Latest / The Financial Exchange Show / Jobs Stay Strong, But Oil and AI Raise New Questions

Transcript

Jobs Stay Strong, But Oil and AI Raise New Questions · 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 Paul Lane, your exclusive look
0:39
Speaker 1: at business and financial news affecting your day, your city,
0:42
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
0:53
Speaker 1: Veterans Department of Massachusetts. Help us support our great American
0:57
Speaker 1: heroes by visiting dav five K on Boston and making
1:01
Speaker 1: a donation today. This is the Financial Exchange with Mike Armstrong,
1:06
Speaker 1: and following.
1:10
Speaker 2: Good Friday here on the Financial Exchange. It's Mike, Paul
1:14
Speaker 2: and Tucker with you here on a day where equity
1:16
Speaker 2: markets are closed. Bond markets will be closing up pretty
1:20
Speaker 2: soon ahead of the Easter weekend, so markets are closed.
1:25
Speaker 2: We had a jobs report this morning and continued events
1:29
Speaker 2: in Iran, with a US jet being shut shot down
1:32
Speaker 2: over Iran just about an hour ago. So lots still
1:36
Speaker 2: going on obviously in the Middle East, and we will
1:40
Speaker 2: see how things develop over the weekend and into next week.
1:43
Speaker 2: As yesterday, quite a bit of market volatility. We had
1:47
Speaker 2: equity markets opening down by about one and a half
1:51
Speaker 2: percent and then rallying into mixed territory by the close
1:54
Speaker 2: at four pm.
1:55
Speaker 3: Oil prices shot upwards.
1:57
Speaker 2: Though on the commentary from President Trumping his address to
2:00
Speaker 2: the nation on the state of the Iran war and
2:04
Speaker 2: the United States seeming willingness to exit the ven exit
2:08
Speaker 2: the scene without reopening the strait of horror moves, which
2:12
Speaker 2: again he walked back and kind of contradicted this morning
2:14
Speaker 2: on truth social So.
2:16
Speaker 3: Still a lot of fog of war.
2:17
Speaker 2: I don't think a lot to interpret in terms of
2:19
Speaker 2: what comes next there. The important question is will traffic
2:24
Speaker 2: start moving through the strait. Big question though on the
2:29
Speaker 2: jobs report. So report released this morning at a thirty am.
2:34
Speaker 2: One hundred and seventy eight thousand jobs created during the
2:37
Speaker 2: month of March, is the initial estimate from the BLS.
2:40
Speaker 2: The unemployment rate dropped down to four point three percent.
2:43
Speaker 2: And what did we say? The aggregate now combined payrolls
2:47
Speaker 2: added for the first quarter of the year came to
2:49
Speaker 2: around sixty thousand total.
2:50
Speaker 4: Sixty eight thousand. That actually is the average if you
2:53
Speaker 4: netted out the loss. Yeah, that was the average. I
2:55
Speaker 4: ran back kin, So.
2:57
Speaker 2: You know, a pretty good pace of job creation for
2:59
Speaker 2: the first quarter of the year. I think a pretty
3:01
Speaker 2: positive signal here. As you know, the labor market has
3:06
Speaker 2: seemed pretty locked up and frozen for much of twenty
3:11
Speaker 2: twenty five and now into twenty twenty six, and.
3:14
Speaker 3: There's some evidence of that.
3:16
Speaker 2: The evidence that I would point to that is the
3:18
Speaker 2: pace of job hiring and quit rates amongst the population.
3:22
Speaker 2: We get that report, we got it earlier this week,
3:25
Speaker 2: and they're quite low. We call that churn. The churn
3:29
Speaker 2: is important because it is the most common way that
3:31
Speaker 2: leads to income increases. Raises usually happen when people are
3:36
Speaker 2: jobs switching and feel confident enough to do so. And
3:39
Speaker 2: the pace of churn that we're seeing in this labor
3:42
Speaker 2: market right now is around the same pace that you
3:45
Speaker 2: were seeing about twenty thirteen to twenty fifteen. And you know,
3:49
Speaker 2: plenty of people listening right now remember that labor market,
3:52
Speaker 2: and obviously, depending on your industry, it was a lot
3:56
Speaker 2: different for everybody, But the way it was described was,
3:59
Speaker 2: you know, a pretty nervous labor market coming off of
4:01
Speaker 2: the Great Financial Crisis, where a lot of your coworkers
4:04
Speaker 2: had just disappeared, especially if you worked in financial services
4:08
Speaker 2: of some sort or an other, and just not a
4:11
Speaker 2: real compelling labor market back then. Until the late twenty tens,
4:15
Speaker 2: we didn't really see much in the way of wage
4:18
Speaker 2: increases or a drop in the unemployment rate, and then
4:21
Speaker 2: you know, by twenty nineteen we were seeing one of
4:23
Speaker 2: the strongest labor markets we've seen in decades. So the
4:26
Speaker 2: overall state of things, I think improvement over the fourth
4:29
Speaker 2: quarter of last year, the improvement so far over the
4:33
Speaker 2: average for twenty twenty five, and we will just have
4:36
Speaker 2: to kind of monitor things from here and see how
4:39
Speaker 2: it continues to develop. I don't think you can say
4:42
Speaker 2: much about how employers were reacting to higher gas prices
4:47
Speaker 2: or you know, anything else related to the war in Iran.
4:50
Speaker 2: This this survey was done in early to mid March,
4:54
Speaker 2: and so you know, I think, you know, we were
4:56
Speaker 2: all just digesting.
4:57
Speaker 3: Okay, what could this mean? How long might it lie last?
5:00
Speaker 2: Diesel prices moving up, gas prices moving up, So the
5:03
Speaker 2: next few months will be pretty important and indicative of
5:06
Speaker 2: what comes next.
5:06
Speaker 4: Yeah, a couple of factors of the report probably lead
5:08
Speaker 4: it led it to be perhaps higher on the headline number,
5:11
Speaker 4: and we'll see what future revisions look like for that
5:14
Speaker 4: month's report. But overall, my takeaway is that there is
5:17
Speaker 4: not some real cliff on the labor market that has
5:21
Speaker 4: emerged yet. The labor market still looks to be in
5:24
Speaker 4: a stable position for the moment.
