Latest / The Financial Exchange Show / Apple’s New CEO Takes Over at a Critical Moment

Transcript

Apple’s New CEO Takes Over at a Critical Moment · The Financial Exchange Show

0:00
Speaker 1: The Financial Exchange is produced by Money Matters Radio and
0:02
Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
0:05
Speaker 1: registered investment advisor. All opinions expressed are solely those of
0:08
Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
0:11
Speaker 1: or anyone else. Investments can lose money. This program does
0:14
Speaker 1: not offer any specific financial or investment advice. Please consult
0:17
Speaker 1: your own financial tax and estate planning advisors before making
0:20
Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
0:23
Speaker 1: this program do not endorse each other or their services.
0:25
Speaker 1: Armstrong and Money Matters Radio do not compensate each other
0:28
Speaker 1: for referrals and are not affiliated. This is The Financial
0:34
Speaker 1: Exchange with Mike Armstrong and Mark Vandetti. Your exclusive look
0:39
Speaker 1: at business and financial news affecting your day, your city,
0:43
Speaker 1: your world. Stay informed and up to date about economic
0:46
Speaker 1: and market trends, plus breaking business news every day. The
0:50
Speaker 1: Financial Exchange is a proud partner of the Disabled American
0:54
Speaker 1: Veterans Department of Massachusetts. Help us support our great American
0:58
Speaker 1: heroes by visiting DAV5K. Boston and making a donation today. This
1:04
Speaker 1: is The Financial Exchange with Mike Armstrong and Mark Vandetti.
1:13
Speaker 2: Good morning. Welcome back to The Financial Exchange. It's 11.06
1:18
Speaker 2: here on September 1st, and so far I've seen no
1:22
Speaker 2: reports of trucks driving. Leaving half of themselves on Sturro
1:26
Speaker 2: Drive bridges. So congratulations to all of the drivers in
1:30
Speaker 2: the Boston area moving around the Boston area on this
1:34
Speaker 2: September 1st. For those that aren't familiar and are tuning in,
1:37
Speaker 2: that's a big day here in the Boston area and
1:40
Speaker 2: generally speaking, one of the moving trucks today. goes on
1:43
Speaker 2: this road called Sturrow Drive that is not tall enough
1:47
Speaker 2: for trucks on Sturrow Drive. We've got markets in negative
1:50
Speaker 2: territory for the second day here. First trading day in September,
1:54
Speaker 2: and you've got the S & P off by half
1:56
Speaker 2: of a percent. The NASDAQ is currently off 224 points,
2:00
Speaker 2: or eight-tenths of a percent, and the Dow Jones Industrial
2:03
Speaker 2: Average off 214 points, points, points, points, points, or four-tenths
2:09
Speaker 2: of a percent. That's on oil continuing higher after Were
2:14
Speaker 2: those Monday morning strikes on Iran that U.S. and Iran exchanged?
2:18
Speaker 2: Oil prices pushing on the West Texas crude up towards
2:21
Speaker 2: $ 90 a barrel. We're up $ 2. 03 this morning, two and
2:26
Speaker 2: a third percent today. Yield on the 10-year Treasury moving
2:31
Speaker 2: higher again, highest that we've seen since January of 2025
2:34
Speaker 2: on While CNBC is calling it oil price inflation concerns,
2:41
Speaker 2: I'm going to call it a general trend towards higher
2:43
Speaker 2: interest rates that could be partly attributed today at least
2:46
Speaker 2: to higher oil price concerns. But it's not the first
2:49
Speaker 2: time that we've seen oil prices moving and when oil
2:51
Speaker 2: prices fell, we did not get a lot of relief
2:54
Speaker 2: on the 10-year Treasury either. The yield on the 10-year
2:57
Speaker 2: sitting at 4.772% this morning. AAA has the national average
3:04
Speaker 2: for a gallon of gas just shy of $ 4. 10. It's
3:08
Speaker 2: at $ 4. 095. And then the interest rate, the average rate
3:14
Speaker 2: on a 30-year fixed rate mortgage just continues to climb.
3:17
Speaker 2: We're now pushing towards 6.9%, 6.87% as of yesterday on
3:20
Speaker 2: the average 30-year fixed rate mortgage according to Mortgage News Daily.
3:29
Speaker 2: At 10 a.m. this morning, we received data from the
3:31
Speaker 2: Bureau of Labor Statistics on the state of the job market.
3:35
Speaker 2: In particular, this was looking at the state of hiring
3:37
Speaker 2: and firing as of the last business day of July
3:41
Speaker 2: this year. What we saw, total jobs open at this point,
3:45
Speaker 2: about 7.3 million. Hasn't changed much month over month. Total separations,
3:50
Speaker 2: so quits plus layoffs and discharges, coming in at 5.1 million.
3:55
Speaker 2: all of which seems to indicate a labor market that
3:58
Speaker 2: is roughly in balance. Sector by sector, you're seeing this
4:02
Speaker 2: differ quite a bit. I know in terms of hiring,
4:06
Speaker 2: we're seeing big increases still in health care, shortages in
4:10
Speaker 2: some areas of the labor market, crackdowns in terms of
4:13
Speaker 2: deportations contributing to certain labor shortages. But overall, in spite
4:18
Speaker 2: of the texts I get on this program every single
4:21
Speaker 2: time I say it, relatively strong labor market from a
4:25
Speaker 2: historical perspective. If you have a job, you seemingly are
4:34
Speaker 2: pretty stable in terms of your employment expectations right now.
4:37
Speaker 2: And if you don't have a job, it might take
4:40
Speaker 2: a little while to get one, but it's not a
4:43
Speaker 2: historically high unemployment rate where you are standing in a
4:47
Speaker 2: line outside the employment office in order to find a job.
4:52
Speaker 2: So 4.1% unemployment. I'm sure you're looking this up as
4:56
Speaker 2: we speak, Mark, but not a lot of instances. I
5:01
Speaker 2: guess my question is how common is a 4.1% unemployment
5:05
Speaker 2: rate from a historical perspective?
