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Why would US automakers take the brunt of tariffs? · The Financial Exchange Show

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  Speaker 2: Morning, Welcome back, happy Thursday to the Financial Exchange.
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  Speaker 3: And like many days.
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  Speaker 2: Of the course of the last month, it is just
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  Speaker 2: a wildfire of changing narratives and stories here. But let's
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  Speaker 2: kind of introduce a few of them. It's Mike, Paul
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  Speaker 2: and Tucker with you on a Thursday. Yesterday, at four
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  Speaker 2: pm in Video released their earnings. At five pm, they
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  Speaker 2: had their earnings call with analysts.
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  Speaker 3: Seemingly very good news across the board.
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  Speaker 2: For Video will be covering that at eight thirty am
• 1:45
  Speaker 2: this morning, we received initial jobless claims, So how many
• 1:49
  Speaker 2: people filed for unemployment in the previous week? Hotter than expected?
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  Speaker 2: And then was it yesterday evening or afternoon? During a
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  Speaker 2: meeting with his cabinet meeting in the Cabinet secretaries, that
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  Speaker 2: was this morning, No, that was yesterday morning, yesterday morning,
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  Speaker 2: Donald Trump stated that tariffs on Mexico and Canada would
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  Speaker 2: like to be likely to be looking at April second
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  Speaker 2: this morning, stating that they are going into place as
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  Speaker 2: planned on March fourth.
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  Speaker 3: So things are bouncing around pretty quickly here.
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  Speaker 2: Let's start with Nvidia, whose stock was up in early
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  Speaker 2: trading prior to the news coming out of the tariffs
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  Speaker 2: going on into effect on March fourth. This was early
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  Speaker 2: pre market trading. I saw the stock up two to
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  Speaker 2: three plus percent on better than expected earnings. Right now
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  Speaker 2: down about three percent, I think on tariff insinuations here.
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  Speaker 2: But let's start with the earnings themselves here, Paul, because
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  Speaker 2: across the board, better than expected, selling well, no real
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  Speaker 2: concern about deep seek or any other Chinese innovation, and
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  Speaker 2: you know, all all power ahead, seems like the message
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  Speaker 2: from in video.
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  Speaker 4: Yeah, these are really good numbers, Mike, across the board.
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  Speaker 4: I'll just dive into them briefly.
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  Speaker 1: Here.
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  Speaker 4: They saw a seventy eight percent rise in revenue to
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  Speaker 4: thirty nine billion in their most recent quarter. And then
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  Speaker 4: for this upcoming quarter that they're in the midst of,
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  Speaker 4: they reported that they're anticipating revenue of forty three billion.
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  Speaker 4: That exceeds analyst expectations of forty two billion. So you
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  Speaker 4: have these two factors combined. When you do these conference calls,
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  Speaker 4: typically what you're looking to do is beat analyst expectations
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  Speaker 4: on what you saw from the past quarter and then
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  Speaker 4: to guide upwards on your current quarter. Both of those things,
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  Speaker 4: in a nutshell, are very positive. But I would almost
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  Speaker 4: compare in Vidia to some sort of you know, perennial
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  Speaker 4: super Bowl winner or some sort of you know athlete
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  Speaker 4: who has just done no wrong and continues to perform
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  Speaker 4: at a high level. The bar keeps getting higher and higher.
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  Speaker 4: And that's really what I believe that we're seeing here.
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  Speaker 4: I have to sort of grapple as to why it's
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  Speaker 4: selling off today. It was going to be a more
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  Speaker 4: muted gain. It seemed like heading into the market.
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  Speaker 2: But the let's tell I think it's tariffs. I don't
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  Speaker 2: think it has much to do. And I know that
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  Speaker 2: tariffs on Mexico and Canada don't really make sense in
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  Speaker 2: terms of why and Video would be selling off itself.
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  Speaker 2: But this stock and the market as a whole was
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  Speaker 2: up substantially until Donald Trump said that tariffs are going
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  Speaker 2: into place on March fourth.
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  Speaker 4: Oh so more of like a macro company, I think,
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  Speaker 4: you because it's such a heavy portion of the S
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  Speaker 4: and P five and that it's always hard to speculate,
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  Speaker 4: you know, what the movement is. But that makes more
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  Speaker 4: sense than anything that we're about to talk about right here.
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  Speaker 2: Yeah, so revenue for their latest Blackwell AI chips. These
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  Speaker 2: are the latest and greatest chips that are really transforming
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  Speaker 2: the company from one that sold chips that are used
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  Speaker 2: to develop the newest AI models, which that was in VideA.
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  Speaker 2: There was some concern over the course of the last
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  Speaker 2: year or so that, hey, you know, there's fewer and
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  Speaker 2: fewer companies doing training. Now, that's not where the big
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  Speaker 2: investment is being made. It is on big comp lex
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  Speaker 2: ongoing computations. And will and Video still be the one
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  Speaker 2: that develops the latest chip for this type of thing,
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  Speaker 2: or will somebody else come in here and pick up
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  Speaker 2: some of that ground. There's a discussion of AMD and
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  Speaker 2: other companies maybe making some headway on them. There's Amazon, Google, Microsoft,
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  Speaker 2: all trying to develop their own semiconductor chips to do this.
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  Speaker 2: In Video's Blackwell selled eleven billion dollars worth in the
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  Speaker 2: latest quarter.
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  Speaker 3: I had seen estimates that were half that.
