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Boring consumer staples stocks getting pricey? · The Financial Exchange Show

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This is the Financial Exchange, with Chuck Zada and Mike Armstrong.
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Speaker 2: Kicking off the second hour.
1:17
Speaker 3: The Financial Exchange is Chuck, Mike and Tucker with the end.
1:21
Speaker 2: We've got mixed markets today, with the Dow up one.
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Speaker 3: Hundred and thirty six points, the S ANDP is down fifteen,
1:25
the Nasdaq being dragged largely by Apple on reports that
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iPhone sixteen sales might be lighter than hoped for. Uh So,
1:33
you've got the Nasdaq struggling the most, down about one percent.
1:36
The tenor US Treasury is off one point six basis
1:39
points to three point six three three percent. Oil rising today,
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back above seventy barrel for the first time in a
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little over a week. I think up a dollar fifty
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one a barrel to seventy sixteen on West Texas Intermediate.
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And we've got gold down three dollars and forty cents
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an ounce to twenty six oh seven and thirty cents
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for gas prices continuing to fall, where at three twenty
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and eight tenths of ascent, that's down an additional tenth
2:05
of ascent overnight and now down about twenty three cents
2:09
in the last month, and about thirty cents off of
2:12
where we spent most of the summer. Based on current
2:16
gasoline futures prices, still looks like we're heading low. We're
2:19
probably getting into the three ten range at least over
2:22
the next couple of weeks, but the potentially get nationally
2:25
below three dollars a gallon sometime in October if these
2:30
trends were to continue. I let's talk a little bit
2:34
about a small Arkansas retailer by the name of Walmart.
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Do you know the hometown of Walmart, by the way,
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either of you? I did, right, Betonville, Bettonville, Arkansas. Yeah,
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it's you kind of wonder like, why do I know that?
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Speaker 2: But I do. For some reason. I do love all
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the newspaper articles from way back in the day of
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you know, can this tiny Bettonville will be tailor take
3:00
down the Sears or Macy's or you know any of
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the stories that they did.
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Speaker 3: Yeah, they did turned out, And this story is not
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about them taking on Seers or taking on anyone, but
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in fact the fact that, hey, consumer staple stocks tend
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to be generally some of the more boring ones in
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the stock world. They still can have volatility associate with
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them especially. Look, even in downturns, they don't necessarily perform great,
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but they tend to be, you know, kind of boring,
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steady eddy. Okay, I'll cut my dividend coupon and carry
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on with my life and YadA YadA. But recently you've
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seen a little bit of excitement heading towards consumer staple stocks.
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I was looking today and in the last month, the
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S and P five hundred consumer staple sector the fourth
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best performing sector in the index. Best performing sector has
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been real estate, which again kind of got beaten up
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over the last couple of years with rising interests. Second
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best has been utilities, again kind of also boring, steady eddy.
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Third consumer discretionary, but that's more just Tesla stock has
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recovered in such a big part of consumer discretionary in
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that in that index. But consumer staples up four point
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five to three percent over the last month through last Friday.
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And so yeah, you've had, you know, kind of a
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nice little run for staple stocks that generally are pretty boring.
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Speaker 2: Walmart stock alone this year up over fifty percent. Now
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with with this most recent bounce after you know, after
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repeated good earnings and you know, same store sales growth
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that has been you know, admittedly impressive. They're attracting new customers,
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they are doing a lot, right, But you know, Jonathan
4:48
Levine and Bloomberg point out the the multiples on these
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companies are again looking like I don't know, massive growth
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tech companies at this stage. You've got Walmart, which is
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commanding a multiple of over thirty and Costco over fifty
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right now, and that's not let's just call it an
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atypical of consumer staple companies.
