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How are markets reacting to the Fed's rate cut? · The Financial Exchange Show

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Speaker 2: Kicking off the second hour the Financial Exchange. It's Chuck,
1:16
Mike and Sucker with you. And stocks are ripping. It's
1:23
the technical term. They're up three hundred and seventy six
1:25
points on the Dow. The S and P is up
1:27
eighty nine. Nas Deck's up four to forty five, So
1:30
anywhere between about a one and a two and a
1:32
half percent jump inequities today, where's it being led by
1:37
I'll give you three guesses, and none of them count
1:40
Michael rates.
1:43
Speaker 3: No, it's being led by tech. Sorry, the sector of
1:47
the market. Okay, it's fine. It was a little confusing.
1:49
Speaker 2: You got Nvidia up over four percent, Apple up over three,
1:52
Meta up over three, Tesla up over five, broad Come
1:55
up over three, a m D up over five. It's
1:58
tech that's ripping today. Places that are cruisin along. Energy
2:02
is up nicely, materials up nicely. What's lagging? You've got
2:07
consumer staples, utilities, real estate, healthcare, all kind of dragon
2:13
a little bit at the moment. In terms of other markets,
2:17
ten of US Treasury is up four and a half
2:19
basis points to three point seventy three two percent. So hey, great,
2:22
the Fed cut interest rates yesterday. Ten You went up
2:24
five basis points yesterday, four and a half today, so
2:26
almost ten basis points in about a day and a half.
2:30
You got oil up forty nine cents of barrel on
2:32
West Text Intermediate to seventy one forty and we've got
2:35
gold of seven dollars and thirty cents to twenty six
2:40
hundred and five dollars and ninety cents an ounce case
2:43
you missed it yesterday, which is really hard because I
2:46
even saw like non news outlets covering this.
2:50
Speaker 3: The Disney Channel was covering No, honestly, it's close.
2:54
Speaker 2: Slim I'm gonna test something.
2:58
Speaker 4: Oh my god, can you imagine Nickelodeon doing the same,
3:01
like version of slimming Powell.
3:06
Speaker 3: I want to see the Nickelodeon coverage of A J.
3:08
Powell count so badly. So I just checked.
3:12
Speaker 2: The FED rate cut decision is not currently on the
3:14
front page of People, so it didn't make it there.
3:20
I'm assuming it's not on ESPN, but look, it's basically everywhere,
3:25
like everyone in their grandmother's been talking about this. Yeah,
3:27
and so the FED did cut interest rates by half
3:29
a percent yesterday. They guided for two additional quarter percent
3:35
cuts by the end of this year and four quarter
3:37
percent cuts by the end of next year, so total
3:38
of two percentage points and cuts priced in by the
3:42
end of next year. The Fed thinks unemployment might continue
3:46
to rise a little bit more, up to four point
3:47
four percent, but they don't see it going higher than that.
3:50
They think inflation is going to continue to come down,
3:52
and so they're basically saying, hey, we think we're really
3:56
close to the soft landing, and we're just doing this
3:58
to prevent the labor market from weakening the way that
4:02
it potentially could if we took no action. Yeah, we
4:05
know people have questions.
4:06
Speaker 4: You can text the show at six one, seven, three, six,
4:08
two thirteen eighty five.
4:10
Speaker 3: Some questions we have answers to others we don't. But
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I don't know what the meaning of life is.
4:15
Speaker 4: No, well, you speak for yourself, but you know happened
4:19
to you know, ponder questions and discuss them out loud,
4:22
and and you know kind of go back and forth
4:24
on this stuff. But you know, the key takeaway is
4:26
that the Fed did cut rates. They did a fifty
4:29
base point cut, which is not normal, it's not the
4:32
standard operating procedure. It's not what they prefer to do.
4:34
They like in a normal environment to do twenty five
4:37
and we will see where this thing goes ultimately. Also
4:41
interesting on the market side of things, with markets did
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close down yesterday. They were up on the announcement, up
4:48
for the beginning of Powell's speech, and then as that
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went on, ended up closing very slightly.
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Speaker 3: Now we down quarter percent on the SMP up thereabouts. Yeah,
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nothing huge, maybe like a third of a percent.
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Speaker 4: So but to see this today, you know, sometimes you
5:02
just need overnight to digest what was actually said and
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what it actually might mean. And traders this morning interpreting
5:08
it as growth.
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Speaker 3: Well.
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Speaker 2: And look, the other thing to remember, I know that
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we're always very US focused because we live in the
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United States. True, Look, the Bank Japan meets tomorrow. They
5:20
could pour a bunch of cold water on this in
5:22
a hurry if they do something unexpected there.
