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Stop listening to silly market predictions · The Financial Exchange Show

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  Speaker 1: and Paul Lane.
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  Speaker 2: Good morning, Welcome back to the Financial Exchange.
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  Speaker 3: Is Mike, Paul and Tucker with you on a Tuesday
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  Speaker 3: here where markets are staging a bit of a recovery.
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  Speaker 3: We've got the SMP flat that dows up six ten
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  Speaker 3: percent and Nasdak's still off half a percent.
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  Speaker 2: A lot of that being dragged down by in.
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  Speaker 3: Video, whose stock price today is down nearly six percent
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  Speaker 3: out of some concerns coming from AI world generally, but
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  Speaker 3: less of the I guess general suspicion about AI and
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  Speaker 3: more some specific and video concerns. We did get a
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  Speaker 3: retail sales report this morning. It showed a small but
• 1:50
  Speaker 3: still a gain for the month of September. Remember we're
• 1:53
  Speaker 3: going to be getting data releases here that are a
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  Speaker 3: couple months out of date now, so the September report
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  Speaker 3: was not great, but also not terrible. You still saw
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  Speaker 3: an increase in overall sales. Restaurants and bars saw a
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  Speaker 3: good uptick, where as you saw drop in all sorts
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  Speaker 3: of retail sporting goods, clothing, and other categories. You had
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  Speaker 3: a consumer sentiment report that came out this morning from
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  Speaker 3: the Census Bureau that reported the weakest consumer numbers since April,
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  Speaker 3: and you had a producer price index report that came
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  Speaker 3: out this morning that was.
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  Speaker 2: Fine. Are we gonna call it fine? Yeah?
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  Speaker 4: I think so.
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  Speaker 3: It was not concerning in any way, did not indicate
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  Speaker 3: anything that I could see that would lead to marginally
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  Speaker 3: higher consumer prices.
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  Speaker 2: And so once again puts the federal reserve.
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  Speaker 3: As we head into December again, the next big event
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  Speaker 3: on the calendar here is the fed's next meeting. They
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  Speaker 3: will be having their press conference and rate decision on
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  Speaker 3: December tenth, so roughly two weeks from now. There's currently
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  Speaker 3: an eighty three percent chance that rates come down by
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  Speaker 3: another quarter per at that meeting. In terms of a
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  Speaker 3: few areas related to interest rates, when we take a
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  Speaker 3: look at thirty year fixed rate mortgages, which the FED
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  Speaker 3: does not control but does influence through their policy and statements,
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  Speaker 3: we've got the average thirty year fixed now sitting at
• 3:19
  Speaker 3: six point three to two percent, that's according to Mortgage
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  Speaker 3: News Daily. Compared to this time the last year, we
• 3:27
  Speaker 3: were sitting at nearly seven percent on that same measure,
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  Speaker 3: So pretty big decline in interest rates over the course
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  Speaker 3: of the last year. And and that's about all that
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  Speaker 3: I would focus on when it comes to markets. We
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  Speaker 3: have this pending US Ukraine negotiation that seems like it's
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  Speaker 3: not seems like it's not moving much. But you do
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  Speaker 3: have oil prices falling, I think in regard to that
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  Speaker 3: piece deal. Oil price is off two and three quarters
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  Speaker 3: of percent this morning. Anything else catching your apple?
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  Speaker 4: I know small caps having a little bit of a
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  Speaker 4: rally here up about one third percent.
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  Speaker 3: We alluded to one other story, which was the Nvidia
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  Speaker 3: sell off that we are seeing. To put it plainly, Paul,
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  Speaker 3: but why would you guess that we are seeing such
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  Speaker 3: a steep sell off or in video stock today?
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  Speaker 4: Potentially Google encroaching on in Vidia's dominance and significant market
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  Speaker 4: share in selling chips that are utilized to power large
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  Speaker 4: length as models and the beginnings of the most prevalent
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  Speaker 4: artificial intelligence that's out there on the market right now.