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Speaker 3: Well, I'm just gonna pull up Walmart and just take
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a look. Actually, I'll pull up both of those. You said,
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Walmart and Costco. Yes, okay, So if we pull these
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up and we take a look at PE ratios. PE
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ratios are forward pee which one were they citing just
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way they were siting forward? Okay, so that's projected projected earnings. Yes,
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over the next you know year, We'll say. And so
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we're looking at Walmart and Costco. So I pulled these
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up just to look at you know, kind of the
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last few years. Just as an example, Costco up until
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January of this year, was generally trading in a multiple
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between thirty and forty five x forward earnings Walmart was
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generally between twenty and twenty five. So, yes, like these
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numbers are higher than they've been, But I also don't
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want to make it seem like, hey, these are the
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stodgy consumer staple stocks or utilities that trade at like
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twelve x. Right, That's not where these have been either
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in recent history. So it's not something where you look
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at it and say, well, they're trading, you know, fifty
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or seventy five percent above their normal valuations. No, they're
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trading probably fifteen to twenty percent above their normal valuations
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for you know, the last several years, and that includes,
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by the way, twenty twenty two, which is when a
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lot of stocks got beaten up pretty badly.
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Speaker 2: Costco's pe forward.
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Speaker 3: Pe during that time went from around forty three at
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the beginning of the year to thirty one at the
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end of the year. Walmart's during that time, I don't
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have data going back all the way for Walmart, but
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in February it was trading at twenty two x twenty
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three x forward earnings. By the end of the year,
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their pe it actually expanded by you know a little
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bit to almost four x forward earnings. So I think
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looking at this Yes, these stocks are a little bit pricey,
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but the whole market's a little bit pricey right now,
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except for a couple areas that continue to be beaten up,
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energy and financials, which just have gotten no love at
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any point in this cycle. Really, financials had a brief
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period of love last year.
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Speaker 2: I think the question that, so, you know, what do
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I do about this as the average person? Well, a
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few months ago, the real piece here was that, look,
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the stock market's being dragged upwards by in Nvidia and
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looks pretty expensive, mainly because of one company or just
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a few companies in the semiconductor and weight loss drug space.
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This has broadened, This rally has broad which is a
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good thing. On one hand. The buyer beware scenario is
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just that, hey, most corners of the stock market are
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historically pretty pricey right now. Yeah, And it's.
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Speaker 3: It's something where ultimately it's there's one thing that's going
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to answer the question of whether or not these valuations
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are deserved here, and that's does the US economy go
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into recession in the next three to six months?
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Speaker 2: Of course, will those earnings continue to grow?
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Speaker 3: Nothing else really matters at this point. It's can you
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get through the next three to six months without any
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kind of recession.
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Speaker 2: And I guess the other piece would be, don't assume
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that just because oh it's a utility company, it can't
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be impacted by the rest like of course it will
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be a heck of a lot of the rally that
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you've seen in some of these utility companies has been
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based on the assumption that AI continues to develop and
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they start selling nuclear power to companies that are utilizing
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the high energy intensive artificial intelligence platforms, And you know,
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will Costco continue to see their membership growth in the
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face of recession, Like, don't always bank on you know,
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one sector or one area of the market dodging a
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recession that that's not historically always how it's played out.
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Speaker 3: Oh and even within those I'm just pulling up a
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couple examples just to look at them. So let's look
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at the they mentioned also in one of these Procter
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and Gamble and Costco doesn't go back that far.
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Speaker 2: When did Costco go public?
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Speaker 1: Yeah?
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Speaker 2: Not not prior to the Great Recession. I don't believe.
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Let's hang on, hold on, maybe they did. Oh no,
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that's not that's not Costco. I don't know how we
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ended up with that.
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Speaker 4: I'm seeing nineteen eighty five, yep, So we.
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Speaker 2: Actually do have data there.
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Speaker 3: Uh So if we look at two thousand and eight,
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just as an example. Uh and again I haven't even
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looked at any of these before, but in July of eight,
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Coca Cola was at twenty five bucks a share, Procter
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and Gambles at sixty five, Costco's at sixty two. By
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March of nine, Coca Cola this is the end of March,
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March thirty first, Coca Cola is a twenty one to
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ninety eight, so down about fifteen percent. Procter and Gambles
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at forty seven, so down about twenty five percent, Costco
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at forty six, down about twenty five percent.
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Speaker 2: So Mark it was off you know, forty or fifty
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or at that time.
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Speaker 3: But it's not like you got out without any problems here.
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So just because someone says, oh, a consumer staples stocks
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or you know, safer than other ones, hey, that's not
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always the case. Like they still have to be good
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companies and well run in YadA YadA.
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Speaker 2: You know, the consumer staples companies have gone out of
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business before they have and we have still the execution risk, yes,
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and they.