5:26
Speaker 3: So it's there's.
5:28
Speaker 2: Never any one story that's done. Like markets are always evolving,
5:31
they're always changing. There's always a new narrative that's coming up,
5:34
and so you have to evolve.
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Speaker 3: Your views with them, otherwise you risk getting left behind
5:41
in markets.
5:42
Speaker 4: The other proof of you know, growth being the story
5:46
of the day. We've got the yield on the ten
5:48
year treasury. It was up yesterday and it's moving up
5:51
again today. So we're now, let's see you over a
5:54
full percentage point higher than where we were two days
5:57
ago on sorry, tenth of a percent atage point higher
6:00
on the ten year treasury deal.
6:02
Speaker 3: The full percentage point would be a pretty wild shift
6:03
for two days.
6:05
Speaker 4: But yeah, again speaks to that confidence about growth, soft landing,
6:10
and no recession that traders have this morning.
6:12
Speaker 2: Anyway, We'll see where things develop over the next three
6:15
to six months. But again we've been concerned about the
6:18
unemployment rate. Today we got weekly jobless claims. The seasonally
6:24
adjusted number came in at two hundred and nineteen thousand,
6:29
which is eleven thousand below where they were last week
6:35
and where they and below expectations. We also when we
6:39
look at the not seasonally adjusted numbers there, they came
6:42
in one hundred and eighty four thousand, which is right
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in line with the past few years of normal economies.
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I exclude basically twenty twenty through twenty twenty two because
6:53
things were abnormal then. But you look at twenty three
6:56
and twenty nineteen and eighteen, and this is basically the
6:58
same seasonal pattern we've been seeing, so there's no sign
7:01
of increased layoffs or unemployment claims on that side of things.
7:06
Speaker 4: I got a question from I think either an email
7:09
or the text line. Does a bank have to follow
7:11
a guideline for setting a mortgage rate or couldn't? In theory,
7:15
a bank set any rate they want because they're the
7:17
one lending out the money. Yeah, mortgage rates and what
7:20
banks choose to lend the money out on is entirely
7:22
a bank decision and has nothing to do with the
7:24
Federal Reserve. I mean, in theory, I guess it directionally
7:28
guides where the rates will be. But yeah, I mean,
7:31
if if a bank out there is really looking for
7:35
a whole bunch of new thirty year mortgage rates and
7:37
wants those loans, they can discount and say, hey, yeah,
7:41
we're we're offering mortgage rates at five seven five right now,
7:45
even though the average according to Mortgage News Daily today
7:48
is six point and.
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Speaker 2: A couple things that banks have to deal with as
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they're trying to set their rates. The first is, okay,
7:54
can we be profitable?
7:56
Speaker 3: At this rate.
7:57
Speaker 2: Their costs associated with running the bank, from just you know,
7:59
your basic overhead keeping the lights on, to the different
8:04
insurance that you need to have in order to operate it,
8:06
all of the.
8:08
Speaker 3: Stuff that you have to do.
8:08
Speaker 2: From a regulatory perspective, there's a whole bunch that goes
8:11
into actually running a bank. And so in theory, look,
8:16
a bank could come out and say, yeah, we want
8:17
to set our interest rate for thirty or fixed rate
8:21
mortgage at two percent, but they're probably not going to
8:24
be able to make money on that.
8:26
Speaker 4: And again, I mean two percent is an extreme. But
8:29
the reason why here does have to do with the
8:31
FED and this FED funds rate in that overnight I mean,
8:36
where does the FED interject that lending rate cost into
8:41
the bank.
8:43
Speaker 2: Well, it's really a bank needs to attract deposits, yea.
8:46
And because remember in banking everything's kind of backwards. So
8:50
even though you think of a deposit as like your
8:52
asset to the bank, the deposits a liability because it
8:55
can leave it anytime. And so if a bank says, okay,
8:58
we've got to attract a poss and if they're not
9:01
Bank of America where they can just pay zero points zero,
9:03
one or two percent because everyone's just.
9:06
Speaker 3: Inertia over there. And yes, I did just turn inertia
9:09
into a verb yep, which is great. By the way,
9:11
I'm gonna start using that more.
