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Is Netflix spending its way into big trouble? · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada
1:06
Speaker 1: and Paul Lane.
1:09
Speaker 2: Chuck Paul Tucker with you, and as we take a
1:12
Speaker 2: look at what's going on in markets today, we've got
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Speaker 2: a little bit of a rebound happening after yesterday's selloff,
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Speaker 2: SP five hundred and seventy one points about one percent,
1:25
Speaker 2: Dow Jones Industrial Average up four hundred and fifty seven points,
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Speaker 2: also about one percent, and then as that can positive,
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Speaker 2: two hundred and eighty two points are about one and
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Speaker 2: a quarter percent, so not reclaiming all of yesterday's losses,
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Speaker 2: but about halfway there. On your major indices, ten year
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Speaker 2: Treasury kind of in the same boat, down two point
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Speaker 2: four basis points to four point two seven one percent.
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Speaker 2: I will note that on yesterday's move up in treasuries, UH,
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Speaker 2: the average interest rate on a thirty year fixed rate
1:53
Speaker 2: mortgage rose by point one four percent to six point
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Speaker 2: to one percent, effectively putting it back to where it
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Speaker 2: was at the start of the year before President Trump's
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Speaker 2: announcement that he was instructing a couple of the GSEs
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Speaker 2: Fannie May and Freddie Mack, to purchase a couple hundred
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Speaker 2: billion dollars in mortgage backed securities. So you basically haven't
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Speaker 2: seen aside from if you were lucky enough to be
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Speaker 2: able to lock in a rate, you know, last week
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Speaker 2: basically you had some lower rates. But other than that,
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Speaker 2: basically where we've been for the last month or so,
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Speaker 2: dating back to just before Christmas and taking a look
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Speaker 2: at other markets, dollar index not really showing much of
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Speaker 2: a rebound here, only up point oh two percent to
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Speaker 2: ninety eight point four to six. Gold continues its upward march,
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Speaker 2: up ninety dollars and thirty cents to forty eight fifty
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Speaker 2: five and ninety cents. And we've got crude oil West
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Speaker 2: Texts Texas Intermediate up nine cents a barrel now to
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Speaker 2: sixty dollars and forty five cents.
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Speaker 3: Uh.
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Speaker 2: The other move that's been happening in energy markets over
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Speaker 2: the last week has been what has been going on
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Speaker 2: in natgas with the cold that has been spreading throughout
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Speaker 2: the continental forty eight states. That gas price is today
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Speaker 2: up twenty percent, and since you know, a week ago,
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Speaker 2: going back to the fifteenth, net gas price is up
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Speaker 2: almost fifty percent. This anticipation of some additional cold that
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Speaker 2: is going to be coming through much of the country.
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Speaker 2: And by the way, don't know if any of you
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Speaker 2: all listening. I've been watching the weather forecast for the
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Speaker 2: eastern part of the United States, but it looks like
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Speaker 2: basically the southeast is gonna get you know, an inch
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Speaker 2: or two of ice. If you're in the mountains in
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Speaker 2: North Carolina, I've seen projections of up to like eighteen
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Speaker 2: inches of snow, which for North Carolina is insane. And
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Speaker 2: then now into the you know, Pennsylvania, New York, and
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Speaker 2: New England region, you've got projections for north of a
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Speaker 2: foot of snow as well. Again, there's still about three
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Speaker 2: days four days off, so this can evolve as we
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Speaker 2: get closer and the models get a little bit more accurate,
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Speaker 2: but to this point, it sure looks like a decent
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Speaker 2: chunk of the country is going to be inoperable for
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Speaker 2: at least portions of early next week. Again, our show
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Speaker 2: is broadcast out of the New England region. We're pretty
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Speaker 2: good at getting ready of snow. They just don't have
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Speaker 2: many plows in Atlanta as an example, and so that's
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Speaker 2: why whenever Atlanta gets you know, a tenth of an
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Speaker 2: inch of ice, you end up with you know, eighteen
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Speaker 2: hour traffic jams and it just gets dodgy. It looks
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Speaker 2: like we may be heading towards some of this. The
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Speaker 2: track does appear to be moving north a bit, so
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Speaker 2: maybe Atlanta gets spared on this one and gets some
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Speaker 2: rain instead. But either way could be dodgy, and this
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Speaker 2: could be something that impacts travel and overall economic activity
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Speaker 2: in the last week of January, So do keep that
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Speaker 2: in mind when we get next month's retail sales report.
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Speaker 2: You could have some pretty big impacts because of this
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Speaker 2: storm and this cold coming through the cold. Also, by
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Speaker 2: the way, for any Midwest oil refineries, they do have
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Speaker 2: to end up shutting down when it gets too cold,
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Speaker 2: so you might see some movement on that front. As
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Speaker 2: far as gas prices in the Midwest as well, that
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Speaker 2: might not be able to be fully supplied by those
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Speaker 2: refineries instead need to be pulling in from other parts
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Speaker 2: of the country. So again, the weather can you know,
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Speaker 2: break some havoc on things over the short term, and
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Speaker 2: it looks like we're in for one of those in
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Speaker 2: uh this weekend.
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Speaker 4: In little little Wednesday weather with Chuck Zada from the Exchange.
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Speaker 5: Yeah, you know, you know it all.
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Speaker 2: I don't not you know, mister meteorologists, but I've dabbled every.
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Speaker 5: Now and then in the h the arts of the cloud.
5:51
Speaker 5: Who hasn't you know?