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  Speaker 2: Like, they really knocked the cover off the ball on
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  Speaker 2: this one. And like I said, there was really not
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  Speaker 2: a whole lot that I could see that was bad
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  Speaker 2: news here. Now we talked about in Vidia sales rising
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  Speaker 2: by seventy eight percent in the most recent quarter. That
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  Speaker 2: is unbelievable news for any company out there. For in
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  Speaker 2: Video it's just par for the course. You know, this
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  Speaker 2: is a stock that has grown by more than eight
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  Speaker 2: hundred percent over the preceding two years, so you know
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  Speaker 2: they have to grow at seventy eight percent if they're
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  Speaker 2: going to even reasonably justify their stock price. But all
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  Speaker 2: of the news here seems to be very positive. The
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  Speaker 2: CEO Jen Sangwong was specifically asked as expected about deep
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  Speaker 2: Seek and the you know the AI developer that did
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  Speaker 2: spook some investors earlier in February was that the news
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  Speaker 2: came out.
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  Speaker 4: Yeah, late January, early February, we saw seventeen percent sell
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  Speaker 4: off from Nvidia on that news.
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  Speaker 3: And reason being.
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  Speaker 2: The insinuation here is that Deepseek was able to kind
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  Speaker 2: of create a shortcut and develop an AI model without
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  Speaker 2: as many semiconductors. And you know, Wan called the Deep
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  Speaker 2: Seek innovation and excellent innovation, and that pretty much AI
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  Speaker 2: every AI developer out there was using techniques inspired by
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  Speaker 2: the development. But that these new models that are now
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  Speaker 2: being created everywhere at a lower cost and more efficiently
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  Speaker 2: need more computing resources. You need more in Vidia chips,
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  Speaker 2: and that continues to be the drive. At least the
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  Speaker 2: message from the CEO that hey, you know, any new
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  Speaker 2: more efficient computation model is just going to bring us
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  Speaker 2: more customer And he at least remains optimistic, which guess
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  Speaker 2: what his job is to be optimistic, So don't believe
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  Speaker 2: everything he says. But nonetheless no real slowdown being seen
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  Speaker 2: here yet.
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  Speaker 5: No.
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  Speaker 4: I think you make a good point sort of describing
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  Speaker 4: the way that the industry has evolved, that there was
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  Speaker 4: a lot of focus on the creation of these models.
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  Speaker 4: Now the focus is much more on the operation of
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  Speaker 4: these models and using inference, so basically running the models
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  Speaker 4: versus just building them up. And so this Blackwell chip
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  Speaker 4: from all early indications, has positions itself really well to
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  Speaker 4: be able to do inference type of work, to be
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  Speaker 4: able to operate these models. All of the information that
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  Speaker 4: you read from this quarterly report is positive indications, whether
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  Speaker 4: it's the numbers on the financial side of things or
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  Speaker 4: just of course the optimism in general from the CEO.
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  Speaker 4: It is fair to point out, if you want to
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  Speaker 4: be devil's advocate or potentially a little bit of a
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  Speaker 4: barecase is that this market is extremely competitive, and Wong
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  Speaker 4: said the same thing too, that there is increase competition
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  Speaker 4: from Huawei in China. They also have domestic competitors, AMD
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  Speaker 4: and others, and they're startups in this space too, Mike,
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  Speaker 4: that are developing specific chips that have a designated use
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  Speaker 4: for specific types of computing. And when you're operating in
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  Speaker 4: a business that has margins of eighty or seventy five percent.
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  Speaker 3: They don't last long.
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  Speaker 4: They don't last long, particularly when half of its data
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  Speaker 4: center revenue from Nvidia comes from Microsoft, Amazon and Google.
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  Speaker 4: And yeah, they have the pocketbooks to be able to
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  Speaker 4: pay a ton of money to get these chips, but
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  Speaker 4: you better believe in house they're looking to do it
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  Speaker 4: their own way so that they don't have to pile
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  Speaker 4: up boatloads of money to pay for in video. So
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  Speaker 4: it's just they've done a great job position themselves. These
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  Speaker 4: Blackwell sales are really encouraging too. It seems like they
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  Speaker 4: continue to be the leader. But better believe that there
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  Speaker 4: is competition coming from them. It's just how long can
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  Speaker 4: they fend them. Often, I would imagine that in Video
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  Speaker 4: will come out with an IMFRINT specific chip too to
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  Speaker 4: fend off some of these competitors.
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  Speaker 2: In Video reached an all time high stock price on
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  Speaker 2: January sixth of this year, one hundred and forty nine
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  Speaker 2: dollars and forty three cents today, trading down a few
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  Speaker 2: percentage points, as we mentioned, off about two percent after
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  Speaker 2: gaining about that much yesterday. That's about a fourteen percent
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  Speaker 2: level off their all time highs back in January, and again,
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  Speaker 2: tough for me to know if this is a selloff
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  Speaker 2: because there is some form of concern about these earnings.
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  Speaker 3: I believe they did.
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  Speaker 2: Mention that their expectations for Blackwell sales for the current
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  Speaker 2: quarter went quite as robust as the most recent one,
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  Speaker 2: which really knocked the cover off the ball. Or if
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  Speaker 2: this is some reaction to what we're going to discuss next,
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  Speaker 2: which would be the implementation and announcement of new tariffs
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  Speaker 2: to go into place in less than a week. Let's
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  Speaker 2: take a quick break here on the Financial Exchange. When
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  Speaker 2: we come back, we'll be tackling that next ever changing
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  Speaker 2: tariff story here on the Financial Exchange.
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  Speaker 2: About a month ago, but less than a month ago,
• 11:02
  Speaker 2: early February, Donald Trump announced significant tariffs on Canada and Mexico.