9:14
Speaker 2: If I am, you know, a small community bank, especially
9:17
one starting up, I might say, look, I might have
9:19
to pay three or four percent in order to attract
9:21
people to my bank, because there are other banks paying
9:23
that in deposits. Okay, if I'm paying out three or
9:26
four percent plus, I've got my operating costs maybe net
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net on each dollar I'm paying five percent for you know,
9:34
all of my costs. Okay, that means I probably got
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to set my rate at you know, five and a
9:39
half to six if I want profit in this environment,
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and so I can do that. Or hey, if I'm
9:44
more cautious, I might set my rates higher just to
9:46
have a wider gap in case inflation comes back or
9:49
something unexpected happens. And that's how rates get set for
9:53
mortgage products and things like that. In the market right now.
9:56
Banks have always had one problem which reared its head
9:59
last year. Deposits are short term. They can come and go.
10:05
If you got a thirty year fixed rate mortgage on
10:07
your books. It's on your books. It's a long term
10:10
loan that you have, even though your deposits are short
10:13
term that you're holding. So that's one of the things
10:15
that banks have to navigate as well, and ultimately that's
10:18
what ended up blowing up Silicon Valley Bank last year
10:20
was a mismatch between loans and deposits, where deposits fled
10:25
and hey, we're still stuck with all these long term
10:28
loans that have now gone down in value.
10:30
Speaker 3: Kind of a problem. Let's take a quick break here.
10:32
Speaker 2: When we come back, we're gon be joined by Matt
10:34
Gagnan or Ganyon.
10:35
Speaker 3: I don't know, is it gang Ganon.
10:38
Speaker 2: Matt Gannon, chief executive officer of the Main Policy Institute.
10:42
Speaker 3: Oh, it's it's Matt. I spake to him like once
10:44
a week.
10:45
Speaker 1: I know.
10:45
Speaker 2: I saw it on the schedule here, very official on
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the schedule. I know it looks more like more efficient
10:49
than I typically talk. So yeah, it's Matt Ganion from
10:53
UH the UH Main Policy in Students, the chief executive
10:55
officer there. He's also the wgan morning show host. And
10:59
Matt's going to join us right after this.
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Speaker 4: Mcdunnon is the chief executive officer of the main policy Institute.
12:12
Speaker 3: He's also the host of.
12:14
Speaker 4: The WGA and Morning News, the show that precedes our
12:17
own up in Portland, Maine, from six to nine every
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day on WGA and Matt.
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Speaker 3: Thanks for joining us, appreciate it.
12:23
Speaker 6: It's pleaged to be back again.
12:25
Speaker 4: So, you know, Chuck and I do a lot of
12:26
talking pre and post Federal Reserve meeting. It kind of
12:30
gets the point where we see a lot of this stuff.
12:32
I to Ie, I'm curious, you know, from your perspective,
12:35
what were your main one or two takeaways from what
12:39
your own Powell had to say and do regarding interest
12:42
rates yesterday.
12:44
Speaker 6: That's a good question. I mean, I think that the
12:46
clear vibe that I was left with, if I can
12:49
call it a vibe, is that he's interested in being aggressive. Obviously,
12:52
the you know, the half point, you know break that
12:56
we got there is clearly on the more aggressive side.
12:58
But they also seem to be signaling that they're going
13:00
to continue to do so, and that to me signals
13:03
a couple things. I mean, for one, I think that
13:05
they feel like they have gotten a handle on inflation
13:09
enough that it is not terribly risky to do that.
13:11
Whether they're right about that it's a different conversation, probably,
13:14
But I think that they are seeing things in the
13:17
economy right now that worry them to the extent that
13:19
they want to be able to take aggressive action to
13:21
try to you know, blunt any problem with unemployment and
13:24
keep the economy running and keeping it out of procession.
13:27
So I think that it called in their minds for
13:29
something fairly. I don't know if I would call it bold,
13:32
but bolder than a lot of people might have been expecting.
13:35
Speaker 3: Yeah, I think it was bold.
13:36
Speaker 4: I think you know, we talked about before how this
13:38
was the first time you had a voting member contradict J.
13:43
Powell or any Federal Reserve chair since two thousand and five.
13:46
So that's not a common occurrence either. But on the
13:50
equity market side, at least you have markets responding with
13:54
a lot of optimism here about that boldness and seemingly
13:57
a lack of concern about either higher inflame or recession.
14:02
I mean, look, market, how markets react the day after
14:04
a federate cut should not be used to indicate much
14:07
of anything. But you know, are are we taking a
14:10
bit of a preemptive victory lap on the soft landing here?