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Speaker 2: It's uh, it's I got buddies who are like commodity
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Speaker 2: traders who are into this stuff, so uh, you know,
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Speaker 2: they get all excited about it, and I'm like, oh yeah,
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Speaker 2: Like tell me more about like the bomb cyclone, like
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Speaker 2: you know, what kind of bombs are they?
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Speaker 5: And they're like, no, that's not what it is.
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Speaker 2: I'm like, oh, okay, But in any case, this is
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Speaker 2: what's going on weatherwise, other news, other things, top story today.
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Speaker 2: Clearly you've got some tension in Davos over Greenland that
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Speaker 2: was you know, present over the last couple of days.
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Speaker 2: And I still think, you know, we're gonna have to
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Speaker 2: see how this evolves in terms of actual actions by
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Speaker 2: a number of different parties.
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Speaker 5: I'm not one for, really.
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Speaker 2: You know, paying too close attention to what someone is
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Speaker 2: saying with their words, simply because you can say one
6:36
Speaker 2: thing and then do something completely different. So I tend
6:39
Speaker 2: to take the approach, and I think it's served most
6:41
Speaker 2: people well over the last year or so. Hey, don't
6:44
Speaker 2: worry too much about what's being said. Let's look at
6:46
Speaker 2: what actually ends up being implemented and done, and you
6:49
Speaker 2: can get a lot of worry off your plate in
6:52
Speaker 2: doing so, let the market do the worrying for you.
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Speaker 5: So we'll see how this evolves.
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Speaker 2: But obviously that is, you know, a major story that
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Speaker 2: will continue to track here. Netflix reported earnings after the
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Speaker 2: bell yesterday.
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Speaker 5: What do we see from them.
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Speaker 4: Paul check The stock is trading down about four percent today,
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Speaker 4: and largely it's not because of anything on the revenue
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Speaker 4: side of things. The revenue numbers came in just fine.
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Speaker 4: I believe it was twelve billion dollars for the Q
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Speaker 4: four number four revenue. But really the focus is spending
7:22
Speaker 4: heading into twenty twenty six. Obviously, what's been covered extensively
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Speaker 4: by US and other affiliates out there is the constant
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Speaker 4: battle that they've been in with Paramount over acquiring Warner Brothers.
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Speaker 4: As of yesterday, Netflix had upped their offer to purchase
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Speaker 4: streaming and studio businesses of Warner Brothers to twenty seven
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Speaker 4: dollars and seventy five cents a share to all as
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Speaker 4: an all cash deal rather than a mix of stock
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Speaker 4: and cash. The stock for Netflix has been down about
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Speaker 4: thirty percent over the last three months, so that complicated
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Speaker 4: things a little bit. Paramount has been sitting at thirty
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Speaker 4: dollars to share. That vote on the deal for Warner
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Speaker 4: Brothers shareholders is supposed to be in April. But really,
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Speaker 4: in terms of what you're seeing from Netflix from their
8:07
Speaker 4: their quarterly numbers here, they did take a little bit
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Speaker 4: of a hit for their their future profitability. They had
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Speaker 4: spent about eighteen billion dollars on programming last year. They
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Speaker 4: saw about eight percent subscriber growth up to three hundred
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Speaker 4: and twenty five million subscribers. But going into to this year,
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Speaker 4: they're going to need to spend more and more. I mean,
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Speaker 4: part of it is going to be the cost of
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Speaker 4: closing this deal, which they estimate that's two hundred and
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Speaker 4: seventy five million to try and close the deal with
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Speaker 4: Warner Brothers. But in general, the earnings per share fell
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Speaker 4: short of what Wall Street had forecast. And it's an
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Speaker 4: interesting year for Netflix. They have dominated the streaming space,
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Speaker 4: that's for sure, compared to its competitors, and they are
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Speaker 4: continuing to try and make the strategic acquisition with Warner
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Speaker 4: Brothers to delve into other areas. I mean, right now, Chuck,
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Speaker 4: their real lover to pull on increasing revenue is pretty simple.
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Speaker 4: I mean, yes, they are growing subscriber growth to three
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Speaker 4: hundred and twenty five million. But at some point you
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Speaker 4: reach kind of a point of saturation or there's only
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Speaker 4: so much subscriber growth.
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Speaker 5: You can drive.
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Speaker 4: The other way you got to pull it is just
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Speaker 4: increase prices, and it seems like they are poised to
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Speaker 4: do that heading into twenty twenty six with the Warner
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Speaker 4: Brothers acquisition. That would allow for them to take a
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Speaker 4: huge library of content and new material to try and
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Speaker 4: jump into other products, video games, experiences, and consumer products
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Speaker 4: in general. So interesting year ahead for Netflix.
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Speaker 5: And Netflix at this point is.
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Speaker 2: I think you can call them what they are, which
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Speaker 2: is a mature company whose explosive growth is likely behind them.
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Speaker 2: But as you noted, they've got pricing power and that's
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Speaker 2: going to be something that I think they seek to
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Speaker 2: exploit in the coming years in order to grow from there.
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Speaker 2: I think that's kind of where we're where we're heading
9:58
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12:10
Speaker 2: United reported earnings after the bell yesterday. The stock is
12:15
Speaker 2: up a little bit less than one percent today, which
12:18
Speaker 2: is actually worse than what the market is up. So
12:21
Speaker 2: my read is that the quarter was fine, but there's
12:24
Speaker 2: nothing really to write home about.
12:26
Speaker 5: There.