5:07
Speaker 3: Pretty outside the 60s, 90s. We never got quite that low,
5:11
Speaker 3: I don't think. I'm not even going to look it up.
5:15
Speaker 3: Late 2010s hovered around there. So yeah, historically, the Fed
5:21
Speaker 3: would have been tightening aggressively if unemployment was below, say,
5:25
Speaker 3: 5% outside the late 1990s when Greenspan had a hunch
5:29
Speaker 3: that investment in computers, I'll just call it, was boosting productivity.
5:34
Speaker 3: And that allowed the Fed to forbear. That was the
5:37
Speaker 3: phrase used at the time. Outside of that period, the
5:39
Speaker 3: Fed would have been worried that it had overstimulated the economy.
5:44
Speaker 2: So we'll return to more about what all of this
5:46
Speaker 2: might mean for Kevin Warsh and the Fed at their
5:48
Speaker 2: next meeting. So anticipation today, one thing I will just
5:53
Speaker 2: take a look at quickly, there is a meeting for
5:55
Speaker 2: the Fed coming up on September 16th, as I mentioned previously.
5:59
Speaker 2: The Fed funds target rate right now is sitting between
6:03
Speaker 2: three and a half and three seven five. And those
6:07
Speaker 2: who bet on this sort of thing are putting the
6:09
Speaker 2: odds of a rate hike at that next meeting at
6:11
Speaker 2: about two thirds, 66.2 percent chance that that happens. Just
6:15
Speaker 2: a week ago, it was only a 40 percent chance
6:17
Speaker 2: that the Fed hikes rates at that next September meeting.
6:20
Speaker 2: Most of that or all of that shift seemingly coming
6:23
Speaker 2: from Kevin Warsh's speech last Friday out in Jackson Hole,
6:27
Speaker 2: where he once again gave pretty tough talk on inflation
6:30
Speaker 2: and the outlook and what the Fed's plans are.
6:32
Speaker 3: The historically low unemployment rate you were referring to gives
6:36
Speaker 3: the Fed room potentially to tighten, to squelch inflation, to curb,
6:43
Speaker 3: to tame inflation. let me put this as correctly as
6:46
Speaker 3: I can anyway, to tame inflation expectations, to get our
6:50
Speaker 3: inflation expectations down, to convince us that the Fed means business,
6:54
Speaker 3: thereby reducing the chance that the spike in inflation that
6:59
Speaker 3: we've experienced over the past, I'm just going to say
7:02
Speaker 3: several months now because we've had a few good ones,
7:04
Speaker 3: a few terrible ones. On average, inflation remains elevated. We
7:07
Speaker 3: don't want that to become persistent. And Warsh feels like
7:13
Speaker 3: the strong, labor market, some would argue with that characterization,
7:16
Speaker 3: but I'm just talking about the unemployment rate here, gives
7:19
Speaker 3: the Fed room to curb demand, chill the economy, how
7:23
Speaker 3: much is unclear, and at the very least get inflation
7:26
Speaker 3: expectations down from four to, say, somewhere in the low
7:29
Speaker 3: threes where they've been for the most part for the
7:31
Speaker 3: past couple decades. That's been high, by the way.
7:34
Speaker 2: We have a new CEO at the helm of one
7:38
Speaker 2: of the largest companies in the world, Apple today. John
7:41
Speaker 2: Ternes takes over from Tim Cook, who has been at
7:43
Speaker 2: the helm for 15, 16 years, I believe, 15 years.
7:48
Speaker 2: John Ternes taking over. He's been with the company for
7:51
Speaker 2: a quarter century, I believe, 25 years. He's a hardware guy.
7:56
Speaker 2: He was heavily involved in pretty much every product release
7:59
Speaker 2: out there for the last few decades and takes over
8:03
Speaker 2: one of the largest companies at what I think is
8:05
Speaker 2: a pretty fascinating time. And I'm not even a really
8:07
Speaker 2: heavy Apple user. I don't have an iPhone. But a
8:11
Speaker 2: few things that I'm comfortable saying about Apple at this moment. One,
8:15
Speaker 2: Tim Cook oversaw one of the most miraculous growth stories
8:19
Speaker 2: we've seen in any company in history. And I don't
8:24
Speaker 2: think you can walk away from that without at least
8:27
Speaker 2: attributing a lot of that growth to their CEO who
8:31
Speaker 2: took over from Steve Jobs and stepped into shoes that were,
8:34
Speaker 2: by all accounts, impossible to fill. Apple shares under his
8:39
Speaker 2: tenure grew by more than 2,000%. Not only that, but
8:43
Speaker 2: in terms of its weighting in the S & P 500,
8:47
Speaker 2: went from 3% to nearly 7% during his tenure. While
8:54
Speaker 2: Jobs was the big creative CEO and why that made
8:57
Speaker 2: it impossible for those shoes to fill, Tim Cook, I think,
9:01
Speaker 2: harnessed the creativity of that company and streamlined everything within it.
9:06
Speaker 2: It became the master of the supply chain and really
9:11
Speaker 2: managed to sidestep a lot of the potential landmines that
9:17
Speaker 2: were out there in terms of trade policy and relationships
9:21
Speaker 2: with China and all of those things to deliver consistently
9:27
Speaker 2: amazing products that are very easy to use while really
9:30
Speaker 2: cornering the market for the supplies of those. Interesting point now,
9:34
Speaker 2: why I think it's so interesting for this new CEO
9:37
Speaker 2: and what he has to prove is arguably the most
9:40
Speaker 2: important thing to Apple's future today is not hardware, but
9:45
Speaker 2: instead software. It's artificial intelligence. It's the Siri assistant. It's
9:50
Speaker 2: where everyone thinks the market is going. They could all
9:53
Speaker 2: be wrong. And maybe Apple's decision to sidestep AI for
9:57
Speaker 2: the time being and not really invest in it is
9:59
Speaker 2: the right move, just like Toyota had with hybrid engines
10:03
Speaker 2: a few years ago. But Apple has kind of made
10:07
Speaker 2: this decision to not pour hundreds of billions of dollars
10:11
Speaker 2: into investing in artificial intelligence and could find themselves behind
10:15
Speaker 2: the eight ball. And now the new person leading the
10:17
Speaker 2: company is Apple. all experience in the hardware side of
10:21
Speaker 2: the business. So I find that to be interesting. At
10:24
Speaker 2: the same time that that's occurring, the dominance that Apple
10:28
Speaker 2: had from a supply chain perspective has weakened substantially over
10:33
Speaker 2: the last three years. There was a time when, you know,
10:38
Speaker 2: Apple's decisions about which supplier to use for different components
10:41
Speaker 2: of their phones, you know, moved jobs, moved where manufacturing
10:45
Speaker 2: happened and really drove things. Today, they are competing for
10:49
Speaker 2: a lot of those same components with some of the
10:52
Speaker 2: most well-capitalized companies in the world, NVIDIA, Alphabet, Amazon, Facebook, Tesla,
10:59
Speaker 2: all now competing for these same components. That's driving up
11:03
Speaker 2: prices and reducing Apple's influence in the space. And so, again...