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  Speaker 2: That morning, I was doing the show and recalled discussing
• 11:10
  Speaker 2: these tariffs that were due to go into effect. We
• 11:12
  Speaker 2: spent a lot of time going into them, and if
• 11:16
  Speaker 2: gone into effect, they are substantial increases to products that
• 11:21
  Speaker 2: Americans consume every day. Vehicle industry among the most heavily impacted,
• 11:25
  Speaker 2: though given how frequently parts cross borders in order to
• 11:29
  Speaker 2: assemble a car here in the United States, those tariffs
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  Speaker 2: that day were announced, markets were selling off a good
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  Speaker 2: two percentage points by ten point thirty. Donald Trump announced
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  Speaker 2: the suspension of Mexico tariffs. By I think eleven thirty
• 11:43
  Speaker 2: or noon, he announced suspension on Canadian tariffs as well,
• 11:46
  Speaker 2: and markets flipped back. Yesterday, during a cabinet meeting, Donald
• 11:50
  Speaker 2: Trump was asked about those tariffs and said during the
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  Speaker 2: meeting that quote, I'm not stopping the tariffs, but he
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  Speaker 2: later went on to say that Mexican Canada would be
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  Speaker 2: implemented on on April second. It wasn't really clear based
• 12:04
  Speaker 2: on all that commentary if that was just a slip meaning, hey,
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  Speaker 2: I meant to say March, or if it was actually
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  Speaker 2: an intended statement to say April second, because a White
• 12:13
  Speaker 2: House official later on Wednesday said that the deadline for
• 12:16
  Speaker 2: Mexico and Canadian tariffs remained March fourth, Donald Trump had
• 12:19
  Speaker 2: not yet decided whether to grant another extension. Finally, this
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  Speaker 2: morning at I don't know when, did you see it
• 12:27
  Speaker 2: flash across your screen? Sometime around nine am FI a
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  Speaker 2: statement from the President stating that no, the tariffs are
• 12:35
  Speaker 2: in effect as of Tuesday of next week, March fourth,
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  Speaker 2: So whiplash a little bit here On expectations go ahead time.
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  Speaker 5: So the exact post was the proposed tariff scheduled to
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  Speaker 5: go in effect on March fourth, will indeed go into
• 12:48
  Speaker 5: effect as scheduled, And then he adds China will likewise
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  Speaker 5: be charged in additional ten percent tariff on that date.
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  Speaker 4: So I'm twenty percent for anyone county.
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  Speaker 2: Yes, because the ten percent initially so the tariffs that
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  Speaker 2: were implemented on Mexico and Canada were suspended, the ones
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  Speaker 2: on China were not. Those ones remained in effect a
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  Speaker 2: month ago, and an additional ten percent would bring it up,
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  Speaker 2: you know, twenty percent from where we were previously.
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  Speaker 3: I have no.
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  Speaker 2: Idea if this is real or not. I'm not going
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  Speaker 2: to guess. I'm done trying to figure this out. I
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  Speaker 2: will say something that is important to recognize markets investors
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  Speaker 2: are not buying it. The SMP right now is up
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  Speaker 2: one fifth of one percent, the Dow is up three
• 13:32
  Speaker 2: quarters of one percent, the nasdac's off a little bit,
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  Speaker 2: you know, off about a third of one percent. Investors
• 13:37
  Speaker 2: are telling the President right now, we do not believe you.
• 13:42
  Speaker 2: That is both dangerous for the president and dangerous for investors.
• 13:44
  Speaker 2: I think because I do kind of believe him. I
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  Speaker 2: do think that this is something that he wants to implement.
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  Speaker 2: I don't know how long it lasts. I do believe
• 13:54
  Speaker 2: he views tariffs, and his cabinet viewed tariffs as a
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  Speaker 2: key instrument in order to raise revenue and bring jobs
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  Speaker 2: back to the United States.
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  Speaker 3: And we can have debates.
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  Speaker 2: Until our faces turned blue about whether that's a good
• 14:09
  Speaker 2: idea or a bad idea. And there are people lining up.
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  Speaker 2: Economists mainly line up on the bad idea side of things.
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  Speaker 2: But again, this is all up for debate. What I'm
• 14:18
  Speaker 2: making the point of is investors are not buying it.
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  Speaker 2: If you genuinely believed that Terris were going into place
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  Speaker 2: on Tuesday of next week, I just cannot really justify
• 14:29
  Speaker 2: General Motors.
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  Speaker 4: I'm just going to go there, General Morris and foe Ford.
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  Speaker 4: Those are the first two companies that I went to
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  Speaker 4: look at to see how their stock was reacting to
• 14:38
  Speaker 4: the news, because they you would think they would be
• 14:42
  Speaker 4: trending trading downwards with this news, you know, because of
• 14:46
  Speaker 4: the substantial impact. Ford and GM executives have been very
• 14:50
  Speaker 4: abundantly clear that it would have a negative impact to
• 14:54
  Speaker 4: their business and would throw their supply chain in a
• 14:57
  Speaker 4: bit of disarray, and that consumers could expect to spend
• 15:00
  Speaker 4: four or five thousand dollars more per car if these
• 15:03
  Speaker 4: were in for a long period of time. So you're
• 15:06
  Speaker 4: not seeing the market reaction at least as it pertains
• 15:08
  Speaker 4: to those two individual stocks that are pretty impacted by
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  Speaker 4: this initial tariff here.
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  Speaker 2: Yeah, So again I have no idea whether or not
• 15:16
  Speaker 2: these will go into place.
• 15:17
  Speaker 3: If they do.
• 15:18
  Speaker 2: Yeah, the auto industry in particular, because of so the
• 15:22
  Speaker 2: way that these tariffs have been talked about, it's not
• 15:25
  Speaker 2: that hey, in the total enny manufactured good that goes
• 15:28
  Speaker 2: through Canada would face a twenty five percent tariff. That's
• 15:32
  Speaker 2: actually not how it works. Here's how it works.
• 15:34
  Speaker 3: Instead, So.
• 15:36
  Speaker 2: General Motors needs to let's say import the chassis for
• 15:41
  Speaker 2: the vehicle that they are manufacturing, and it comes over
• 15:44
  Speaker 2: the border. As just the chassis, that specific product is
• 15:49
  Speaker 2: going to hit a twenty five percent tariff.
• 15:51
  Speaker 3: Then the way these vehicles work is they go back across.