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  Speaker 4: Google had not previously been in the market really of
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  Speaker 4: selling the chips that they constructed themselves that are called TPUs,
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  Speaker 4: but more recently, whether it's this news story that we
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  Speaker 4: cover this morning regarding Meta potentially using some of the
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  Speaker 4: chips by Google in its data centers in twenty twenty seven,
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  Speaker 4: or renting some of them as early as next year,
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  Speaker 4: and I believe anthropic buying a million from Google, this
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  Speaker 4: was not something that was really prevalent with Google's business model.
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  Speaker 4: That is thwarting the confidence that investors have in Nvidia
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  Speaker 4: stock and the dominance that it has shown over the
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  Speaker 4: last few years.
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  Speaker 5: Here by the way Google stock is or Alphabet stock
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  Speaker 5: is now turned negative.
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  Speaker 4: It's cooled off. Yeah.
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  Speaker 3: Yeah, So look, I don't know where this goes next.
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  Speaker 2: But if if we get a month out.
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  Speaker 3: And Google's Gemini is the you know, front runner for
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  Speaker 3: best generative AI tool out there, and you know, they
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  Speaker 3: provide evidence that it was primarily trained on these chips,
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  Speaker 3: and they have the ability to ramp these up, it
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  Speaker 3: is a significant threat to in Nvidia's business in a
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  Speaker 3: way that we haven't seen from some of the other
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  Speaker 3: competition that's been mentioned out there, like a MD and
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  Speaker 3: others leave it like that.
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  Speaker 4: Yeah, it puts a lot of It puts pressure on
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  Speaker 4: a business that has had really high margins for Nvidia.
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  Speaker 4: That is atypical for a long period of time with chips.
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  Speaker 4: If you look back historically, usually there is some competition
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  Speaker 4: creeping up, and we're seeing some of that now.
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  Speaker 3: So I want to move on to our dumb story
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  Speaker 3: of the day from the folks over at Baron's. Sorry Barons,
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  Speaker 3: but they have an article how the SNP could hit
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  Speaker 3: eight thousand in twenty twenty six, and they I didn't frankly,
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  Speaker 3: you know what, I'm just gonna admit it. I didn't
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  Speaker 3: read the article. I didn't read the article. I don't
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  Speaker 3: think you should read the article either. I'm just here
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  Speaker 3: to do everyone a service here. But let's just do
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  Speaker 3: some quick math. How could the S and P five
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  Speaker 3: hundred hit eight by one thousand by the end of
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  Speaker 3: next year. It would have to go up by twenty percent.
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  Speaker 3: That insurmountable. Is that impossible? No, it's impossible. In fact,
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  Speaker 3: twenty eight the SMP has gone up by at least
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  Speaker 3: twenty percent thirty four times.
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  Speaker 4: And in twenty three and twenty four. I believe that's
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  Speaker 4: a third of the time, say the third of the time.
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  Speaker 4: So you're saying, there's a chance if you.
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  Speaker 3: If you were to roll a dice and get a
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  Speaker 3: one or a two, that's about.
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  Speaker 2: The likelihood that you would that you would see this
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  Speaker 2: happen next year. So if we're gonna talk about random chance,
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  Speaker 2: then that's where we are. What a preposterous question to
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  Speaker 2: even ask.
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  Speaker 4: Yeah, let's explain why it is so preposterous, because making
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  Speaker 4: market projections for next year. This will happen, and we'll
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  Speaker 4: cover more of these on the show, I'm sure in
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  Speaker 4: the next month, because every analyst out there at the
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  Speaker 4: major financial institutions is going to be asked to do
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  Speaker 4: at Golden Sachs, Morgan, Merrill, et cetera. And it is
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  Speaker 4: just the biggest fools errand out there. They're really it's
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  Speaker 4: just so difficult to project. I mean, you can analyze
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  Speaker 4: some of the economic threats and reposition portfolios, but just
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  Speaker 4: picking a number.
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  Speaker 2: Does the AI bubble pop or not? No? One?
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  Speaker 3: If no, then you very likely could get to eight thousand.