5:25
Speaker 2: If the things were not going on and around, we'd
5:28
Speaker 2: likely only be talking about artificial intelligence and it's continued
5:31
Speaker 2: impact on the labor market, you know, how people do
5:35
Speaker 2: their jobs, the state of the stock market. That conversation
5:39
Speaker 2: has dried up due to the you know, all the
5:42
Speaker 2: focus being brought to the Middle East and oil prices,
5:44
Speaker 2: but the development does continue. We could have some IPOs
5:48
Speaker 2: in the space this year we will see either this
5:50
Speaker 2: year or next year would be my guess. And I
5:53
Speaker 2: think one thing that has shifted quite a bit over
5:56
Speaker 2: the course of just the last year has been this
5:59
Speaker 2: serious that investors, economists and everybody else is giving to
6:05
Speaker 2: the industry as a whole. And it's not that it
6:08
Speaker 2: was fundamentally laughed at in the past, but I do
6:13
Speaker 2: personally remember right using some chat GPT and asking it
6:17
Speaker 2: a math equation that it could not solve, or asking
6:20
Speaker 2: it to look up a you know, somebody in my
6:22
Speaker 2: office and it would just hallucinate and you know, make
6:25
Speaker 2: up a bunch of things about that person that didn't
6:27
Speaker 2: truly exist. So there was a lot more joking about
6:31
Speaker 2: the technology early on, and today I think that has
6:34
Speaker 2: morphed quite a bit. Right back in February, we saw
6:38
Speaker 2: the it was almost this weekly takedown of different industries.
6:42
Speaker 2: You had to take down of software stocks, you had
6:44
Speaker 2: to take down, then of financial services companies, and then
6:48
Speaker 2: the silliest one of them all when the karaoke company
6:52
Speaker 2: just you know, said that they could re route shipping
6:54
Speaker 2: and a bunch of transportation logistics company get companies get hit.
6:58
Speaker 2: Most economists agree that you have not seen yet much
7:02
Speaker 2: of an effect on the labor market, but increasingly you're
7:06
Speaker 2: hearing economists say, but it might be something we need
7:09
Speaker 2: to pay attention to.
7:10
Speaker 4: That has been the biggest sentiment shift is the conversations
7:13
Speaker 4: we were having late towards the end of last year.
7:16
Speaker 4: There was including some hosts on this program. I'm pretty
7:19
Speaker 4: sure Mark Fandetti was one who was just questioning, Okay,
7:23
Speaker 4: you know, the technology seems great, but let's see some
7:27
Speaker 4: evidence that it is actually going to be impactful and
7:32
Speaker 4: potentially taking people's jobs, like.
7:33
Speaker 2: Letz, and I think his point wasn't so much that
7:35
Speaker 2: it won't be impactful, like I think very clearly AI
7:38
Speaker 2: will be impactful. But I think his point was speed,
7:41
Speaker 2: You're gonna have a tough time convincing me that this
7:43
Speaker 2: is going to affect the labor market more than the
7:44
Speaker 2: internet did HM, like, more than electricity.
7:50
Speaker 3: Tell me how that's going to work.
7:51
Speaker 2: And that's the piece that I've landed on too, is
7:54
Speaker 2: I'd be surprised if the effect on the labor market
7:58
Speaker 2: was more significant than the invention of the Internet itself,
8:01
Speaker 2: which this technology is obviously built upon.
8:04
Speaker 4: I would make the counter argument that perhaps because it's
8:07
Speaker 4: built on that technology already, that the adoption, the pace
8:11
Speaker 4: at the speed of it actually comes about quicker more
8:15
Speaker 4: quickly than we saw with the Internet, which took a while, yeah,
8:18
Speaker 4: decade and a half plus to really sort of hit
8:20
Speaker 4: full swing.
8:22
Speaker 3: Here would be the two extremes that I can think of.
8:25
Speaker 2: One is that, you know, the pace of AI development,
8:28
Speaker 2: which has been breakneck. Right like six months ago, this
8:34
Speaker 2: technology was doing some impressive things. Now it is writing
8:38
Speaker 2: code for software on its own, testing the software out,
8:42
Speaker 2: and launching it completely independent, I think shortly.
8:47
Speaker 3: What was the other one?
8:47
Speaker 2: We just had the news break that public dot com
8:50
Speaker 2: is going to start implementing an AI agent that will
8:53
Speaker 2: allow you to build in portfolio prompts and build out
8:58
Speaker 2: trading strategies right in your or financial services companies. So
9:02
Speaker 2: the pace of these usable technologies that are being put
9:05
Speaker 2: out there has been breakneck, and one extreme scenario would
9:10
Speaker 2: be that that continues at this breakneck pace and it
9:12
Speaker 2: starts doing things that frankly, maybe I'm just not that
9:15
Speaker 2: creative a person. I don't know what they're going to
9:17
Speaker 2: come up with next. If it does, I can see
9:20
Speaker 2: that picture. I can see how it could have a
9:22
Speaker 2: dramatic impact on the labor market, albeit temporarily. But right, like,
9:26
Speaker 2: is there a scenario where this stuff develops at such
9:29
Speaker 2: a fast pace, and, as typically happens with new technologies,
9:33
Speaker 2: gets subsidized to a level that it can be afforded
9:35
Speaker 2: at a number of companies and therefore eliminate some jobs. Yeah,
9:39
Speaker 2: I can envision that scenario. There is another scenario too, though,
9:43
Speaker 2: that I think is equally likely, where the pace of
9:46
Speaker 2: development naturally slows Yep, you know, you have this deep
9:49
Speaker 2: curve initially as new programs and new thoughts of how
9:52
Speaker 2: to use this stuff gets developed, and then it slows down.
9:56
Speaker 2: And if that happens, frankly, you know, like other technolologies
10:00
Speaker 2: in the past, I think the adoption slows down, and
10:03
Speaker 2: I think the pace at which jobs get replaced slows down.
10:06
Speaker 3: Too.