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Speaker 3: Do still get caught up in overall market volatility. It's
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not something where they just escape it h and everything
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is fine and honkey dory for them.
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Speaker 2: Let's take a quick break here.
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Speaker 3: When we come back, we're gonna be joined by Sarah
10:30
Foster from Bank Rate H talking a little bit about
10:34
inflation and wages. When we return, tune in for trivia
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Speaker 2: Joining us now is Sarah Foster from Bancre. Talk to
12:19
us about the wage inflation index and Sarah, this has
12:23
been something that's been written about quite a bit. Is
12:26
have American workers in the aggregate or on average, kept
12:30
pace with the incredible inflation that we've seen over the
12:34
last few years. Thanks for joining us, and I guess
12:36
what did you guys look at specifically when it came
12:40
to price increases versus American wages?
12:44
Speaker 6: Great to be here. One thing that I think is
12:47
important to note is that prices have cooled so much
12:51
that wages over the past sixteen months have been recovering
12:55
from the rapid post pandemic inflation. But I think what
12:58
is especially important is to zoom out to the very
13:01
point that prices first began to surge, And if you
13:04
do that, you can still see that there is a
13:06
gap between inflation and wages, which is probably why Americans
13:10
are feeling so downtrodden about the economy. But when you
13:14
put it on paper here we see that wages have
13:16
risen seventeen point four percent since January first, twenty twenty one,
13:20
and then prices have risen twenty percent.
13:23
Speaker 2: So you asked the important question is of will American
13:27
wages ever recover? Will we ever recover from high inflation?
13:31
And I guess I don't know how to answer that
13:33
question other than to look at it historically, because you know,
13:36
we've talked a lot. In fact, I think much has
13:39
been written about the stagnation of the American middle class
13:42
and how wages generally haven't really kept pace with where
13:46
they were decades ago. But have they outperformed inflation over
13:50
thirty year time periods in American history? I think is
13:52
an important question too. I mean, how do you guys
13:55
look at it in terms of answering the will it
13:57
ever make us come back? Question?
14:00
Speaker 6: And it's a very valid question, and economists and researchers
14:04
that we talk to for this study also say that,
14:09
you know, some of them are skeptical whether inflation will
14:12
ever slow enough to the point that wages are able
14:16
to catch back up. I think what is important is
14:19
that as inflation flows and as the economy holds up,
14:23
wages are actually rising at a faster pace than inflation.
14:27
But it's just that totality that they're still trailing. So
14:31
I think while wages rise at that faster pace, it
14:35
is going to help Americans feel better. But it's of
14:38
course when you look at how much prices that everyday
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Americans are trying to afford. You know, we look at gasoline, groceries, housing,
14:46
you know, those components have risen even faster than the
14:50
overall rate of inflation. I think what is especially crucial,
14:54
and of course we're two days away from an expected
14:57
interest rate cut from the Federal Reserve for the first time.
15:01
What's especially important is that the Fed does get this right,
15:04
because if we were to face a recession, of course
15:07
inflation would probably slow, but so would wages as well,
15:11
because it's directly related to the bargaining powers that American
15:15
workers have in this labor market.
15:17
Speaker 2: Sarah, that is important, absolutely, Sarah. I mean one of
15:21
the areas too that you point out, and this is
15:23
where people can get lost in the averages. But obviously
15:27
not all demographics are the same here, right, Did you
15:30
guys notice any differences when looking at either certain sectors
15:34
of the economy or certain age demographics in terms of
15:36
keeping up or especially losing pace to inflation.
15:40
Speaker 6: We wanted to look at an industry perspective, and we
15:44
did find that there are some industries that have actually
15:46
beat inflation. We're thinking accommodations and food services, leisure and hospitality.
15:53
The reason is exactly kind of what we were talking
15:55
about before. Those workers had tremendous bargaining power coming out
16:00
of the post pandemic no recession where they lost jobs,
16:03
companies tried to bring them back in a hurry. There
16:06
was that mismatch between labor demand and labor supply, and
16:10
that ultimately helped push up wages. That wasn't really the
16:14
same for other industries. The other industries that were really
16:17
trailing inflation the most were education and then construction.
16:22
Speaker 2: That's Sarah Foster from Bancrea joining us today talk about
16:25
how Americans wages are keeping pace or losing ground to
16:30
inflation over the last few years. Sarah, thanks so much
16:32
for joining us.