• 15:53
  Speaker 2: The border and some other part of the vehicle is
• 15:56
  Speaker 2: going to get assembled in Canada. When it's closer to finished,
• 16:00
  Speaker 2: it comes back over, it's going to face an additional
• 16:02
  Speaker 2: twenty five percent tariff on these These automakers will face
• 16:06
  Speaker 2: substantial increases in cost if these tariffs go into place,
• 16:09
  Speaker 2: and the mere fact that their stock is not reacting
• 16:12
  Speaker 2: in any meaningful way to me at least, speaks to
• 16:16
  Speaker 2: investors not buying it. So again, why I think that's
• 16:20
  Speaker 2: a big deal is if markets aren't buying it, I
• 16:23
  Speaker 2: doubt Trudeau, and I apologize the Mexican President's name is
• 16:28
  Speaker 2: escaping me right now. I worry that this is not
• 16:32
  Speaker 2: being taken seriously by investors, and that sets us up
• 16:34
  Speaker 2: for one of two things. One, it could set us
• 16:37
  Speaker 2: up for a market that is going to be substantially
• 16:41
  Speaker 2: surprised when in fact they do go into place. Two,
• 16:44
  Speaker 2: it could set up a present that feels like he
• 16:46
  Speaker 2: needs to go and implement tariffs that he might not
• 16:49
  Speaker 2: want to because nobody is believing it anymore and he
• 16:51
  Speaker 2: needs to regain credibility. So that's where things are on
• 16:54
  Speaker 2: the tariff front right now. We will obviously know more
• 16:57
  Speaker 2: on Tuesday of next week, March fourth, when these are
• 16:59
  Speaker 2: due to get implemented per the President, and we'll cover
• 17:02
  Speaker 2: it then, But for now I have to just I
• 17:06
  Speaker 2: get a little bit concerned when you see stuff like
• 17:09
  Speaker 2: this where oh yeah, quick market reaction. We did see
• 17:12
  Speaker 2: the Nasdaq down about one percent earlier this morning. Right now,
• 17:16
  Speaker 2: Nasdaq's barely down, it's off a third of a percent.
• 17:19
  Speaker 2: SMP's off up more than a fifth of a percent
• 17:22
  Speaker 2: right now. And that is not how markets would behaving
• 17:25
  Speaker 2: in my estimation, were they about to face tariffs on
• 17:29
  Speaker 2: all products coming into the United States from Mexico and Canada.
• 17:32
  Speaker 2: Anything else on tariffs before we before we move on,
• 17:35
  Speaker 2: I know we're going to cover aluminum later.
• 17:37
  Speaker 3: Go ahead.
• 17:37
  Speaker 5: I mean, if you're just looking back at the previous
• 17:39
  Speaker 5: month when we did this, there was a report from
• 17:42
  Speaker 5: that weekend heading into that initial deadline, So I would
• 17:46
  Speaker 5: expect something similar this weekend. And I'm curious how markets
• 17:49
  Speaker 5: would react on Monday.
• 17:51
  Speaker 2: Yeah, yeah, it will likely move be ahead of all
• 17:54
  Speaker 2: of that, because I would imagine that this weekend will
• 17:57
  Speaker 2: be a busy one for negotiation and of all of this.
• 18:04
  Speaker 3: Yeah, let's move on.
• 18:05
  Speaker 2: There is also a discussion of aluminum tariffs that is
• 18:09
  Speaker 2: making its way through. We will cover that later on
• 18:11
  Speaker 2: in the show.
• 18:12
  Speaker 4: EU has also been mentioned in the mix. Maybe tariff
• 18:17
  Speaker 4: on the EU.
• 18:18
  Speaker 2: So that was part of the cabinet meeting yesterday as well.
• 18:20
  Speaker 2: Was you know, okay, we have the Canada Mexico terriffs.
• 18:23
  Speaker 2: But remember too that there's been this discussion of reciprocal
• 18:27
  Speaker 2: tariffs and specifically what they mean there is there are
• 18:30
  Speaker 2: countries that protect certain industries frankly as the United States
• 18:35
  Speaker 2: does too, but there are countries that protect certain industries
• 18:37
  Speaker 2: through the use of tariffs. And the EU is guilty
• 18:40
  Speaker 2: of this, India is guilty. There's many other countries are
• 18:42
  Speaker 2: guilty of this practice. And the Trump administration has said, look,
• 18:46
  Speaker 2: give us a little bit of time, but we are
• 18:47
  Speaker 2: planning to implement these tariffs across many countries that have
• 18:51
  Speaker 2: terrafts of their own on American products, and those two
• 18:55
  Speaker 2: are in the works. There's a fair bit of discussion
• 18:57
  Speaker 2: across the European Union in terms of how they would
• 18:59
  Speaker 2: reach act to all of that, but all of this
• 19:03
  Speaker 2: stuff remains in the works. And just genuinely, I wouldn't
• 19:06
  Speaker 2: be surprised. I mean, we've already seen a change in
• 19:09
  Speaker 2: the narrative this morning between you know, yesterday's news and
• 19:14
  Speaker 2: nine am this morning when the President was it via
• 19:17
  Speaker 2: social media postcocer. It's right, So I wouldn't be surprised
• 19:22
  Speaker 2: if We have another announcement within the next few hours here,
• 19:24
  Speaker 2: and we'll keep your praise.
• 19:25
  Speaker 3: Wall Street Watch's next.
• 19:40
  Speaker 1: Like us on Facebook and follow us on Twitter. Act
• 19:43
  Speaker 1: TFFE show. Breaking business news is always first right here
• 19:48
  Speaker 1: on the Financial Exchange Radio Network. Time now for Wall
• 19:52
  Speaker 1: Street Watch. A complete look at what's moving market so
• 19:56
  Speaker 1: far today right here on the Financial Exchange Radio Network.