11:08
Speaker 2: There's nothing that has me concerned necessarily about John Ternus
11:11
Speaker 2: taking over the helm. I wouldn't be well-qualified enough to
11:15
Speaker 2: talk about whether or not he is qualified to do it,
11:17
Speaker 2: but it's a change at what could end up being
11:19
Speaker 2: a critical time for Apple in terms of their future here.
11:23
Speaker 3: Yeah, I guess he won't have as much freedom to
11:25
Speaker 3: act as his predecessors did.
11:26
Speaker 2: Of course not. But Tim Cook probably didn't have a
11:30
Speaker 2: lot of freedom to act in his first few years.
11:32
Speaker 3: No, I don't mean freedom to act because the board's
11:34
Speaker 3: going to tie his hands. I mean... where to build
11:36
Speaker 3: a factory, where to source a product. There are political
11:40
Speaker 3: risks today, and this would be true no matter who
11:42
Speaker 3: was president, that didn't exist, geopolitical risks today, that didn't
11:46
Speaker 3: exist 15 years ago, 20 years ago. That's going a
11:50
Speaker 3: little bit before Tim Cook's time. But that was more
11:53
Speaker 3: or less still the heyday. It was in its twilight,
11:56
Speaker 3: we now know, but the heyday of globalization, where you
12:00
Speaker 3: just went where stuff, where you built stuff, where it
12:02
Speaker 3: was more or less cheapest. You sourced your inputs from
12:05
Speaker 3: where it was cheapest. The considerations were solely economic. Today,
12:10
Speaker 3: the considerations are more political, geopolitical.
12:14
Speaker 2: It's a fair question. Tim Cook was seemingly a master
12:19
Speaker 2: at the political side of this, navigating that world. And
12:24
Speaker 2: John Tarnas is going to need to do that and
12:26
Speaker 2: then some based on where we are with geopolitics.
12:28
Speaker 1: I mean, I don't know.
12:28
Speaker 3: It depends on who the... With Trump, you just bring
12:30
Speaker 3: him a gold something or other And you say nice things. Well,
12:33
Speaker 3: you do that. That's what Tim Cook had to do.
12:34
Speaker 3: And Trump's open about that. He bought him a 24
12:36
Speaker 3: karat something or other and flattered him. And he went
12:39
Speaker 3: to his dinners and said he was a genius and
12:40
Speaker 3: all that. And Trump didn't tweet bad things about Apple.
12:44
Speaker 3: It made everybody's life. It's like when Google changes Ontario
12:47
Speaker 3: to America.
12:48
Speaker 2: It's smart.
12:48
Speaker 3: It's just stay out of the crosshairs. Tim Cook did
12:52
Speaker 3: an excellent job of managing that relationship. So part of
12:55
Speaker 3: his job, I guess, is managing a mercurial president. And
13:00
Speaker 3: the next one, whoever succeeds Trump, may be equally whimsical.
13:04
Speaker 3: We just don't know. It's just part of the job
13:06
Speaker 3: description now.
13:08
Speaker 2: Let's take a quick break. When we return, a little
13:11
Speaker 2: bit about the Federal Reserve, their upcoming meeting. later in
13:15
Speaker 2: September and what's going to be important for that upcoming meeting.
13:18
Speaker 2: That's next here on the Financial Exchange.
13:20
Speaker 1: Stay informed and prepared for market changes and breaking business news.
13:24
Speaker 1: The Financial Exchange is live every day on YouTube. Tune in, subscribe,
13:29
Speaker 1: and keep up to date on all of our show's
13:31
Speaker 1: content on a daily basis. This is the Financial Exchange
13:34
Speaker 1: Radio Network. Stay connected between shows. Follow the Financial Exchange
13:39
Speaker 1: on Instagram for daily clips on business news from New
13:42
Speaker 1: England and around the country. This is the Financial Exchange.
14:05
Speaker 2: All right, Mark, as I mentioned before, we've got an
14:07
Speaker 2: upcoming Fed meeting September 16th. Markets now, you know, odds
14:13
Speaker 2: are placed on a higher interest rate. That could obviously
14:15
Speaker 2: change if we get a weaker than anticipated inflation report.
14:18
Speaker 2: So we will see what happens on the inflation side
14:22
Speaker 2: of things. I don't know what the anticipation is actually for.
14:25
Speaker 2: Is it next week's CPI report or is it the
14:28
Speaker 2: week after? Let me take a quick peek here.
14:30
Speaker 4: I think it's next week, isn't it?
14:33
Speaker 3: God forbid I lift a finger to help while you're
14:35
Speaker 3: trying to host the show.
14:36
Speaker 2: Friday, the 11th of September. Year over year, CPI is
14:41
Speaker 2: anticipated to come in at 3.4%. Month over month, a
14:45
Speaker 2: tenth of a percent. Core, two and a half percent anticipation.
