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SpaceX Faces Its First Public Market Test · The Financial Exchange Show

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Speaker 1: Chuck Zada and Mike Armstraw.
1:09
Speaker 2: It's Chuck, Mike and Tucker with you. Hope you all
1:11
Speaker 2: had a great weekend. If you enjoy watching stocks go up,
1:15
Speaker 2: then today it's your kind of day. We got the
1:19
Speaker 2: Dow Jones Industrial Average up five hundred and twenty nine
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Speaker 2: points one percent. The sm P is up eighty three
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Speaker 2: points about one percent now as that can pose up
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Speaker 2: four hundred and thirty five points one point seven percent,
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Speaker 2: So a bunch of green on the board, which is
1:32
Speaker 2: always fun to see. Bond's getting some green as well.
1:36
Speaker 2: Yields dropping a bit today after a run up in
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Speaker 2: the second half of last week. Tenure Treasury back down
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Speaker 2: five point nine basis points to four point six eight
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Speaker 2: six percent. Still in an up trend, but uh, you know,
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Speaker 2: we'll see if this is the start of, you know,
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Speaker 2: kind of a reversal or just a temporary reprieve before
1:53
Speaker 2: yields continue to move up.
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Speaker 3: We'll see how things develop.
1:56
Speaker 2: Dollar Index down point two percent point oh two percent
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Speaker 2: to ninety six. Gold is off thirteen to fifty an ounce.
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Speaker 2: Interesting gold being down with yields being down. It's not
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Speaker 2: something you see every day, so we'll take note of that.
2:09
Speaker 2: But Gold's off thirteen to fifteen ounce crude oil on
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Speaker 2: the back of President Trump indicating that he's pausing potential
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Speaker 2: strikes to try to negotiate. This the ninth time that
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Speaker 2: we have seen something similar to that since.
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Speaker 3: Mid March nine.
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Speaker 2: Thank you very much, Principal Rooney. Always good to have
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Speaker 2: you on board. We've got crude oil off five dollars
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Speaker 2: and seven cents on West Texas Intermedia, down to seventy
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Speaker 2: nine to sixty. We'll see how it holds there again.
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Speaker 2: It did this last week and then rose again over
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Speaker 2: the course of the week. So we'll see how things
2:44
Speaker 2: in the Middle East evolve in the coming days and
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Speaker 2: whether there's anything that indicates a more lasting change than
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Speaker 2: what we've seen during previous piece attempts over the course
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Speaker 2: of the spring and summer.
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Speaker 4: We don't have quite as busy a calendar this week
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Speaker 4: as we did last, but there will. It is a
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Speaker 4: jobs we so that we'll have all those traditional reports. We're
3:02
Speaker 4: getting the JULT report tomorrow. We will have just see
3:06
Speaker 4: m manufacturing this morning. I did not yet get to ISM.
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Speaker 4: We'll have the jobs report Friday, weekly jobless claims.
3:12
Speaker 3: What do we get from ISM this morning?
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Speaker 2: At ten am, Tucker, can you get the steel drums
3:17
Speaker 2: queued up for me? Yep, I'm gonna need a little
3:20
Speaker 2: bit of steel drum action because the ism was.
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Speaker 3: Them was.
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Speaker 2: Yeah, it was fifty five six, hottest reading since twenty
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Speaker 2: twenty four, I believe, actually, I mean sorry twenty twenty two.
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Speaker 2: And new orders coming in, strong production coming in, well,
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Speaker 2: employment up, you have. You know, basically all good signs.
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Speaker 2: Prices paid remain really elevated, so it is the sense
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Speaker 2: that there could be some more inflation coming through the pipe.
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Speaker 2: But really good report and continues to point towards the
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Speaker 2: manufacturing sector not just being a short term re stocking item,
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Speaker 2: but potentially a shift that we're seeing there, so some
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Speaker 2: good news on that front. We will get earnings this
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Speaker 2: afternoon from Pallanteer. Tomorrow, the big story is SpaceX, which
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Speaker 2: will be covering shortly, but AMD will be reporting tomorrow
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Speaker 2: as well as Caterpillar and Merk.
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Speaker 3: Wednesday, before the bell, we.
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Speaker 4: Have Eli Lilly, the trillion dollar pharmaceutical company, reporting, as
4:23
Speaker 4: well as a few others. But the real highlights of
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Speaker 4: the week are SpaceX, AMD and Eli Lilly I think
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Speaker 4: are the big market movers in terms of earnings reports.
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Speaker 3: I had those on my list as well. Excellent.
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Speaker 2: Let's talk about SpaceX because it's their first earnings report
4:39
Speaker 2: as a publicly traded company tomorrow, and with that we
4:44
Speaker 2: also are starting to get into the expiration in the
4:48
Speaker 2: lock up period for employees. It's a it's a very
4:52
Speaker 2: kind of drawn out schedule that starts earlier than normal
4:56
Speaker 2: and then continues later than normal, probably to try to
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Speaker 2: just blunt the impact that that lockup schedule has on
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Speaker 2: the stock price.
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Speaker 4: A lockup schedule being you know, employees as well as
5:07
Speaker 4: pre IPO investors who were not allowed to sell their
5:10
Speaker 4: shares for a period of time. That that's very typical
5:13
Speaker 4: in an IPO elon Musk's own shares I believe are
5:17
Speaker 4: more than a twelve month lock up, as well as
5:19
Speaker 4: some other key executives and investors, but for many those
5:23
Speaker 4: lockups expiring shortly.