16:32
Speaker 6: Appreciate it, grace to be here, Thanks for having me. Well.
16:35
Speaker 3: Street Journal piece today titled why a FED rate cut
16:38
won't solve the housing wealth gap, Well, it's because you
16:42
can't use a rate cut to go back in time
16:44
and buy before prices went up. Insurance is continuing to
16:48
go up in costs, property taxes are continuing to go up,
16:51
and as such, if you're on the outside looking in
16:53
for housing, you generally feel like you're kind of screwed
16:56
and have no chance.
16:57
Speaker 2: Well, and furthermore, nothing about a rate cut specifically incentivizes
17:02
homebuilders to build more homes nor is it anywhere within
17:06
the FEDS mandate.
17:09
Speaker 3: It's not to make housing affordable. It's not their problem,
17:13
and it shouldn't be.
17:15
Speaker 2: You don't want the FED being the ones that makes
17:18
housing more affordable and solves the wealth gap. In fact,
17:21
I'll take it further, You don't want the federal reserves
17:24
solving the wealth gap at all. Rather, it's any area
17:27
of the wealth gap. You want them to do two things,
17:31
keep this in mind, only two. Keep unemployment low and
17:36
attempt to moderate price increases.
17:38
Speaker 3: The other thing that I got to say, it continues
17:40
to bother me when interest.
17:41
Speaker 2: Rates are low.
17:43
Speaker 3: Hey, low interest rates punish people who aren't homeowners, like
17:46
it makes it impossible for them to get into the
17:48
home ownership market. Well, okay, we raised interest rates. High
17:53
interest rates make it impossible for people to get into
17:55
It can't be both, apparently, can you have to pick
17:59
one and stay with it.
18:02
Speaker 2: High and low interest rates can't be the problem, Or
18:05
if they are, maybe the problem is in interest rates.
18:08
Maybe the problem is the overall amount of housing that
18:10
we have. Yeah, lower interest rates in my mind, the
18:15
only group that I can think that that definitively might
18:18
help risk av Yeah, I mean in the housing market specifically,
18:23
it's definitively Okay. If I have an outstanding mortgage at
18:26
like seven and a half percent and rates go lower, okay,
18:29
I know I can refinance my mortgage. I'm less confident
18:32
by the way that lower rates are going to lead
18:35
new home buyers to get more affordable deals on housing,
18:37
because competition is gonna keep back up for that housing.
18:40
Everybody's gonna want a motgage again, you're gonna have. I'm
18:43
not convinced you will see more inventory. I'm pretty convinced
18:46
you will see new buyers.
18:47
Speaker 3: I think you'll see more inventory, but you buy like
18:50
I think what you end up with is how the
18:52
housing market is stagnated this year when you know rates
18:55
were high and more inventory came on, it'll help to
18:57
clear that inventory, but not more affordable prices. It doesn't
19:03
do anything on that, and it's not supposed to, by
19:05
the way. Quick break here, when we come back, we
19:08
have the trivia answer, and then we're talking Apple's hot
19:12
new product.
19:21
Speaker 1: Bringing the latest financial news straight to your radio every day.
19:26
It's the Financial Exchange on the Financial Exchange Radio Network.
19:31
Speaker 2: Mike, are you a fan of Apple's AirPods? No, I
19:34
don't have them. I don't either, Tucker, do you have them?
19:37
Speaker 4: I received them as a wedding gift from you know,
19:41
the being a grooms and.
19:43
Speaker 2: Crows and gifts simply yes, what it's done. Yes? And
19:45
I barely use them.
19:47
Speaker 3: He has friends, whereas wet I barely use it.
19:53
Speaker 2: You don't you? How come?
19:55
Speaker 1: I don't know?
19:56
Speaker 4: I have no need to you.
19:57
Speaker 2: I barely on the phone. Can't you the music? Yeah?
20:01
Speaker 4: I don't. I just I have a speaker in my
20:05
living room and I listen to that.
20:07
Speaker 2: What about when you're working out?
20:09
Speaker 1: I don't.
20:11
Speaker 2: Okay, I guess we've covered all the use cases now.