14:49
Speaker 2: So we will see where... Sorry, those were actually the
14:52
Speaker 2: previous numbers. I don't have forecasts available yet. In any case... Three,
14:58
Speaker 2: three and a half percent inflation, well above what the
15:02
Speaker 2: Fed considers to be tolerable levels of inflation. Tolerable. And
15:08
Speaker 2: while they are studying what should be the tolerable rate and,
15:11
Speaker 2: you know, what the... You have a stroke? I might be.
15:14
Speaker 3: Sorry, that's not funny.
15:15
Speaker 2: It's not funny.
15:17
Speaker 3: What are you guys laughing at?
15:19
Speaker 2: And they're, you know, creating all these study groups to
15:21
Speaker 2: figure out what the appropriate measure is. Kevin Warsh himself
15:27
Speaker 2: acknowledged that inflation is too high and the Fed is
15:29
Speaker 2: going to control it. Let's assume that inflation does not
15:33
Speaker 2: come in below expectations, Mark. Does the Fed need to
15:37
Speaker 2: hike at the next meeting to maintain credibility, or am
15:41
Speaker 2: I misreading the situation?
15:42
Speaker 3: There's a strong argument for it, and it is based
15:45
Speaker 3: on what we know today. There's an argument against it.
15:47
Speaker 3: It's based on hope and speculation. And I said that
15:51
Speaker 3: in such a way as to telegraph a bias against
15:55
Speaker 3: the hope and the speculation but we do that all
15:56
Speaker 3: the time i don't mean to say.
15:58
Speaker 2: Once yeah we are biased both of us and the
15:59
Speaker 2: other every.
16:00
Speaker 3: Every human being and monetary policymakers are too obviously the
16:04
Speaker 3: argument for raising rates is that what matters for the
16:07
Speaker 3: economy is the real rate of interest that it's the
16:11
Speaker 3: real rate is just what you see printed the observed
16:14
Speaker 3: rate uh minus technically expected inflation but we'll just use
16:18
Speaker 3: inflation The real rate of interest is arguably very close.
16:22
Speaker 3: The real Fed funds rate, short-term rate, is arguably very
16:26
Speaker 3: close to zero. In anybody's book, that's stimulative, right? You
16:32
Speaker 3: don't need to have an advanced monetary policy degree to
16:36
Speaker 3: know this. So is that appropriate? Well, I mean, maybe
16:39
Speaker 3: if you thought the economy was in trouble, it might be.
16:42
Speaker 3: It's just very hard to hear the case. And most
16:44
Speaker 3: Fed officials that have spoken on this publicly in the
16:46
Speaker 3: past few weeks have said in no uncertain terms fed
16:50
Speaker 3: policy it more said it last week he said we're
16:53
Speaker 3: policies not restrictive that's what he means yet he means
16:57
Speaker 3: in all likelihood the real fed funds rate is below
16:59
Speaker 3: the neutral or natural rate the rate which keeps inflation
17:03
Speaker 3: stable constant not not growing still positive but not growing
17:07
Speaker 3: given that the economy's operating at its potential let's suppose
17:11
Speaker 3: the economy is operating at potential now you could just
17:14
Speaker 3: focus on the inflation part of the feds objective the
17:18
Speaker 3: central bank uh... chairs objective and ask if output is
17:24
Speaker 3: a potential i can ignore that term if you will
17:26
Speaker 3: i can focus on the inflation term inflation is above
17:28
Speaker 3: michael the response textbook response is to take you have
17:35
Speaker 3: to have a pretty strong conviction that things are gonna
17:36
Speaker 3: work out okay to not and i'm not saying by
17:39
Speaker 3: the way that would be right jerk a greenspan is
17:42
Speaker 3: was like mister instinct in his instinct was often correct
17:45
Speaker 3: But you've got to have really good instincts and a
17:47
Speaker 3: lot of luck, too.
17:49
Speaker 2: Yeah, I think that I would maintain that they're going
17:52
Speaker 2: to have a credibility issue if this doesn't work out.
17:54
Speaker 2: If it doesn't work out. Sorry, if they don't go
17:57
Speaker 2: in high grades at the next meeting, I think it's
17:59
Speaker 2: a credibility problem. I was just underscoring what you said,
18:01
Speaker 2: like a chorus. Warsh might not see it this way,
18:06
Speaker 2: but his commentary that he made in the corner that
18:09
Speaker 2: Besant painted it into at that last Fed press conference was...
18:16
Speaker 2: I think telling, right, hey, we are relying on the
18:18
Speaker 2: longer end of the curve, which is bringing up borrowing
18:21
Speaker 2: costs for all sorts of borrowers, and so we don't
18:24
Speaker 2: think we need to take action at the shorter end
18:26
Speaker 2: of the curve, was, albeit a.
18:29
Speaker 3: I didn't read it that way at all. I thought,
18:31
Speaker 3: we're going to take action at the shorter end to
18:33
Speaker 3: ensure the longer end stays under control.
18:35
Speaker 2: I'm talking about, not Jackson Hole, I'm talking about his
18:37
Speaker 2: previous press conference before.
18:38
Speaker 3: Oh, God, I'm sorry.
18:39
Speaker 2: Yeah, so.
18:39
Speaker 3: You probably said that, and I.
18:41
Speaker 2: You're good. With that commentary... That all, you know, it
18:45
Speaker 2: might be contrary to, you know, popular thinking about how
18:48
Speaker 2: the Fed's supposed to operate. But I think there is
18:51
Speaker 2: justification to it until Besant started doing what he was doing,
18:55
Speaker 2: which is trying to control the long end of the curve.
18:57
Speaker 2: You can say it hasn't worked. You say it's irrelevant.
19:00
Speaker 2: But I think from a independence perspective, I think there
19:04
Speaker 2: are too many voting members on there who are going
19:06
Speaker 2: to push you to, you know, prove that you're capable
19:09
Speaker 2: of defying the White House and Besant and the president.
19:13
Speaker 2: and push you to raise interest rates.
19:14
Speaker 3: But that's not defying them is my point. It's helping
19:16
Speaker 3: them if you can reduce inflation expectations. You won't have
19:20
Speaker 3: to raise rates as much in the future if you
19:22
Speaker 3: raise them now. That should help reduce pressure on long-term treasuries.