• 20:00
  Speaker 5: Busy down Wall Street with markets and mixed territory as
• 20:02
  Speaker 5: Wall Street reacts to big fourth quarter earnings from Nvidia,
• 20:06
  Speaker 5: more terrif und certainty and economic data streaming in this morning,
• 20:10
  Speaker 5: including higher than expected jobless claims. At the moment, the
• 20:14
  Speaker 5: Dow is up by eight tenths of a percent or
• 20:16
  Speaker 5: three hundred and forty one points s and P five
• 20:19
  Speaker 5: hundred is off by only two points in the Nasdaq
• 20:23
  Speaker 5: down by seven tenths of a percent or one hundred
• 20:26
  Speaker 5: and thirty five points. Russell two thousand is off about
• 20:29
  Speaker 5: a quarter of a percent. Tenyure Treasure reeled up by
• 20:31
  Speaker 5: four basis points a four point twenty nine percent, and
• 20:35
  Speaker 5: crude oil up over two percent higher on the day,
• 20:38
  Speaker 5: trading just above seventy dollars a barrel on the heels
• 20:41
  Speaker 5: of their anticipated earnings report. Nvidia shares down by three
• 20:44
  Speaker 5: percent after the chip and ai giant reported sharply higher
• 20:49
  Speaker 5: sales in profit for the previous quarter, but a narrower
• 20:51
  Speaker 5: profit margin. The company also offered a better than expected
• 20:55
  Speaker 5: outlook and revenue for the current quarter. However, in Nvidia
• 20:58
  Speaker 5: did acknowledge that global competition was ramping up. Meanwhile, shares
• 21:03
  Speaker 5: in Salesforce pulling back by three percent after the software
• 21:06
  Speaker 5: company's fourth quarter revenue missed street forecasts. The company also
• 21:11
  Speaker 5: offered weaker than expected guidance. Another software company also reported earnings,
• 21:15
  Speaker 5: as Snowflake posted a big jump in quarterly revenue but
• 21:19
  Speaker 5: a wider loss than a year ago, that stock jumping
• 21:22
  Speaker 5: by eight percent on the day. Elsewhere, eBay down by
• 21:26
  Speaker 5: nine percent after its first quarter revenue guidance fell short
• 21:30
  Speaker 5: of expectations. The e commerce giant did, however, beat fourth
• 21:33
  Speaker 5: quarter estimates. Jeffries upgraded Freeport Macbran to buy, with a
• 21:38
  Speaker 5: firm sighted improving free cash flow trends as well as
• 21:41
  Speaker 5: cost reductions as growth catalysts moving forward. Freeport shares are
• 21:46
  Speaker 5: up by one percent, and shares and Warner Brothers Discovery
• 21:49
  Speaker 5: jumping by six percent after the media Giants said it
• 21:52
  Speaker 5: added six point four million global streaming subscribers in the
• 21:57
  Speaker 5: previous quarter, bringing its total to about one hund hundred
• 22:00
  Speaker 5: and seventeen million subscribers. Extreming segments revenue anchored by Max
• 22:06
  Speaker 5: total two point sixty five billion dollars, up five percent
• 22:10
  Speaker 5: from the same period last year. I'm Tucker Silvan, that's
• 22:13
  Speaker 5: Wall Street Watch.
• 22:14
  Speaker 2: Tucker briefly mentioned the weekly jobless claims that we saw, Paul.
• 22:18
  Speaker 2: When we talk about economic indicators that we get, we
• 22:21
  Speaker 2: kind of lump them into leading, coincident and trailing indicators.
• 22:26
  Speaker 2: A leading indicator would be the stock market. It would
• 22:29
  Speaker 2: be something like sentiment expectations on behalf of consumers are
• 22:33
  Speaker 2: considered leading indicators. Coincident would be jobless claims. You're getting
• 22:38
  Speaker 2: it pretty much live. This data that we collected that
• 22:41
  Speaker 2: the BUI labor statistics collected anyway, was as of the
• 22:43
  Speaker 2: week ended February twenty seconds, so just a week ago.
• 22:47
  Speaker 3: And then your trailing indicators would be something like GDP measurements.
• 22:50
  Speaker 2: Right when you get a measurement of how much did
• 22:52
  Speaker 2: the grow economy grow in the most recent quarter, doesn't
• 22:55
  Speaker 2: really tell you anything about the future. The weekly jobless
• 22:58
  Speaker 2: claims were elevated for the week that ended February twenty second.
• 23:02
  Speaker 2: This is a reading of how many people actually filed
• 23:05
  Speaker 2: for unemployment at the state level.
• 23:07
  Speaker 3: All the states put.
• 23:07
  Speaker 2: The data together, give it to the federal government, and
• 23:10
  Speaker 2: they put these numbers together. Initial jobless claims came in
• 23:13
  Speaker 2: at two hundred and forty two thousand claims for unemployment.
• 23:16
  Speaker 2: That's an increase of twenty two thousand from the previous
• 23:19
  Speaker 2: week's level. It brings the previous week's level was also
• 23:23
  Speaker 2: slightly revised upwards, and the four week moving average is
• 23:27
  Speaker 2: now sitting at two hundred and twenty four thousand. So
• 23:30
  Speaker 2: to contextualize this, this at least for me, is not
• 23:35
  Speaker 2: a significant increase of concern. But if, for instance, you
• 23:41
  Speaker 2: saw this hovering around two hundred and fifty thousand jobless
• 23:44
  Speaker 2: claims for a few weeks, you start to get to
• 23:47
  Speaker 2: a point where the unemployment rate is going to creep
• 23:49
  Speaker 2: back up. And that is where I would start to
• 23:54
  Speaker 2: grow concerned, and where I think some consumers and individuals
• 23:58
  Speaker 2: out there are concerned that, hey, are you going to
• 24:00
  Speaker 2: start seeing unemployment creep up because of federal government layoffs,
• 24:04
  Speaker 2: because contracts and things like that are being canceled. What
• 24:07
  Speaker 2: sort of downstream impact do we have two employees out here?