5:25
Speaker 2: So here's what we know about SpaceX's earnings. They're going
5:28
Speaker 2: to report earnings in three segments. Space Glad to hear It,
5:33
Speaker 2: Connectivity I think starlink and things like that, and AI.
5:38
Speaker 2: The Space business is, you know, obviously the one that
5:41
Speaker 2: we're all most familiar with. I think the one that
5:44
Speaker 2: is you know, again, when we look at this, probably
5:47
Speaker 2: you know, the driver of actual you know, revenue and
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Speaker 2: profit activity is probably the connectivity one and AI, based
5:55
Speaker 2: on the data that we saw from their you know,
5:58
Speaker 2: pre IPO paperwork, is spending a bunch of money and
6:01
Speaker 2: not really making any right now.
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Speaker 4: Yeah, they actually based on the fact that they're selling
6:07
Speaker 4: a whole bunch of their capacity that they might see
6:09
Speaker 4: a little bit of revenue coming from it. But yes,
6:11
Speaker 4: just like everybody else, they are hyper scaling the investment
6:13
Speaker 4: and not seeing much of a return on it. And
6:16
Speaker 4: you know, the author of this piece at least calling
6:19
Speaker 4: it wild. And I do think the earnings call going
6:22
Speaker 4: to be wild. And I do think he has a
6:23
Speaker 4: good summary for why. It's a one point four trillion
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Speaker 4: dollar company which was three trillion dollar company only three
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Speaker 4: weeks ago, valued at thirty five times estimated twenty twenty
6:32
Speaker 4: six sales, led by the world's richest human, Elon Musk.
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Speaker 3: So yeah, I think I think a lot of this.
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Speaker 4: Will be a little bit wild. It is the first
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Speaker 4: ever earnings report for this company. The stock what was
6:45
Speaker 4: the first trade at one fifty uh in that ballpark
6:49
Speaker 4: up to two twenty five got up to two twenty
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Speaker 4: five at one point is currently trading at one hundred
6:54
Speaker 4: and eleven dollars per share. Hence the you know, one
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Speaker 4: point four versus three trillion dollar valuation that we're talking
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Speaker 4: about here. And given the way that any other company
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Speaker 4: that's been hyper spending on AI, or frankly even just
7:09
Speaker 4: growth companies that aren't even spending on AI have been
7:12
Speaker 4: treated recently in markets, I think Apple I do expect
7:15
Speaker 4: that the the the price reaction could be pretty severe here.
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Speaker 2: Yeah, it's gonna be just interesting to see how this
7:21
Speaker 2: thing actually trades once earnings start coming in on a
7:25
Speaker 2: regular basis for them, Obviously, there's a ton of hype
7:28
Speaker 2: around them. That hype can either be fulfilled or not.
7:32
Speaker 2: I'm not telling you anything that you don't know. Look,
7:34
Speaker 2: Elon Musk's companies have a history of trading above what
7:38
Speaker 2: people think is you know, anything resembling a fundamental valuation.
7:42
Speaker 3: So I'm not.
7:43
Speaker 2: Gonna be one of those people that sits here and
7:45
Speaker 2: is like, well, it's trading blank times you know this,
7:49
Speaker 2: and that's what they're That's what his companies do. Yeah,
7:54
Speaker 2: and at some point pretty standard.
7:59
Speaker 3: At some point.
8:00
Speaker 2: Point, again, it might not be for ten years, twenty years. However,
8:03
Speaker 2: long Elon's not going to be able to run these
8:06
Speaker 2: companies anymore, and then we'll see, you know, how they
8:09
Speaker 2: trade under whoever comes after him. His job right now
8:12
Speaker 2: is okay, can you make you know the most of
8:14
Speaker 2: it while you're getting this extra valuation from the market
8:18
Speaker 2: because of you, and we'll see how it.
8:21
Speaker 3: Ends up playing out there.
8:22
Speaker 2: So the problem with all of the businesses that SpaceX
8:26
Speaker 2: operates in, they're really expensive.
8:32
Speaker 3: Like, none of these are cheap businesses to get into.
8:35
Speaker 4: Frankly, none of the businesses that Elon Musk is in
8:40
Speaker 4: generally are you know, low cost intensive businesses. Social media
8:45
Speaker 4: is yeah, Twitter, I guess is that part of SpaceX.
8:48
Speaker 3: Yeah it is.
8:49
Speaker 2: It's putt Yeah, I think so, uh so, I think
8:52
Speaker 2: you look at this and space again is typically really
8:55
Speaker 2: capital intensive. There's a reason why until recently they're basically
9:00
Speaker 2: was no private space exploration is because it's really.
9:05
Speaker 3: Expensive, like government only game.
9:06
Speaker 2: Even now, it's not like you just have like people
9:09
Speaker 2: like going up and like exploring space on their own.
9:13
Speaker 2: SpaceX is revenue on the space side, it's government contracts,
9:17
Speaker 2: do government work, like That's basically what it is. On
9:20
Speaker 2: the connectivity side. Yeah, as part of that, they also
9:23
Speaker 2: do you know, their own launches of satellites for starlink,
9:28
Speaker 2: and there's money in that once the satellites are up,
9:30
Speaker 2: but it's still really expensive to get them actually up
9:33
Speaker 2: there and operating and AI.