19:25
Speaker 2: Let's take a quick break. When we come back, full
19:28
Speaker 2: market update with Wall Street Watch is next.
19:40
Speaker 1: Bringing the latest financial news straight to your radio every day.
19:44
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:50
Speaker 2: Time now for.
19:51
Speaker 1: Wall Street Watch. Tracking the stocks, the data, and the
19:54
Speaker 1: headlines driving markets so far today. Right here on the
19:57
Speaker 1: Financial Exchange Radio Network.
19:59
Speaker 4: Some easiness on Wall Street as a result of a
20:01
Speaker 4: global bond sell-off this morning. Overinflation concerns. and increased expectations
20:08
Speaker 4: of upcoming rate hikes. Right now, the Dow is down 0.4%
20:10
Speaker 4: or 215 points off. S & P 500 also down
20:12
Speaker 4: over 0.4% to 33 points lower. NASDAQ down 0.7% or
20:13
Speaker 4: 185 points lower. Rust 2000 also down.
20:15
Speaker 2: 0.7% of 1%.
20:16
Speaker 4: Ten-year treasury yield is now up one basis point at 4.768%.
20:18
Speaker 4: And oil up nearly 3% higher now. trading at $ 88
20:37
Speaker 4: a barrel. Chinese fast fashion giant Shein made its stock
20:41
Speaker 4: market debut overseas in Hong Kong that somewhat disappointed, where
20:46
Speaker 4: shares fell by as much as 10% before rebounding to
20:49
Speaker 4: close at the IPO price, leaving the company with a
20:52
Speaker 4: valuation of $ 26 billion. Meanwhile, today marks the first day
20:57
Speaker 4: for new Apple CEO John Ternes, following Tim Cook's 15-year
21:02
Speaker 4: run as the tech giant's chief executive. Apple stock is
21:06
Speaker 4: up 2% today. Elsewhere, shares in GoPro are now pulling
21:10
Speaker 4: back slightly from its earlier rally, but still up over
21:14
Speaker 4: 40% after Bloomberg reported that popular YouTuber Mark Fischbach had
21:19
Speaker 4: accumulated an 8.5% stake in the action camera company. And
21:24
Speaker 4: after today's closing bell, we'll see earnings from Dell Technologies
21:29
Speaker 4: and Palo Alto Networks.
21:32
Speaker 1: I'm Tucker Silva.
21:32
Speaker 4: That is Wall Street Watch.
21:35
Speaker 2: WalletHub does a study once a year of the best
21:38
Speaker 2: and worst places to retire in the country. And the
21:44
Speaker 2: conclusion seems to be that the snowbirds might have it
21:49
Speaker 2: right here. Top three locations to retire based on affordability, activities,
21:55
Speaker 2: quality of life. Don't know how you measure that one.
21:57
Speaker 2: And health care access. Top three. Orlando, Florida, Miami, Florida, Tampa, Florida. Fourth,
22:05
Speaker 2: by the way, Scottsdale, Arizona. So rounding out the top
22:10
Speaker 2: four here are traditional Sunbelt places to retire here. I'm
22:17
Speaker 2: trying to get... I always like looking at the worst
22:19
Speaker 2: places to retire as well. All right, here we go.
22:24
Speaker 2: This is a ranking of 182 different cities. You got Stockton, California,
22:29
Speaker 2: San Bernardino, California, Newark, New Jersey, Fresno, California... Dear God,
22:35
Speaker 2: they're all California cities. Local New England ones. Bridgeport, Connecticut
22:42
Speaker 2: does make the worst 10 list.
22:44
Speaker 3: Who has ever gone to Bridgeport? Great city. Industrial powerhouse
22:48
Speaker 3: at one time and all that. Who's ever gone there
22:49
Speaker 3: to retire?
22:50
Speaker 2: No one that I know. Why would you do that?
22:52
Speaker 3: It's a silly list.
22:53
Speaker 2: And there is no one in the Northeast that has... Well,
22:58
Speaker 2: maybe that's why nobody's retiring.
22:59
Speaker 3: Why would you belittle Bridgeport or Newark or... They have
23:03
Speaker 3: their own attributes, positive qualities for other purposes.
23:07
Speaker 2: Let's be honest. Both of their main attributes are that
23:09
Speaker 2: they're close to New York City.
23:13
Speaker 3: Yeah, I mean, that's what happens when you're in the
23:15
Speaker 3: orbit of a metropolis.
23:19
Speaker 2: I always find these studies to be a little bit interesting.
23:22
Speaker 2: The fact of the matter is almost no one in
23:24
Speaker 2: the world decides to retire and then says, hey, let
23:29
Speaker 2: me take a look at WalletHub's rankings of the blessed
23:32
Speaker 2: places in the country to retire. Most of the time it's, oh,
23:37
Speaker 2: I have family that moved to this area and I
23:40
Speaker 2: visited them a few times and I like it quite
23:42
Speaker 2: a bit. Or my kids are taking their first job
23:46
Speaker 2: or having their first kids and they're moving here and
23:48
Speaker 2: so I want to be there. Or I grew up
23:50
Speaker 2: in this place, and I'm going to live here until
23:51
Speaker 2: the day I die. I don't know anybody who's been like,
23:54
Speaker 2: time to retire. Let's take a look at the WalletHub list.
23:58
Speaker 2: I think what I find interesting about it is if
24:02
Speaker 2: you are considering a move, I like having data on
24:06
Speaker 2: this stuff. I think some of these are more useful
24:09
Speaker 2: than others. The affordability ranking actually has numbers behind it.
24:13
Speaker 2: I don't know how you put together an activities rank.
24:16
Speaker 3: No one's going to use that as like a menu.
24:18
Speaker 3: You have a target in mind, maybe two, and then
24:20
Speaker 3: you're going to compare along all those metrics. A more
24:23
Speaker 3: useful tool would be a calculator. Put the city in.