10:07
Speaker 2: In that first scenario, higher unemployment, maybe you can justify
10:12
Speaker 2: the price that you're paying on some of these stocks
10:14
Speaker 2: in the semiconductor space and other areas of the market.
10:17
Speaker 2: In that second scenario, where it doesn't really affect the
10:21
Speaker 2: labor market, you might have concerns about the valuations you're
10:23
Speaker 2: paying on some giant tech companies because the adoption won't
10:26
Speaker 2: be that fair.
10:26
Speaker 4: Yeah, And I think to your on that second scenario
10:29
Speaker 4: where perhaps adoption is slowed, there are some potential pitfalls
10:33
Speaker 4: that loom out there that are not technology specific. A
10:36
Speaker 4: lot of this infrastructure is relying on kind of the
10:39
Speaker 4: picks and shovels approach of like building out these data
10:41
Speaker 4: centers to enable the technology to expand and to evolve
10:46
Speaker 4: more rapidly. And what we've seen we covered a piece
10:49
Speaker 4: yesterday where the state of Maine was looking at pausing
10:53
Speaker 4: data center construction. If that takes a more wider spread
10:55
Speaker 4: approach throughout the United States, and you have companies that
10:58
Speaker 4: are committed, the big hyper scalers that are committed to
11:01
Speaker 4: spending five to six hundred billion on this infrastructure and
11:05
Speaker 4: data center build up, if that gets paused, then to
11:08
Speaker 4: your point, that leads to that scenario of the advancements
11:12
Speaker 4: don't come as rapidly as they have been, and perhaps
11:15
Speaker 4: there's a question of valuations, but it remains probably the
11:18
Speaker 4: biggest question for the markets outside of the independent variable
11:22
Speaker 4: that we're dealing with right now with the war and Iran,
11:24
Speaker 4: how does this look going forward? And it's a fascinating
11:27
Speaker 4: subject to kick around because no one really knows.
11:30
Speaker 2: Quick break when we come back, A little bit of
11:32
Speaker 2: trivia here next on the Financial Exchange.
11:34
Speaker 1: Smart Financial Talk Whenever you want find The Financial Exchange
11:38
Speaker 1: on YouTube. Hit that subscribe button and keep up to
11:41
Speaker 1: date on daily business news from New England and around
11:44
Speaker 1: the country. This is the Financial Exchange Radio Network. There's
11:49
Speaker 1: only one show that follows well Street's continued volatility. Keep
11:53
Speaker 1: it here all morning long on the Financial Exchange Radio Network.
12:00
Speaker 5: Time for trivia here on the Financial Exchange. Today is
12:03
Speaker 5: Eddie Murphy's sixty fifth birthday. The comedy legend began his
12:09
Speaker 5: comedy career at age fifteen when he first performed at
12:13
Speaker 5: his stand up comedy set. Murphy was the age of
12:17
Speaker 5: nineteen when he joined the cast of Saturday Night Live
12:20
Speaker 5: in nineteen eighty. So our trivia question today, who is
12:24
Speaker 5: the youngest ever member of the Saturday Night Live Cast?
12:29
Speaker 3: Once again?
12:29
Speaker 5: Who is the youngest ever member of the Saturday Night
12:34
Speaker 5: Live Cast? Be the fourth person today to text us
12:38
Speaker 5: at six one, seven, three, six two thirteen eighty five
12:41
Speaker 5: with the correct answer along with keyword trivia, and you'll
12:44
Speaker 5: win a Financial Exchange Showed t shirt once again. The
12:47
Speaker 5: fourth correct response to text us to the number six one, seven, three,
12:52
Speaker 5: six two thirteen eighty five with the correct answer along
12:55
Speaker 5: with the keyword trivia will win that T shirt. Seek
12:59
Speaker 5: Complete contest rule was ad Financial Exchange Show dot Com.
13:02
Speaker 2: I want to talk about six Flags because it's a Friday,
13:06
Speaker 2: the markets are closed and uh, and I'm heading down
13:09
Speaker 2: to a theme a week of theme parks in Florida
13:12
Speaker 2: this April. UH, at a couple of places that you've
13:15
Speaker 2: probably heard of once or twice before.
13:17
Speaker 3: Disney, Yeah that in Universal. We're doing both. Oh, you're
13:20
Speaker 3: doing both. It's going to be a lot wow.
13:23
Speaker 5: Yeah, a lot of money, yeah, and a lot off.
13:29
Speaker 2: You know, I know everybody knows this your energy. But
13:32
Speaker 2: I could fly anywhere in the world and stay at
13:36
Speaker 2: a pretty nice place for substantially less than what I'm
13:40
Speaker 2: paying to go to.
13:43
Speaker 3: Disney Memories Australia.
13:46
Speaker 2: I could get to Australia and stay at a nice
13:48
Speaker 2: place for substantially.
13:49
Speaker 3: Less than what it's cost. Really wow, all the way
13:52
Speaker 3: around the world.
13:55
Speaker 4: I guess kids are going to off for a couple
13:58
Speaker 4: more years.
14:00
Speaker 2: So, speaking of that six Flags, which you know in
14:04
Speaker 2: part was I don't think it was cropped up as
14:07
Speaker 2: a direct reaction to Disney, but clearly in the theme
14:11
Speaker 2: of that they've been operating for some I mean fifty
14:17
Speaker 2: plus years. I don't remember when the first one won. Okay,
14:20
Speaker 2: so you know, came out in Texas back in nineteen
14:23
Speaker 2: sixty one. They now have dozens of parks across the country,
14:28
Speaker 2: and they've announced plans to close or sell several of
14:31
Speaker 2: their forty one different amusement and water parks in the
14:34
Speaker 2: next few years as they just focused on their high
14:37
Speaker 2: performing parks.
14:38
Speaker 3: And I gotta be honest, this is not surprising to me.
14:42
Speaker 3: I've mapped.
14:42
Speaker 2: I looked at a map of all of these parks
14:45
Speaker 2: and just where they are, because they are all over
14:47
Speaker 2: we obviously in New England, have one out here in
14:49
Speaker 2: western Massachusetts. I counted like half of them that are
14:54
Speaker 2: north of Tennessee. And I just don't know how you're
14:58
Speaker 2: supposed to make money all a theme park destination that
15:02
Speaker 2: has to buy necessity clothes for half of the year.