12:26
Speaker 4: Your thoughts, Paul, Yeah, I thought it was going to
12:29
Speaker 4: tick up a little bit higher because they, similarly to
12:32
Speaker 4: what we saw with Delta, reported a pretty significant increase
12:36
Speaker 4: in revenue from premium offerings. That seems to be the
12:39
Speaker 4: story here, Chuck, for Delta United is that these first
12:42
Speaker 4: class or business seats are really the drivers of revenue
12:47
Speaker 4: growth for United and Delta. And then you have even
12:50
Speaker 4: some of the cheaper airlines trying to jump into this space.
12:54
Speaker 4: With Spirit going through its second round of bankruptcy. But
12:57
Speaker 4: it just came across my desk here in the Wall
13:00
Speaker 4: Street jenneral piece that they're now going to offer first
13:02
Speaker 4: class seats, which is.
13:04
Speaker 5: News to me there.
13:05
Speaker 4: But ultimately, in terms of the stuff that we're seeing
13:09
Speaker 4: here from United, while they did see increase on the
13:12
Speaker 4: cabin revenue for the premium segment, the overall hit that
13:17
Speaker 4: they took from the government shutdown that was about two
13:19
Speaker 4: hundred and fifty million, and just perhaps some tepid growth
13:22
Speaker 4: heading into twenty twenty six, just not enough to excite investors.
13:27
Speaker 4: But overall, if you look at the numbers, not a
13:29
Speaker 4: bad quarter for them at all.
13:31
Speaker 2: No, and kind of as you noted what we've been
13:34
Speaker 2: seeing from other airlines as far as you know that
13:38
Speaker 2: premium cabin being the driving force behind the growth that
13:44
Speaker 2: they are seeing. Piece in Bloomberg opinion, Wall Street's bounty
13:49
Speaker 2: doesn't extend to the job market. And basically what you
13:55
Speaker 2: are seeing here is look financials of reported earnings.
13:58
Speaker 5: They've been fine.
13:59
Speaker 2: Banks have gotten punished because of the earnings just because
14:01
Speaker 2: they haven't been as rosy as people had hoped for.
14:04
Speaker 2: But banks are also saying, yeah, guys, even though our
14:07
Speaker 2: earnings are good, we're not really hiring here and at
14:12
Speaker 2: least on a net basis. And so ultimately it's kind
14:17
Speaker 2: of this story that we've had over the last six
14:20
Speaker 2: to eight months, which is that earnings growth has been
14:23
Speaker 2: powering stocks, but that same earnings growth is not translating
14:28
Speaker 2: into companies being willing to increase hiring in any meaningful way,
14:35
Speaker 2: if at all.
14:36
Speaker 4: That's the story of the job market really over the
14:38
Speaker 4: course of the last twelve months plus or so, chuck
14:41
Speaker 4: in it. This one is highlighting specifically the financial sector,
14:45
Speaker 4: where there was ten six hundred workers that were taken
14:50
Speaker 4: out of the sector the worse since twenty sixteen. A
14:52
Speaker 4: lot of that was from Wells Fargo. They've had twenty
14:55
Speaker 4: two quarters of consecutive cuts as they're trying to reshape
14:58
Speaker 4: the company. So that was the big in there. But
15:00
Speaker 4: ultimately you're seeing a tremendous amount of activity in terms
15:04
Speaker 4: of deal making and potential IPOs heading into this year
15:07
Speaker 4: for the financial sector's business financial services sector, and it
15:11
Speaker 4: seems like earnings and profitability, like you mentioned, all those
15:14
Speaker 4: things are growing quite well, but there is this consistent
15:17
Speaker 4: scrutiny and bank of America has been sitting at about
15:19
Speaker 4: two hundred and thirteen thousand headcount for two or three
15:23
Speaker 4: years now, where they are trying to assess whether they
15:26
Speaker 4: need to replace people as they leave. And this is
15:29
Speaker 4: a blanket statement. It feels like for a lot of
15:32
Speaker 4: different industries out there, do we need to replace this
15:35
Speaker 4: person is something that is in tremendous focus. Is some
15:38
Speaker 4: of this burnout from the post COVID hiring boost and
15:42
Speaker 4: just companies reshaping their workforst there or is it, you know,
15:45
Speaker 4: a larger sign.
15:47
Speaker 2: It's probably a little bit of both, you know, because
15:50
Speaker 2: because companies during that twenty one to twenty early twenty
15:54
Speaker 2: the twenty twenty one through like early twenty three period,
15:58
Speaker 2: they were just hiring everyone they could, right because they
16:00
Speaker 2: were like they're seeing massive increases in sales. They're like,
16:05
Speaker 2: we just need all hands on deck. We got to
16:06
Speaker 2: bring everyone in.
16:08
Speaker 5: And part of.
16:09
Speaker 2: What happens when you do that is, look, you've got
16:11
Speaker 2: to pay top dollar for those people. So I think
16:13
Speaker 2: part of it is, hey, if if we had to
16:17
Speaker 2: bring someone on for like one hundred and fifty percent
16:19
Speaker 2: of the normal salary that we pay during that time,
16:23
Speaker 2: can we find a way like this is how I
16:25
Speaker 2: think a lot of these companies are thinking, can we
16:28
Speaker 2: find a way to make life kind of uncomfortable for
16:31
Speaker 2: them so they'll leave, and then we can bring someone
16:34
Speaker 2: back into.
16:34
Speaker 5: A more normal salary.
16:36
Speaker 2: You know, it's not a net change in headcount, but
16:40
Speaker 2: it might be a net reduction in overall compensation or you.