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  Speaker 3: Can we just leave it there?
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  Speaker 5: Like?
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  Speaker 2: What?
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  Speaker 3: Just a silly question? To even pose eight thousand on
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  Speaker 3: the S and P five hundred is less than twenty
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  Speaker 3: percent away from where we are right now. That is
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  Speaker 3: not an insurmountable task. It would not be crazy for
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  Speaker 3: that to happen. It would be potentially surprising because we
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  Speaker 3: are going on three years of absolutely breakneck pace of
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  Speaker 3: S and P five hundred gains. But you know, crazy impossible, No, no,
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  Speaker 3: absolutely not. And as I just mentioned for the last
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  Speaker 3: one hundred or so years, in about a third of
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  Speaker 3: the cases, the market's gone up by more than twenty percent.
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  Speaker 3: So this wouldn't be crazy. I don't think it's particularly likely,
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  Speaker 3: but it's not crazy at all, and I don't see
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  Speaker 3: any value by any bank that.
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  Speaker 2: By the way, all the banks go out and do this.
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  Speaker 3: They put together their predictions for where we get by
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  Speaker 3: the end of next year, and they're all useless.
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  Speaker 2: They're all useless.
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  Speaker 3: They have to revise them fifteen times based on where
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  Speaker 3: the market goes, and they don't actually base any of
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  Speaker 3: their businesses on where the SMP is going to go.
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  Speaker 3: They don't position any assets or plan anything based on
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  Speaker 3: where the SMP forecast is going to bring them. So
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  Speaker 3: it's useless and investors should ignore it in my humble opinion.
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  Speaker 3: Anything else on the subject, Okay, I'll put it in
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  Speaker 3: my festiv a stat.
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  Speaker 4: At the fire stings shut weeks. God just burned down. Parents.
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  Speaker 2: Let's take a quick break.
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  Speaker 3: When we return, We're playing a little bit of trivia
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  Speaker 3: next on the Financial Exchange.
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• 10:00
  Speaker 5: Let us do a little bit trivia here on the
• 10:01
  Speaker 5: Financial Exchange on this day. Back in twenty twenty, Kitlyn
• 10:07
  Speaker 5: Clark made her college basketball debut with the stat line
• 10:11
  Speaker 5: of twenty seven points, eight rebounds, and four assays. Clark
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  Speaker 5: would go on to set many college basketball records, including
• 10:19
  Speaker 5: most points of all time. So our trivia question today
• 10:23
  Speaker 5: is simply which college did Kaitlyn Clark play basketball for?
• 10:27
  Speaker 5: Once again, which college did Caitlyn Clark play basketball for?
• 10:32
  Speaker 1: Uh?
• 10:32
  Speaker 5: Be the fifth person today to text us at six
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  Speaker 5: one seven three six two thirteen eighty five with the
• 10:39
  Speaker 5: keyword trivia along with the correct answer, and you win
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  Speaker 5: a Financial Exchange Show T shirt. Once again. The fifth
• 10:46
  Speaker 5: correct response to text us to the number six one
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  Speaker 5: seven three six two thirteen eighty five with the correct
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  Speaker 5: response and the keyword trivia will win that Financial Exchange
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  Speaker 5: Show t shirt. See complete financial complete contest rules at
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  Speaker 5: Financial Exchange Show dot com.
• 11:04
  Speaker 3: Paul and Tucker, I have good news and I have
• 11:06
  Speaker 3: bad news when it comes to housing.
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  Speaker 2: Which one do you want to news first? All right?
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  Speaker 3: So the bad news is that home sellers have not
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  Speaker 3: yet become accustomed to the twenty twenty five and what
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  Speaker 3: I expect will be the twenty twenty six housing market.
• 11:20
  Speaker 3: They are still latched onto a price point that they
• 11:23
  Speaker 3: got fixated on, either when they bought their home back
• 11:26
  Speaker 3: in twenty twenty two or when they saw their neighbors
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  Speaker 3: sell their home back in twenty twenty two, and it's
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  Speaker 3: just not happening for them.
