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Did TSMC's results show the AI boom still has room to run? · The Financial Exchange Show

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Speaker 1: Zada and Mike Armstrong, Chuck Mike.
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Speaker 2: Tucker with you as we continue through a busy.
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Speaker 3: Week of economic data and the first week of Q
1:16
Speaker 3: four earnings. And look, it's not you know that we've
1:21
Speaker 3: gone too far into the year, but yesterday was you know,
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Speaker 3: two full weeks into the calendar year for twenty twenty six.
1:27
Speaker 3: And I think it's interesting just to look at, you know,
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Speaker 3: kind of where things have gone so far this year,
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Speaker 3: to get a sense of what's been working, what hasn't
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Speaker 3: been working, and you know what some of the implications
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Speaker 3: of that may be.
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Speaker 4: Are we all on the same page that it feels
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Speaker 4: like it's been two full months. The data, the news
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Speaker 4: has been flying pretty fast in twenty twenty six. Maybe
1:50
Speaker 4: that's always the case, but yeah, it's been it's been
1:53
Speaker 4: chugging along here.
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Speaker 3: Yeah, I don't know that it feels like it's been
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Speaker 3: two full months. But I can tell you that I
1:59
Speaker 3: got home on Monday day of this week it was like,
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Speaker 3: feels like it should be Friday already. Yeah, you know,
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Speaker 3: it had that vibe to it. So here here's where
2:08
Speaker 3: we are right now through yesterday. The S and P
2:10
Speaker 3: five hundred is up one point eight percent, the Dow
2:13
Speaker 3: Jones Industrial Average up two point twenty six the NASDAK
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Speaker 3: composite up point nine to nine percent, and the cute.
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Speaker 2: Little Russell two thousand.
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Speaker 3: Here boy, here, boy, here have a treat up six
2:24
Speaker 3: point eight four percent. So small caps knocking it out
2:27
Speaker 3: of the park so far this year. And look, I
2:31
Speaker 3: made a remark and this is you know, one that
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Speaker 3: I'm I'm going to stick with, which is, Look, unfortunately, unfortunately,
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Speaker 3: the last two times that markets have tried this trick
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Speaker 3: July of twenty four and Q one of twenty five,
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Speaker 3: they promptly fell flat on their face in subsequent months.
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Speaker 2: You know, it's.
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Speaker 3: The markets have tried this broadening out rotation a couple
2:59
Speaker 3: of times and it just hasn't worked for them. And
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Speaker 3: it's not to say that it won't at some point,
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Speaker 3: because unless you believe that we're going to become the
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Speaker 3: United States of Google or the United States of Nvidia,
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Speaker 3: tech is not going to continue to, you know, in
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Speaker 3: perpetuity outperform the rest of the S and P by
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Speaker 3: you know, ten percent a year.
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Speaker 2: That's just like not how it works.
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Speaker 3: You know, we've seen these swings before, where you know,
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Speaker 3: in the early two thousands, energy had its day for
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Speaker 3: a few years. Uh, and then in the you know,
3:30
Speaker 3: mid twenty tens, you had industrials that were, you know,
3:34
Speaker 3: kind of the dominant player. Then is you know, we
3:37
Speaker 3: finally started to see an economic recovery. What we're seeing
3:40
Speaker 3: right now is for the last three years twenty three,
3:43
Speaker 3: twenty four, and twenty five, tech has been the dominant player,
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Speaker 3: aside from a couple of times when markets have tried
3:48
Speaker 3: to rotate away and those rotations just have not gone well.
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Speaker 3: So maybe this is the time where you finally get
3:54
Speaker 3: escape velocity there. Maybe this is just a little one
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Speaker 3: or two week thing that ends up reverting back to
4:00
Speaker 3: tech leadership as it is today, by the way, And
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Speaker 3: so I think it's just interesting to note what's happened
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Speaker 3: so far this year because it's different from the overall
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Speaker 3: longer term trend from the last three years where tech
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Speaker 3: has been the dominant force and anytime we've tried to
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Speaker 3: do something else hasn't actually been great for markets. Once
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Speaker 3: you get passed, you know, the initial wave of excitement.
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Speaker 4: I'm trying to think this year maybe maybe more like
4:27
Speaker 4: United States of America sponsored by Google in Vidia presents
4:32
Speaker 4: the United States of America something something along those lines.
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Speaker 3: Nvidia powers the United States of America. Yeah, yeah, with
4:41
Speaker 3: an assist from Microsoft, you know, like the United States
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Speaker 3: of Open AI. Yeah, it doesn't doesn't flow well, it's
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Speaker 3: it's not good. But in any case, so this is
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Speaker 3: where we are as we you know, continue into the
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Speaker 3: second half of January now and today you've got the
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Speaker 3: Nasdaq rebounding. You take a look at you know why
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Speaker 3: that's happening, and it's all in the semiconductor space. And this,
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Speaker 3: in my opinion, is because overnight we got earnings from
5:11
Speaker 3: Taiwan's Semiconductor, who is not in the S and P
5:14
Speaker 3: five hundred because last time I checked, Mike not an
5:17
Speaker 3: American company, correct, But they are the dominant player in
5:21
Speaker 3: the chip making space. And what they saw was that
5:26
Speaker 3: they are continuing to have robust orders. They are planning
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Speaker 3: to invest capex of fifty two to fifty six billion
5:33
Speaker 3: dollars this year. That's up anywhere from twenty seven to
5:36
Speaker 3: thirty seven percent from what they did last year. And
5:39
Speaker 3: this indicates they're not looking for any kind of drop
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Speaker 3: in orders despite higher prices for memory chips, higher prices
5:45
Speaker 3: for GPUs and things like that, and so you've got
5:49
Speaker 3: Nvidia up three percent today, AMDP five, Micron up three
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Speaker 3: and a half, broad Coom up one seven to five,
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Speaker 3: and that's powering the market today in a you know
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Speaker 3: world that otherwise you know is kind of okay, everything's fine,
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Speaker 3: but it's really tech and Semis in particular that are
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Speaker 3: leading the way today.