24:26
Speaker 3: I'll compare it to where you are today. Where you
24:28
Speaker 3: are today is a one. Is it a one five
24:31
Speaker 3: in terms of various categories?
24:33
Speaker 2: Or is it, They do have a nice city-by-city cost-of-living calculator.
24:37
Speaker 2: That one's nice. How much would my money go in
24:41
Speaker 2: this city? But it doesn't account for all of those things.
24:44
Speaker 3: I prefer them easily ranked. You put where you are today,
24:46
Speaker 3: and then just give me a simple ranking system. This
24:49
Speaker 3: is not hard to do. You just have to pull
24:51
Speaker 3: the data in, because the data's out there. These people
24:53
Speaker 3: do a terrific job of compiling it and publicizing it.
24:57
Speaker 2: The... Opportunity for mistakes here. I'm trying to think through
25:02
Speaker 2: them because we do, as financial advisors at Armstrong Advisory Group,
25:06
Speaker 2: we do get questions about relocating in retirement pretty often.
25:10
Speaker 2: People find the idea desirable, most of the time don't
25:14
Speaker 2: end up doing it because, again, the biggest thing that
25:16
Speaker 2: determines where you live and retire and eventually die has
25:22
Speaker 2: to do with your network. And if you grew your
25:24
Speaker 2: network in a specific area, you're usually pretty hesitant to
25:27
Speaker 2: do away with it. But especially here in New England,
25:30
Speaker 2: where the idea of moving from Massachusetts to southern New
25:35
Speaker 2: Hampshire might not be that heavy of a lift, people
25:38
Speaker 2: tend to have questions about it. And so affordability does
25:41
Speaker 2: come into play quite a bit. But for example, I
25:45
Speaker 2: was speaking with somebody just a few weeks ago who
25:47
Speaker 2: was trying to think through that. Hey, what's the benefit
25:52
Speaker 2: of me leaving the Boston area and moving to New Hampshire, right? Like,
25:57
Speaker 2: how am I going to really benefit once I'm done working? And,
26:00
Speaker 2: you know, when you do out the math, it obviously depends.
26:03
Speaker 2: But in this case, the majority of the benefit did
26:06
Speaker 2: not go to that couple by moving. They would have,
26:09
Speaker 2: you know, seen a smaller tax bill over their lifetimes.
26:12
Speaker 2: But the real benefit went to their kids who didn't
26:15
Speaker 2: have to pay an estate tax to the Commonwealth of
26:17
Speaker 2: Massachusetts compared to them during their lifetimes experiencing a lower
26:21
Speaker 2: tax bill. And they decided, at least for the time being,
26:24
Speaker 2: to not make that trade-off. And I know plenty of
26:27
Speaker 2: people that have, and out of an anticipation of a
26:31
Speaker 2: lot lower taxes, and instead end up paying a whole
26:33
Speaker 2: bunch of real estate taxes and not saving themselves a
26:36
Speaker 2: whole bunch of money. The worst thing you can do
26:40
Speaker 2: is move during retirement, not think it through well enough,
26:43
Speaker 2: and then need to move again. I've seen that happen too.
26:47
Speaker 2: Moving is a lot more difficult in your 70s than
26:49
Speaker 2: it is in your 20s. And it's costly. Real estate
26:55
Speaker 2: fees plus capital gains taxes in some cases can really
26:59
Speaker 2: add up. If you're considering a move in retirement, it's
27:04
Speaker 2: one of those kind of surprising things that people don't
27:08
Speaker 2: think about when they're talking about hiring an investment manager
27:12
Speaker 2: and financial planner. But it is a critical thing that
27:15
Speaker 2: we talk with clients about all the time. Hey, how
27:18
Speaker 2: do I measure You know, financially, how do I measure
27:21
Speaker 2: the benefit or drawback of moving from one place to another?
27:24
Speaker 2: Should I be buying or renting at this stage of
27:27
Speaker 2: my life? Do I want a full-time home? Am I
27:29
Speaker 2: willing to be a landlord? All of these questions are
27:33
Speaker 2: a lot to consider. And if you could use a
27:37
Speaker 2: second opinion on the logistics and financial piece of aspect
27:41
Speaker 2: of all of this, give the folks at Armstrong a call.
27:44
Speaker 2: The number is 800-393-4001. Again, that's the toll-free number for
27:49
Speaker 2: Armstrong Advisory Group, 800-393-4001.
27:52
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:57
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:59
Speaker 1: Armstrong guide is specific financial, legal, or tax advice. Consult
28:02
Speaker 1: your own financial, tax, and estate planning advisors before making
28:05
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
28:08
Speaker 1: advisory services.
28:09
Speaker 2: New York Times has a piece today about Chinese cars
28:13
Speaker 2: and how they could be huge in the U.S.
28:16
Speaker 3: This was my stack roulette. I'm so weak at that.
28:18
Speaker 2: I stole it. Well, too bad, but give it to
28:20
Speaker 2: me for what you were going to say about this piece.
28:35
Speaker 3: To a yuan, to their currency, to buy this car.
28:39
Speaker 2: Plug-in hybrid, 110 miles on the battery. It's got a
28:41
Speaker 2: million-mile range.
28:45
Speaker 3: Of course, you can't buy these cars here. They're either
28:47
Speaker 3: prohibited outright or they put 100% tariff on them to
28:49
Speaker 3: make them uneconomical, to make it prohibited.
28:52
Speaker 2: It's actually an interesting question. Even if you tried to
28:54
Speaker 2: import one, could you ever register it? I don't think so.
28:56
Speaker 3: You listen to the alarmists, and I don't know if
28:59
Speaker 3: it's genuine or just protectionists, in the garb of people
29:05
Speaker 3: who are concerned about national security? Because there's always this overlap.
29:08
Speaker 1: Sure.
29:09
Speaker 3: So industry people say, you can't have Chinese cars sold here.
