: the nineteen sixty one Sports Broadcasting Act.
35:44
Speaker 2: So I don't know.
35:45
Speaker 6: I'm looking to you too.
35:46
Speaker 4: What does this all mean for the NFL, the networks,
35:50
Speaker 4: and for viewers like myself.
35:53
Speaker 2: Here's what it means is that there's a bunch of
35:56
Speaker 2: billionaires that want to fight over who gets the most billions,
36:00
Speaker 2: and it's probably gonna end up resulting in us having
36:03
Speaker 2: to have forty three subscription services because the first half
36:07
Speaker 2: of the game is gonna be on ESPN Minus and
36:10
Speaker 2: the second half is gonna be on Paramount Equals, and
36:14
Speaker 2: if there's overtime, you got to tune into Amazon Squared
36:18
Speaker 2: in order to watch it.
36:20
Speaker 4: If there's one thing I'm fairly confident about, it's that
36:23
Speaker 4: I don't think the government has any business being involved
36:26
Speaker 4: in any of this.
36:26
Speaker 2: Well, they already are though, Okay, they already are with
36:29
Speaker 2: the anti trust exception. Now, the point that I've made
36:32
Speaker 2: is that, you know, people, I forget what was the
36:36
Speaker 2: thing a couple months ago with someone wanted the anti
36:39
Speaker 2: trust exception looked into because because it's gotten too complicated
36:45
Speaker 2: to watch these things. And my point was, okay, so
36:48
Speaker 2: get rid of it. Now, all of the teams negotiate
36:50
Speaker 2: their own deals. You're gonna have Packers TV that you know,
36:53
Speaker 2: the Packers decide they're gonna make available at you know,
36:56
Speaker 2: nine thousand dollars a month, and Jacksonville's to give their
37:00
Speaker 2: games away on you know, Jaguars I'm limited, yeah, because
37:05
Speaker 2: it's Jacksonville. So I just I don't know what is
37:10
Speaker 2: going to actually help us get better viewing experiences. What
37:15
Speaker 2: I do know is as much as I think the
37:16
Speaker 2: viewing experience kind of sucks for professional sports right now
37:19
Speaker 2: because there's so many different platforms they're on, it's not
37:23
Speaker 2: a problem worth solving by. Like, I don't want Congress
37:28
Speaker 2: people spending a minute of their time worrying about what
37:32
Speaker 2: channel the Patriots play on. Yeah, I can figure it
37:36
Speaker 2: out and then complain to you, because that's all that is.
37:39
Speaker 6: It's entertainment. Who cares?
37:40
Speaker 4: Like we got I do really feel like I want
37:43
Speaker 4: all parties to lose, though. It's like it's like when
37:47
Speaker 4: you're watching I don't know, a sports final that you
37:50
Speaker 4: just hate both teams, Like, yeah, could they.
37:52
Speaker 5: All come out losing on this one somehow?
37:55
Speaker 2: Ultimately, hey, Congress, spend some time fixing Social Security and
37:59
Speaker 2: once you've done that, then you can deal with fixing
38:01
Speaker 2: the NFL broadcast schedule. Yeah we can agree there, but
38:05
Speaker 2: otherwise we're we're done for the day. And I hope
38:08
Speaker 2: you all have a great weekend. I hope you have, Yeah,
38:13
Speaker 2: a great weekend. And we're gonna see you on Monday
38:16
Speaker 2: and we'll see, uh, see what we get from the
38:19
Speaker 2: Middle East in that time.