15:06
Speaker 2: I'm taking a look at six Flags New England right now,
15:08
Speaker 2: and Gemini is telling me that they are supposed to
15:11
Speaker 2: open on April sixth, or no, that they did open
15:14
Speaker 2: last year on April six I don't know. When they'll
15:16
Speaker 2: open this year. I mean, just think through the logistics
15:20
Speaker 2: of hiring and firing people every six months, paying your
15:24
Speaker 2: property tax bills, electricity costs, security, maintenance, all the other
15:27
Speaker 2: stuff on shutting down and reopening a ride every few months.
15:31
Speaker 2: And I just don't understand how operating a theme park
15:35
Speaker 2: or a And you know, trust me, there's a bunch
15:38
Speaker 2: of them in New England that I absolutely love, Santons
15:41
Speaker 2: Village and Storyland up in New Hampshire, Cannby Lake, like
15:46
Speaker 2: a lot of great water parks and theme parks that
15:49
Speaker 2: must be such a difficult operation to make any sort
15:52
Speaker 2: of money on at a mass level. And the only
15:57
Speaker 2: solution to me is you have to find a way
15:59
Speaker 2: to monetize this in the way and the problem is
16:03
Speaker 2: you need so much space that I just don't know
16:04
Speaker 2: how it's doable, right, Like, yes, could you open an
16:08
Speaker 2: outdoor skating rink and sledding course maybe in some of
16:11
Speaker 2: these things, Yeah, but are you going to drive out
16:14
Speaker 2: to it's not actually in Springfield, I don't think the
16:17
Speaker 2: one that's in Massachusetts, it's like in that general area,
16:21
Speaker 2: and you just don't have a ton of traffic going
16:23
Speaker 2: back in.
16:23
Speaker 3: The back a mass.
16:26
Speaker 2: I just I don't know that the model itself does
16:29
Speaker 2: not seem designed for a place that you buy necessity
16:32
Speaker 2: have to close a minimum of four months a year. Hey,
16:35
Speaker 2: you make it work, And I'm guessing that's where they're
16:38
Speaker 2: going to close a bunch of them.
16:39
Speaker 4: You think that's the main reason. It seems like from
16:41
Speaker 4: reading this it's more about they overextend themselves.
16:43
Speaker 3: With dead It's definitely both.
16:45
Speaker 4: The price increases didn't really justify the value that people
16:48
Speaker 4: were getting.
16:48
Speaker 3: One hundred percent.
16:49
Speaker 2: I don't think it is purely a environment and you know,
16:53
Speaker 2: location issue. I'm just fascinated by the idea of running
16:57
Speaker 2: a theme park like six Flags when you are only
17:00
Speaker 2: able to make money a few months a year.
17:02
Speaker 3: It's such a massive operation.
17:04
Speaker 4: Yeah, but I mean, don't get me wrong, not to
17:06
Speaker 4: say that the operation is the same, but like a
17:08
Speaker 4: golf course around this area is the same sort of thing.
17:10
Speaker 4: I mean, it's not as much maintenance as theme park is,
17:14
Speaker 4: but there's still a lot to keep the course in
17:16
Speaker 4: good ships. So there are plenty of businesses. I feel
17:18
Speaker 4: like that can be seasonal, but you're right, there certainly
17:23
Speaker 4: are some months where it stinks not to have any
17:25
Speaker 4: revenue coming in at all.
17:27
Speaker 2: Brand new guide from the Armstrong Advisory Group out for
17:30
Speaker 2: the month of April, obviously just kicking off the month. Here,
17:32
Speaker 2: it's all about building your emergency financial binder. I know
17:36
Speaker 2: a lot of people have thought about this before, or
17:39
Speaker 2: maybe they've dealt with it firsthand with family members who
17:42
Speaker 2: get sick or pass away and cleaning up their financial
17:45
Speaker 2: life is a disaster. If you've been through that before
17:48
Speaker 2: or heard of someone who has, this is the guide
17:51
Speaker 2: for you. It is a step by step guide on
17:53
Speaker 2: how to create that emergency financial binder, what belongs in it,
17:57
Speaker 2: how to list it out, and you know, building the
17:59
Speaker 2: framework for how you get one of these things underway.
18:02
Speaker 2: You can request your free copy at eight hundred three
18:04
Speaker 2: nine three for zero zero one or Armstrong Advisory dot
18:08
Speaker 2: Com that number again, eight hundred three nine three for
18:11
Speaker 2: zero zero one.
18:12
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
18:15
Speaker 1: registered investment advisor. Nothing in the ad or in any
18:17
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
18:20
Speaker 1: your own financial tax into state planning advisors before making
18:23
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
18:26
Speaker 1: advisory services.
18:29
Speaker 2: Just quickly before we go to break here, I have
18:31
Speaker 2: to continue talking about prediction markets and the hunt for
18:34
Speaker 2: the quote new dumb money. The survey that was recently done,
18:40
Speaker 2: and this accompanies many others that we have seen, but
18:43
Speaker 2: Northwestern Mutual published survey last week. Nearly one third of
18:48
Speaker 2: US respondents between the ages of eighteen and twenty nine
18:51
Speaker 2: said that they were either investing in or considering investing
18:55
Speaker 2: in sports betting and prediction markets. And two things caught
18:58
Speaker 2: my eye there. One that is a massive portion of
19:01
Speaker 2: eighteen to twenty nine year olds they're talking about sports
19:04
Speaker 2: betting on prediction markets. Two is the term investing being
19:09
Speaker 2: complicated with prediction markets on sports betting. And again, this
19:14
Speaker 2: is something that I've I am all on board with
19:16
Speaker 2: legalized gambling. I've been in favor of it, but more
19:19
Speaker 2: and more the evidence is suggesting that it's addicting for
19:23
Speaker 2: young people and they are confusing investing versus gambling. A
19:28
Speaker 2: lot of problems here. Quick Break, Wall Street Watch coming
19:30
Speaker 2: up next, and Money Matters Mailbag.