29:11
Speaker 3: There's surveillance entities on wheels. Like, I'm sorry, are people
29:16
Speaker 3: parking in front of military installations with these things? Okay,
29:21
Speaker 3: so the Chinese Politburo knows what time I go to
29:24
Speaker 3: work and that I shop at Shaw's or wherever. I
29:28
Speaker 3: don't think that's a big national security risk. Do you
29:31
Speaker 3: buy that? I'm going to call it a pretext. And
29:35
Speaker 3: my sarcasm is probably evident because this is just another
29:38
Speaker 3: instance of a big. corporation buying effectively protectionism by persuading
29:45
Speaker 3: gullible politicians or politicians just want to pocket their money
29:48
Speaker 3: under some flimsy national security pretext. Do you buy that?
29:52
Speaker 2: Here's what I buy. The Chinese have become better at
29:55
Speaker 2: making cars than the United States. We'll let that sink in.
29:59
Speaker 2: I think they're better at it than us. Because they
30:02
Speaker 2: stole our technology, but I think they are better at it.
30:04
Speaker 2: They're making nicer cars at a cheaper price than we are.
30:07
Speaker 2: You can call that theft. You can call it subsidization.
30:11
Speaker 2: Whatever you want to call it, it appears to be
30:13
Speaker 2: the case.
30:14
Speaker 3: Are we moving back to the battle?
30:15
Speaker 2: Go ahead.
30:15
Speaker 3: Sorry, you were making a point.
30:17
Speaker 2: My conclusion would be I don't think the national security
30:19
Speaker 2: risk is the Chinese being able to track and remotely
30:22
Speaker 2: shut down Mark Fandetti's car, although in a worst-case scenario
30:25
Speaker 2: and an all-out war, that would be concerning. My concern
30:28
Speaker 2: would be, do they have the ability to put out
30:32
Speaker 2: of business our... two or three major U.S. automakers.
30:36
Speaker 3: I mean, we've bailed them out multiple times in my
30:38
Speaker 3: lifetime alone. Would that be a terrible thing if we
30:40
Speaker 3: didn't have an auto industry? Put aside for the moment
30:43
Speaker 3: the emotional... Believe me, I've driven up until recently only American,
30:47
Speaker 3: so I get it.
30:48
Speaker 2: I don't know, but certainly in World War II, it
30:50
Speaker 2: was a critical thing for us.
30:52
Speaker 3: To be able to switch that over and make that.
30:54
Speaker 2: We've got.
30:55
Speaker 3: Lockheed and Boeing now. We've got a separate defense complex.
30:58
Speaker 2: We do.
30:59
Speaker 3: We had them then, too, but they're... Yep.
31:02
Speaker 2: So I don't have an answer for you, but that
31:03
Speaker 2: would be my main argument.
31:04
Speaker 3: I'm reading this, Mike, and for the most part, I
31:06
Speaker 3: was sympathetic with America with the national security arguments until
31:08
Speaker 3: I read these quotes and I started thinking, that sounds
31:13
Speaker 3: pretty flimsy.
31:14
Speaker 2: No, I do believe that most of this is coming
31:16
Speaker 2: from the point of we can't compete and we deem
31:20
Speaker 2: it a national security issue to have a domestic auto
31:23
Speaker 2: manufacturer rather than, oh boy, what if they have access
31:28
Speaker 2: to Mark Fandetti's car? Well, they already have access to
31:31
Speaker 2: your phone through all the apps that you use and
31:32
Speaker 2: all the components that go into it. So that seems
31:35
Speaker 2: like a pretty flimsy argument.
31:35
Speaker 3: I mean, how about we just keep these cars? If
31:37
Speaker 3: you're concerned, we keep them away from... Now, Alyssa Slotkin,
31:40
Speaker 3: the senator from Michigan, she has gravitas. I've seen her.
31:47
Speaker 3: We've probably all seen her on the news. Former CIA agent.
31:50
Speaker 3: Do we have to break here?
31:51
Speaker 2: No, you're good. Okay, fine.
31:53
Speaker 3: I was hoping you'd say yes because I'm not really
31:55
Speaker 3: well prepared for what I'm about to say. Slotkin thinks
31:58
Speaker 3: that I'll just quote, all the data that these cars
32:01
Speaker 3: are collecting from our military bases, comma, from our infrastructure site, okay,
32:04
Speaker 3: I'm not going to say the grammar, from our infrastructure sites,
32:07
Speaker 3: individual information on a senior leader and where they, okay.
32:10
Speaker 3: Who the hell? Are we putting the president in a Greeley? No,
32:13
Speaker 3: that would be very stupid. How is this different than
32:16
Speaker 3: me carrying around a Chinese-made piece of electronics? Obviously, I'm
32:20
Speaker 3: not going to take it onto a military base.
32:21
Speaker 2: Yeah, so I think the answer to me is if
32:24
Speaker 2: you feel that way about these vehicles, then you should
32:27
Speaker 2: feel the same way about the router that you put
32:30
Speaker 2: in your home, about the machinery that's used to pick
32:34
Speaker 2: up container ships at every port. at the cell phone
32:38
Speaker 2: apps that you put on your phone, including TikTok. And
32:40
Speaker 2: we clearly don't care about those things. So this is
32:42
Speaker 2: a bad argument. The only argument that I think you
32:45
Speaker 2: can make is they are better at this than us.
32:48
Speaker 2: And so if we deem having a domestic auto manufacturing industry,
32:52
Speaker 2: we have to do these things, which is going to
32:53
Speaker 2: make us ultimately less competitive and even worse at making cars.
32:57
Speaker 3: Read further into the article. Another quote, I guess it's
32:59
Speaker 3: from Slotkin. that's 450,000 workers in my state alone, says Slotkin,
33:03
Speaker 3: who are connected.
33:04
Speaker 2: Yeah, there's the self-interest.
33:05
Speaker 3: Yeah, that should be at the top. This is just
33:08
Speaker 3: protectionism in disguise, as usual. And we all foot the bill.
33:11
Speaker 3: My question was going to be, are we going back
33:13
Speaker 3: to the bad old days of the 1970s, where we
33:16
Speaker 3: didn't let anything in, and we all remember the great
33:18
Speaker 3: quality of the Chevy Citation. No offense, I drove one.