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  Speaker 2: I'm gonna use Florida as the.
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  Speaker 3: Is the use case here, just because it's, you know,
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  Speaker 3: an easy place to pick on. But June of twenty
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  Speaker 3: twenty two, the median listing price for a home in
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  Speaker 3: Florida hit four ninety three five hundred, four hundred ninety
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  Speaker 3: three thousand, five hundred dollars. Since then, it has come
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  Speaker 3: down to four hundred and twenty five thousand. If you
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  Speaker 3: watched your neighbor sell your home sell their home in
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  Speaker 3: the exact same neighborhood two to three years ago go,
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  Speaker 3: they are going to get a lot more for that home.
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  Speaker 3: They will have gotten a lot more from that home
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  Speaker 3: than you will be able to get today. That is
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  Speaker 3: the case in Florida. It's probably the case in places
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  Speaker 3: like Texas, Louisiana, Arizona, and other locations as well. I
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  Speaker 3: think it's you know, particularly severe in Florida. But just
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  Speaker 3: to point out for a minute here that same median
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  Speaker 3: listing price in June of twenty nineteen across Florida was
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  Speaker 3: three hundred and thirty thousand dollars. So long as you
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  Speaker 3: didn't buy in twenty twenty two, you should still have
• 12:29
  Speaker 3: made a boatload of money on your home and can
• 12:31
  Speaker 3: sell it at a big state profit and are certainly
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  Speaker 3: not underwater.
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  Speaker 4: Of course, but there's always the psychological impact of seeing,
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  Speaker 4: you know, the other numbers that were in the market
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  Speaker 4: in years prior. Florida is a great example to pick
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  Speaker 4: for this. In general, it does seem like across the nation, though,
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  Speaker 4: even as we focus on Florida, that there is a
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  Speaker 4: heavier percentage of liftings that are seeing some sort of
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  Speaker 4: price cut. And the piece that's outlining the Wall Street
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  Speaker 4: Journal here makes a fair point that if you're looking
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  Speaker 4: to sell your home quickly, then trying to find the
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  Speaker 4: right price for it, a price that you don't have
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  Speaker 4: to cut down, is going to allow you to sell
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  Speaker 4: much faster. But I kind of scramble on my head,
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  Speaker 4: is just because you picked a lower price and it
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  Speaker 4: sells faster versus a higher price that sells for less.
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  Speaker 4: You know, are you in the middle of those two
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  Speaker 4: the right price versus what was too high? But then
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  Speaker 4: you sell slightly higher than the right pace. You know,
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  Speaker 4: I'm not sure if I can reconcile that exactly. Do
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  Speaker 4: you pick that up?
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  Speaker 2: Well? I do. I think what a realtor will tell
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  Speaker 2: you is if.
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  Speaker 3: You you'll end up being more damaged by putting it
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  Speaker 3: at the higher price point.
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  Speaker 2: Because if a buyer sees a.
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  Speaker 3: Home that's been out there for ninety to one hundred
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  Speaker 3: sittings on the market, h it's a sitting duck. They
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  Speaker 3: assume that there's a problem and they are going to
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  Speaker 3: beat you up on price, as opposed to if you
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  Speaker 3: can create an environment where there's a competitive bid. Now,
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  Speaker 3: on the other hand, yeah, if you prove if you
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  Speaker 3: price that thing fifteen percent market value below market value.
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  Speaker 3: You might get you know, enough bids to raise it
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  Speaker 3: up to the fair market value, but you also might
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  Speaker 3: just have you know, discounted yourself and psychologically set all
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  Speaker 3: the buyers to that lower price point. So I think
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  Speaker 3: there is a happy medium there. But the good news
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  Speaker 3: for the market overall, again comparing to pre COVID, is
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  Speaker 3: what I like to do when it comes to housing.