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Speaker 4: So again TSMC, the space that they occupy, they actually
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Speaker 4: make this stuff in Nvidia might design it, Intel or
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Speaker 4: others might design the chips that go into your iPhones
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Speaker 4: or your data centers. More the data centers these days,
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Speaker 4: TSMC actually assembles these things and gets paid.
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Speaker 5: To do so.
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Speaker 4: So this is a few years old now, but as
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Speaker 4: a few years ago, Apple was their biggest customer by
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Speaker 4: far in Nvidia possibly could have surpassed that by now.
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Speaker 4: But when they are chugging along, I guess my point
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Speaker 4: would be it'd be rather surprising if they weren't displaying
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Speaker 4: results like this given what we are seeing from the
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Speaker 4: likes of Nvidia, and like we've said, from the likes
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Speaker 4: of Nvidia, this would not be an early warning sign
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Speaker 4: of excitement about the AI industry dissipating. This will be
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Speaker 4: one of the last things to turn because the orders
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Speaker 4: for these things are backlogged and they are manufacturing them
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Speaker 4: as quickly as possible. But but when a company like
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Speaker 4: this speaks to optimism about hey, we're going to expand manufacturing.
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Speaker 4: We're gonna have fifty six billion dollars in capex this year, Yeah,
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Speaker 4: it speaks to still that ongoing excitement about the AI industry.
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Speaker 3: And again, it doesn't mean that everything is all clear.
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Speaker 3: It doesn't mean that everything is fine because remember think
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Speaker 3: about this in terms of the financial incentives. If you
7:28
Speaker 3: are Taiwan Semiconductor and right now you've got companies lining
7:33
Speaker 3: up to give you money, there's a phrase that was
7:37
Speaker 3: instilled in me at you at an early age, which
7:40
Speaker 3: is you only get so many bites at the Apple,
7:42
Speaker 3: and you don't know if those orders. If you say, look,
7:46
Speaker 3: we're not going to increase capacity, those orders could go
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Speaker 3: to a competitor. They could just disappear into the ether
7:52
Speaker 3: and never actually occur because it takes too long to
7:55
Speaker 3: fulfill them. And so if you're Taiwan semi, the incentive is, hey,
7:59
Speaker 3: we operate in a space that is.
8:02
Speaker 2: Just a wee bit cicular cyclical.
8:06
Speaker 3: I like cicular, though it's a good one that describes
8:09
Speaker 3: the AI space, isn't it.
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Speaker 2: It's a secular space right now.
8:12
Speaker 3: So it's a it's a cyclical business where you have
8:18
Speaker 3: these huge boom and bust cycles in chip making, and
8:23
Speaker 3: so if you are Taiwan Semi, the financial incentives view were, hey,
8:28
Speaker 3: yes we're in a boom and bust industry, but if
8:31
Speaker 3: the boom's happening, we've got to participate. As what's his
8:35
Speaker 3: name the CEO of a city group back in two
8:38
Speaker 3: thousand and six, two thousand and seven, last name was Prince.
8:40
Speaker 3: I can't remember his first name off the top of
8:42
Speaker 3: my head. He said, look, if the music's playing, you
8:44
Speaker 3: gotta keep on dancing. Artist also Prince also Prince, yes,
8:49
Speaker 3: the the CEO formerly known as Prince. Uh So, I
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Speaker 3: think that when you look at this, I understand the incentives,
8:56
Speaker 3: but it's also you're not going to see the first
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Speaker 3: signs of trouble here. The first sign of trouble is
9:03
Speaker 3: going to finally be big tech companies Microsoft, Gemini, Meta, Amazon,
9:12
Speaker 3: Like you go down the list, it's gonna be them saying,
9:14
Speaker 3: you know what, we're gonna scale back our CAPEX plans.
9:17
Speaker 3: And that's when Taiwan Semi goes oops, are bad, So
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Speaker 3: this is not unexpected. I think it's it's it's what
9:25
Speaker 3: you would expect to see. It's giving some optimism to
9:29
Speaker 3: chip stocks that have kind of had a hard time
9:32
Speaker 3: achieving escape velocity recently. You know, you look at in
9:36
Speaker 3: Video just as an example, and Video has been between
9:39
Speaker 3: one seventy and two hundred basically every day since mid July,
9:45
Speaker 3: aside from a late burst in October. Yep, you know,
9:49
Speaker 3: in Video has basically been flat for the last six months.
9:52
Speaker 2: Now.