• 24:12
  Speaker 3: This is one data points.
• 24:14
  Speaker 2: Don't take it as an alarm bell in and of itself,
• 24:18
  Speaker 2: but you know, this is definitely something to monitor because
• 24:21
  Speaker 2: it is the fastest way I know of anyway to
• 24:25
  Speaker 2: monitor the unemployment situation in the United States. The weekly
• 24:29
  Speaker 2: job or the monthly jobs report is a more all
• 24:32
  Speaker 2: encompassing area and way to do it. We'll get that
• 24:34
  Speaker 2: on Friday of next week for the month of February.
• 24:38
  Speaker 2: But this gives you rapid series of data in terms
• 24:40
  Speaker 2: of oh, yep, weekly job as, claims, where they come
• 24:42
  Speaker 2: and how do we see in this stuff? And so
• 24:44
  Speaker 2: I would say, you know, not quite an alarm bell,
• 24:47
  Speaker 2: but certainly you know, smelling a bit of smoke here
• 24:50
  Speaker 2: and something to keep an eye on.
• 24:51
  Speaker 4: Yeah, I think it's something that's worth myying. You hit
• 24:53
  Speaker 4: kind of the major points that I would want to
• 24:55
  Speaker 4: cover on it. One last data point the amount of
• 24:58
  Speaker 4: people receiving unemployment benefit for the week ending on February fifteenth,
• 25:02
  Speaker 4: that did decrease to one point eight six million.
• 25:05
  Speaker 3: So we'll get for those continuing claims.
• 25:07
  Speaker 4: Exactly, we'll get more context on it. Next Friday, the
• 25:10
  Speaker 4: jobs report is the one we lean on, probably the heaviest,
• 25:14
  Speaker 4: I would say, from all these indicators.
• 25:16
  Speaker 2: So if the last week or so the concern has
• 25:19
  Speaker 2: definitely not been about inflation, the shift that you have
• 25:22
  Speaker 2: seen over the course of the last week has moved
• 25:24
  Speaker 2: from oh, maybe the economy is overheating, to bond's interest
• 25:29
  Speaker 2: rates coming down, bond prices getting bid up, stock prices
• 25:32
  Speaker 2: coming down slightly, and sentiment across the US population moving
• 25:36
  Speaker 2: away from inflation concern and more towards recession concern. I
• 25:42
  Speaker 2: think is the only real way to put it. That
• 25:44
  Speaker 2: was what I saw from the University of Michigan Consumer
• 25:46
  Speaker 2: Sentiment Survey as well as the Conference Boards Sentiment Survey,
• 25:50
  Speaker 2: both of which showed steep drops in sentiment on behalf
• 25:55
  Speaker 2: of consumers.
• 25:55
  Speaker 3: That were pulled.
• 25:56
  Speaker 2: I've said before, and I'll say it again, I don't
• 25:58
  Speaker 2: know that that actually leads to it. I think very
• 26:01
  Speaker 2: frequently we've seen examples where people get nervous about the
• 26:04
  Speaker 2: economy and then are proven otherwise after time goes on.
• 26:08
  Speaker 2: But one area that we do have hard data on
• 26:10
  Speaker 2: remains prices, and in the month of January, we saw
• 26:15
  Speaker 2: prices shoot up pretty significantly. You had overall prices shooting
• 26:19
  Speaker 2: up by half a percent in the month of January.
• 26:23
  Speaker 2: If you strip out you know, the volatile food and energy,
• 26:26
  Speaker 2: because food was a key component of this, with egg
• 26:28
  Speaker 2: prices through the roof. Even then, you still saw prices
• 26:31
  Speaker 2: shooting up four tenths of a percent in the most
• 26:33
  Speaker 2: recent month. And again this hasn't been the biggest concern
• 26:37
  Speaker 2: according to two consumers. But as these egg prices continue
• 26:42
  Speaker 2: to climb, as you're still not seeing much in the
• 26:45
  Speaker 2: way of housing activity, inflation has heated up again in
• 26:49
  Speaker 2: the month of January. But this piece from Bloomberg, I
• 26:52
  Speaker 2: don't know. To me, it feels a bit overstated. Right now,
• 26:55
  Speaker 2: I'm not as concerned about a big inflation overheating right now.
• 27:00
  Speaker 4: At least I would agree with you. I think that
• 27:04
  Speaker 4: it's how much weight do you want to put into
• 27:06
  Speaker 4: the seasonality impacts on that January report which spooked people
• 27:09
  Speaker 4: a little bit. The headline print on that January report
• 27:12
  Speaker 4: was three percent year over year for inflation increase, But
• 27:16
  Speaker 4: there was a lot of questions that arose from perhaps
• 27:20
  Speaker 4: the impacts of the seasonality adjustments on that data. When
• 27:23
  Speaker 4: we get February's report, which that's probably a couple weeks away,
• 27:27
  Speaker 4: then we'll get a little bit more clarification. It is
• 27:29
  Speaker 4: worth noting, as much as there may be some anomalies
• 27:33
  Speaker 4: on the data for the month of January, the prior
• 27:36
  Speaker 4: months in December, we're trending a little bit more sticky
• 27:39
  Speaker 4: in terms of inflationary numbers. We were really in a
• 27:41
  Speaker 4: much better place in the fall, and now you have
• 27:44
  Speaker 4: all these different factors that we're combating that could lead
• 27:47
  Speaker 4: to further increases. But I'm not fully I'm not panicked,
• 27:51
  Speaker 4: ready to panic yet.
• 27:52
  Speaker 2: Let me just read out for everyone the month over
• 27:55
  Speaker 2: month increases from July through January. So July point one,
• 28:00
  Speaker 2: in August point two, September point two, October point two,
• 28:03
  Speaker 2: pretty reasonable trend there, November point three, December point four,
• 28:08
  Speaker 2: January point five. That's what we're talking about when we
• 28:11
  Speaker 2: talk about inflation heating up right. Those are the month
• 28:13
  Speaker 2: over month bumps in prices, and you are seeing a
• 28:16
  Speaker 2: reasonably rapid increase there. We will see where it goes.