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  Speaker 3: In October of this year, across the nation, there were
• 14:22
  Speaker 3: one point one million properties for sale. This includes condos
• 14:26
  Speaker 3: and single family residences. In October of twenty nineteen there
• 14:31
  Speaker 3: were one point two million. We're pretty close. I mean,
• 14:35
  Speaker 3: not that twenty nineteen was a screaming buyer's market, right,
• 14:39
  Speaker 3: There was still a lot of competition for housing. I
• 14:42
  Speaker 3: certainly didn't feel like I was getting the deal of
• 14:44
  Speaker 3: a century when I bought my own home in November
• 14:46
  Speaker 3: of twenty nineteen, but compared to today, it now looks
• 14:50
  Speaker 3: like it was a heck of a deal. And the
• 14:52
  Speaker 3: point that I would make is nationally we're about back
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  Speaker 3: to where we were in terms of total inventory available
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  Speaker 3: for sale. There is not happening is price dramatic price cuts,
• 15:04
  Speaker 3: and I think that that is largely tethered to the
• 15:07
  Speaker 3: fact that people are still psychologically attached to those price
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  Speaker 3: points that they were able to get and their neighbors
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  Speaker 3: were able to get over the course of the last
• 15:16
  Speaker 3: three years. And now in some markets that's still doable, right.
• 15:20
  Speaker 3: I was speaking to somebody just yesterday. They've been planning
• 15:23
  Speaker 3: on selling their home once they were able to get
• 15:25
  Speaker 3: into the retirement community they wanted to get into. Finally
• 15:28
  Speaker 3: they you know, they were accepted into the retirement community
• 15:31
  Speaker 3: because the space opened up. They listed their home for sale,
• 15:34
  Speaker 3: had an open house over the weekend, ten offers on
• 15:37
  Speaker 3: Monday morning, and they selected the highest offer on Monday,
• 15:40
  Speaker 3: and they're going to close very quickly.
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  Speaker 4: So Greater Boston area.
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  Speaker 2: Yes, yep.
• 15:44
  Speaker 3: Obviously there's a big difference between real estate for sale
• 15:48
  Speaker 3: in New England and the northern half of the Midwest.
• 15:51
  Speaker 3: But yeah, there are markets that are still still testing
• 15:55
  Speaker 3: those prices that you have seen. But you know, again,
• 15:58
  Speaker 3: nationally we have yet to come back. Even on the
• 16:02
  Speaker 3: national basis, the median listing price is not up to
• 16:05
  Speaker 3: the peak that we saw back in June of twenty
• 16:07
  Speaker 3: twenty two, so people get tethered to those prices and
• 16:13
  Speaker 3: from what you know, I'm not a real estate expert.
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  Speaker 3: From what I understand, though, you're doing yourself a disservice
• 16:19
  Speaker 3: if you get too tethered to those prices, and especially
• 16:22
  Speaker 3: you know, it's one thing when it's your primary residence,
• 16:24
  Speaker 3: but when it's a rental.
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  Speaker 2: Property, you just have to apply cold, hard math to it.
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  Speaker 1: Right.
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  Speaker 3: Ye if I sell this thing and turn around and
• 16:32
  Speaker 3: invest it elsewhere, how much can I make as a
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  Speaker 3: replacement to that? And if it's if you're getting a
• 16:37
  Speaker 3: bad deal on the rent, then you gotta lower the
• 16:39
  Speaker 3: price and just move along. Because I've spoken to a
• 16:43
  Speaker 3: number of people in Florida, let's just say, who are
• 16:45
  Speaker 3: failing to do that math? And I think just waiting
• 16:48
  Speaker 3: for that comeback, I just don't see it coming.
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  Speaker 4: It's hard to the the extraneous force.
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  Speaker 2: Maybe I'm wrong.
• 16:58
  Speaker 3: Maybe all of New York City is about to flee
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  Speaker 3: the new mayor there and move to Florida. That was
• 17:04
  Speaker 3: the theory of one of my somebody that I work,
• 17:07
  Speaker 3: somebody that I know that was, you know, talking about
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  Speaker 3: buying a bigger home in Florida. And they're like, we
• 17:10
  Speaker 3: got to rush to this because all the New Yorkers
• 17:12
  Speaker 3: are going to move down.