20:14
Speaker 3: In any case, Apple's AirPods Pro two, with an update
20:20
that is being rolled out this fall, is being turned
20:24
into a real legitimate hearing aid. And this is very
20:30
cool for a couple of different reasons, the first being
20:33
that it obviously makes hearing aids accessible to just a
20:37
wide number of people who might know they need hearing
20:40
aids but might not have gotten off the couch to
20:42
do anything about it yet, and might own this product.
20:45
Speaker 2: Because it's specifically designed for mild hearing loss, you have
20:49
a severe hearing loss, You're you're not going to be
20:53
all that impressed with these products, is my guess.
20:55
Speaker 3: So there might already be just a ton of people
20:57
with these in hand that can use them to be like, oh,
20:59
like does make you know my hearing much better? Maybe
21:02
I should continue to use this. But it also is,
21:06
as we've seen from Apple, this is one of those
21:08
use cases that I think might actually drive marginal sales
21:11
in some cases with the caveat these. I looked at
21:17
pictures of these just because I was curious, like what
21:19
they look like and everything. It looks like you have
21:24
earbuds in when you have these in, because you have
21:27
earbuds in when you have these.
21:29
Speaker 2: Yeah, they're not hidden like a like some higher end
21:32
hearing aids.
21:33
Speaker 3: So a couple of things. If you see someone walking
21:37
around with air pods in, isn't your assumption that they're
21:40
listening to something else and not available to be talked to.
21:44
Speaker 2: I think that's starting to change, is it. I think
21:47
so because of these products, which you know have been right.
21:50
They have all these different modes right where you can
21:52
do transparency mode where you can actually hear other conversations,
21:56
or you can you know, block all the noise out.
21:58
So I think it is becoming more common to have
22:00
a conversation with Yeah, your EarPods in, but yeah, that
22:05
would be a stopper for me. If somebody started talking
22:08
to me on the street that was wearing headphones, I
22:11
would assume they're talking to somebody on their phone. So
22:13
I do wonder about that.
22:14
Speaker 3: The other thing is, look, I think a lot of
22:17
people who do use hearing aids do want something with
22:19
as minimal as form factor as they can find, because
22:22
they don't want something that's drawing attention to it. Right,
22:25
this does somewhat potentially draw attention to it, but it's
22:29
also hey, it's a headphone, so it could just be
22:32
someone who's listening to headphones.
22:34
Speaker 2: Yeah, a few years ago, something changed in the hearing
22:39
aid space. I don't remember what it was. It might
22:41
have been Medicare rules around them, where they became suddenly
22:45
massively more affordable and could be produced by a lot
22:48
of new competitors. And so I know that already occurred,
22:52
but I do think, you know, especially by the way,
22:54
if Apple can get this approved as a true like
22:58
Medicare eligible medical device, that does open up a new
23:04
potential sales channel for them. Yeah.
23:06
Speaker 3: The big thing that happened it was back in twenty
23:08
twenty two, the FDA they announced that for people with
23:13
mild to moderate hearing loss, they don't need to get
23:15
a prescription and can buy right hearing aids directly from
23:18
stores or online vendors. And so it again you saw
23:22
the cost just absolutely collapse for the hearing aids that
23:27
fit that you know description, and so this potentially just
23:31
again add some additional accessibility here.
23:34
Speaker 2: I don't know how much it drives in sales, but
23:36
I could see this being a marginal sales driver for
23:39
this product for Apple at least. Yeah, I could too.
23:42
I'm putting it in by grandfather's perspective, has worn hearing
23:45
aids for a few decades, and you know, talk to
23:47
me about that when twenty twenty two yelled around. And
23:49
these days his hearing aids do a lot more. They
23:52
do connect to his phone. He listens to music on
23:54
them when exercising. He talks to people. When I call
23:57
him on the phone, he's talking to me through his
23:59
hearing aid. So yeah, I mean for someone like him,
24:02
where he's already had the product for a long time,
24:05
he's not going to go to an AirPod. But for
24:07
somebody that is experiencing it and might need something but
24:12
doesn't go quite that far. Yeah, I think it opens
24:15
something up.
24:16
Speaker 3: And again, this is only on the air Pods Pro two,
24:19
It's not on any other version that is currently out there.
24:23
Speaker 2: Chuck. Yes, next month we're hitting the road. We are.