• 28:20
  Speaker 2: I tend to also think that the shelter stuff that
• 28:23
  Speaker 2: they mentioned here. Housing is outrageously expensive across the country.
• 28:27
  Speaker 2: Don't get me wrong, but you are starting to see
• 28:29
  Speaker 2: some more matchup of buyers and sellers, especially in the South.
• 28:35
  Speaker 2: According to the USDA, or sorry, the Agricultural Department, the
• 28:41
  Speaker 2: price for eggs, which is already outrageous, could soar an
• 28:45
  Speaker 2: additional forty percent in twenty twenty five. That's from the
• 28:49
  Speaker 2: Trump Administration's Agricultural Department. They have put together a plan
• 28:53
  Speaker 2: to spend another additional billion dollars to try and fix
• 28:57
  Speaker 2: some of this issue.
• 28:58
  Speaker 3: But everything that.
• 28:59
  Speaker 2: I have read speaks to a long drawn out process
• 29:03
  Speaker 2: to address the bird flu issues that we are seeing.
• 29:07
  Speaker 2: So the money that was going to be spent will
• 29:09
  Speaker 2: be spent on tightening up biosecurity at farms, you know,
• 29:13
  Speaker 2: continuing to pay farmers for slaughtering chickens that come down
• 29:16
  Speaker 2: with bird flu. But none of this speaks to a
• 29:20
  Speaker 2: rapid solution to all of this. There's also been discussion
• 29:23
  Speaker 2: of importing eggs from overseas vaccinating flocks, which farmers are
• 29:28
  Speaker 2: very hesitant to do because certain foreign countries won't buy
• 29:31
  Speaker 2: your eggs if your chickens are vaccinated. I don't know
• 29:36
  Speaker 2: that this is a quick solve solution.
• 29:38
  Speaker 4: The only reason chuckling is I was on with Chris
• 29:41
  Speaker 4: Ryan this morning on one of our New Hampshire affiliates,
• 29:43
  Speaker 4: and he gave me the imagery of the birds masking
• 29:46
  Speaker 4: up and you know, everyone getting their shots ministered, and
• 29:51
  Speaker 4: I immediately had to say to you know what, I
• 29:54
  Speaker 4: as much as I'm mentioning the idea of vaccines, what
• 29:57
  Speaker 4: the heck do I know about bird vaccines? To be clear,
• 30:00
  Speaker 4: based on what I've read, there are none that are
• 30:02
  Speaker 4: approved correct at the moment, and the prototypes aren't practical
• 30:06
  Speaker 4: because you have to individually shoot up each bird. And
• 30:09
  Speaker 4: so it's just a territory that you know, it's not
• 30:13
  Speaker 4: our day job at all. But the bottom line is
• 30:17
  Speaker 4: there isn't a near term solution. And this is where
• 30:20
  Speaker 4: you get into inflation where the president can have an impact,
• 30:24
  Speaker 4: and I don't care who's in office, there is no
• 30:26
  Speaker 4: fix that a political figure can have to rework the
• 30:30
  Speaker 4: supply chain when the amount of consumption of eggs that
• 30:33
  Speaker 4: we have in this country and the amount of production
• 30:36
  Speaker 4: that just can't be unwound. And that's the tricky part
• 30:39
  Speaker 4: with inflation in general, is as much as you can
• 30:41
  Speaker 4: make policy changes in the FED can utilize its tools,
• 30:45
  Speaker 4: sometimes these things are just beyond your control.
• 30:47
  Speaker 2: Last month alone, farmers slaughtered nearly nineteen million egg laying chickens.
• 30:55
  Speaker 2: That that is a steep, steep number and speaks to
• 30:59
  Speaker 2: the effort that is ongoing on this front. Let's take
• 31:02
  Speaker 2: a quick break. When we come back. Microsoft urging the
• 31:07
  Speaker 2: administration to curb some of their chip exports that were
• 31:11
  Speaker 2: put in place under the Biden administration. We'll be covering
• 31:13
  Speaker 2: that next Here on the Financial Exchange.
• 31:16
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• 31:57
  Speaker 2: Microsoft is urging the Trump administration to overhol their curb
• 32:01
  Speaker 2: on AI exports. If memory serves me anyway, these were
• 32:06
  Speaker 2: rules that were put into place under the Biden administration
• 32:09
  Speaker 2: when it came to tiering out different countries and their
• 32:12
  Speaker 2: export controls on US made chips of different sorts, and
• 32:17
  Speaker 2: specifically it put a few countries that would generally be
• 32:19
  Speaker 2: considered close allies on a second tier list India, Switzerland,
• 32:23
  Speaker 2: and Israel, for example, our countries that are in that
• 32:25
  Speaker 2: second of a three tier system that underpins the export controls.
• 32:29
  Speaker 2: And Microsoft's main argument is well, self interested because they
• 32:34
  Speaker 2: have relationships with all businesses in all of those countries
• 32:37
  Speaker 2: and you know, want to maintain those relationships. But also,
• 32:43
  Speaker 2: you know, I think practical, which is to say that
• 32:46
  Speaker 2: if these countries cannot buy in video made chips or
• 32:51
  Speaker 2: AMD or you know, other major US suppliers of the
• 32:54
  Speaker 2: latest and greatest semiconductors, they will eventually turn to China,
• 32:58
  Speaker 2: who is not that far behind us the development of
• 33:01
  Speaker 2: these and so that seems to be a lot of
• 33:04
  Speaker 2: the concern here. But again I think, you know, let's
• 33:07
  Speaker 2: contextualize this.