19:32
Speaker 6: Stay tuned, bringing the latest financial news straight to your
19:44
Speaker 6: radio every day. It's the Financial Exchange on the Financial
19:47
Speaker 6: Exchange Radio Network.
19:51
Speaker 1: Till out full whoa Street Watch trecking the stocks FANDATO
19:55
Speaker 1: and the headlines driving markets so far today right here
19:58
Speaker 1: on the Financial Exchange Radio network.
20:01
Speaker 5: Well markets are closed in observance of Good Friday, but
20:03
Speaker 5: we did get a jobs report this morning for the
20:06
Speaker 5: month of March, where one hundred and seventy eight thousand
20:08
Speaker 5: jobs were added last month, blowing pass estimates of sixty
20:13
Speaker 5: five thousand. The unemployment rate also fell to four point
20:17
Speaker 5: three percent. Bomb markets are open for about another half
20:20
Speaker 5: an hour here. Ten year treasure reeled currently up three
20:24
Speaker 5: basis points at four point three four five percent in
20:27
Speaker 5: as of Thursday's close, oil trading around one hundred and
20:31
Speaker 5: eleven dollars per barrel. TRIPAA national average for gas currently
20:35
Speaker 5: sits at four dollars in nine cents. Some breaking news
20:38
Speaker 5: this morning from Iran, where a search and rescue operation
20:41
Speaker 5: is underway for the crew of a US fighter jet
20:45
Speaker 5: that reportedly went down over Iran, and Bloomberg reporting that
20:49
Speaker 5: SpaceX boosted its target IPO valuation above two trillion dollars
20:55
Speaker 5: as the world's most valuable startup gears up to pitch
20:59
Speaker 5: put tenctually the biggest ever market debut. I'm Tucker, Silva
21:05
Speaker 5: and that is Wall Street watch for mails here.
21:09
Speaker 3: Here's the mail for mails. It makes big one the
21:12
Speaker 3: wag my tail when it comes. I want where.
21:17
Speaker 1: You've got questions, We've got answers. It's time for the
21:20
Speaker 1: Money Matters Mailbag. We are tackling your calls and emails
21:23
Speaker 1: on everything from economic policy to global markets and everything
21:27
Speaker 1: in between. Leave us a voicemail at three three nine
21:30
Speaker 1: three nine nine four three three three and you might
21:33
Speaker 1: hear it on the show. You can also email your
21:35
Speaker 1: question to TFE Show at gmail dot com. No, it's
21:39
Speaker 1: time for the Money Matters mail Bag.
21:42
Speaker 5: Yes, that's right, it is the Money Matters mail Bag.
21:46
Speaker 7: Here.
21:48
Speaker 5: Let's get started here, boys, Paul, this is your first
21:51
Speaker 5: uh time with the Money Matters mail Bag.
21:54
Speaker 1: You must be excited about it.
21:55
Speaker 4: I am very excited. I loved the intro.
21:58
Speaker 3: Yeah, thanks uh so.
21:59
Speaker 4: We Actually we got this email.
22:00
Speaker 5: In about an hour ago from one of our listeners, Robert.
22:04
Speaker 5: He had this question regarding jobs since we saw the
22:07
Speaker 5: jobs report posted earlier this morning. Guys, can you talk
22:11
Speaker 5: about the dramatic cut in federal government jobs Under the
22:15
Speaker 5: Biden administration, job growth was dependent on more government jobs,
22:19
Speaker 5: not so much under the Trump administration.
22:22
Speaker 3: Yes, happy to talk about that, so you can check
22:24
Speaker 3: out this data. Point two.
22:26
Speaker 2: Saint Louis, FED has this awesome charting tool that we
22:30
Speaker 2: use for all sorts of stuff. But one of the
22:31
Speaker 2: factors that it can tell you is, according to the reports,
22:35
Speaker 2: how many federal government employees were working at different points
22:38
Speaker 2: in time. So taking a look one two things can
22:41
Speaker 2: be true at the same time. I think, Robert, you're
22:44
Speaker 2: absolutely correct that under the Biden administration, federal government employees grew,
22:50
Speaker 2: and very clearly under the Trump administration they shrank, and
22:54
Speaker 2: you can see the straight line downward in summer and
22:58
Speaker 2: fall of twenty twenty five. Actually was pardon me, the
23:02
Speaker 2: straight line job was October of twenty twenty five, because
23:05
Speaker 2: that was when the buyouts actually finally took place, in
23:08
Speaker 2: a huge drop at that point in time. But let's
23:11
Speaker 2: talk about the actual numbers here, because that's what she
23:13
Speaker 2: asked about. January of twenty twenty one two point eight
23:17
Speaker 2: eight four million government employees. By January of twenty twenty five,
23:21
Speaker 2: when Biden left office, three point zero one million.
23:24
Speaker 3: March of twenty.
23:25
Speaker 2: Twenty six, two point sixty five eight million federal government employees,
23:30
Speaker 2: so a drop under the Trump administration of about three
23:33
Speaker 2: hundred and fifty two thousand. According to these numbers, increased
23:36
Speaker 2: during the Biden administration about one hundred twenty six thousand
23:39
Speaker 2: over the course of four years. The piece, the second
23:44
Speaker 2: piece of the question, though, was can you talk about
23:46
Speaker 2: how the Biden administration job growth was dependent on more
23:51
Speaker 2: government jobs. That's not really clearly the case. So during
23:55
Speaker 2: the Biden administration, we went from one hundred and forty
23:58
Speaker 2: million total employee to one hundred and fifty five million,
24:02
Speaker 2: and that number specifically stripped out all federal government hiring.
24:07
Speaker 2: So I took that out and just told me that,
24:09
Speaker 2: just asked it to tell me. Give me the total
24:11
Speaker 2: non farm employment excluding federal employees.
24:16
Speaker 4: Fifteen million gains.
24:17
Speaker 2: So it was a fifteen million gain under Biden and
24:20
Speaker 2: under President Trump. So far you're looking at about a
24:23
Speaker 2: seven hundred and twenty thousand job gain outside of federal employment.
24:27
Speaker 2: So I'm not putting any judgment on one versus the other.