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  Speaker 2: I don't know. I'm not seeing a lot of evidence
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  Speaker 2: of that. I don't.
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  Speaker 4: I don't know.
• 17:17
  Speaker 2: I don't. I don't see a lot of evidence of that.
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  Speaker 3: McKinsey is explaining why AI won't take your job, even
• 17:24
  Speaker 3: though it can automate fifty seven percent of all US
• 17:28
  Speaker 3: work hours. So we're going to continue to see every
• 17:32
  Speaker 3: story published about this. And I will acknowledge for a
• 17:34
  Speaker 3: moment here that AI is a new emerging technology and
• 17:40
  Speaker 3: different from other technologies insofar as it mimics human behavior
• 17:44
  Speaker 3: more than any other technology I can think of. But
• 17:49
  Speaker 3: we've got a few centuries worth of history here to judge,
• 17:54
  Speaker 3: and every other time a new innovation has come along,
• 17:56
  Speaker 3: whether it's the steam engine or the printing press, we
• 18:01
  Speaker 3: have not been followed by two decades worth of high
• 18:04
  Speaker 3: unemployment and general terrible economic malaise. I guess I just
• 18:11
  Speaker 3: I don't know what new jobs are going to come about,
• 18:14
  Speaker 3: but I have a sense that it's not just going
• 18:16
  Speaker 3: to replace ten percent of the US workforce.
• 18:19
  Speaker 4: I agree with you ultimately. As human beings, we crave
• 18:23
  Speaker 4: social interaction. I just am not ready to reach out
• 18:27
  Speaker 4: that far to a mass elimination of jobs.
• 18:31
  Speaker 3: Even if it's not the human element of all this,
• 18:35
  Speaker 3: the desire to be around.
• 18:36
  Speaker 2: People that causes all of it. Every time we've had.
• 18:39
  Speaker 3: A big technological innovation, it has opened up new economic activities.
• 18:45
  Speaker 3: You create more productivity, Thereby there's more wealth, and thereby
• 18:49
  Speaker 3: there are new innovations, new technologies, new areas of the
• 18:53
  Speaker 3: labor market that did not previously exist because of that
• 18:56
  Speaker 3: technological advance. And I just really struggle to believe that
• 19:00
  Speaker 3: this is going to be the first technology in human
• 19:03
  Speaker 3: society that.
• 19:04
  Speaker 2: Breaks that trend line. I'm with you, I just I
• 19:08
  Speaker 2: don't get it.
• 19:09
  Speaker 3: In fact, you know, there's others that are arguing, no,
• 19:11
  Speaker 3: we're actually gonna have a labor shortage because Americans are
• 19:13
  Speaker 3: so bad at stem that we're not going to have
• 19:17
  Speaker 3: enough people to work in this AI sector to train
• 19:19
  Speaker 3: these models and actually get them up and running because
• 19:22
  Speaker 3: we're so bad at science and math here in the
• 19:24
  Speaker 3: United States. Quick break, we'll have the trivia winner and
• 19:27
  Speaker 3: a full market update next on the Financial.
• 19:29
  Speaker 1: Exchange, bringing the latest financial news straight to your radio
• 19:43
  Speaker 1: every day. It's the Financial Exchange on the Financial Exchange
• 19:47
  Speaker 1: Radio Network. Time Now for Wall Street. Watch a complete
• 19:53
  Speaker 1: look at what's moving market so far. Today right here
• 19:56
  Speaker 1: on the Financial Exchange, Radio Network.
• 19:58
  Speaker 5: Markets and Mixed Territs slorry Following yesterday's rally as traders
• 20:02
  Speaker 5: react to more economic data from the month of September.