14:14
Speaker 6: Yeah? I don't know we might be. I mean, the
14:15
thing is is that the reaction in the market is
14:18
obviously just psychological. It doesn't mean that they know anything
14:21
that you or I don't know. I think they're just
14:22
reacting to the positive news. Ultimately, this is a dangerous
14:26
thing to bank on if you're them, in my opinion,
14:30
because if you think that inflation has been whipped to
14:34
use an old term from the seventies, and then it
14:37
ends up not being I mean, it really undermines the
14:39
credibility of the Federal Reserve. You've got to go back
14:41
in time a little bit to the time before the
14:44
inflation problem really began to become an issue, before it
14:48
really exploded. You know, there were predictions that we were
14:50
going to be able to be stable, to largely avoid inflation.
14:53
When inflation began, you know, it was pitched by a
14:56
lot of these very same people as being somewhat temporary
14:58
and really not as big as it ended up being
15:00
in the end. And then that really cut into the
15:03
notion of these people being sort of the grand marionettes
15:06
of our economy. They're not. They don't have a crystal ball,
15:10
and really no one does. The economy is far too
15:13
large and far too complex to be able to truly
15:15
know how to direct it, to control it, to centrally plant,
15:19
and to manage it in the way that the Federal
15:21
Reserve oftentimes thinks that it is. So I hope they're right.
15:25
I do. I hope that they're right and the inflation
15:27
can stay in the low tos or even continue to drop.
15:30
Who knows, But I am not terribly comfortable. It's the
15:36
notion that it is, and we'll see. I mean, it's
15:38
very uncertain in my point of view, Matt.
15:40
Speaker 2: When we look at the impact of this cut on
15:45
families and households throughout the country. Obviously, you know, housing's
15:50
one area where high rates have you know, really hampered
15:53
you know, housing markets in recent years with much lower
15:56
volumes coming through. And so when we talk about the
15:59
economic activity that could be generated as a result of this, look,
16:02
long term interest rates and mortgage rates have come down
16:05
a lot. So one would think that there's the potential
16:07
setting up for the spring of next year to be
16:10
kind of a bumper housing season. And I think it's
16:12
all about, hey, does that materialize and does that start
16:15
to generate those inflationary pressures Again your thoughts.
16:19
Speaker 6: Yeah, it's entirely possible, that does. I mean, if it
16:22
does start to generate some fluidity in the housing market,
16:25
for instance, I mean, like I know on my block
16:27
right where I live, about four or five people who
16:30
were my wife and I are friends with who would
16:32
like to sell their house right now, but they just
16:33
think it's insanity. It's not a wise time to do it.
16:37
The interest rates being what they are, they have a
16:39
low rate now, and if they were to sell, they
16:40
would have to have a high rate for a much
16:42
more expensive house. So they're just sitting on it. So
16:44
if it suddenly loosens up and it becomes more financially
16:47
feasible for you to be able to kind of maybe
16:49
move your house and do that kind of thing, it
16:51
has I think the great potential to exacerbate the issues
16:55
that exist with inflation by really reintroducing a lot of
16:58
that additional supply into the and it's definitely additional demand
17:03
into the system. It might make things really hot, but
17:05
it might take longer than just a rate cut or
17:07
two to do that too. And remember that the tail
17:09
on this is not immediate. I mean, we're gonna see
17:12
virtually nothing happen to anything for a little while with
17:15
this rape cut, it's going to take a while to
17:17
have that baked into the pie. So you know, you're
17:19
definitely talking about early part of next year. You might
17:21
be talking about mid part of next year or late
17:23
next year where some of this stuff really starts to matter.
17:25
And then when it does, what does it ultimately do?
17:28
Speaker 4: Mc danion he is the chief executive officer of the
17:31
Main Policy Institute.
17:32
Speaker 3: He's all those also the host of.
17:33
Speaker 4: The WGAN Morning Show and join us today talk about
17:37
the Federal Reserve and their bold fifty basis point cut yesterday.
17:41
Speaker 3: Matt, thanks so much for joining us. Appreciate it and
17:43
talk to you again soon.
17:45
Speaker 6: Appreciate you, guys.
17:46
Speaker 2: Thanks taking a look at Mark. It's still a lot
17:49
of green on the board. The down now of four
17:51
hundred and forty three points, the S and P of
17:53
ninety six nasdaka four eighty two. So really just a
17:57
lot of green in your major indices. Still have some
18:00
individual names that are lagging behind, as always happens.
18:04
Speaker 3: But overall, pretty pretty strong day the day after the FED.
18:08
Speaker 2: Again, it doesn't necessarily mean anything about where things go
18:10
from here, but looking like we got a realistic chance
18:14
at new all time highs for the close on the
18:16
s and P five hundred by the end of the
18:18
day Quick Break.