9:35
Speaker 3: We've talked about it. In Q one.
9:38
Speaker 2: They spent seven point seven billion dollars on capex. They
9:41
Speaker 2: revenue of eight hundred and eighteen million, So they're spending
9:43
Speaker 2: a bunch of money to hopefully make money down the road.
9:46
Speaker 2: We'll see how it plays out. To take a quick
9:48
Speaker 2: break when we come back, I want to talk about
9:52
Speaker 2: something I want to talk about, just a really sad
9:55
Speaker 2: bitcoin hack actually from last week. I've been reading about
10:01
Speaker 2: this for the last four or five days, and we're
10:04
Speaker 2: going to talk about this next when we return.
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10:52
Speaker 3: All right, So bitcoin is a cryptocurrency. You may have
10:56
Speaker 3: heard of that.
10:58
Speaker 2: Some people have, some some peoples and last week starting
11:03
Speaker 2: on July thirtieth. Again, I'm not a big cryptocurrency guide.
11:08
Speaker 2: It's not my thing, but it comes up, you know, occasionally,
11:11
Speaker 2: and quite honestly, like most of the time in the
11:14
Speaker 2: last like five to ten years that it's come up,
11:15
Speaker 2: it's been like, oh, this cryptocurrency scam hitter, like this
11:20
Speaker 2: pump and dump scheme hitter. Like you know, it's a
11:22
Speaker 2: lot of kind of unseemly stuff.
11:25
Speaker 4: Minnesota, for instance, recently banned all bitcoin ATMs due to
11:29
Speaker 4: the number of people using them to pay what turned
11:32
Speaker 4: out to be scams.
11:33
Speaker 3: Yeah, there's a lot of it. So here's the deal.
11:36
Speaker 2: There are a bunch of people within the cryptocurrency world,
11:40
Speaker 2: specifically within like the bitcoin world, that I think don't
11:44
Speaker 2: try to like run in the scammy places. But true believer,
11:47
Speaker 2: I truly believe, like for one reason or another, hey,
11:50
Speaker 2: like this is the future of finance, and I'm gonna
11:52
Speaker 2: be responsible as responsible as I can be with me,
11:55
Speaker 2: and I'm gonna do all the things that I need
11:57
Speaker 2: to do in order to build my future using this.
12:00
Speaker 2: And one of the things that's typically recommended by proponents
12:05
Speaker 2: in the crypto world is, hey, once you have like
12:07
Speaker 2: your crypto, you know, stacked is the term that's used,
12:11
Speaker 2: is put it into cold storage so that you know
12:14
Speaker 2: it's safer in cold storage. The basic premise of it is,
12:18
Speaker 2: remember your bitcoin is always on the blockchain, so like
12:22
Speaker 2: it's it's always out there, but in order to access it,
12:26
Speaker 2: you can have different encryption keys that you can then
12:29
Speaker 2: pull away from the Internet and basically hold in a
12:32
Speaker 2: disconnected wallet for safe keeping. Think of it as like, yeah,
12:36
Speaker 2: your safe deposit box always exists at the bank, but
12:39
Speaker 2: if you keep you know, the password to be able
12:42
Speaker 2: to access to get your key or your you know,
12:45
Speaker 2: I don't have a safe deposit box. I don't know how
12:46
Speaker 2: it works exactly, but you've got your key that you've
12:49
Speaker 2: got to use and the bank has theirs, and okay,
12:51
Speaker 2: like great, now you can you know, keep your safe.
12:54
Speaker 2: So in any case, there was a platform it still is.
13:00
Speaker 2: It's called cold card, which it was one of these
13:02
Speaker 2: cold storage wallets, and it used an encryption key in
13:06
Speaker 2: order to again supposedly protect the holders from having their
13:12
Speaker 2: bitcoin taken, and pretty much what ended up happening here,
13:16
Speaker 2: what someone found out was that the key for these
13:22
Speaker 2: wallets that was supposed to be random wasn't as randomized
13:26
Speaker 2: for a certain set of them as they were supposed
13:27
Speaker 2: to be, and also had far lower encryption than it
13:32
Speaker 2: was supposed to. And so over the last several days,
13:37
Speaker 2: it appears that in total, somewhere in the ballpark of
13:44
Speaker 2: again we don't know exactly, but it looks like at
13:48
Speaker 2: least one hundred million, potentially several hundred million dollars of
13:51
Speaker 2: bitcoin have been stolen from these cold card wallets, because
13:56
Speaker 2: even though that wallet is disconnected, if you can go
13:59
Speaker 2: through when you have you know, predictable keys for them, Remember,
14:03
Speaker 2: the bitcoin is still always on the blockchain. The wallet
14:05
Speaker 2: does not keep the bitcoin from being stolen. It, you know,
14:09
Speaker 2: in theory, provides the encryption so that no one else
14:12
Speaker 2: can access it. But if that encryption is broken, then
14:15
Speaker 2: it's gone. And so what you're seeing in this case
14:18
Speaker 2: are a bunch of people who truly did everything they
14:23
Speaker 2: were supposed to when it came to cryptocurrency. They didn't
14:27
Speaker 2: get involved in the scammy ones they didn't, you know,
14:29
Speaker 2: do the latest.
14:30
Speaker 3: Pump and dump.