16:44
Speaker 4: Know, come into the office five days a week. We've
16:46
Speaker 4: seen we've seen a lot of that sort of this.
16:47
Speaker 5: That's what I'm saying, make life uncomfortable.
16:49
Speaker 2: So it's like, Okay, you're gonna quit because you don't
16:52
Speaker 2: want to come back in five days a week, you know,
16:54
Speaker 2: like we we want to get you to move on.
16:56
Speaker 2: So I think there's that, and then some of it
16:58
Speaker 2: is also depending on the industry. Hey, sales growth is
17:02
Speaker 2: not uniform across all businesses, and so there's some you
17:07
Speaker 2: know reductions in some areas and hiring that's still going
17:10
Speaker 2: on in others that ultimately is just kind of netting
17:12
Speaker 2: out to overall flat hiring. Like that's that's just what
17:17
Speaker 2: it is right now. There's there's no big hiring impulse
17:21
Speaker 2: that is coming through. It's just okay, we're largely you know,
17:27
Speaker 2: replacing our workers and that's about it, and we'll have
17:30
Speaker 2: to see if there's any positive inflection that we get
17:34
Speaker 2: there over the next you know, three to four months.
17:36
Speaker 2: I think that'll be the uh, the big thing to
17:39
Speaker 2: look at here. Let's see along these lines. CEO say
17:44
Speaker 2: AI is making work more efficient, employees tell a different story.
17:49
Speaker 2: And basically what you have here is that more than
17:53
Speaker 2: forty percent of executives are saying that the technology is
17:57
Speaker 2: saving them more than eight hours of work, but two
18:01
Speaker 2: thirds of non management staffers are saying that they saved
18:04
Speaker 2: less than two hours of work a week or no
18:06
Speaker 2: time at all. So there's clearly a difference of opinion
18:11
Speaker 2: in terms of whether AI is helping or not on
18:15
Speaker 2: this stuff.
18:16
Speaker 4: At this point, this is a story really for twenty
18:18
Speaker 4: twenty six is we've seen these tremendous increases and valuations
18:22
Speaker 4: of these big companies, but we need to try and
18:24
Speaker 4: see more of a material impact of artificial intelligence on
18:28
Speaker 4: businesses with productivity and revenue growth. And there are some
18:32
Speaker 4: stories that I could moonlight to say that that is
18:35
Speaker 4: the case, but I think on a broad basis, because
18:38
Speaker 4: the technology is in its infancy, the adoption across all
18:41
Speaker 4: different sections of business, it's taking a while, and you
18:45
Speaker 4: just have different stories, Chuck, at least for me personally,
18:47
Speaker 4: that make you feel different ways. Some things I hear
18:49
Speaker 4: about that are tremendous and really have a lot of optimism,
18:53
Speaker 4: and I still do from a longer term perspective, but
18:55
Speaker 4: that near term is always is cloudy to me. Sometimes
18:59
Speaker 4: I use it personally and sort of say, geez, this
19:02
Speaker 4: isn't really doing as much as I thought it would
19:04
Speaker 4: be doing for me on a business day to day basis.
19:07
Speaker 2: No sometimes and also it's it's hard to tell sometimes
19:11
Speaker 2: what's the problem with the technology and what's the problem
19:13
Speaker 2: with how we're using it, because you have to like
19:15
Speaker 2: train yourself also in new ways to approach it. It's
19:18
Speaker 2: not a search engine in the same way it's not
19:20
Speaker 2: you know, like if you tried to use a screwdriver
19:23
Speaker 2: to hammer in a.
19:24
Speaker 5: Nail, you'd be like, oh, this sucks, yep, But if
19:27
Speaker 5: you use it to put in screws, you're like, oh,
19:28
Speaker 5: this is pretty good.
19:29
Speaker 2: Actually like it. We'll try it again. Let's take a
19:32
Speaker 2: quick break. When we come back. We got the trivia
19:34
Speaker 2: answer in Wall Street Watch.
19:39
Speaker 1: Bringing the latest financial news straight to your radio. Every day.
19:44
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:49
Speaker 1: Time now for Wall Street. Watch a complete look at
19:53
Speaker 1: what's moving market so far today right here on the
19:56
Speaker 1: Financial Exchange Radio Network.
19:58
Speaker 3: Market's rebounding from yesterday is sell off as Walstreet reacts
20:01
Speaker 3: to President Trump's remarks at the World Economic Forum in
20:04
Speaker 3: Davos this morning, where Trump called for immediate negotiations to
20:08
Speaker 3: acquire Greenland and said he won't use.
20:11
Speaker 5: Force right now.
20:12
Speaker 3: The Dow is up nearly one percent or four hundred
20:15
Speaker 3: and forty nine points higher, SMP five hundred up about
20:18
Speaker 3: nine tenths of a percent or sixty one points higher.
20:21
Speaker 3: NASDAC up nearly one percent or two hundred and eighteen points.
20:25
Speaker 3: Ruster of two thousand is up one in a third percent.
20:28
Speaker 5: Ten.
20:29
Speaker 3: Your Treasure reeled down two basis points at four point
20:32
Speaker 3: two seven one percent, and crude oil mostly flat, dipping
20:36
Speaker 3: trading at sixty dollars and thirty three cents at barrel.