9:53
Speaker 3: You take a look at Broadcom and Broadcom in the
9:57
Speaker 3: same boat. They've been between three twenty and three eighty
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Speaker 3: since early September, with one little burst above in December,
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Speaker 3: basically flat four four and a half months now. Micron
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Speaker 3: the outlier, and this is because Micron occupies a different
10:15
Speaker 3: niche where they are selling the memory that helps to
10:19
Speaker 3: power these GPUs that in Vidio makes, and because they're
10:23
Speaker 3: basically the only game in town, the memory prices are
10:26
Speaker 3: going bonkers. If you want a sneaky scary prediction for
10:29
Speaker 3: this year based on it, Apple either likely has to
10:32
Speaker 3: significantly raise iPhone prices for the next cycle or their
10:35
Speaker 3: margins are going to take a hit because there's only
10:40
Speaker 3: there's basically one or two games in town when it
10:42
Speaker 3: comes to memory, and they all are able to charge
10:45
Speaker 3: stratospheric prices right now. If you've had to buy a
10:47
Speaker 3: computer in the last year, you see this, and you
10:49
Speaker 3: know this, AMD you take a look at them. They've
10:54
Speaker 3: been between one ninety five and two thirty since the
10:57
Speaker 3: beginning of October. Again, three and a half months, no movement.
11:00
Speaker 2: So I think this.
11:02
Speaker 3: Story here is Hey, these these chip stocks, these semis
11:05
Speaker 3: are looking for that story to give them the next
11:07
Speaker 3: leg up. This here keeps them from taking a leg down,
11:10
Speaker 3: which is good, but it still is these arrange bound
11:14
Speaker 3: companies that have yet to figure out, you know, ways
11:17
Speaker 3: to convince the market. Hey, it's time to move us
11:19
Speaker 3: meaningfully higher the way that we were doing from mid
11:22
Speaker 3: April through you know, August of last year.
11:26
Speaker 4: Bring us back to your question earlier. Of all of us,
11:30
Speaker 4: you should know the name of the Prince City CEO.
11:33
Speaker 2: Chuck.
11:33
Speaker 4: Yeah, Charles goes by Chuck.
11:36
Speaker 2: Sorry to hear. That's take a quick break here.
11:40
Speaker 3: When we return, let's talk a little bit about Goldman's
11:45
Speaker 3: Sachs and their CEO who's back from his djaying gigs
11:50
Speaker 3: and has them cranking out some M and A activity
11:54
Speaker 3: and trading revenue right after this.
11:56
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12:56
Speaker 2: Mike.
12:56
Speaker 3: We had Goldman Sachs report their earnings for Q four
13:01
Speaker 3: this morning, and guess what, Mike, They had a record
13:07
Speaker 3: for trading revenue from a Wall Street bank four point
13:11
Speaker 3: three to one billion dollars in trading revenue. Again, that's
13:13
Speaker 3: not their whole piece for you know, all of their
13:16
Speaker 3: revenue overall. But yeah, look, trading is you know, just
13:21
Speaker 3: cranking along at all these investment banks. Morgan Stanley's seen
13:24
Speaker 3: a big uptick in the last year to JP Morgan
13:28
Speaker 3: aside from the last quarter in the same boat, and
13:31
Speaker 3: so that continues to be a major driver of quarterly
13:35
Speaker 3: activity right now.
13:36
Speaker 4: And for Boldman at least, it's a return to what
13:38
Speaker 4: they are tried and true good at investment banking, you know,
13:43
Speaker 4: speculating in markets, market making. They had this foray into
13:48
Speaker 4: issuing credit cards. It went extraordinarily poorly. It was kind
13:52
Speaker 4: of fun for them to be at the butt of
13:53
Speaker 4: the jokes. But now they are back to the serious
13:56
Speaker 4: stuff that that just makes them oodles and kaboodles of money.
14:04
Speaker 5: And they had a pretty good quarter in the fourth quarter.
14:06
Speaker 4: They did anything else to add, No, I got nothing
14:10
Speaker 4: to be clear with all of these banks, even people
14:14
Speaker 4: who pay pretty close attention to it when they report
14:17
Speaker 4: their earnings themselves, people aren't all that interested in what
14:23
Speaker 4: the actual results were. Most people when they are tuning
14:27
Speaker 4: into what's going on at bank earnings. They're there for
14:30
Speaker 4: the earnings call to hear what the CEOs are talking
14:33
Speaker 4: about the state of the financial markets and the state
14:36
Speaker 4: of the economy, because they tend to have a pretty
14:37
Speaker 4: good read on that. When it comes to how much
14:40
Speaker 4: investment banking revenue did you make or how much did
14:44
Speaker 4: you take in loan loss provisions? Unless you are a
14:47
Speaker 4: banking analyst, there's not a ton of interest in that
14:50
Speaker 4: data point, and certainly not me.
14:52
Speaker 3: Yeah, so do we want to say anything about Morgan
14:55
Speaker 3: Stanley's earnings.
14:57
Speaker 5: I think it's issue.
14:58
Speaker 4: So the one piece of it that's interesting is that
15:01
Speaker 4: they made a boatload of money on the AI trade.
15:05
Speaker 2: Good, so did everyone else.
15:06
Speaker 5: Yeah, so did everybody else.
15:07
Speaker 4: The reason that they made it is because they are
15:09
Speaker 4: the ones issuing the debt to fund the building of
15:12
Speaker 4: this AI stuff. So we talk about how the tentacles
15:16
Speaker 4: of the AI trade are making their way into lots
15:18
Speaker 4: of different areas of the economy. That does include major
15:21
Speaker 4: banks like Morgan Stanley, Goldman, Sachs and others.
15:24
Speaker 3: Yeah, let's talk a little bit about Black Rocks earnings
15:27
Speaker 3: because I do think there's some interesting stuff in here.