14:31
Speaker 2: They might have been saving five dollars a month for
14:33
Speaker 2: the last you know, decade, and their stories. If you
14:37
Speaker 2: go to like the reddit bitcoin subreddit, you've got like
14:42
Speaker 2: random people in rural India that make three hundred dollars
14:46
Speaker 2: a month that have been putting like five dollars a
14:49
Speaker 2: month away for the last ten years and it finally
14:51
Speaker 2: gotten like a bitcoin. And basically we're like, I thought
14:55
Speaker 2: this was going to be like my way out of here,
14:58
Speaker 2: and now everything I have is gone.
15:00
Speaker 3: And I think this is tough.
15:02
Speaker 4: To kind of put your head around as a US
15:05
Speaker 4: listener right now. Where Yeah, I think many would look at, oh,
15:09
Speaker 4: you're you know, you're taking the three dollars that you
15:11
Speaker 4: can save and putting it into something like bitcoin. You know,
15:14
Speaker 4: shame on you, you know, you save in dollars or
15:18
Speaker 4: savings accounts. Think about other places in the world though,
15:21
Speaker 4: where that is not the type of stability that the
15:23
Speaker 4: US dollar affords you. Correct, right, I mean you live
15:26
Speaker 4: in El Salvador, saving in the local currency provides.
15:30
Speaker 3: You no assurance of future.
15:33
Speaker 4: If you live in Argentina or India, I would have
15:37
Speaker 4: to say, is a little bit less of a concern
15:39
Speaker 4: on that front, but nonetheless, like there are plenty of
15:42
Speaker 4: places in the world where the idea of saving into
15:44
Speaker 4: the stock market or saving into a stable currency like
15:48
Speaker 4: the dollar is just not practical, and that this was
15:51
Speaker 4: seen as by many as a replacement for that.
15:56
Speaker 3: So yeah, pretty disheartening. And I guess just kind of
15:59
Speaker 3: further proof to me that.
16:02
Speaker 4: The use cases that over and over have been brought
16:04
Speaker 4: up as viable for this thing just keep getting proven
16:07
Speaker 4: wrong over and over.
16:08
Speaker 2: It Well, and this is the tough thing, is that
16:11
Speaker 2: there really is no recourse on this this kind of stuff.
16:15
Speaker 2: There is no FDIC for it, there is no SIPC
16:18
Speaker 2: for it.
16:20
Speaker 3: It is very much the wild West.
16:22
Speaker 4: Occasionally the FBI goes and hacks one of the hackers
16:25
Speaker 4: and steals it back.
16:26
Speaker 3: Yep.
16:27
Speaker 4: So you can cross your fingers that maybe that happens
16:30
Speaker 4: and then you can maybe petition the US government for
16:33
Speaker 4: your cryptocurrency back, but you know, probably no guarantee of
16:37
Speaker 4: that happening, and probably pretty tough to actually get the
16:42
Speaker 4: payment if it ever does happen.
16:44
Speaker 3: So I just.
16:47
Speaker 2: Again, when stuff happens like last week with the Situational
16:52
Speaker 2: Awareness Fund.
16:53
Speaker 3: Yeah, the hedge fund that blew up that.
16:55
Speaker 2: Honestly, like, to a certain extent, I find it kind
16:59
Speaker 2: of acceptable to laugh at you know, people managing forty
17:03
Speaker 2: five billion dollars who name their fun situational awareness and
17:07
Speaker 2: then blow up on a three percent draw down in disease. Yeah,
17:12
Speaker 2: it's it's okay to punch up. Is kind of how
17:15
Speaker 2: I view it. When you have people that their life
17:19
Speaker 2: savings have now been stolen from them through no fault
17:22
Speaker 2: of their own, and specifically through like trying to do
17:25
Speaker 2: the right thing, which is oh, like I need to
17:27
Speaker 2: get my crypto into cold storage. I feel just gutted
17:33
Speaker 2: for them, Like I can't imagine how I would feel
17:36
Speaker 2: if that happened to me, And I just I know
17:44
Speaker 2: there's no way that this is going Like there's almost
17:47
Speaker 2: no way this is going to be recovered.
17:49
Speaker 4: And the frustrating piece too, I mean, it's not exactly
17:54
Speaker 4: somebody in particular to point the blame out there. There's
17:57
Speaker 4: the company that was a cold card, is the company
17:59
Speaker 4: that yeah, grew it up the encryption. You can point
18:02
Speaker 4: the blame at the hackers themselves.
18:03
Speaker 3: Who stole it.
18:05
Speaker 4: But that's the whole point of bitcoin, is that it
18:07
Speaker 4: is this decentralized that that's beholding no one, building to
18:11
Speaker 4: no one, and so what are you gonna do about it?
18:13
Speaker 2: And I guess my question is, look if all bitcoin
18:17
Speaker 2: is at this point, because look, this really like gets
18:20
Speaker 2: it like that core myth of bitcoin, which is like
18:23
Speaker 2: it's it's money that you know is is supposed to
18:26
Speaker 2: be like that once you have it like put aside
18:28
Speaker 2: in cold storage that no one can take, and now
18:30
Speaker 2: like it obviously you know if something goes wrong on
18:33
Speaker 2: this it's clearly accessible. I don't know, like you look
18:37
Speaker 2: at it and it's kind of like is just like
18:41
Speaker 2: another trading item in the casino now because this like
18:45
Speaker 2: story's gone, Like this one's hard to recover from.