18:25
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18:48
Speaker 2: Boeing is in the midst of a strike of its
18:52
unionized workers in Washington State, and as a result, they
18:59
are are well, they're trying to do a whole bunch
19:02
of stuff.
19:02
Speaker 4: But they're trying to avoid a credit down grade. Yeah,
19:05
ultimately is what they're trying.
19:06
Speaker 2: They're going to start furlowing employees for one week out
19:09
of every four weeks as long as the strike continues.
19:11
Speaker 4: These are and these are by the way, not blue
19:13
collar workers. In part, they are furlowing some of their
19:17
white collar workers to cut costs here, because yes, if
19:20
you're not manufacturing planes, then you're kind of sitting there
19:22
twiddling your thumbs, even if you're not on the assembly line.
19:25
Speaker 3: Correct.
19:26
Speaker 2: Also, the executive team is going to be taking a
19:29
twenty five percent pay cut. I know it's not you know, Okay,
19:37
let's be honest here. If you're in the C suite
19:39
at Boeing, you're getting paid pretty well. Sure you should
19:44
not take a pay cut that is commensurate with everyone else.
19:47
It should be larger, even if it's just symbolic, I guess.
19:52
But on the other hand, the CEO got here like yesterday,
19:55
it's fine.
19:55
Speaker 3: He knew what knew he's getting into. Listen, you're the
19:59
CEO of Boeing.
20:01
Speaker 2: You don't get sympathy for me, like, oh, you got
20:03
to take a pay cut after you just got shigned
20:05
up there, You're not gonna be too bad. No, Like, dude,
20:08
you knew what you were getting into. Yeah, you knew
20:11
that this was a possibility.
20:12
Speaker 3: Yeah, the guy.
20:13
Speaker 2: The guy's sixty five years old. I think you're fifty.
20:16
Like he's in his late fifties early sixties. It's not
20:19
someone where you're like, oh, I feel bad that he's
20:21
gonna have to take a pay cut. He just signed
20:23
up to be the CEO of Boeing sixty four sixty four,
20:26
thank you. Like again, he kind of knew the job
20:29
was gonna suck.
20:30
Speaker 4: Yeah, well it's sucking. It is, So it's following through
20:35
on that promise. Yes, do you think he's woken up
20:39
every day this week? Like?
20:40
Speaker 3: Why did I do this?
20:42
Speaker 4: Hard to say, probably not they if you're of the
20:46
if you are.
20:46
Speaker 3: A CEO of a company as large as Boeing, there's
20:50
a little bit. But he was retired. Man, why do
20:53
you come back to do? I get it.
20:55
Speaker 4: But if you are the CEO of a company like this,
20:58
I mean there's been a lot written about this, Like
21:00
normal things don't impact you in terms of, you know,
21:04
stuff that would bother you and I there's a sociopath
21:10
type of quality that comes to a lot of these
21:12
American CEOs.
21:14
Speaker 2: Maybe, but still you like two weeks ago, you were
21:18
sitting on the beach sipping my ties potentially for the
21:22
rest of your life. Yeah, and now this is what
21:25
you're dealing with.
21:25
Speaker 4: Yeah, but if I turn it around, then my name
21:30
will be written in the history of books. That's what's
21:32
going through your mind as the CEO of Bowing. Not
21:35
this is annoying. I could be sipping my ties. You're
21:37
probably miserable sipping my ties. If you are willing to
21:40
take the job at Boeing you were, it's absolutely miserable
21:43
sitting on the beach, sipping my ties. You hated your
21:46
life and that's why you did this. Probably this is
21:52
Mike trying to assess Kelly or Berg's psychological well being.
21:56
So I don't know that any of this is accurate,
21:58
but yeah, that's what I imagine with you know, Fortune,
22:01
five hundred CEOs of American public trading companies.
22:04
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23:11
Speaker 4: I I'm gonna come out there and say Tucker that
23:13
I think my tie might be one of my least
23:15
favorite cocktails out there.
23:17
Speaker 3: Honestly, don't think I've ever had one.
23:18
Speaker 5: You good for one and then you're like, Okay, I
23:20
can just have another one.
23:22
Speaker 3: Don't think like teeth itch because it's so sweet. Give
23:25
me the mojito over my tie. What goes into my tie?
23:28
I honestly don't.
23:29
Speaker 4: I've got a recipe right here. Pineapple juice, orange juice,
23:32
spiced rum, coconut rum, grenadine.
23:35
Speaker 3: No, Yeah, more refreshing in either case. Yeah, not for me.
23:41
I'll pass uh.
23:43
Speaker 2: Piece in the Wall Street Journal, tech jobs have dried
23:45
up and aren't coming back soon. And we we talked
23:50
about this a little bit yesterday with Amazon and their
23:55
return to work.