• 33:11
  Speaker 4: That there is some self interest. Yeah, yeah, I think
• 33:14
  Speaker 4: it's strategically from a country perspective, it's hard to navigate.
• 33:18
  Speaker 4: But ultimately, if AI is going to be the next
• 33:22
  Speaker 4: frontier of source or another golden age on top of
• 33:25
  Speaker 4: what we saw from the Internet, you'd like the US
• 33:28
  Speaker 4: to be the most dominant player, and you'd like other
• 33:30
  Speaker 4: countries to adopt as much of our policies are much
• 33:36
  Speaker 4: of our technologies as possible, So whether that's CHIP use,
• 33:40
  Speaker 4: particularly our allies, we do not want China being sort
• 33:44
  Speaker 4: of the main resource to go to from a technology
• 33:46
  Speaker 4: perspective in this arena. So this is you know, the
• 33:50
  Speaker 4: push that Microsoft is making, particularly to open this up
• 33:52
  Speaker 4: a little bit to our allies in order to let
• 33:55
  Speaker 4: them have access and not have them turn to China.
• 33:59
  Speaker 4: Obviously there's self interest behind it, but I can kind
• 34:01
  Speaker 4: of understand the strategic piece too from the United States perspective.
• 34:05
  Speaker 5: The calendar is turned and the cold is here to stay.
• 34:08
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• 35:05
  Speaker 2: Tucker, I have a question for you, what prior to
• 35:08
  Speaker 2: putting this story that we're about to read about an
• 35:11
  Speaker 2: economic blackout in front of me, had you ever heard
• 35:14
  Speaker 2: of John Schwartz, People's Union USA or the no shopping
• 35:18
  Speaker 2: economic blackout coming out on February twenty eight?
• 35:20
  Speaker 3: Nope, Okay three hours ago, Paul, I have a questions
• 35:23
  Speaker 3: for you.
• 35:23
  Speaker 2: Do you know any human being alive that reads more
• 35:27
  Speaker 2: news sources than Tucker Silva on a daily basis that
• 35:31
  Speaker 2: scours as many different publications to find content for this show?
• 35:36
  Speaker 4: I there's he's in the top one percent.
• 35:38
  Speaker 3: I would think, okay, so then this isn't going to happen.
• 35:43
  Speaker 3: Let's talk about what it is, and then we'll just
• 35:45
  Speaker 3: move on.
• 35:46
  Speaker 2: Because if Tucker had never heard of this prior to today,
• 35:49
  Speaker 2: then nobody else.
• 35:50
  Speaker 4: Knows something like that.
• 35:51
  Speaker 3: Hell is this so?
• 35:52
  Speaker 2: John Schwartz is the founder of People's Union USA and
• 35:55
  Speaker 2: lives in the Chicago area. The fifty seven year old
• 35:57
  Speaker 2: meditation teacher of course and teaching came up with the
• 36:02
  Speaker 2: idea to basically just spend no money on February twenty eighth,
• 36:07
  Speaker 2: and look, if done, this would be a very significant
• 36:12
  Speaker 2: message to corporations across the country and across the globe.
• 36:16
  Speaker 2: Quite frankly, of hey, us consumers have a lot of power,
• 36:20
  Speaker 2: and you should listen to us when we talk about
• 36:22
  Speaker 2: our demands. When it comes to all of this, he's
• 36:24
  Speaker 2: calling for a social media campaign that he started for
• 36:27
  Speaker 2: an economic blackout on Friday, which, by the way, is
• 36:31
  Speaker 2: just one of several boycotts planned by those activists over
• 36:35
  Speaker 2: the course of this year. The Union bills itself as
• 36:40
  Speaker 2: a nonpartisan, grassroots movement dedicated to economic resistance, and.
• 36:46
  Speaker 3: As I mentioned.
• 36:49
  Speaker 4: French accents, whenever I hear.
• 36:50
  Speaker 2: Resistance, I have to give it a French accent. Yeah,
• 36:56
  Speaker 2: this isn't going to do anything. Again, Hucker hasn't heard
• 37:00
  Speaker 2: of it. And this is like economic news, right, this
• 37:03
  Speaker 2: is a big push, It's gotten a big social media following.
• 37:07
  Speaker 3: This is not going to do anything at all.
• 37:10
  Speaker 2: And I, for one, am hosting some people at my
• 37:13
  Speaker 2: house for dinner on Friday, and I just I don't
• 37:15
  Speaker 2: know that I'm gonna be able to buy my food
• 37:18
  Speaker 2: on Thursday to make.
• 37:19
  Speaker 5: Whatever's in the pantry. Then Mike, you can't go on
• 37:21
  Speaker 5: buy anything for your dinner.
• 37:22
  Speaker 2: Enjoy my somewhat wrinkly apples and tuna castro with mac
• 37:27
  Speaker 2: and cheese. That's what you're getting for dinner, and you're
• 37:30
  Speaker 2: never coming back.
• 37:32
  Speaker 3: You like it.
• 37:34
  Speaker 4: That's all we got. Yeah.
• 37:36
  Speaker 2: Look, I mean American consumers have an immense amount of power,
• 37:39
  Speaker 2: and if we all agreed to not buy stuff, then
• 37:42
  Speaker 2: it would send a message. But the problem to is
• 37:44
  Speaker 2: what exact message are you attempting to send? What it
• 37:47
  Speaker 2: was the behavior that you don't like out of companies
• 37:50
  Speaker 2: that you are trying to correct, Because again, if you're
• 37:53
  Speaker 2: if you're this nonpartisan institution, I'm assuming it's not DEI
• 37:58
  Speaker 2: and it's not you know, I don't know whatever the
• 38:02
  Speaker 2: other main issue is from corporations these days.
• 38:05
  Speaker 3: Let's take a quick break markets. Remain confused.
• 38:10
  Speaker 2: We'll cover markets and a whole lot more next on
• 38:14
  Speaker 2: the Financial Exchange.