24:30
Speaker 2: But to say the Biden administration's job gains were reliant
24:34
Speaker 2: upon government employees, well not really. They grew, you know,
24:38
Speaker 2: outside of government employees. They grew fifteen million jobs. Again,
24:42
Speaker 2: they started at the word, you know, the best possible
24:44
Speaker 2: time to start, because a bunch of people had been
24:46
Speaker 2: laid off during COVID, and you had this opportunity for
24:49
Speaker 2: massive job creation that does not exist in twenty twenty five.
24:53
Speaker 2: Given the pace of creation over the last five years.
24:55
Speaker 4: It is definitely a dragging factor heading into the job
24:57
Speaker 4: supports that we're discussing here, that you don't have the
25:00
Speaker 4: robust hiring in the government structor and in fact you
25:02
Speaker 4: have jobs being detracted away from that overall number. So
25:05
Speaker 4: the concentration of gains that we've seen now are largely
25:08
Speaker 4: within healthcare, and there's far fewer additions on the government side.
25:12
Speaker 4: In fact, they are detractors.
25:14
Speaker 3: All right.
25:15
Speaker 5: Back to the mail bag we go, and again, Robert,
25:19
Speaker 5: thank you again for that email. It was sent to
25:22
Speaker 5: tfe Show at gmail dot com. We got a voicemail
25:27
Speaker 5: the other day, gentlemen, This one is coming from Liz,
25:31
Speaker 5: So let's go to the audio.
25:33
Speaker 7: Liz, Hi, I had a question. My best friend's father
25:39
Speaker 7: recently passed away a little unexpectedly, and her mothers have
25:44
Speaker 7: been in the dark with their finances because he was
25:46
Speaker 7: the one that did all of the banking, He paid
25:48
Speaker 7: all the bills and handled all of their investments. My
25:50
Speaker 7: friend's mom doesn't know where anything is outside of their
25:53
Speaker 7: joint bank accounts. Are there any kind of services or
25:57
Speaker 7: programs or anything that will help organize and access any
26:00
Speaker 7: of these things for them?
26:03
Speaker 2: So I don't know about a ton of professional organizations
26:06
Speaker 2: that do it. I know senior centers across, you know,
26:11
Speaker 2: across different areas can offer a lot of this type
26:13
Speaker 2: of help, you know, free tax filings and things like that,
26:17
Speaker 2: and so that might be a good place to start
26:19
Speaker 2: as the local senior center to get some help. I
26:22
Speaker 2: know that there are bookkeepers that sometimes get hired in
26:25
Speaker 2: events like this that work for like an accounting firm
26:28
Speaker 2: or something like that to help out. But just a
26:31
Speaker 2: few tips on this for people that have been through
26:34
Speaker 2: this type of thing before and are dealing with it.
26:38
Speaker 2: One would be the the frequency of account statements that
26:42
Speaker 2: get delivered.
26:43
Speaker 4: Yeah, I was to go there.
26:44
Speaker 2: So if you own an investment account, the custodian maybe
26:49
Speaker 2: it's Fidelity or Schwab or e Trade, any of those,
26:51
Speaker 2: they are required at a bare minimum to send out
26:55
Speaker 2: a quarterly statement. Sometimes they can come more frequently, but
26:59
Speaker 2: bare minimum quarterly. So if you've got an account out there,
27:02
Speaker 2: you should be getting something at all. It's minimum quarterly
27:06
Speaker 2: to give you a sense of what's going on, and
27:07
Speaker 2: that would apply to certain types of annuities too, but
27:11
Speaker 2: once every three months that's coming. The problem is if
27:13
Speaker 2: they were getting it digitally email is still open, that
27:18
Speaker 2: can be tough to track down. If you don't have
27:20
Speaker 2: access to the email account, et cetera, that that becomes
27:23
Speaker 2: pretty tricky. The other stuff that's out there, insurance policies,
27:29
Speaker 2: other types of annuities minimum once a year you can
27:32
Speaker 2: expect to see something premium notice or other kind of
27:36
Speaker 2: account statement. Once a year you can expect to see that.
27:39
Speaker 2: And then the other place. I always tell people to
27:41
Speaker 2: start looking at grab the tax return because on that
27:45
Speaker 2: tax return, you know you should have the ten ninety
27:47
Speaker 2: nine available from any type of investment account, especially if
27:51
Speaker 2: it's a retirement acount where withdrawals were taking place. And
27:54
Speaker 2: from there, right on the tax document, it tells you
27:58
Speaker 2: who was the person, who was the company that generated
28:00
Speaker 2: the tax document, what's the name of it, what's their
28:03
Speaker 2: tax ID number, And from there you can you reach
28:05
Speaker 2: out to that organization and find out, hey, what what
28:07
Speaker 2: was had here? Any other tips that you have, Paul
28:10
Speaker 2: on You know, we've all dealt with this before in
28:12
Speaker 2: our industry.
28:13
Speaker 4: And uh you you hit on a lot of the
28:14
Speaker 4: biggest ones. Really aggregating those statement copies together is the
28:18
Speaker 4: first place that I'd recommend anyone starting. Hopefully there are
28:21
Speaker 4: paper ones coming to the home. It does become a
28:23
Speaker 4: lot trickier if it's electronic delivery, but just organizing all
28:27
Speaker 4: the corresponds as best you can and then connecting her
28:30
Speaker 4: with somebody who can assist of figuring out Okay, this
28:33
Speaker 4: is what is at stake, and here's where we go
28:36
Speaker 4: from here. Here's the phone calls that we need to make.
28:38
Speaker 4: But I like your idea with the tax reporting document
28:41
Speaker 4: is you just need to find the financial institution and
28:43
Speaker 4: then you pick up the phone and hopefully with the
28:45
Speaker 4: personal information you get a step in the right direction.
28:47
Speaker 5: Yep, all right, one more question out of the money
28:53
Speaker 5: Matters mail bag, Let's go to John and Bristol, Rhode Island,
28:57
Speaker 5: sending us an email to tfe Show at gmail dot com.