15:29
Speaker 3: They reported this morning as well, and they pulled in
15:32
Speaker 3: three hundred and forty two billion dollars in new assets
15:36
Speaker 3: under management, and the firm now has a record fourteen
15:40
Speaker 3: trillion dollars of assets under management. Their exchange traded fund
15:47
Speaker 3: business that operates under the I Shares name has five
15:50
Speaker 3: point five trillion of that, and so on a net basis,
15:55
Speaker 3: investors adding two hundred and sixty eight billion dollars to
15:58
Speaker 3: their long term investment funds, with about two thirds of
16:00
Speaker 3: that going into et f's and so again, they just
16:05
Speaker 3: continue to be an absolute juggernaut in terms of what
16:09
Speaker 3: they do as far as you know, attracting new assets.
16:14
Speaker 3: The the piece that is a little bit problematic to
16:19
Speaker 3: me about these giant asset managers Blackrock Vanguard, were those
16:26
Speaker 3: the would would those be the ones that I you'd
16:28
Speaker 3: point out the most mic.
16:30
Speaker 4: I mean margat largest asset managers out there would be,
16:33
Speaker 4: I mean, I don't have the numbers on me, but Blackrock, Vanguard,
16:37
Speaker 4: American Funds, which is Capital Group, and Fidelity Investments.
16:40
Speaker 5: Fidelity is not public though.
16:41
Speaker 3: So each year, each year, on some kind of fixed schedule,
16:45
Speaker 3: a lot of these guys they go through and they
16:48
Speaker 3: say Okay, for our funds, how do we want to
16:51
Speaker 3: adjust the expense ratio on them?
16:53
Speaker 2: For you know what investors pay sure?
16:56
Speaker 3: And we've reached the point now where because these guys
16:59
Speaker 3: are so big, the adjustments they make are like, hey,
17:03
Speaker 3: we're reducing this fund from point zero five percent to
17:07
Speaker 3: point zero four percent.
17:09
Speaker 2: And I'm gonna say.
17:10
Speaker 3: Something now that probably, like is counterintuitive and maybe even
17:13
Speaker 3: a little bit unpopular, but I think we've reached the
17:16
Speaker 3: point where these large fun families reducing their expenses in
17:20
Speaker 3: this fashion produces no tangible benefit to investors anymore, and
17:26
Speaker 3: only serves to crowd out competition because no startup can
17:31
Speaker 3: compete with those prices. What I mean by this is
17:36
Speaker 3: when Vanguard and Blackrock were like new to the you know,
17:39
Speaker 3: low cost investing game, it was, Hey, if you wanted
17:43
Speaker 3: to go out and have you know, a mutual fund
17:45
Speaker 3: manage your money, it was you know, one and a
17:47
Speaker 3: half to two percent a year, And Vanguard and Blackrock
17:50
Speaker 3: would come and be like, no, we're one percent, And
17:52
Speaker 3: then mutual funds chased them down and they went down
17:54
Speaker 3: to half a percent and then a quarter percent, And
17:56
Speaker 3: there's a big difference in long term returns if you
18:00
Speaker 3: look at paying you know, one and a half percent
18:03
Speaker 3: versus a quarter percent, there is no meaningful difference in
18:07
Speaker 3: long term returns. If you're paying point zero four percent
18:10
Speaker 3: versus point zero five it is not going to be
18:14
Speaker 3: a driver of any significant extra performance that you get.
18:20
Speaker 3: Just the math doesn't work that way. If you compounded
18:23
Speaker 3: an extra point zero one percent for thirty years, okay, great,
18:28
Speaker 3: you ended up with like an extra like half a
18:30
Speaker 3: percent by the time you're done compared to what you
18:32
Speaker 3: would have had otherwise. That's not going to determine whether
18:36
Speaker 3: your financial plan is successful or not. But what it
18:38
Speaker 3: does do is it makes it harder for the new startup,
18:43
Speaker 3: you know, cool guys investment company to come in and
18:47
Speaker 3: compete because they can't start with their prices that low.
18:51
Speaker 4: No, which which is why they don't and which is
18:53
Speaker 4: why there is no competition. For instance, for a ETF
18:58
Speaker 4: that aim is to mimic the S and P five hundred.
19:04
Speaker 3: The problem is that even the supplemental stuff is getting
19:06
Speaker 3: so cheap that it's hard to get into now. And
19:10
Speaker 3: again I'm not saying that it's good for investors in
19:14
Speaker 3: that Hey, other things other than just S and P
19:17
Speaker 3: fivetfs are getting cheaper. The bad news is that we're
19:21
Speaker 3: losing competition that might have a better way of doing things. Yeah,
19:25
Speaker 3: quick break here when we return, it's Wall Street Watch.
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Speaker 1: on the Financial Exchange Radio Network. Time now for Wall
19:53
Speaker 1: Street Watch a complete look at what's moving markets so
19:56
Speaker 1: far today right here on the Financial Exchange Network.
20:01
Speaker 6: Markets are bouncing back after yesterday's losses, driven by a
20:04
Speaker 6: rebound in the tech sector on the heels of impressive
20:07
Speaker 6: quarterly results from Taiwan Semiconductor. All Street's also sifting through
20:11
Speaker 6: more bank runnings and better than expected jobless claims data.
20:15
Speaker 6: Right now, the Dow is up two thirds of a
20:19
Speaker 6: percent or three hundred and twelve points higher. SMP five
20:23
Speaker 6: hundred also up two thirds of a percent or forty
20:26
Speaker 6: two points higher, Nasdaq up nearly nine tenths of a
20:28
Speaker 6: percent or two hundred and three points higher. Russell two
20:32
Speaker 6: thousand also up over two thirds of a percent ten
20:35
Speaker 6: Your Treasure REELD is up one basis point at four
20:38
Speaker 6: point one five percent, and crude oil retreating over four
20:42
Speaker 6: and a half percent. Now trading just above fifty nine
20:45
Speaker 6: dollars a barrel. Taiwan Semiconductor shares are jumping six percent
20:49
Speaker 6: after it posted another record corridor where it's saw a
20:52
Speaker 6: thirty five percent increase in fourth quarter profit amid demand
20:57
Speaker 6: for its AI chips. Other chip makers are also seeing
21:00
Speaker 6: gains on the day in reaction to those results. Meanwhile,
21:03
Speaker 6: Blackrock posted stronger than expected earnings, although it's product of fell.