18:50
Speaker 3: Yeah yeah, but one of the most.
18:52
Speaker 4: Secure platforms or technology is possible to secure your stuff
18:57
Speaker 4: was hacked and there's really no recourse.
19:02
Speaker 2: So it's this one again, as someone who is not
19:07
Speaker 2: I don't really pay a ton of attention to crypto.
19:09
Speaker 2: It's not something I get into a ton, but this
19:13
Speaker 2: one just hurts. I feel for all those people out
19:16
Speaker 2: there that have been putting their money into this and
19:18
Speaker 2: trying to do everything right actually like not not just
19:23
Speaker 2: looking for like the quick buck necessarily and man, it
19:26
Speaker 2: just I feel for them. Right now, let's take a
19:29
Speaker 2: quick break. We got Wall Street Watch next.
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19:57
Speaker 5: Market staging a strong rally to begin the week as
20:00
Speaker 5: oil prices are dropping after the US called off strikes
20:02
Speaker 5: in Iran to continue talks. Right now, the Dow is
20:05
Speaker 5: up one percent or five hundred and twenty six points.
20:09
Speaker 5: Some P five hundred up nearly one point two percent
20:12
Speaker 5: or eighty nine points higher. Nasdak now up one point
20:16
Speaker 5: eight percent or four hundred and sixty seven points higher.
20:18
Speaker 5: RUSS two thousand's up one point six percent, Tenure Treasureel
20:22
Speaker 5: down five basis points at four point six eight percent,
20:26
Speaker 5: and Oiled down by six percent, trading at seventy nine
20:29
Speaker 5: dollars a barrel. According to the Financial Times, ash Resenka
20:33
Speaker 5: is in talks to combine with US rival Bristol Myers
20:36
Speaker 5: squib and a deal that would create one of the
20:38
Speaker 5: world's biggest pharmaceutical groups valued at nearly four hundred billion dollars. However,
20:44
Speaker 5: talks could still fall apart. Ash Resenica down by nine
20:48
Speaker 5: percent now, while Bristol Myers is off modestly. Meanwhile, Amazon
20:52
Speaker 5: is building on Friday's fifteen percent rally following its impressive
20:56
Speaker 5: earnings report. The stock is up another five percent today,
21:00
Speaker 5: has officially surpassed three trillion dollars in market valuation, joining Apple, Microsoft, Nvidia,
21:06
Speaker 5: in Alphabet. Alibaba up over five percent after the Chinese
21:11
Speaker 5: company unbuild a new AI model that is set to
21:14
Speaker 5: be released next week. And after today's closing bill, we'll
21:17
Speaker 5: see second quarter earnings from pall Andeer. I'm Tucker Silvan.
21:22
Speaker 1: That is Wall Street Watch, Mike.
21:24
Speaker 2: We had a piece here from Bloomberg. The post pandemic
21:27
Speaker 2: travel boom is finally losing steam, is it?
21:31
Speaker 3: I don't know.
21:33
Speaker 4: There was few There were fewer Americans traveling to Europe,
21:37
Speaker 4: the Middle East, and just generally abroad this summer than
21:40
Speaker 4: last year. Obviously, we have a spike in energy, oil prices,
21:47
Speaker 4: flight prices, and some general concern about flying through the
21:52
Speaker 4: Middle East right now that could be putting some of
21:55
Speaker 4: the damper on all of this, but you know these
21:58
Speaker 4: are real numbers. The number of US travel flying internationally
22:01
Speaker 4: this June fell by three point two percent. Travel from
22:04
Speaker 4: the US to Europe this July down five points seven percent,
22:08
Speaker 4: So like, yeah, there might be something to that. But
22:12
Speaker 4: I went and took a look forget about international travel,
22:15
Speaker 4: just hey, how many people.
22:17
Speaker 3: Are going through TSA.
22:18
Speaker 4: We used to look at this during COVID quite a
22:20
Speaker 4: bit to see is anybody actually.
22:22
Speaker 3: Traveling the March through July period. I measured that.
22:27
Speaker 4: One specifically because hypothetically you could have some concern about
22:31
Speaker 4: oil prices and anything. From March on twenty twenty six
22:35
Speaker 4: was ninety nine and a half percent the volume of
22:38
Speaker 4: twenty twenty five, So you're really at the exact same spot.
22:42
Speaker 3: Now.
22:42
Speaker 4: Granted, if you're traveling in March, April, May, June or July,
22:47
Speaker 4: you probably in many cases booked that travel prior to
22:51
Speaker 4: the increase in ticket prices and things like that. So
22:54
Speaker 4: I don't think it's the perfect measurement, but I'm not
22:57
Speaker 4: sure that our travel boom is really losing a whole
23:02
Speaker 4: lot of steam right now based on a temporary fall
23:05
Speaker 4: this summer.
23:05
Speaker 2: Now, again this is talking specifically like international travel between
23:08
Speaker 2: the US and Europe. I'll also go with Marriott. This
23:12
Speaker 2: morning reported their earnings, and Marriott at this point is
23:17
Speaker 2: pretty much the dominant hotel chain in the world, having
23:20
Speaker 2: bought up was it star Wood?
23:23
Speaker 3: Was Starwood?