20:39
Speaker 3: Netflix falling over four percent after the streaming giant posted
20:42
Speaker 3: better than expected quarterly results. The company also counted a
20:46
Speaker 3: record three hundred and twenty five million global paid subscribers. However,
20:50
Speaker 3: concerns about rising costs for Netflix are weighing on the stock. Meanwhile,
20:54
Speaker 3: United Airline stock is up over two percent after the
20:58
Speaker 3: carrier said it expects earnings to jump this year, with
21:01
Speaker 3: its Price Your Seats and loyalty program outperforming standard ticket
21:05
Speaker 3: sales elsewhere. Craft Hind shares down over five percent following
21:09
Speaker 3: news that Berkshire Hathaway may soon sell some or all
21:13
Speaker 3: of its steak in the food maker, just months after
21:15
Speaker 3: the firm announced plans to split into two companies. And
21:20
Speaker 3: Johnson Johnson stock is down over one and a half
21:22
Speaker 3: percent after the pharmaceutical company posted stronger than expected financial
21:27
Speaker 3: forecast for this year, in addition two solid earnings for
21:31
Speaker 3: the previous quarter. I'm Tucker Silvan.
21:34
Speaker 5: That is Wall Street watching.
21:35
Speaker 3: In the previous segment, we asked you the trivia question
21:38
Speaker 3: which US president was the first to fly on a
21:40
Speaker 3: plane dubbed Air Force One. That would be Eisenhower. Chris
21:44
Speaker 3: from Walpole, Mass is our winner today taking on a
21:47
Speaker 3: Financial Looks Change Show t shirt Congress to Chris and
21:50
Speaker 3: we play trivia every day here on the Financial Looks
21:53
Speaker 3: Change See complete contest rules ad Financial Looks Change Show
21:56
Speaker 3: dot com.
21:57
Speaker 5: Paba. We got a piece in CMBC.
22:00
Speaker 2: It's actually from the Center for Retirement Research at Boston College,
22:03
Speaker 2: who consistently just puts out excellent research on retiree spending
22:08
Speaker 2: and financial planning topics like year in, year out. It's
22:11
Speaker 2: like we always just get fun stuff from them. And
22:14
Speaker 2: what they found here, I'll quote from the piece, more
22:17
Speaker 2: than eight to ten retiree households, eighty three percent face
22:20
Speaker 2: unplanned outlays in any given year. According to new research
22:24
Speaker 2: from the Center for Retirement Research at Boston College, among
22:27
Speaker 2: households that do experience unexpected expenses, the average annual amount
22:31
Speaker 2: spent across retirement is typically around six thousand dollars per year.
22:37
Speaker 2: Measured another way, the typical household will spend an amount
22:40
Speaker 2: equivalent to ten percent of its yearly income. Now, I
22:43
Speaker 2: do think it's important to contextualize this in that I
22:47
Speaker 2: think often what's like put in here as unexpected expenses.
22:51
Speaker 2: These are things that I think many retirees, because they've
22:54
Speaker 2: been you know, budgeting for you know, fifty years or so,
22:58
Speaker 2: they understand these things are gonna happen. Oh, hey, you had,
23:01
Speaker 2: you know, a flat tire, Okay, in order to get
23:03
Speaker 2: a replacement, that's going to be a couple hundred months Hey,
23:06
Speaker 2: you've got prescription costs that might be you know, a
23:09
Speaker 2: few hundred dollars. You know, you understand and expect that
23:12
Speaker 2: that you know may happen. So I think some of
23:15
Speaker 2: this falls into normal spending patterns anyways, but it does
23:19
Speaker 2: get the idea that, hey, you do need to plan
23:22
Speaker 2: that there might be some new things that happen that
23:24
Speaker 2: hit you in retirement that you're not used to. Maybe
23:27
Speaker 2: you haven't had any prescriptions for your whole life, and
23:30
Speaker 2: as your health changes and evolves, you start to have
23:33
Speaker 2: them in retirement, and that's a new thing that you
23:35
Speaker 2: need to budget for. So I think that this is
23:37
Speaker 2: kind of an interesting look at the realities of Hey,
23:42
Speaker 2: how does a budget evolve as you get into and
23:45
Speaker 2: go through retirement.
23:47
Speaker 5: Yeah, it's something that check.
23:48
Speaker 4: We spend a ton of time with our clients trying
23:51
Speaker 4: to create that foundation if someone's preparing for retirement, and
23:54
Speaker 4: even for those people who are in retirement, like you mentioned,
23:57
Speaker 4: the expenses change on a yearly basis. I can't tell
24:00
Speaker 4: you how many withdrawal requests I get for dental expenses
24:03
Speaker 4: unexpected ones there that seems to be a recurring theme
24:06
Speaker 4: that we see quite often. It's just that those come
24:09
Speaker 4: out of the blue and they're significant in nature in
24:11
Speaker 4: terms of how much the cost is. But that is
24:14
Speaker 4: so critical in terms of retirement success is understanding what
24:19
Speaker 4: your monthly budget looks like, but making sure that you're
24:21
Speaker 4: grouping in these one off charges because oftentimes when you
24:25
Speaker 4: meet with people, they'll quote you the number that is
24:27
Speaker 4: kind of their baseline expenses hey, food, cable, mortgage, et cetera.
24:33
Speaker 4: But oftentimes these types of things are missed, and so
24:37
Speaker 4: studying historical numbers of last twelve months or last six
24:41
Speaker 4: months of spending data can be a lot more useful
24:44
Speaker 4: to kind of encapsulate some of these one off expenses.
24:47
Speaker 4: It's an important part of planning, folks.