21:07
Speaker 6: Goldman Sachs also beat Earing's forecast and posted record annual revenue,
21:11
Speaker 6: where Morgan Stanley's profit and revenue beat expectations. All three
21:15
Speaker 6: of those banks are jumping three percent higher on the day.
21:20
Speaker 6: Spotify announced it would raise its subscription price one dollar
21:23
Speaker 6: to twelve dollars and ninety nine cents a month. Shares
21:26
Speaker 6: in the audio streaming and podcast company down two percent
21:29
Speaker 6: on that news. Barclays upgraded Dell Technologies to overweight from
21:33
Speaker 6: equal weight, sighting the strength of Dell's AI server orders.
21:36
Speaker 6: Dell shares arising nearly four percent, and Boston Scientific agreed
21:41
Speaker 6: to buy Pinumbra for fifteen billion dollars in cash and
21:45
Speaker 6: stock to bolster its cardiovascular portfolio. Boston Scientific shares are
21:50
Speaker 6: down almost five percent. I'm Tucker Silva, and that is
21:54
Speaker 6: Wall Street Watch, Mike.
21:57
Speaker 3: There's a piece of the Wall Street Journal it's not
22:00
Speaker 3: time to dump megabanks shares just yet. And this gets
22:04
Speaker 3: it something else that we were talking about yesterday, which
22:06
Speaker 3: is that through yesterday a lot of the big financials
22:09
Speaker 3: had reported and basically they've all gotten bopped on the
22:14
Speaker 3: head by little bunny fufu. Yeah, and today you had
22:18
Speaker 3: you know, a couple more big financials that reported, but
22:20
Speaker 3: more not not you know, big diversified banks. You're talking
22:25
Speaker 3: more capital market focused businesses and Morgan Stanley and Goldman Sachs.
22:29
Speaker 3: But this piece is more talking about your JP Morgan,
22:32
Speaker 3: Chases of the World, your Bank of America, your Wells
22:35
Speaker 3: Fargo City Group, you know, and it lays out the case, Okay, like, yeah,
22:41
Speaker 3: these haven't done well to start the year, but maybe
22:45
Speaker 3: things are you know a little bit overdone in terms
22:48
Speaker 3: of selling them off. And look, sure enough they've bounced
22:51
Speaker 3: back today in trading. But I don't have any convincing
22:56
Speaker 3: view on these big banks. And the reason why, to
23:00
Speaker 3: be honest, is that by and large, right now, since
23:04
Speaker 3: the Great Financial Crisis, they're one step away from being
23:09
Speaker 3: you know, regulated utilities basically, and so you kind of
23:13
Speaker 3: look at and you're like, there's limited opportunity for you
23:17
Speaker 3: to actually go out and make new money, and ultimately,
23:21
Speaker 3: we know we're going to bail you out if things,
23:23
Speaker 3: you know, really, you know, go to a nasty place,
23:25
Speaker 3: because we already have and these are only more concentrated
23:28
Speaker 3: relative to where they were twenty years ago. So I
23:32
Speaker 3: just I never have any interesting thoughts about banks.
23:35
Speaker 5: Because I just utilities.
23:39
Speaker 3: Yeah, they're kind of like quite honestly, like none of
23:42
Speaker 3: them really do anything different from each other. You're basically
23:46
Speaker 3: conducting your banking with the US government, just with a
23:48
Speaker 3: different logo on it.
23:51
Speaker 4: Yeah, there's very little differentiation, especially between a few Wells
23:56
Speaker 4: Fargo Bank from America, JP, Morgan Chase. Like, walk into
23:59
Speaker 4: a brand, tell me what's different about them other than
24:02
Speaker 4: the colors that you see. Yeah, you can get a
24:04
Speaker 4: financial advisor there, you can get a CD there, you
24:07
Speaker 4: can get a mortgage, and you can get some cash.
24:09
Speaker 4: They're effectively the same thing. You notice some differences when
24:13
Speaker 4: you go into your smaller regional bank there might not
24:15
Speaker 4: be the financial advisor they like, there are some differences there,
24:18
Speaker 4: But if you place yourself in I don't know. Southern Connecticut,
24:23
Speaker 4: where all three of these operate, you really won't see
24:27
Speaker 4: much of a differentiator between them, and.
24:29
Speaker 5: So I hear you.
24:30
Speaker 4: I also think it's fair, like you mentioned, what happened
24:33
Speaker 4: in the first fifteen trading days of the year for
24:35
Speaker 4: any segment of the market is not relevant to what
24:37
Speaker 4: it's going to do for the rest of the year.
24:39
Speaker 4: If you want to be really optimistic, there are potentially
24:42
Speaker 4: a bunch of very large IPOs that are being floated
24:45
Speaker 4: out there, and guess who's going to assist them in
24:47
Speaker 4: going public these guys.