23:23
Speaker 2: Yeah, Starwood a few years back, not a few like
23:26
Speaker 2: ten years back. Now it's been a while. You know,
23:29
Speaker 2: other ones still exist, like you still have Hilton, you
23:31
Speaker 2: still have IHG, but they're a fraction of the size
23:33
Speaker 2: of Marriott. Marriott tells you more about what's going on
23:36
Speaker 2: with travel and lodging than just about any other hotel company.
23:39
Speaker 2: So here's the deal. A couple different things. Number One,
23:42
Speaker 2: when you look at Marriott's occupancy year over year for
23:46
Speaker 2: Q two, it's up point two percent. It's not down,
23:49
Speaker 2: it's up point two percent. Their revenue per available room
23:53
Speaker 2: or RevPAR as it's known in the biz, up five percent,
23:57
Speaker 2: which means not only are they seeing occupancy up, they're
24:01
Speaker 2: able to push price. Okay, they're pushing price and still
24:04
Speaker 2: getting higher occupancy than last year. Now, as has been
24:09
Speaker 2: the case for the last couple of years, the high
24:11
Speaker 2: end is driving the bulk of this. If you will
24:15
Speaker 2: get their US and Canada luxury segment it's up nine
24:19
Speaker 2: point one percent for RevPAR. Their middle segment called premium
24:23
Speaker 2: is up five their lower one, called select is up
24:26
Speaker 2: four point four. But that's a narrower dispersioning we saw
24:29
Speaker 2: last year when the lower end was basically not moving
24:32
Speaker 2: at all. And this again matches what we have seen
24:36
Speaker 2: from banks and what they're telling us about spending data,
24:39
Speaker 2: and that is not just at the high end. Now
24:42
Speaker 2: the lower end is starting to pick up as well,
24:45
Speaker 2: and that's being reflected in marriage broadening out of their
24:49
Speaker 2: hotel revenue. So I think, yes, there might be something
24:53
Speaker 2: happening between the US and Europe in terms of you know,
24:56
Speaker 2: international travel being diminished, but domestic travel seems pretty robust.
25:02
Speaker 2: If you would get overall total flight numbers around the world,
25:05
Speaker 2: they're still up year over year, and so I don't
25:09
Speaker 2: see anything that suggests a broader, more durable shift in
25:15
Speaker 2: travel downshifting.
25:16
Speaker 4: No, I don't either, and I would expect some by
25:19
Speaker 4: the way, given jet fuel prices, right like I do
25:22
Speaker 4: expect generally speaking the second half of this year to
25:25
Speaker 4: see fewer tickets booked because of the higher prices, But
25:29
Speaker 4: I'm not really sure that's an indication that the whole
25:32
Speaker 4: thing is losing steam.
25:34
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27:01
Speaker 3: I'm gonna talk about this piece of the New York Times.
27:03
Speaker 3: What else do we.
27:04
Speaker 2: Lose when people give up booze? So this is an
27:08
Speaker 2: interesting piece, and it's something that we've talked about occasionally here,
27:12
Speaker 2: and that what you're seeing in particular from younger generations
27:16
Speaker 2: is not as much drinking as previous ones. The counter
27:20
Speaker 2: to that is the thing that you are seeing more
27:22
Speaker 2: from younger generations is much higher use of marijuana. And
27:28
Speaker 2: so the question is what is actually going on here
27:31
Speaker 2: in terms of what does it mean for businesses, what
27:34
Speaker 2: does it mean for communities, and what does it mean
27:36
Speaker 2: for just kind of like the social framework that we
27:40
Speaker 2: operate within. And I think it's interesting because for a
27:47
Speaker 2: couple of different reasons. The first, there's no doubt that
27:49
Speaker 2: one of the things we've seen in the last fifteen
27:52
Speaker 2: years is just a huge proliferation of craft alcohol all kinds.
27:57
Speaker 2: Sure started with beer and then moved into spirits afterwards,
28:02
Speaker 2: and now that's coming crashing down. Part of that, I
28:04
Speaker 2: think is just oversaturation. You've had one craft ipa, You've
28:09
Speaker 2: had ninety nine percent of them, Like, there's not a
28:12
Speaker 2: ton of variation in a lot of cases.
28:14
Speaker 3: And I think that.
28:15
Speaker 2: People have woken up to that it's happened with whiskey
28:18
Speaker 2: and bourbon's happened with you. Like you're seeing this across
28:20
Speaker 2: the alcohol landscape. And some of that is just the
28:23
Speaker 2: nature of the boom bust cycle in these industries, but
28:27
Speaker 2: with the broader talk of you know, more and more
28:30
Speaker 2: people saying, hey, drinking it all is not healthy for me,
28:34
Speaker 2: I think it does raise questions about what it means
28:37
Speaker 2: for businesses that have supplied alcohol, namely bars and restaurants,
28:42
Speaker 2: and how it alters the social and community fabric there.
28:45
Speaker 2: But also, hey, if you're not doing things that historically
28:48
Speaker 2: brought people together, even if they're not healthy for you,
28:51
Speaker 2: how do you continue to actually hang out with people
28:54
Speaker 2: on a weekly basis that aren't living in your house
28:59
Speaker 2: with you?