23:56
Speaker 3: Five day a week. Yeah. Yeah.
23:58
Speaker 4: My theory is it's stealth lay off. Yeah, it's an
24:02
easy way to do it.
24:03
Speaker 2: You know, it's hey, if you don't like it, go
24:06
somewhere else, and we can not fill your role, and
24:08
that's how we're going to cut headcount.
24:10
Speaker 3: Yeah.
24:10
Speaker 4: I think there's a lot of companies that are doing Now.
24:12
You've heard of a number of companies really getting granular
24:15
with their tracking data of their employees, ensuring that they're
24:18
actually showing up to those days of the week that
24:21
they're expected to be in the office, which in Amazon's
24:23
case is every day of the week. But my wife
24:25
works for a company who just upped their work in
24:28
the office policy, and I'm sure that they are tracking
24:32
that and you know, including it for their certainly their
24:36
performance and bonus reviews. But you know, in the event
24:38
that they decide, hey, we've got to reduce headcount, where
24:40
we're going to go. We're going to go to the
24:42
ones that are not following policy of being in the
24:45
office and working and.
24:47
Speaker 2: Overall, according to layoffs, do fyi the tech industry has
24:50
shed about one hundred and thirty seven thousand jobs since January.
24:53
That's not net because this doesn't show which companies have
24:57
also been, you know, hiring, it's just tracking that are announced.
25:01
But that is still a meaningful number there. It's it's
25:04
lower than what we saw in twenty twenty two pretty significantly,
25:09
but you still do have some layoffs that are poking
25:11
up there and more. I think we're just seeing companies
25:15
where when someone leaves, they're really taking a look at, hey,
25:17
do we actually need to backfill that position and bring
25:20
someone new in or does that position not really have
25:23
a purpose here anymore.
25:25
Speaker 4: I've got a couple questions, and the first one is
25:27
how much of this might be AI related? And I
25:30
don't necessarily mean that AI is replacing these jobs. I
25:34
just more mean that it might be a different skill
25:36
set than the industry average coder for I don't know. Yeah,
25:41
I'm not sure about that either. The second question, how
25:44
do you feel about the strategy of Glenn Kugelman who
25:48
lost his job and printed off one hundred and fifty
25:52
flyers advertising recently laid off looking for a new job
25:57
with a QR code linking to his LinkedIn page and
26:00
duct taped them to telephone polls all across New York City.
26:04
Speaker 2: Well, I feel kind of bad for Glenn because the
26:08
fact that he's been interviewed for this piece means he
26:10
hasn't been hired, true, which means it probably hasn't worked
26:14
that well.
26:16
Speaker 3: While I think this is tacky, I love the innovative.
26:19
Speaker 4: Remember they I don't even know if it's a true story,
26:21
but you remember the story of the guy who started
26:25
delivering donuts with his resume printed on the box to
26:28
a bunch of offices to try and get a job.
26:31
No again, I love these innovative ways of getting your
26:34
foot in the door because anybody that's had to apply
26:37
to a job in the last decade sucks can tell
26:39
you it is terrible. You know, your your resume oftentimes
26:43
does not even get read by a human. They have
26:45
an AI system or a pre screening tool that's automatically
26:50
going to filter you out. Plenty of people tell you like, yeah,
26:53
you applied one hundred plus jobs these days in order
26:56
to get one interview. So I applaud it, even if
26:59
it didn't necessarily in this case, land him the job
27:01
he was looking for.
27:02
Speaker 2: Yeah, it's look, it's a challenging market for tech workers
27:07
right now, and all of the money is heading to AI.
27:11
And so if you're in an auxiliary role, which is
27:14
pretty much anything other than someone directly on the front
27:16
lines for AI or you know, sales for AI, you're
27:21
kind of Even if someone has an open position, that
27:26
position might be kind.
27:27
Speaker 3: Of on the back burner in a lot of cases.
27:28
I want to know.
27:31
Speaker 4: Where in the college education process is artificial intelligence training
27:35
right now. I would imagine most top of the line
27:38
universities are already including that in some form of course work,
27:43
because quite honestly, if you're a graduating senior right now
27:45
and you don't know how to prompt an artificial intelligence
27:50
large language model, in my mind, you're behind the eight ball.
27:54
Speaker 2: I'm curious just because I haven't actually looked at this.
27:56
So I'm going to check what Dartmouth, I just for uh,
28:01
their their stuff on this. They do have a whole
28:05
course on artificial intelligence. They they got a few different ones.