24:50
Speaker 3: So yeah, that's kind of what we have going on
24:53
Speaker 3: there with banks. Let's talk a little bit about weekly
24:56
Speaker 3: jobless claims. We got this data this morning at eight
24:59
Speaker 3: thirty am. We saw weekly job as claims decline further
25:03
Speaker 3: in the last week, down from two hundred and seven
25:06
Speaker 3: thousand to one hundred ninety eight thousand, continuing claims dropping
25:09
Speaker 3: a touch as well, from one point nine oh three
25:12
Speaker 3: million to one point eight eighty four And this is
25:16
Speaker 3: something where we continue to see despite a slowing labor
25:21
Speaker 3: market in terms of the pace of hiring and net
25:24
Speaker 3: job editions.
25:25
Speaker 2: You're just not seeing anything.
25:27
Speaker 3: Here that is concerning in terms of either new or
25:30
Speaker 3: continuing jobless claims.
25:31
Speaker 5: Yeah, it's pretty wild, isn't it.
25:33
Speaker 4: I mean, just to see the pace of the increase
25:35
Speaker 4: on the unemployment rate without seeing this uptick here, and
25:39
Speaker 4: this has been consistent over the last few years. Here,
25:42
Speaker 4: Maybe maybe it's not incredible, but the sentiment that I
25:45
Speaker 4: keep hearing from employees is I'm really worried about losing
25:49
Speaker 4: my job. I know somebody who has recently lost their job,
25:52
Speaker 4: and so, you know, I'm The term job hugging has
25:55
Speaker 4: made a appearance over the course of the last six
25:58
Speaker 4: to nine months, where employees are pretty nervous about switching
26:02
Speaker 4: and are getting back into the office and doing what
26:05
Speaker 4: their employer is asking because they're nervous about this. But
26:09
Speaker 4: it's not something we are seeing reflected in any sort
26:11
Speaker 4: of data that there's any sort of increase in layoffs.
26:15
Speaker 4: In fact, the data kind of indicates the exact opposite that,
26:20
Speaker 4: you know, we're at a pretty historically low level of
26:23
Speaker 4: filings for unemployment right now.
26:25
Speaker 3: Yeah, so I think that, you know, when looking at
26:30
Speaker 3: this and trying to make sense of it, the other
26:33
Speaker 3: piece that I did find interesting that someone brought up
26:35
Speaker 3: to me today for the first time is we've talked
26:39
Speaker 3: about the demographic changes and how they may be influencing
26:42
Speaker 3: like the break even level for you know, job creation
26:47
Speaker 3: where Hey, because of you know, reduced immigration and increased deportations,
26:53
Speaker 3: maybe you only need you know, twenty to fifty thousand
26:56
Speaker 3: jobs added a month for the unemployment rate to not
26:58
Speaker 3: go up, right, And always thought about it in that context. Sure,
27:03
Speaker 3: But the other piece is, hey, because of changes to
27:06
Speaker 3: how the population is growing, how much does that impact
27:10
Speaker 3: continuing jobless claims as well?
27:13
Speaker 5: Like that?
27:13
Speaker 3: It's another like they're all related in that fashion, and
27:18
Speaker 3: so I hadn't thought of it in that context. So
27:21
Speaker 3: Guy Berger, who works for the Burning Glass Institute is Geeberze.
27:28
Speaker 5: We guess how his name is pronounced every day and noo.
27:31
Speaker 3: I found it out because I finally listened to a
27:33
Speaker 3: podcast on it and it was Guy Berger. But we
27:36
Speaker 3: can call him Gieberze if we want. In any case,
27:40
Speaker 3: his estimate this year is that continuing jobbles claims on
27:43
Speaker 3: average should rise about four point two percent year over year,
27:46
Speaker 3: which is a slight deceleration in the pace of increase
27:50
Speaker 3: from around five percent last year. So we still expecting
27:53
Speaker 3: to see continuous continuing jobless claims ticking up slowly year
27:57
Speaker 3: over year, but at a better pace than last year,
28:01
Speaker 3: and against Stilly's sluggish labor market, but not one that
28:05
Speaker 3: spills over into, you know, something catastrophic. Just take a
28:09
Speaker 3: quick break when we come back. Seven Signs you Need
28:12
Speaker 3: a Financial Advisor in twenty twenty six, We'll discuss the next.
28:16
Speaker 1: Breaking business news as it happens, only here on the
28:19
Speaker 1: Financial Exchange Radio Network. The Financial Exchange streams live on YouTube.
28:25
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28:28
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28:39
Speaker 2: Mike, we got a piece of market Watch.
28:41
Speaker 3: Seven signs you need a Financial Advisor in twenty twenty six.
28:45
Speaker 2: What are they?
28:47
Speaker 4: Yeah, sometimes these things are silly, don't I don't think
28:50
Speaker 4: these are too silly. These are pretty good. So they
28:53
Speaker 4: outline seven of them. I'll go run through them. You
28:55
Speaker 4: don't have clear, detailed financial goals. You don't know if
28:58
Speaker 4: your portfolio will help achieve those goals. You don't fully
29:01
Speaker 4: understand what it will take to retire. You don't have
29:04
Speaker 4: full confidence in your own financial decision making. You let
29:07
Speaker 4: a motion dictate too many money decisions. These are eight
29:11
Speaker 4: They gave us eight and said they're going to.
29:13
Speaker 5: Give us seven?
29:14
Speaker 2: Did they? Yeah?
29:15
Speaker 5: One, two, three, four, five, six, seven, eight. Yeah, you
29:19
Speaker 5: don't have the time.
29:21
Speaker 2: There's seven? Why it says seven?
29:23
Speaker 6: Oh?
29:23
Speaker 5: Sorry?
29:24
Speaker 4: The last one is how to find a financial planner.