29:01
Speaker 5: What are your thoughts on Warren Buffett's comments wishing the
29:04
Speaker 5: FEDS inflation targets should be U zero percent instead of
29:08
Speaker 5: two percent. He said something in along lines of if
29:11
Speaker 5: you're getting less than two percent on your money, you're
29:14
Speaker 5: going backwards. So thoughts on that, gentleman.
29:16
Speaker 2: You know, I actually didn't see this until I heard
29:20
Speaker 2: until I got this message now and I just looked
29:22
Speaker 2: at up. It was during I think a CNBC interview
29:24
Speaker 2: that he gave back, and yeah, I think.
29:28
Speaker 1: So.
29:28
Speaker 2: I think one thing I'll acknowledge, the two percent is
29:31
Speaker 2: completely arbitrary. Yes, it's made up. The Federal Reserve targets it.
29:35
Speaker 2: They say they target it. They don't really care if
29:36
Speaker 2: it's much higher, and they chose two percent because it
29:39
Speaker 2: sounded nice. There's not a lot of thesis behind it.
29:44
Speaker 2: And so I think I'm open to the idea that
29:47
Speaker 2: that target should eventually change, but.
29:52
Speaker 4: I'm I'm not willing to go zero on it. Why
29:55
Speaker 4: because deflation, as much as it sounds sexy from a
30:00
Speaker 4: consumer standpoint, Oh I get to pay less for prices
30:02
Speaker 4: of good, is never if you look at economic history,
30:06
Speaker 4: has never been good for any economy to get into
30:08
Speaker 4: a deflationary cycle. We almost got on the prespice of
30:10
Speaker 4: that coming out of the Great Financial Crisis, and that
30:13
Speaker 4: certainly wasn't a good good time for the economy. If
30:16
Speaker 4: you create this cycle where consumers are going to delay
30:19
Speaker 4: purchase because they're hoping that perhaps they'll be lower in
30:22
Speaker 4: the future, that doesn't do anything to stimulate business revenue.
30:26
Speaker 4: And ultimately all of us, as equal participants in the
30:29
Speaker 4: US economy, should want GDP to continue to grow. If
30:33
Speaker 4: you invest in stocks, you should want the same thing
30:36
Speaker 4: as well. And so creating this deflation risk of deflation
30:40
Speaker 4: if you have a zero percent target, that doesn't mean
30:42
Speaker 4: you always stay pinpoint round the target. Just look at
30:45
Speaker 4: what Mike just said. We barely could get two percent.
30:48
Speaker 4: We never hit two percent since the FED is made
30:50
Speaker 4: it a target. So you run that risk that you're
30:52
Speaker 4: more susceptible to getting into a deflationary economy, which never
30:56
Speaker 4: has strong results. It just leads to less activity. And
31:01
Speaker 4: we want an economy that continues to grow, and with
31:04
Speaker 4: a healthy economy, you do need inflation to stimulate that
31:08
Speaker 4: to keep wages growing, you don't want to run the
31:11
Speaker 4: risk of wages having to be cut during a period
31:14
Speaker 4: of time. And so that two percent buffer that's created
31:17
Speaker 4: with having that target, I feel is better than the
31:20
Speaker 4: zero percente.
31:20
Speaker 2: So with that said, are you trying to say that
31:22
Speaker 2: you're smarter than Warren Buffett.
31:23
Speaker 4: Never trying to say I'm smarry than Warren Buffet, a huge,
31:26
Speaker 4: warm Buffet sort of disciple, and love everything that he's
31:28
Speaker 4: done for the investing community. He has far more expertise
31:32
Speaker 4: and knowledge.
31:33
Speaker 2: You're allowed to disagree with them on one thing, but
31:34
Speaker 2: I do, and he he does go on to say
31:37
Speaker 2: in this piece that he's not so overly concerned with inflation.
31:41
Speaker 4: Yes, he'd like to see the target be lower, but
31:43
Speaker 4: he was more concerned about the Federal Reserve, its independence
31:47
Speaker 4: and its policies being something that stays tried and true.
31:49
Speaker 5: All right, Well, that was it for the Money Matters
31:51
Speaker 5: mail Bag, And as you guys are doing the segment,
31:53
Speaker 5: we actually got another email in and we'll do that
31:55
Speaker 5: next week next Friday. So if you want to get
31:58
Speaker 5: in your voicemail before for next week, you can call
32:01
Speaker 5: us at three three nine three nine nine four three
32:04
Speaker 5: three three once again three three nine three nine nine
32:07
Speaker 5: four three three three four the Money Matters mail Bag,
32:10
Speaker 5: or you can email us to TFE Show at gmail
32:14
Speaker 5: dot com.
32:15
Speaker 2: Let's take a quick break. When we come back. Paulamonica
32:18
Speaker 2: from Baron's join us next.
32:20
Speaker 1: The Financial Exchange streams live on x Stay on top
32:23
Speaker 1: of the markets and get live reaction as it happens.
32:27
Speaker 1: He's the Financial Exchange. Subscribe now to our YouTube page,
32:32
Speaker 1: where you'll find daily interviews and full shows of the
32:34
Speaker 1: Financial Exchange. We'll get you caught up on anything and
32:37
Speaker 1: everything you might have missed right here on the Financial Exchange,
32:42
Speaker 1: Ladies and gentlemen.
32:44
Speaker 5: The weekend, before we get to Paula Monica, we got
32:49
Speaker 5: to pay up for a trivia question here and it
32:51
Speaker 5: was who was the youngest member ever of SNL. That'll
32:55
Speaker 5: be Anthony Michael Hall, who is seventeen years old when
32:58
Speaker 5: he joined the cast in nineteen eighty five. Bruce in Wittonsville,
33:02
Speaker 5: Mass is our winner today, taking home a Financial Change
33:04
Speaker 5: Show T shirt. Congrats to Bruce, and we played trivia
33:07
Speaker 5: every day here in the Financial Exchange. See complete contest
33:10
Speaker 5: rules at Financial Change Show dot com.
33:13
Speaker 4: As promised, we are joined by Paulama Lamonica from Barons
33:17
Speaker 4: here to talk to us a little bit about Levi's stock. Paul,
33:20
Speaker 4: thanks so much for joining us.
33:22
Speaker 3: Thank you so Paul.