28:08
It kind of depends on what you're looking for here,
28:12
But I'm just looking at like the upcoming uh winter
28:16
stuff that they have there, and you've got, you know,
28:19
a couple of different courses on machine learning. Let's see,
28:24
there's actually the only one that's on artificial intelligence.
28:26
Speaker 3: Is looks like it was a fall course that was
28:29
offered spring.
28:31
Speaker 4: I'm seeing one from my alma mater as well. I
28:34
don't know the details of the course, but yeah, again,
28:36
an artificial intelligence.
28:39
Speaker 2: They got one of They got a couple of things
28:42
that are kind of cool here. They got one on
28:43
music and artificial intelligence, which must be kind of a
28:46
party course, like that's got to be awesome.
28:49
Speaker 3: Uh.
28:49
Speaker 2: And then deep learning generalization and robustness gets into probably
28:53
some pretty heavy stuff, a bunch of machine learning and
28:56
and and all kinds of stuff there. But you know,
28:58
the you've got to be adapting your curriculum, Like computer
29:01
science is one area where you've got to be adapting,
29:04
probably on like a two to three year timeline, like
29:06
adding courses pretty consistently.
29:09
Speaker 3: You know. It's it's it's not math. Yeah, it's math.
29:13
It's kind of like, well, we still have calculus. This
29:16
is what Pythagoras came up with, and it's still true.
29:19
Speaker 2: You know, here's philosophy. This is what they thought back
29:25
when the Greeks were roaming around and everything. Yeah, computer
29:28
science is moving a little faster. By the way, you missed. Yesterday, Mike,
29:31
we covered the uh.
29:34
Speaker 3: Who was it you?
29:34
Speaker 2: Goov did a poll on the un Americans thoughts about
29:40
the different ancient empires that existed. They pulled Americans on
29:45
like favorable unfavorable for ancient empires.
29:48
Speaker 3: They actually did this. I'm not making this up. Okay,
29:51
it's a real thing.
29:52
Speaker 2: But the Huns had the the most underwater favorability rankings
29:57
at fourteen percent favorable and forty three percent unf favorable,
30:01
whereas ancient Athens was the strongest at fifty four percent
30:05
favorable ten percent unfavorable.
30:07
Speaker 3: Great infrastructure. America is very anti Hun these days.
30:11
Speaker 4: Yeah, clearly very anti Hun. That tillah huh at Atilla,
30:16
I really just ruined the brand.
30:18
Speaker 2: Well you know that Attila he actually played football too.
30:24
Actually it was it was Jaba who played football, got it,
30:26
Jaba the hot Hot Hike.
30:28
Speaker 3: Yeah. Anyways, it played better yesterday.
30:30
Speaker 2: Sorry, It's never as good the second time you tell it,
30:34
like this is why no one should be a stand
30:36
up is because like, oh, it hits once and you're like, yeah,
30:38
I got it.
30:39
Speaker 3: No, you can never replicate it. Thank you, Tucker.
30:43
Speaker 2: Let's take a quick break to recover from that, and
30:45
when we return, we've got stack Roulette after this.
30:49
Speaker 1: The Financial Exchange streams live on YouTube. Like our page
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and stay up to date on breaking business news all morning.
30:56
Long Base is the Financial Exchange Radio Network business and
31:01
financial news affecting the markets and your wallet. We've got
31:04
it all straight from Wall Street right here on the
31:07
Financial Exchange Radio Network.
31:17
Speaker 3: Like what you got for me for stack Roulettes. Darn Restaurants.
31:22
Not a great year for their stock.
31:23
Speaker 4: Stock is now up about five and a quarter percent
31:26
for the year and up about seven percent today. Tucker
31:29
mentioned they reported earnings overnight or was it this morning?
31:32
Speaker 3: This morning?
31:33
Speaker 4: This morning they reported earnings. You're a restaurant company. You
31:37
should report earnings after the bell at the night.
31:39
Speaker 3: Now, that's that's right in the middle of the busy period. Yeah,
31:42
I guess you're trying to wait tables. Yeah, reporting.
31:46
Speaker 4: Big misses really across the board here and nonetheless stock
31:49
moving up on really commentary from the CEO. But earnings missed,
31:54
and I do wonder what exactly it speaks to in
31:59
terms of consumers willingness to spend. They represent a broad
32:03
swath of different types of restaurants from Olive Garden to
32:05
what's their high end steakhouse, Capitol Grill, Capitol Grill, and
32:09
you know, seeing a pullback and spending here. I also
32:13
do openly wonder you mentioned Tucker what a partnership with
32:16
Uber eats Geordash.