29:26
Speaker 4: That was I just read all the bold things.
29:28
Speaker 7: You don't have the time and or financial as a
29:31
Speaker 7: financial advisor to deal on your own, and you don't
29:35
Speaker 7: know if your family will be taken care of if
29:38
Speaker 7: something happens to you.
29:39
Speaker 5: These are all fine and well and good.
29:42
Speaker 4: The only problem as I see them, is, depending on
29:46
Speaker 4: which one of these applies to you, you might need
29:48
Speaker 4: a very different type of financial advisor, yes, than any
29:52
Speaker 4: of the other ones.
29:52
Speaker 3: And they also require an awful lot of self awareness
29:57
Speaker 3: to be able to Like, when's the last time you
30:01
Speaker 3: actually had someone say to you, I'm too emotional about investing.
30:06
Speaker 3: I need someone else to do it.
30:08
Speaker 5: Yeah.
30:08
Speaker 2: Never.
30:08
Speaker 5: It's just like when you ask people if they're better
30:10
Speaker 5: than the average car driver.
30:11
Speaker 2: Yes, you know. So.
30:14
Speaker 3: I think that the place that I get to is
30:18
Speaker 3: just kind of like I view a financial advisor the
30:21
Speaker 3: same way that I view a doctor in that generally,
30:26
Speaker 3: like quite honestly, for like, large portions of your life.
30:29
Speaker 3: You don't necessarily need one because there are relatively simple
30:32
Speaker 3: things that you need to do. But the problem is
30:35
Speaker 3: that when you do need one, you want someone that
30:37
Speaker 3: you've already been working with who understands the history and
30:40
Speaker 3: how you got to that point, right.
30:43
Speaker 5: You know, I was speaking with somebody the other day who.
30:47
Speaker 4: Loves doing investments, but knew nothing about how those investments
30:51
Speaker 4: were affecting their tax plan or overall retirement strategy, and
30:54
Speaker 4: so like that person might need a financial advisor, probably
30:57
Speaker 4: doesn't need an investment advisor. And those two things oftentimes
31:01
Speaker 4: get paired directly together, and you don't really have the
31:04
Speaker 4: choice to choose one versus the other. But that's where
31:07
Speaker 4: I mean asking some basic questions can help when it
31:11
Speaker 4: comes to that uncertainty around, you know, confidence in your
31:14
Speaker 4: decision making process. I guess I would just ask myself, Hey,
31:18
Speaker 4: is there anything that I can point to in my investment.
31:21
Speaker 5: Portfolio that.
31:23
Speaker 4: I view as a real like looking back on it,
31:25
Speaker 4: as a very critical mistake in my decision making process,
31:31
Speaker 4: not mistaken like the results. Plenty of us have that
31:33
Speaker 4: in investments, Like I bought the wrong stock, it didn't
31:35
Speaker 4: go the direction I thought. That's that's not what I'm
31:37
Speaker 4: talking about. But I made a decision that I you know,
31:42
Speaker 4: in hindsight regretted because it was charged with emotion. If
31:45
Speaker 4: you've done that, then you're kind of in that in
31:48
Speaker 4: that category, even if you don't think you'll do it again.
31:51
Speaker 4: The other ones that I just see, and I've spoken
31:55
Speaker 4: to people that I know personally about this, it's like,
31:58
Speaker 4: if finances are making your relationships difficult, right like you
32:07
Speaker 4: and your spouse, you and your husband, or you and
32:09
Speaker 4: your wife are arguing about the right direction of your finances,
32:13
Speaker 4: or you know, not on the same page about something.
32:18
Speaker 4: Also great reason to have, you know, an independent financial
32:23
Speaker 4: advisor who can sit with you and actually give you
32:26
Speaker 4: their opinion. You know, they're not trained as you know,
32:30
Speaker 4: marriage counselors or mediators, but they can actually, you know,
32:33
Speaker 4: sit there and be an objective force to say, this
32:37
Speaker 4: is kind of the right path to be on, and
32:39
Speaker 4: this is where you need to get to. If you're
32:42
Speaker 4: falling into that category of just hey, I'm uncertain about
32:46
Speaker 4: where this goes, or money matters are becoming a problem
32:52
Speaker 4: in a relationship, these are all indications that hey, it
32:55
Speaker 4: might be a good time to at least sort out
32:57
Speaker 4: what people do when they provide for financial advice and
33:00
Speaker 4: what different types of financial advice is out there.
33:03
Speaker 5: It runs the gambit, and you know, the.
33:06
Speaker 4: Guy working at the giant bank that only caters to
33:10
Speaker 4: ten million plus of investable assets probably is not the
33:14
Speaker 4: right person for somebody who is got two kids in
33:18
Speaker 4: college and trying to figure out which is the best
33:21
Speaker 4: path for student loans. If you have questions about your
33:25
Speaker 4: financial future and you're trying to figure out how to
33:29
Speaker 4: find an as financial advisor that you can work with personally,
33:33
Speaker 4: please give us a call at Armstrong Advisory Group so
33:35
Speaker 4: we can give you a free assessment of how we
33:37
Speaker 4: work with our clients and how it might fit with
33:39
Speaker 4: your financial plan. The numbers eight hundred three nine three
33:43
Speaker 4: for zero zero one. You can book time for us
33:46
Speaker 4: to call you back at Armstrong Advisory dot com or
33:49
Speaker 4: call us now at eight hundred three nine three for
33:52
Speaker 4: zero zero one.