24:27
We got some road trips planned. We have some road
24:29
trips planned. We are doing two live broadcasts of this show.
24:33
The Financial Exchange broadcast is going to be occurring in
24:36
October from the MGM in Springfield and the Marguerite Hotel
24:43
in Hyannas. Not at the same time. That'd be challenging.
24:46
That would be especially challenging for Tucker back here in
24:49
the studio trying to rerout all of it. But we're
24:51
doing a live broadcast of the Financial Exchange on October
24:54
eighth in Springfield at the MGM, and then following that,
24:58
we'll be doing a live broadcast on October twenty fourth
25:01
from the Margarita Vote Margaritaville Hotel and Resort on Hyannas.
25:06
We'll be following that up with a free live seminar
25:10
that Armstrong Advisory Group's doing after the Financial Exchange. Again,
25:15
October eighth and twenty fourth are the dates of the events,
25:18
but we'll be joined by Ed Lambert down on the
25:20
Cape where he'd be talking to us about the overall
25:23
political situation and heading into the election, and we'll be
25:26
covering a lot of that. Obviously, a lot of questions
25:28
being raised about tax policy coming out of the Harris campaign,
25:32
coming out of the Trump campaign, what might it look
25:35
like for tax rates and markets in the future. We'll
25:38
be covering that in a whole lot more, both during
25:40
the live broadcast as well as during the seminar following
25:43
the live broadcast. But once again we're doing one from Springfield.
25:47
That one's October eighth live broadcast of the Financial Exchange.
25:50
You can come on down see how we do it.
25:52
It's at the MGM Springfield October eighth, followed by the
25:55
Margarita Vote Margaritaville Hotel and Resort on Hyannas on October
26:01
twenty fourth. If you would like to sign up, space
26:04
is limited, so we do need you to sign up
26:05
ahead of time. You go to Armstrong Advisory dot com
26:09
slash events and you can sign up right there. You're
26:12
also welcome to call us and we can help you
26:13
register the phone number there for the Armstrong Advisory Group
26:16
is eight hundred three nine three four zero zero one.
26:19
But again Armstrong Advisory dot Com slash events to sign
26:23
up for our live broadcast of the Financial Exchange or
26:26
eight hundred three nine three four zero zero one.
26:30
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
26:33
registered investment advisor. Nothing in the ad or in any
26:35
Armstrong guide a specific financial, legal or tax advice. Consult
26:38
your own financial, tax, and estate planning advisors before making
26:41
any investment decisions. Armstrong make contact you to offer investment
26:44
advisory services.
26:46
Speaker 2: Mike, do you visit Indeed dot com very often?
26:48
Speaker 6: No?
26:49
Speaker 2: Tucker, what about you? No?
26:51
Speaker 3: No, I feel like I have no other options? Stay
26:56
there in any case? Yeah, weekly, every single day. Spara
27:00
to get out of here every single moment. I guess,
27:02
I guess. They put up a chart on Indeed in
27:05
their Career Advice section, and it divided your career into stages,
27:11
and the first stage of age twenty one to twenty
27:13
five was exploration that sounds exciting. By age forty five
27:18
to fifty five you hit late career, and by fifty
27:22
five to sixty five you hit decline. And naturally, all
27:26
of those who were working in their fifties and sixties
27:29
are like, yo, man, just getting started.
27:31
Speaker 2: Yeah, I'm cooking now, Like, let me keep going.
27:35
Speaker 3: And this reaches something, you know, kind of gets to
27:38
something that we've seen over the last fifteen years in particular,
27:41
which is, hey, there are more people that are continuing
27:44
to work into their fifty sixty, seventies and now eighties
27:47
yea than any other generation previously. And in some cases
27:51
that is because they have to, though that's diminished somewhat
27:54
since the Great Financial Crisis, and now you're seeing more
27:58
and more people working into their seventies and eighties because
28:03
they want to, and they're saying, no, like I enjoy
28:07
what I'm doing. I like to do this to you know,
28:09
keep myself sharp and not enter into the decline phase
28:12
of you know, my life and everything. So no, please
28:16
don't refer to me as being in the decline phase. Yeah,
28:18
I have a family member who's right there.
28:20
Speaker 2: You know, he's at the age where he's going to
28:23
be working while of required minimum distribution agent. That's a
28:27
far more common occurrence than it was a few years ago.