29:00
Speaker 4: Yeah, I would tend to say that we will find
29:02
Speaker 4: another way to fill our schedules, but I fear that
29:05
Speaker 4: it is with things like social media, in which case
29:08
Speaker 4: I don't think that's healthy for society. I'm not terribly
29:12
Speaker 4: convinced that we as society should be concerned about fewer
29:16
Speaker 4: bartender jobs and bars generally speaking, if people pull back
29:20
Speaker 4: on alcohol, I think, you know that the net gain
29:22
Speaker 4: to our health might be okay there. And you know,
29:26
Speaker 4: to the extent that there have been bars that have
29:28
Speaker 4: closed and bartenders lost, how many jobs and new businesses
29:31
Speaker 4: have come about because of the cannabis industry. I think
29:35
Speaker 4: there's been a you know, a fair number of new
29:37
Speaker 4: ones there. Whether you like it or not, I'm not
29:40
Speaker 4: putting a judgment on that, but you know that got
29:42
Speaker 4: replaced with something else. I yeah, I do wonder about
29:47
Speaker 4: the youngest generation that went through the COVID period and
29:53
Speaker 4: seems to socialize a lot differently than we did. And
29:56
Speaker 4: I don't know, I hate to call a different generation
29:59
Speaker 4: completely different than the one before it, but I yeah,
30:02
Speaker 4: I do wonder if drinking rates are going to permanently
30:07
Speaker 4: stay this much lower, or if they will, if they
30:10
Speaker 4: will correct in some mainiful way back to where other
30:13
Speaker 4: generations were.
30:14
Speaker 2: Yeah, I think we'll have to just see how it
30:15
Speaker 2: evolves over the next five or six years, because there's
30:18
Speaker 2: plenty of times where I still remember, you, look when
30:21
Speaker 2: when US millennials were in our twenties, it was, oh,
30:24
Speaker 2: look like they're never going to buy houses, They're never
30:26
Speaker 2: gonna settle down, never gonna and sure enough, like you
30:29
Speaker 2: will get millennial home ownership rates now and they're in
30:31
Speaker 2: line with previous generations and they move to the suburbs
30:34
Speaker 2: and YadA YadA. So I think, let's see how this evolves.
30:38
Speaker 2: But it's an interesting set of open questions that we
30:41
Speaker 2: just need to watch and see what happens with them.
30:44
Speaker 3: To take a quick break. When we return, it's time
30:46
Speaker 3: for stack Roulettes.
30:48
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31:47
Speaker 2: Mike, there's only one piece that we can kick stack
31:50
Speaker 2: Roulette off with today.
31:52
Speaker 3: Go ahead, talker.
31:53
Speaker 2: Put it in the stack because I saw it and
31:56
Speaker 2: was like, Tucker, better put this in the stack, otherwise
32:01
Speaker 2: he's not stacking anymore. And it's title helicopter parents are
32:05
Speaker 2: copiling their adult career, adult children's careers, And my goodness, like, look,
32:12
Speaker 2: I'm sure we got this with the millennials when we were,
32:14
Speaker 2: you know, twenty two, but I just need to read
32:17
Speaker 2: from this because.
32:19
Speaker 5: This reminds me of Deborah Brown going into Save robertson
32:22
Speaker 5: yes interview.
32:23
Speaker 3: At the FBI.
32:25
Speaker 2: Y'all have never seen anything till you've seen this. Steve
32:28
Speaker 2: Can Stephen Clark had the unpleasant task of firing a
32:31
Speaker 2: twenty four year old twice. Once was in a brief
32:34
Speaker 2: conversation with the new hire who showed up late or
32:36
Speaker 2: not at all four times this first week at a
32:38
Speaker 2: construction job. So like clearcutcase, you're fired right, like you've
32:43
Speaker 2: never done anything for us. You can't prove that you're
32:45
Speaker 2: doing anything because you're showing up later or not, and
32:47
Speaker 2: so you're gone. Then Clark had to do it all
32:50
Speaker 2: over again, this time with the guy's mother. She called
32:52
Speaker 2: him a few hours later, pleading to give herself another chance.
32:54
Speaker 2: When Clarke told her, no, things got heated before the
32:56
Speaker 2: end of the call. I just I don't know what
33:02
Speaker 2: the right Actually, no, I do know. Here's the deal.
33:04
Speaker 2: My first job it was in let me think, stopping shop, right,
33:09
Speaker 2: it was in Stoppin'chop'm trying to think of how old
33:11
Speaker 2: I was when I got it. It was either fourteen or
33:13
Speaker 2: fifteen when you're able to get your work permanent Massachusetts.
33:16
Speaker 2: I can't remember how old I was. Teenager and but
33:19
Speaker 2: like young teenager, not like nineteen. Like you know, I
33:22
Speaker 2: couldn't even drive, which is why my mom had to
33:25
Speaker 2: drive me to the stopping shop in order to like
33:28
Speaker 2: have an interview with the hiring manager. And even then
33:32
Speaker 2: I went into the room with the guy, talked to
33:35
Speaker 2: him for you know, twenty minutes or so, and then
33:37
Speaker 2: came out and said, okay, Mom, like I got the job.
33:39
Speaker 2: It's time for me to go home. And that was
33:42
Speaker 2: the extent of her involvement in it at fourteen, was Okay,
33:46
Speaker 2: I'm gonna drive you there because you can't drive yourself,
33:50
Speaker 2: so I know.
33:50
Speaker 3: Check.