33:54
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
33:56
Speaker 1: registered investment advisor. Nothing in the ad or in any
33:59
Speaker 1: Armstrong guide is special financial, legal or tax advice. Consult
34:02
Speaker 1: your own financial tax into state planning advisors before making
34:04
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
34:08
Speaker 1: advisory services.
34:10
Speaker 3: Let's see, should we talk about private markets going into
34:13
Speaker 3: four to one K plans or the rise and fall
34:17
Speaker 3: of Fenway's Timeout markets.
34:20
Speaker 1: I don't know.
34:20
Speaker 4: I guess I've been to Time out market, whereas I
34:22
Speaker 4: haven't been to a Family.
34:23
Speaker 5: Office as of late. So let's let's go with Timeout.
34:27
Speaker 3: Uh yeah, unfortunately appropriately named, as it looks like Timeout
34:33
Speaker 3: is going to be well closing rightly. Yeah, January twenty third,
34:39
Speaker 3: which is eight days away, twenty seven thousand square feet
34:44
Speaker 3: that had fifteen vendors, and basically those vendors have now
34:49
Speaker 3: been told, hey, we're going to be shutting our doors,
34:51
Speaker 3: largely because revenue fell twenty percent last year, even as
34:56
Speaker 3: operating costs climb. And if you know anything about the
34:58
Speaker 3: restaurant business, which again I know just enough to be dangerous,
35:02
Speaker 3: it is a low margin, high effort, high capex business
35:06
Speaker 3: that is just going to again be absolutely incredibly tough
35:12
Speaker 3: to compete in. And so just seeing a twenty percent
35:15
Speaker 3: fallen revenue, even without sales moving I'm sorry, even without
35:19
Speaker 3: cost moving up, a twenty percent drop in revenue is
35:21
Speaker 3: often enough to shutter many restaurants and even though this
35:25
Speaker 3: is a kind of group of you know, vendors that
35:29
Speaker 3: operate within a single space. This is going to be
35:33
Speaker 3: closing as well. It's not unique to the Boston area.
35:37
Speaker 3: They also announced the closure of their Chicago location on Wednesday,
35:41
Speaker 3: and their Miami location closed in twenty three, So the
35:44
Speaker 3: only one that they're gonna have left in the US
35:47
Speaker 3: is now in New York and so just kind of
35:50
Speaker 3: a failed expansion that just never really was able.
35:54
Speaker 2: To take off.
35:55
Speaker 5: I guess it was really cool concept.
35:57
Speaker 4: Yeah, you go, You've got you know, seating in the middle,
36:00
Speaker 4: there's seven or eight different food options. I took my kids,
36:04
Speaker 4: But I'm part of the problem here. I took my
36:06
Speaker 4: kids in twenty twenty one and haven't been back. So
36:09
Speaker 4: I think what they're experiencing is the same thing that
36:12
Speaker 4: a lot of places that appeal to workers in the area,
36:16
Speaker 4: those types of restaurants, which this definitely was. I mean,
36:19
Speaker 4: that's not why I took my kids. We were seeing
36:22
Speaker 4: a frozen Fenway hockey game, and we parked there, went
36:25
Speaker 4: and grabbed food, and then went to the game. But
36:28
Speaker 4: a lot of their business was to appeal to the
36:30
Speaker 4: lunch crowd at the offices in the area and guess what,
36:34
Speaker 4: the offices in that area are still not where they
36:38
Speaker 4: were in twenty nineteen. So this is not unique to
36:41
Speaker 4: this market. It's not unique to the city either. It's
36:44
Speaker 4: something that they're seeing in their locations really across the country.
36:48
Speaker 3: Yeah, and partly one is just if the location was
36:50
Speaker 3: an issue here, because again it's it's kind of down
36:52
Speaker 3: near Fenway Park and you get a lot of kind
36:56
Speaker 3: of sports kind of like you get a lot of
37:00
Speaker 3: sorts fans near Fenway Park for obvious reasons. And one
37:03
Speaker 3: of the vendors suggests at one point airing, you know,
37:06
Speaker 3: Women's World Cup in Red Sox games on their projection
37:09
Speaker 3: screen TV. It was told, no, that's not what we
37:11
Speaker 3: do here. I'm just not sure they read the market
37:15
Speaker 3: right for that location.
37:16
Speaker 4: Yeah, high end sushi when everybody wants to watch the game.
37:19
Speaker 2: And high end sushi while watching a game could be
37:22
Speaker 2: a thing.
37:23
Speaker 4: Sure, but you know they didn't combine those two. So
37:26
Speaker 4: I'm with you there.
37:27
Speaker 3: No, So again, disappointing, and this is going to be
37:30
Speaker 3: closing in eight days. I don't think we have any
37:34
Speaker 3: word as to whether anything is going into that space
37:36
Speaker 3: right now. He's a massive space twenty seven thousand feet
37:40
Speaker 3: is not small. I mean, think of it this way.
37:43
Speaker 3: The average grocery store generally runs about thirty to sixty
37:46
Speaker 3: thousand square feet. So you're talking, you know something that
37:49
Speaker 3: typically could house a grocery store, a smaller one, but
37:52
Speaker 3: like that's the amount of space you're talking about, so
37:55
Speaker 3: probably a grocery store.
37:58
Speaker 2: Well, when you put it like that.
38:03
Speaker 5: It seems to be the perfect opportunity.
38:05
Speaker 3: Let's take a quick break and when we come back,
38:08
Speaker 3: we got hour two coming up. We're gonna be joined
38:10
Speaker 3: by Michael san Totally from CNBC during that hour.
38:14
Speaker 2: Make sure you stick around