33:21
Speaker 3: Nice car. I didn't drive it long. But, you know,
33:24
Speaker 3: like textbook fit and finish and other issues because of
33:30
Speaker 3: protectionism ultimately. Competition was great for the American auto industry
33:34
Speaker 3: in many ways. It was great for the American consumer
33:37
Speaker 3: first and foremost.
33:38
Speaker 2: Let's take a quick break. When we return, Stack Roulette
33:41
Speaker 2: is next.
33:42
Speaker 1: The Financial Exchange streams every day live on YouTube. Subscribe
33:45
Speaker 1: to our page and follow the markets all morning long.
33:48
Speaker 1: Only here on the Financial Exchange Radio Network. The Financial
33:52
Speaker 1: Exchange is now available every day from 11 to noon
33:55
Speaker 1: on Sirius XM's Business Radio Channel 132. Stay informed about
33:59
Speaker 1: the latest from Wall Street fiscal policy and breaking business
34:02
Speaker 1: news every day. The Financial Exchange is live on Sirius
34:06
Speaker 1: XM's Business Radio Channel 132. This is the Financial Exchange
34:11
Speaker 1: Radio Network.
34:14
Speaker 4: The Financial Exchange is a proud partner of the Disabled
34:17
Speaker 4: American Veterans Department of Massachusetts, and this year's 5K is
34:21
Speaker 4: officially sold out. The race takes place on Saturday, November
34:26
Speaker 4: 7th at Fort Independence on Castle Island, and we hope
34:28
Speaker 4: you can take this opportunity to consider making a donation.
34:33
Speaker 4: Your gifts help provide vital services like free transportation to
34:37
Speaker 4: medical appointments and safe housing. For single veterans and their families,
34:41
Speaker 4: donate today at DAV5K. Boston. That's DAV5K. Boston.
34:46
Speaker 2: The Boston Globe today has a piece about sports betting
34:51
Speaker 2: and kind of feeds into another conversation Mark and I
34:53
Speaker 2: were having about investing or gambling disguised as investing. In
34:59
Speaker 2: any case, a few stats that I just want to
35:02
Speaker 2: bring up about this. One, the National Council on Problem
35:05
Speaker 2: Gambling said, notes that about a third of young adults
35:08
Speaker 2: aged 21 to 44 placed a sports bet before turning
35:12
Speaker 2: 21 years old. That's compared to just 11% of adults
35:17
Speaker 2: aged 55 and older. So the way that this stuff
35:20
Speaker 2: has migrated makes it a lot easier for young adults
35:23
Speaker 2: to do this sort of thing. The piece from Boston
35:28
Speaker 2: Globe cites a few other statistics. They did a very...
35:32
Speaker 2: small study here. So they studied 62 young adults in Massachusetts.
35:39
Speaker 2: 71% of those young adults had previously bet on sports.
35:43
Speaker 2: 66% of the young adults who participated in the study
35:46
Speaker 2: were born between ages 21 and 25. The others were younger,
35:51
Speaker 2: 18 to 20. And it follows on this general theme
35:56
Speaker 2: that we've been seeing here, where whether it's through the
35:59
Speaker 2: traditional sports betting apps like DraftKings, and who are the others, Tucker,
36:03
Speaker 2: that are big in this space?
36:06
Speaker 4: FanDuel, DraftKings.
36:07
Speaker 2: FanDuel, DraftKings.
36:07
Speaker 3: Tucker, you degenerate.
36:09
Speaker 2: Or, you know, PolyMarket, Kalash. I know PolyMarket's not really
36:14
Speaker 2: easy to use here in the U.S. because it's been banned,
36:16
Speaker 2: but these are futures trading platforms that are pretty much
36:20
Speaker 2: just gambling sites that are, you know, being sued by
36:23
Speaker 2: all of these same gambling sites that are actually allowed,
36:25
Speaker 2: you know, forced to pay tax revenue and things like that.
36:29
Speaker 2: more and more I'm hearing studies like this of young
36:33
Speaker 2: people using these things to generally their own poor experiences,
36:41
Speaker 2: losing money on them, hopefully usually pretty small amounts of money.
36:46
Speaker 2: And that's what, while this study cites that among those
36:49
Speaker 2: active veterans, the majority of their wagers were less than
36:51
Speaker 2: 10 bucks, it is very definitely been normalized in a
36:56
Speaker 2: way that was not the case Even just 15, 20
37:01
Speaker 2: years ago, and I just, I'm shrugging, hoping that it's
37:08
Speaker 2: not a big deal, but part of me is growing
37:11
Speaker 2: increasingly concerned that this becomes a big deal.
37:14
Speaker 3: Well, if you bemoan or warn against the slippery slope,
37:17
Speaker 3: you get. Dismissed is an old fart, but there is
37:20
Speaker 3: something to it. When it gets made legal, some people,
37:28
Speaker 3: those without judgment like all of us when we were young,
37:30
Speaker 3: can misinterpret that as, well, it's okay for me to do.
37:34
Speaker 2: Yeah.
37:34
Speaker 3: And we know it's bad. No one's ever made a
37:37
Speaker 3: living gambling. Okay, a couple people have.
37:39
Speaker 2: Where I struggle with this is I was fully in
37:41
Speaker 2: favor of casinos in Massachusetts. I voted for it all
37:45
Speaker 2: about regulated. Thanks a lot. And now with the prevalence
37:50
Speaker 2: of it on your phone, as well as it creeping
37:55
Speaker 2: into investment markets more and more, I have now grown concerned.
38:00
Speaker 3: This is what critics warned about at the time.
38:02
Speaker 2: Yeah, yeah.
38:03
Speaker 3: Leave it up to the mob.
38:06
Speaker 2: As we close out the show today, markets remain in
38:09
Speaker 2: the negative, in the red. We've got the NASDAQ leading
38:11
Speaker 2: the way down nearly off half a percent. We will
38:14
Speaker 2: be back at it tomorrow in 22 hours. Have a
38:17
Speaker 2: great rest of your day, folks, and we will catch
38:19
Speaker 2: you then.