24:49
Speaker 2: If you're looking to get someone on the phone or
24:51
Speaker 2: meet someone in person to chat a little bit about
24:54
Speaker 2: your financial planning, maybe see if you can get your
24:57
Speaker 2: budget in line with where it needs to be in
24:59
Speaker 2: the new year. The Armstrong Advisory Group has offices all
25:03
Speaker 2: throughout the New England region and advisors that are happy
25:07
Speaker 2: to discuss your financial plan with you. Call eight hundred
25:11
Speaker 2: three nine three for zero zero one to speak with
25:14
Speaker 2: a member of our team. Again, it is a great
25:17
Speaker 2: time of year to kind of get started on improving
25:20
Speaker 2: your finances in the new year. And that number again
25:23
Speaker 2: is eight hundred three nine three for zero zero one.
25:27
Speaker 2: To speak to a member of the Armstrong Advisory Group.
25:30
Speaker 2: Whether it's about building a financial plan, improving a financial plan,
25:34
Speaker 2: or taking a look at investments to help coordinate them
25:37
Speaker 2: with your financial plan, these are all things that the
25:40
Speaker 2: Armstrong Advisory Group can help with. Again, that number is
25:43
Speaker 2: eight hundred three nine three for zero zero one.
25:47
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
25:50
Speaker 1: registered investment advisor. Nothing in the ad or in any
25:52
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
25:55
Speaker 1: your own financial tax into state planning advisors before making
25:58
Speaker 1: any investment decisions. Strong make contact you to offer investment
26:01
Speaker 1: advisory services.
26:03
Speaker 2: Great piece in the Wall Street Journal. I actually really
26:06
Speaker 2: enjoy this one. This January, Americans aren't just giving up alcohol,
26:10
Speaker 2: they're giving up buying anything at all. Few by social media,
26:13
Speaker 2: some consumers are starting the new year with a no
26:15
Speaker 2: by January where they are trying to eliminate purchases of
26:19
Speaker 2: anything non essential for the entire thirty one days of January.
26:24
Speaker 2: And I got to say, I've never done something quite
26:26
Speaker 2: like this. Like occasionally I do have a month where
26:28
Speaker 2: I'm like, yeah, I spent too much last month and
26:31
Speaker 2: I really need to you know, rope things in and
26:33
Speaker 2: and you know, recover from that a little bit.
26:36
Speaker 5: But I think that this is an.
26:39
Speaker 2: Interesting way just to get people to start being more
26:41
Speaker 2: conscious about their spending in terms of Look, it's every
26:46
Speaker 2: company out there right now has tried to make it
26:48
Speaker 2: ridiculously easy to buy stuff by reducing friction. Oh you know,
26:52
Speaker 2: just click to buy this on your phone and use
26:54
Speaker 2: Apple Pay and do this and do that, and it's
26:55
Speaker 2: it's faster and quicker and easier what I found. And
26:59
Speaker 2: I think, what a great you know, middle ground is
27:01
Speaker 2: if you can't if you can't commit to no by January.
27:05
Speaker 2: My little trick that I do is, look, if if
27:07
Speaker 2: I am buying something, and my threshold that I set
27:10
Speaker 2: is if it's over one hundred dollars, I do not
27:14
Speaker 2: buy it this second that I look at it, I
27:16
Speaker 2: force myself to sleep on it and come back to
27:18
Speaker 2: it the next day. And if I still really am like, no,
27:21
Speaker 2: I need to follow through on this, I'll buy it.
27:24
Speaker 2: But otherwise a lot of times I sit there and
27:25
Speaker 2: I'm like, no, you know what, I don't need to
27:28
Speaker 2: do that. I can wait and it'll be just fine.
27:31
Speaker 2: But I think the idea of, you know, consumers finding
27:34
Speaker 2: ways to be more thoughtful about spending, I think it's great.
27:37
Speaker 4: I agree with you I personally and probably a lot
27:40
Speaker 4: of people fall in this camp. You look at your
27:41
Speaker 4: credit card bill from the holiday season and had a
27:45
Speaker 4: similar conversation with who. I thought, like, you know, we
27:47
Speaker 4: really should try and rain some of this stuff in
27:50
Speaker 4: for January once you look at some of the expenses
27:53
Speaker 4: that you had for the kids and other people at
27:55
Speaker 4: the end of last year, and hopefully we can get
27:59
Speaker 4: on the same page. But it does seem like it's
28:01
Speaker 4: always a push and pull sort of effort. But I
28:05
Speaker 4: like to try and follow like the monthly credit card
28:07
Speaker 4: spend and just sort of see like, hey, what can
28:09
Speaker 4: we do to reduce the number from from last month?
28:12
Speaker 4: Like similar sort of approach to what are some ways
28:15
Speaker 4: that we can cut down that number to bring down
28:17
Speaker 4: the average. So I'm right with this this trend. I
28:21
Speaker 4: feel like January is a prime month coming off the
28:23
Speaker 4: holidays to scrutinize this kind of things.
28:25
Speaker 2: Take a quick break here when we return It's time
28:28
Speaker 2: for a little bit of stack roo left.
28:31
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28:38
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28:45
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29:04
Speaker 3: The Financial Exchange is incredibly proud to be a partner
29:07
Speaker 3: of the Disabled American Veterans Department of Massachusetts. Planning is
29:12
Speaker 3: well underway for the twenty twenty six DAV five K.
29:16
Speaker 3: The event sold out in record time last year, so
29:19
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29:23
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29:48
Speaker 5: Paul, what do you got for me? For stack Rue Lentz.