33:50
Speaker 4: You're not on social media as much or at all
33:53
Speaker 4: these days. One thing that I find very common on
33:57
Speaker 4: Facebook is this phenomenon of parents posting asking for jobs
34:02
Speaker 4: for their children. Now I'm not talking about careers for
34:05
Speaker 4: their children. I'm talking about jobs. And in some cases
34:10
Speaker 4: I start to have a little bit of I guess
34:13
Speaker 4: understanding there because they're like, you know, my kid's not
34:15
Speaker 4: on Facebook. I don't want them to be on Facebook,
34:18
Speaker 4: but he's got this self this business, and go check
34:20
Speaker 4: it out. In other cases, it really just seems like
34:25
Speaker 4: I sorry to have some pity there, and then I
34:27
Speaker 4: decided I don't anymore. If you want a job, I'm sorry.
34:34
Speaker 4: You can't have your parents post anything or ask somebody
34:39
Speaker 4: for the job for you.
34:41
Speaker 3: You need to put yourself forward and go do it. Now.
34:45
Speaker 4: I'm not blind to the fact that family connections have
34:48
Speaker 4: a lot to do with where jobs come from. So
34:51
Speaker 4: I'm not dismissing that that's reality, like it or not.
34:55
Speaker 4: But yeah, like having dad be in the like off
35:02
Speaker 4: screen while you're doing a zoom interview with somebody and
35:05
Speaker 4: feeding you answers or giving you facial expressions just does
35:09
Speaker 4: not seem like a conducive thing to you having a
35:13
Speaker 4: successful career in the future.
35:14
Speaker 5: Applying for jobs on the adult child's behalf, that's silly,
35:20
Speaker 5: that's a joke.
35:21
Speaker 4: Look, I mean, I've I've certainly got some pity for
35:25
Speaker 4: the parents of kids who won't get off your couch
35:28
Speaker 4: and get out of your basement.
35:30
Speaker 3: But that is to stop doing stuff for you. Yea.
35:35
Speaker 2: If you want the bird out of your nest, you
35:38
Speaker 2: gotta stop bringing them worms.
35:41
Speaker 3: Oh man, Like.
35:42
Speaker 2: I'm I'm, I'm I'm sorry. It's it's just it's not
35:45
Speaker 2: gonna work. And again, after a gen Z employee Nation's
35:52
Speaker 2: Best Holdings, a chain of hardware and home good stores,
35:54
Speaker 2: didn't get an exceed expectations designation on his performance review
35:59
Speaker 2: at HSR last year, Amber Little, the chief HR executive,
36:03
Speaker 2: got a call asking why it was one of a
36:06
Speaker 2: number of calls from parents her office is picked up
36:09
Speaker 2: recently about issues ranging from negative feedback to understanding which
36:12
Speaker 2: health insurance plan to choose. Guys, here's the deal. If
36:15
Speaker 2: you're a parent and you've got like a twenty four
36:18
Speaker 2: year old that you're picking their health insurance plan for,
36:20
Speaker 2: what is your plan for when you die? And they
36:23
Speaker 2: can't rely on you anymore? Cause you're gonna die at
36:27
Speaker 2: some point we all are, and odds are, as someone
36:31
Speaker 2: older than your child, it will be you first. So
36:34
Speaker 2: like you're not helping your kid by picking their adult
36:39
Speaker 2: plan for health insurance.
36:42
Speaker 3: Ah, this stuff is getting absurd, it is.
36:45
Speaker 2: And look, I'm sure these stories were written in twenty
36:48
Speaker 2: ten about the millennials too, so I'm sure this is
36:50
Speaker 2: every generation, but it seems worse now, partly because I'm
36:54
Speaker 2: older and Crotcherdyer, which is the way to say it.
36:57
Speaker 2: But also like the estimates that you have here are
37:01
Speaker 2: crazy in terms if it's like as much as like
37:03
Speaker 2: twenty percent of parents are involved in their adult children's
37:07
Speaker 2: like job search and selection, Like, what.
37:11
Speaker 3: Are we doing here?
37:13
Speaker 4: Can can you imagine for a moment getting I'm just
37:17
Speaker 4: trying to put myself in the shoes the iron manager
37:20
Speaker 4: and getting a call or the HR manager whatever from
37:24
Speaker 4: this twenty this adults Okay, sixty year old.
37:29
Speaker 2: Here's why I can't be a NHR manager, Mike, I
37:32
Speaker 2: want you to call me is like Tucker's parent, Chuck.
37:35
Speaker 4: Tucker didn't get a great performance review, and I want
37:37
Speaker 4: you to reconsider.
37:37
Speaker 3: You're fired the mom. Yeah you're fired, but I don't matter.
37:43
Speaker 3: You're fired.
37:44
Speaker 4: Also privacy, I can't talk to you about your son's career.
37:48
Speaker 3: His career.
37:49
Speaker 2: I can't talk to you about like you're gonna talk
37:51
Speaker 2: to me. Oh, which health insurance plans best for them?
37:53
Speaker 2: I got hip a man, I don't want hip all
37:56
Speaker 2: up in my business.
37:57
Speaker 4: Don't do this to your kids. Doing it to you
38:00
Speaker 4: your kids, it's not helping them. No, you're just not
38:03
Speaker 4: my goodness. So glad I don't work in HR. Let's
38:10
Speaker 4: take a quick break for the entire rest of the day.
38:13
Speaker 4: We'll reconvene tomorrow. Tell your parents they can listen to
38:17
Speaker 3: Us at least