28:32
And you know, it has been reshaping the labor market
28:35
around the edges. I think that's definitely the case more
28:38
than it was, say, thirty years ago. It also, you know,
28:41
causing to question a whole bunch of their rules around
28:44
things like social Security, like required distributions and how all
28:47
these things work. Right, if we have a larger portion
28:49
of the population working into their seventies, some of these
28:52
things might need to be looked at and reformed even
28:54
further than they already have been.
28:56
Speaker 3: And I do love that they up a couple of
29:00
people that they reference here. First Eugene Fama, who is
29:03
a very famous economist who's literally had all kinds of
29:09
theories that have been published about markets. They reference him
29:12
as one of the people that they're talking about in
29:14
this and then Ian McKellen, who played Gandolf and Lord
29:18
of the Rings is another day reference. You might as
29:21
well just throw a Warren Buffett on the list, just
29:22
for I mean, there are also normal.
29:25
Speaker 2: Average Americans that work into the seventies.
29:27
Speaker 3: Yes, there are not all Knights, no, exactly like you.
29:34
You don't have to be someone of like that stature
29:37
and that you know, renown to continue to work into
29:40
your eighties. It's like, oh, well, Morgan Freeman, you know
29:42
it was like ninety six right now.
29:44
Speaker 2: That would narrow the label laborpool quite considerably if you
29:47
had to be knighted in order to work into your seventies.
29:50
Do either of you think you'll ever be knighted? Maybe
29:54
by one of my kids, No, like by the king
29:57
or Queen of England. No, I don't think so. Not
30:01
rolling it out, mostly though I don't spend much time there.
30:04
I don't think that matters. Yeah, well maybe it does
30:08
a little bit. That's the only reason. Like if I
30:11
if I just spent a few more holidays in the UK,
30:13
I'm sure.
30:13
Speaker 3: Can they do like an honorary nighting, like where you
30:15
get an honorary degree from a college.
30:17
Speaker 2: Isn't the whole thing? Is? Well, then what's the problem.
30:23
Speaker 3: I think they give you a sword and you have
30:25
to like swear to you know, be a nice But
30:28
they don't send you in to the Crusades, not yet.
30:33
Speaker 2: You never know. This is just how they like pull
30:36
you in, right ye? In any case, classic bait and switch.
30:41
Speaker 3: I thought it was getting just you know, a cool title,
30:43
and instead now I'm being deployed by.
30:46
Speaker 2: The UK somewhere. Let's take a quick break. When we return,
30:49
it's time for stack Roulette.
30:52
Speaker 1: The Financial Exchange Show. Podcast drops every day on Apple, Spotify,
30:56
and iHeartRadio. Hite that subscribe button, then leave us a
30:59
five star review. You're listening to the Financial Exchange Radio network.
31:05
Speaker 4: The Financial Exchange has built an incredible partnership with the
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31:42
Speaker 2: Mike, what do you have for me for stack Roulettes?
31:44
What would happen if TikTok loses its fight over the
31:48
law that is banning it in the United States? The
31:51
obvious answer would be that it would be banned, would
31:53
one would think, But the opening arguments are starting today
31:57
in US Court Appeals in d C on the congressional
32:02
ban of TikTok specifically, and whether or not, Yeah, that
32:07
circuit will overrule the law that Congress passed here, But
32:11
certainly I think the risk is higher than any time
32:13
previously when this was done via executive action. This was
32:16
in fact a law that passed by Congress to say, yeah,
32:20
this platform cannot continue to exist in its current format. Now,
32:26
potentially what would happen here if it did in fact
32:28
pass and the TikTok lost their appeal would be a sale,
32:33
although Chinese owner ByteDance has made very clear that they
32:37
don't want to sail, and furthermore, the government has said
32:39
that they're probably not going to allow a sale or
32:42
at least a sale of the algorithms that go along
32:47
with the TikTok app. So I don't know where this
32:50
is going to be. I don't know where anyone's going
32:52
to go with it. You could make a pretty compelling argument,
32:54
by the way, that with Congress writing the law in
32:58
the way that they did, which was specifcifically banning one
33:01
company rather than saying, hey, if if an app you know,
33:05
breaks these rules, then we are going to ban it.