32:18
Speaker 3: Yeah, at the end of this year, how do you
32:20
get zuber eats? How do you get unlimited breadsticks with
32:23
Uber Eats.
32:23
Speaker 4: I don't think that's gonna work out too well, but
32:26
I be interested to keep an eye on a good question. Yeah,
32:31
tough to get ulimited breadsticks. The guy's not gonna go
32:33
back and forth all day to get to your unimited.
32:37
Speaker 3: The whole back seats filled with them.
32:38
Speaker 4: This is one of very few companies that's publicly traded
32:43
in the sit down restaurant space. There's not a lot
32:48
of other ones that give them a good viewpoint into
32:51
how consumers are spending. And so I do find this
32:53
significance just in terms of what it tells you about
32:56
American's ability and willingness to spend at restaurants right now.
33:00
Speaker 2: Yeah, it's it's it's tough also to get a read
33:03
because they're in so many different categories.
33:05
Speaker 3: Yeah, of course, I mean, you know, quite high high.
33:08
I mean.
33:08
Speaker 2: But the piece that is interesting is that they said
33:10
the only division that reported same store sales growth was
33:13
Longhorn Steakhouse. Everything else, whether it's Olive Garden, whether it's
33:17
Capital Grill, Yard House, everything else, they had same store
33:22
sale declines. Yeah, So that I think is something that's
33:25
that's notable.
33:27
Speaker 4: And none of their brands occupy the McDonald's space, I
33:32
think is the other point here. There's no there there's
33:34
no brand that they have that you can look at
33:36
for the segment and say, oh, that's the place to
33:39
get a really cheap dinner.
33:41
Speaker 2: I mean, Olive Garden to some extent occupies. They've also
33:43
got no fast casual right space. Like, there's no Chipotle
33:46
in there, there's no Panera in there. It's it's it's
33:50
it's different fundamentally from both of those. Also, So there's
33:54
that piece in Bloomberg. It's titled Salesforce is a dark
33:58
horse in the AI race. First, I take exception with
34:01
one of the thirty companies that's included the Dow Jones
34:05
Industrial Average being called a dark horse for anything like that.
34:10
Speaker 3: That's just not what a dark horse I heard of.
34:13
This company Salesforce.
34:14
Speaker 2: That's like, well, Microsoft is a dark horse to you know,
34:18
have crab legs delivered to all employees, Like, I don't
34:22
know like they could do that. They're a sleep Yeah,
34:26
so the Salesforce isn't really a dark horse. What it's
34:28
talking about is, Hey, all the hype for AI right
34:31
now is going towards one company quite honestly, yea Open AI. Yeah,
34:36
Like who talks about Google's AI these days? Aside from
34:40
did I don't think we ever covered it?
34:43
Speaker 3: Well, there's open Ai.
34:45
Speaker 4: Then the next tier down is Microsoft, Google and Facebook
34:48
Open That is Microsoft, like it's viewed one day of saying,
34:51
and then the tier down from that would be companies
34:53
like Salesforce that nobody's really talking about when it comes
34:55
to AI. So I think part of it is just
34:58
that open ai is sucked up all the ox gin
35:00
in the room. But I did want to make sure
35:02
we cover just tangentially, did we ever cover any of
35:04
the creepiness about what Google is putting together for its
35:09
like photos app for Android now no where you can
35:14
delete and add stuff to photos using AI, Like hey,
35:17
put a dog in this picture?
35:18
Speaker 3: And I can't imagine any nefarious purposes that could be
35:22
used like why do we need that, we don't.
35:26
Speaker 2: This is so stupid that we are now giving people
35:29
the ability to just add stuff that wasn't there into.
35:34
Speaker 3: Photos a photoshop.
35:36
Speaker 2: Well, yes, but you need to have some skill to
35:38
do that, which is why most people don't pay for it.
35:42
Speaker 3: And so this is just it's gonna get.
35:45
Speaker 2: Where we're going is no one is going to trust
35:47
any online information, even from their friends anymore.
35:51
Speaker 3: You won't be able to.
35:53
Speaker 2: We are going to kill the Internet, start it over,
35:59
reset the We're gonna have to move to the outernet,
36:01
unplug it, plug it back in, folks.
36:03
Speaker 3: Yeah, the outer nets coming. Once the Internet died, it's
36:07
gonna be like the Internet. But out stocks remain positive.
36:12
As we conclude the show today, hope you all have
36:15
a great rest of the day and we'll see you tomorrow.
36:16
Speaker 2: To finish up the week on the Financial Exchange,