29:51
Speaker 4: Chuck Elon Musk is racing to take SpaceX public. This
29:55
Speaker 4: is a quite a bit of a reversal from what
29:58
Speaker 4: he had sort of a pine before about being a
30:01
Speaker 4: publicly traded company, really sort of regretting the all the
30:07
Speaker 4: entanglements that come with being a publicly traded company for Tessa.
30:11
Speaker 4: But he's sort of changed his tune and is now
30:13
Speaker 4: trying to get this IPO out in July of this year,
30:18
Speaker 4: according to the piece here in the Wall Street Journal,
30:21
Speaker 4: and it seems as if the catalyst for his enthusiasm
30:24
Speaker 4: and going to the public markets is this idea of
30:27
Speaker 4: building data centers for AI computing in space which which
30:33
Speaker 4: apparently SpaceX for years has been developing technology such as
30:38
Speaker 4: computing nodes that would be helpful for an AI Satelle
30:41
Speaker 4: satellite network according to form employees. But regardless, it will
30:45
Speaker 4: probably be the biggest IPO of the year if it
30:47
Speaker 4: is to occur this year. There's also some enthusiasm from
30:52
Speaker 4: us to try and help this bolster. It's his EXAI
30:56
Speaker 4: company and sort of to parlay these two together as
31:01
Speaker 4: the IPO market is looking a little bit more sort
31:05
Speaker 4: of a lot more exuberance for it this year. Anthropic
31:07
Speaker 4: is another one that's been mentioned out as coming public
31:10
Speaker 4: SpaceX and potentially open AI too being make for a
31:14
Speaker 4: huge year in terms of IPOs if this were all
31:16
Speaker 4: three word to participate.
31:18
Speaker 2: I'm curious just in general about the the the whole
31:24
Speaker 2: idea of data centers in space, and just because like
31:28
Speaker 2: I've heard it talked about by a number of people.
31:31
Speaker 5: It's it's not something where it's like just.
31:35
Speaker 2: You know, Elon Musk talking about this is like, this
31:37
Speaker 2: is something that I've I've heard a number of people
31:40
Speaker 2: discuss in terms of you know, hey, this is something
31:44
Speaker 2: that we think is you know, a legit development that
31:49
Speaker 2: we want to make happen. And I guess what I
31:52
Speaker 2: struggle with on this is I look at it and look,
31:58
Speaker 2: I don't know how heavy data centers are, Like I've
32:03
Speaker 2: never been like, gee, how many pounds do you think
32:06
Speaker 2: that building?
32:07
Speaker 5: Ways?
32:07
Speaker 2: Like it's not a normal conversation that you have. But
32:10
Speaker 2: what I do know is that when you talk about
32:12
Speaker 2: like the payloads that we can get into orbit, you're
32:17
Speaker 2: generally looking at payloads somewhere in the range of fifteen
32:24
Speaker 2: to thirty thousand pounds is what you can get into orbit.
32:28
Speaker 2: And it's at you know, pretty extensive, pretty expensive cost.
32:32
Speaker 2: And so I'm just trying to figure out, like how
32:35
Speaker 2: much data center can you launch into orbit? And furthermore,
32:40
Speaker 2: like you can't maintain it, you know, like let's say
32:45
Speaker 2: that something if something breaks in a data center on Earth,
32:50
Speaker 2: you send Billy over there. Hey, put a new microprocess
32:53
Speaker 2: in it. You got to get that taken care of.
32:55
Speaker 2: We're losing power. Okay, great, Like we'll get it done,
32:59
Speaker 2: no problem if something breaks up there in your data center.
33:05
Speaker 2: But you don't just have like a rocket sitting there
33:07
Speaker 2: like okay, like we're ready to go. You're not firing
33:09
Speaker 2: these things off every three hours. It's kind of a
33:12
Speaker 2: process to get everything in position so that you can
33:16
Speaker 2: do it right, let alone having the rocket availability.
33:19
Speaker 5: So I've got questions on that kind of stuff.
33:21
Speaker 2: But there are people way smarter than me that I'm
33:24
Speaker 2: sure looking at this and have figured out hey, because
33:27
Speaker 2: like the power thing isn't an issue because you can
33:29
Speaker 2: have you know, solar panels up there that you know,
33:31
Speaker 2: can get the sun without the atmospheric interference, you can
33:35
Speaker 2: get more power and it's cheaper and blah blah blah.
33:37
Speaker 2: Like I'm sure they've looked at this and tried to
33:39
Speaker 2: figure out the math.
33:40
Speaker 4: But the way piece is a valid concern because I
33:44
Speaker 4: think I had heard on some podcasts somewhere that you're
33:47
Speaker 4: talking about some of these server racks running like three
33:50
Speaker 4: thousand pounds for each rack, and like, if you just
33:52
Speaker 4: extrapolate to what you're talking about, you know, five or
33:55
Speaker 4: six server racks, when you're talking about data centers that
33:58
Speaker 4: are being built that are you know, several home depots long,
34:02
Speaker 4: it doesn't seem like that would really be of great
34:05
Speaker 4: benefit to be able even if you launch several of
34:08
Speaker 4: those satellites, Like how do you get to the same
34:11
Speaker 4: scale that a Northern Virginia data center does that is
34:15
Speaker 4: you know, ten hell depots long. I'm right with you
34:18
Speaker 4: on that, but I acknowledged that it is something a
34:22
Speaker 4: subject that is way above my pay grade in terms
34:25
Speaker 4: of space you know, acumen. But I love it. I
34:28
Speaker 4: love the idea of it. I think it's you know,
34:31
Speaker 4: fantastic and interesting. But it does seem like one of
34:34
Speaker 4: these things, you know, we're having trouble as it is
34:37
Speaker 4: getting AI to be you know, the transform of technology.