33:23
Speaker 4: Many of us, of course know Levi's from its denim
33:26
Speaker 4: and Jens products and what I found interesting in your
33:30
Speaker 4: piece here you allude to they have gone through a
33:32
Speaker 4: bit of a strategic shift where the focus is more
33:35
Speaker 4: so on delivering direct to consumer versus just you or
33:40
Speaker 4: I going to a store and purchasing their products. Talk
33:44
Speaker 4: to us a little bit about that strategy shift and
33:46
Speaker 4: sort of the growth that they've seen in that endeavor.
33:50
Speaker 8: Yeah, you've got almost half of their revenue coming from
33:53
Speaker 8: that you direct to consumer kind of strategy, and the
33:58
Speaker 8: margins are higher as well. Well. So that's both online,
34:02
Speaker 8: it's through mobile apps. It does include some retail physical
34:06
Speaker 8: retail as well, but it's Levi's own stores as opposed
34:09
Speaker 8: to say going to an apparel or mass market retail
34:15
Speaker 8: or like a Walmart or Target and getting lead by
34:17
Speaker 8: jeans there. So the strategy seems to be working as
34:21
Speaker 8: well as a bit of some diversification, trying to focus
34:26
Speaker 8: more on non denim pants on tops as well and
34:32
Speaker 8: other bits of apparel so that they're not just classic
34:37
Speaker 8: blue jeans. And yeah, revenue is expected to be up
34:40
Speaker 8: about ten percent this year, so it looks like investors
34:44
Speaker 8: are going to be excited about that and consumers as well.
34:47
Speaker 4: Talk about some of the marketing initiatives that they have
34:50
Speaker 4: that may boost the brand's visibility that could help Levi's
34:55
Speaker 4: going forward.
34:56
Speaker 8: Yeah, it's going to be interesting. The World Cup is
35:00
Speaker 8: later this year, and there are several games that are
35:04
Speaker 8: going to be held at Levi's Stadium in the Bay Area,
35:09
Speaker 8: which is where you know, the Super Bowl was as well.
35:13
Speaker 8: And even though I believe as part of the World
35:15
Speaker 8: Cup promotion that you know, the stadium isn't really going
35:21
Speaker 8: to be referred to by FIFA marketing as Levi's, everyone
35:25
Speaker 8: knows it's Levi's Stadium, and the company is also part
35:29
Speaker 8: of a Bay Area committee to kind of try and
35:33
Speaker 8: drum up you know, more support in you know, northern
35:38
Speaker 8: California for all of the various World Cup activities going on.
35:42
Speaker 8: So you could see a potential boost, you know, just
35:46
Speaker 8: from the fact that you know, their name is going
35:48
Speaker 8: to be out there during the World Cup.
35:50
Speaker 4: Who are some of the competitors in Levi's space that
35:52
Speaker 4: they're up against, Paul, Who are some of the brands
35:54
Speaker 4: that they go head to head with.
35:56
Speaker 8: Yeah, there's a company, Contour Brand, which is a spin
36:02
Speaker 8: off of VF Corp. That owns the Wrangler and Lee brands.
36:07
Speaker 8: You know, obviously Ralph Lauran, the Polo brand, they make
36:11
Speaker 8: genes as well. You know other fashion brands, you know
36:14
Speaker 8: Columbia Sports, where you could argues maybe somewhat of a
36:18
Speaker 8: comp But the interesting thing is is that Levi's is
36:22
Speaker 8: trading at a discount to all of those companies. So
36:26
Speaker 8: if their pe multiple just expands a little bit to
36:29
Speaker 8: be more in line with other fashion companies, other apparel companies,
36:34
Speaker 8: that's one reason why the stock could really go a
36:37
Speaker 8: lot higher from here. There's an analyst at UBS who's
36:39
Speaker 8: got a thirty three dollars price target on it, which
36:42
Speaker 8: you know, about seventy five percent or so higher than
36:45
Speaker 8: current levels.
36:46
Speaker 4: Paul A Monica from Baron's joining us to talk about Levi's. Paul,
36:49
Speaker 4: thanks so much for the time, and have a great weekend.
36:51
Speaker 8: Thanks a lot you do you guys.
36:53
Speaker 2: I want to talk about a real American hero out there.
36:56
Speaker 2: His name's Brad Reese. He's the grandson of the Reces
37:00
Speaker 2: buttercup inventor, and he has single handedly, or maybe maybe
37:05
Speaker 2: with some help out there.
37:07
Speaker 3: Convinced Hershey's to reverse course.
37:09
Speaker 2: On a move that they and other candy bar makers
37:11
Speaker 2: have been making because of cocoa prices being too high
37:15
Speaker 2: where they would just kind of grab other types of
37:17
Speaker 2: fats and put them into their chocolate bars as an
37:20
Speaker 2: alternative to actual cocoa, because again, it's really expensive and
37:25
Speaker 2: you can replace it with nasty stuff like I'm assuming,
37:28
Speaker 2: like sunflower oil and crap like that. And mister Reese,
37:33
Speaker 2: who again grandson of the famous HB. Reese candy company
37:38
Speaker 2: which sold out in nineteen sixty three to Hershey's, is
37:42
Speaker 2: pushing them to you know, to back off, and also
37:45
Speaker 2: getting the attention of our k of course, who hates
37:48
Speaker 2: all of these fake types of products.
37:50
Speaker 3: So as as everybody else agrees.
37:54
Speaker 2: Reese's obviously the best candy bar out there that's available
37:57
Speaker 2: for mass production, you know, is there.
38:00
Speaker 3: Really any debate there?
38:01
Speaker 4: Snickers?
38:03
Speaker 2: Every single Halloween, everybody agrees that its Reese's Peanut butter
38:06
Speaker 2: Cups is the best one out there, So we don't
38:07
Speaker 2: even need to have this debate.
38:09
Speaker 3: But they're pushing joy Coco back.
38:13
Speaker 2: That's all the time we have. We can't start talking
38:15
Speaker 2: about candy bars at noon. Have a great weekend, everybody,
38:18
Speaker 2: Happy Easter, Good Friday, and we will see you on Monday.
38:21
Speaker 3: On the Financial Exchange