33:07
Perhaps this will get overturned. I'm not sure, but yeah,
33:11
huge market for TikTok. Obviously, if we look at other
33:14
social media companies, the United States is consistently at the
33:17
top of that average revenue per user list, so your
33:21
TikTok would lose out on a massive income base here
33:26
as well. And it's already banned in India, so there
33:28
aren't a ton of other new markets that they would
33:30
be able to enter into replace this. Yeah, it's I
33:35
think it should be banned by the way. I don't
33:37
know if that came across. I hope that they lose
33:40
their appeal and this is no longer I've voiced my
33:43
concerns about the Chinese government having this level of tracking data.
33:48
Speaker 3: And if if byte Dance comes out and you know,
33:51
if they lose, then they're like, no, we're not going
33:53
to pursue a sale.
33:54
Speaker 2: Great.
33:54
Speaker 3: Well, then doesn't it ultimately become even more apparent that hey,
33:57
you just wanted access to the data because them didn't
34:00
matter to you. Of course, Yeah, right, Tucker. You've been
34:04
watching some football games the last.
34:06
Speaker 2: Couple I have had, you know, on DirecTV. No, god, no,
34:10
have you noticed anything about the games this year? Have
34:16
you not underwhelming?
34:17
Speaker 3: Have you noticed that they're boring. Yeah, a lot of
34:20
dogs are covering too well. I want to talk to
34:22
you a little bit about this, okay. Steve Palizzolo, formerly
34:25
of Pro Football Focus, has some data on this that
34:29
through the first two weeks, and granted Monday Night hasn't
34:31
happened here yet, but these are the number of passing
34:34
touchdowns through the first two weeks in the NFL one
34:37
hundred and five and twenty nineteen, one hundred and ten
34:39
and twenty twenty, one hundred and ten, twenty twenty two,
34:42
one hundred and five and twenty twenty three. I'm sorry,
34:45
I skipped a year eighty six and twenty twenty three,
34:49
sixty six in twenty twenty four. Passing touchdowns down forty
34:53
percent over the last two years now, and it's resulting
34:58
in a whole bunch of people. Again I don't know about,
35:00
but a lot of my friends, who you know, enjoy
35:03
gambling on sports or you know, fantasy football and this
35:06
and that, they absolutely despise what is going on right
35:11
now because they're saying, look, this is boring. I'm like,
35:14
I'm getting crushed by this and that and everything and
35:16
are generally not enjoying it. And what I'm wondering about
35:20
on this is before sports gambling was legalized, it was Hey,
35:25
I'm watching the games to watch the games, and I'm
35:27
watching the games. But if people start to have bad
35:30
experiences gambling on your sport, does that push them away
35:34
from it in any way, shape or form, or is
35:36
that not the case.
35:37
Speaker 4: I had a buddy yesterday who you know, I feel
35:40
like collectively people got smoked yesterday on the gambling front.
35:43
But one of my buddies was just like, Okay, I
35:45
get I'm pushing away now like NFL is too hard to.
35:48
Speaker 2: Can't do it, But right now, yeah, I would think not.
35:51
I would eventually imagine that the odds change and you
35:56
have new people playing the same different bets this time. Yeah,
35:59
I don't know what the uh.
36:01
Speaker 3: I don't have an answer on it, but I just
36:02
wonder about it because for years we've you know, speculated,
36:06
all is this gonna be what you know hurts the
36:08
NFL is and nothing, nothing like nothing continues to it
36:12
doesn't matter. It's the only place that you can consistently
36:15
get tens of millions of people watching each weekend and
36:18
then hundreds of millions for the Super Bowl.
36:19
Speaker 2: Even if I have to change the app on which
36:22
I watched the program. Every single time I watch.
36:24
Speaker 3: It, it doesn't matter like it's it is kind of
36:27
impervious to everything right now. I just wonder if when
36:32
people start losing money on it because of this, does
36:34
that change it. But again, I think it kind.
36:37
Speaker 2: Of has to prove that it would. Yeah, facts aren't
36:39
in evidence yet.
36:40
Speaker 3: Taking Oligan market, it's still mixed right now. The Dow
36:42
is up one hundred and forty one points, SMPS down nine,
36:45
nasdack down one fifty two.
36:47
Speaker 2: We're done for the day. See you tomorrow.