34:40
Speaker 4: I'm not saying that there's this huge issue, but that
34:43
Speaker 4: problem hasn't been solved, or maybe in twenty twenty six
34:46
Speaker 4: we make huge strides, but it seems like this is
34:48
Speaker 4: a far further leap to get these satellites into space
34:51
Speaker 4: to solve our AI data center issue. This immediately.
34:55
Speaker 2: If you could solve one problem on Earth by launching
34:59
Speaker 2: something into space, what problem do you want to solve?
35:01
Speaker 5: Paul, Wow, that.
35:05
Speaker 4: Is a great question. It's got to be the energy one.
35:11
Speaker 4: Harnessing the solar energy would be would be pretty helpful
35:15
Speaker 4: given the demand there. But do you put my brain
35:21
Speaker 4: in a pretzel?
35:21
Speaker 5: What would you do?
35:22
Speaker 4: You have an answer for this?
35:23
Speaker 5: No, I I don't. I'm trying to think of like, well,
35:26
Speaker 5: it's like food.
35:27
Speaker 4: I can't you know, immediately go to world hunger.
35:29
Speaker 5: But I'm like, how is that? Forth? And this and that?
35:33
Speaker 2: I think in a perfect world, and again like look
35:38
Speaker 2: to a certain extent like this is this is very
35:40
Speaker 2: dumb for a large number of reasons, which is why
35:42
Speaker 2: we don't do it. But one of the main holdups
35:45
Speaker 2: in trying to develop more nuclear power is no one
35:47
Speaker 2: wants to hold the waste, right, there are obvious reasons
35:50
Speaker 2: why you don't launch it into space because it can
35:53
Speaker 2: blow up anywhere along the way. And now instead of
35:56
Speaker 2: you know, hey, like you know, here's like a little
35:58
Speaker 2: bit of nuclear waste, now it's like there's a lot
36:00
Speaker 2: spread out over a big area.
36:02
Speaker 5: So you know that's kind of problematic.
36:03
Speaker 2: And this is before you even get into Okay, so
36:06
Speaker 2: you send it into space, and like what exactly happens
36:08
Speaker 2: to it?
36:09
Speaker 5: Like where does it go? Now?
36:10
Speaker 2: You're just like polluting space? Doesn't that just feel like
36:14
Speaker 2: morally or ethically bad or something? But is it really
36:16
Speaker 2: worse than just putting it under a mountain in Nevada?
36:18
Speaker 5: Probably not.
36:19
Speaker 2: Like ultimately you're gonna use the stuff to make fuel.
36:22
Speaker 2: It's just a matter of where you're sending it. So
36:26
Speaker 2: I don't know, Like that's kind of one place that my.
36:27
Speaker 5: My head goes.
36:30
Speaker 2: I personally think that again, just from you know, my
36:35
Speaker 2: own personal preference. I would love to have like commercial
36:39
Speaker 2: space flight more, you know, a lot cheaper and just
36:42
Speaker 2: open to more people because I'd love to go. I know, Tucker, Tucker,
36:45
Speaker 2: you're very anti space, yes.
36:46
Speaker 5: Yeah, Like what are we going to do up there?
36:50
Speaker 5: What are we going to do up there? You could
36:51
Speaker 5: play ping pong?
36:52
Speaker 3: Yeah, good luck getting that ball.
36:54
Speaker 5: Yeah it's over there, don't worry about it floats away
36:57
Speaker 5: into space. I don't know. So you're stuck. You got kick.
37:05
Speaker 5: So you're just talking about leisure travel, like, what are
37:08
Speaker 5: we gonna do? No, that's that's your Number one is energy.
37:11
Speaker 5: The Energy's the reason why Frank Sinatra wrote fly Me
37:14
Speaker 5: to the Moon. You know, yeah, he wanted to go
37:17
Speaker 5: to the moon.
37:18
Speaker 2: In any case, Taking a look at markets as we
37:20
Speaker 2: head towards the top of the hour, stocks retracing some
37:23
Speaker 2: of their games from today. Dow is now up three
37:26
Speaker 2: hundred and twenty six point s and p is up
37:28
Speaker 2: thirty three nasdak Can Posite up seventy one. So stocks
37:33
Speaker 2: that previously we're up around one percent for the day
37:35
Speaker 2: now up anywhere from about a quarter percent to two
37:37
Speaker 2: thirds of a percent as they try to hold onto
37:40
Speaker 2: their gains after yesterday's losses. So we'll see where this
37:45
Speaker 2: bounce goes. Tenure Treasury holding relatively flat, down one point
37:49
Speaker 2: two basis points to four point two eight three percent,
37:54
Speaker 2: so coming in just a little bit there, but overall
37:57
Speaker 2: We'll have to see if stocks can hold on to
38:00
Speaker 2: these gains over the course of the day. Clearly some
38:04
Speaker 2: buying appetite early in the morning. Is there enough to
38:08
Speaker 2: power through and continue things moving in the right direction? Well,
38:12
Speaker 2: I guess we'll all see tomorrow. Hope you all have
38:15
Speaker 2: a great rest of the day. We'll see you tomorrow
38:17
Speaker 2: on the Financial Exchange