• 20:05
  Speaker 5: The producer price index met expectations, while retail sales climb
• 20:10
  Speaker 5: zero point two percent, just below estimates of zero point
• 20:14
  Speaker 5: four percent. Right now, for markets, the DOWS up over
• 20:18
  Speaker 5: seven tents of a percent, or three hundred and thirty
• 20:20
  Speaker 5: two points. S and P five hundred is up about
• 20:23
  Speaker 5: a quarter percent or fifteen points higher. NASDAC down about
• 20:27
  Speaker 5: a quarter percent or fifty three points. RUSTED two thousand
• 20:31
  Speaker 5: is up over one point four percent. Tenure TREASREELD is
• 20:35
  Speaker 5: down two basis points at four point zero zero eight percent.
• 20:39
  Speaker 5: In crude oil down just over two percent lower, trading
• 20:42
  Speaker 5: at fifty seven dollars in fifty one cents a barrel.
• 20:46
  Speaker 5: According to the Information Meta, is in talks to spend
• 20:49
  Speaker 5: billions on Google's AI chips as Google steps up its
• 20:53
  Speaker 5: efforts to compete directly with Nvidia. After initially adding to
• 20:57
  Speaker 5: its recent rally in early trading, alphabets DOT is now
• 21:01
  Speaker 5: up only half a percent, and video shares are now
• 21:04
  Speaker 5: down by four percent. On the heels of that report
• 21:07
  Speaker 5: of the chip makers, including AMD are seeing sympathy losses. Meanwhile,
• 21:11
  Speaker 5: Best Buy shares arising four percent after the consumer electronics
• 21:14
  Speaker 5: retailer hiked its full year sales in earnings outlook after
• 21:18
  Speaker 5: beating earnings expectations. During the quarter. The retailer saw customers
• 21:23
  Speaker 5: upgrade tech devices in splurge on new computers, gaming consoles,
• 21:28
  Speaker 5: and smartphones elsewhere. After naming a new CEO, yesterday, Coles
• 21:32
  Speaker 5: reported better than expected third quarter results with a surprise profit.
• 21:36
  Speaker 5: Coles also upped its annual guidance, sending shares in the
• 21:39
  Speaker 5: struggling retailer surging thirty four percent now and Dick Sporting
• 21:43
  Speaker 5: Goods beach Street expectations for the previous quarter. However, the
• 21:47
  Speaker 5: company announced it will shutter some footlocker stores as part
• 21:50
  Speaker 5: of a larger restructuring so that the sneaker company doesn't
• 21:54
  Speaker 5: weigh on Dick's profits. Dick Sporting Goods stock is up
• 21:57
  Speaker 5: over one percent now. Silva and that is Wall Street watching.
• 22:01
  Speaker 5: On the previous segment, we asked you the trivia question
• 22:03
  Speaker 5: which college did Caitlin Clark play basketball for? That would
• 22:07
  Speaker 5: be Iowa. Bob from Griffin Georgia is our winner today
• 22:11
  Speaker 5: taking home my Financiers what. By the way, Bob, there
• 22:14
  Speaker 5: you go. Okay, thanks for that, taking home the Financial
• 22:16
  Speaker 5: Exchange Show t shirt and we play trivia every day
• 22:19
  Speaker 5: here in the Financial Exchange. See complete contest rules at
• 22:22
  Speaker 5: Financial Exchange Show dot com.
• 22:24
  Speaker 4: Tucker, congrats, big day for coles Man. I'm happy for you.
• 22:28
  Speaker 5: Every huge on the shows.
• 22:35
  Speaker 3: CNBC has a piece today, Paul. Cash can feel safe,
• 22:38
  Speaker 3: but it doesn't grow your wealth. Portfolio strategists as well.
• 22:42
  Speaker 3: I'm going to debate that because I am on bank
• 22:44
  Speaker 3: Rate's website right now, and I see no fewer than
• 22:47
  Speaker 3: twelve separate banks that are willing to pay me four
• 22:50
  Speaker 3: percent or.
• 22:50
  Speaker 2: More on my cash.
• 22:53
  Speaker 3: A little bit tongue in cheek here, Nonetheless, why do
• 22:56
  Speaker 3: we as financial advisors spend so much time forocusing on
• 23:00
  Speaker 3: our clients cash and trying to largely minimize it. It's
• 23:05
  Speaker 3: not to say nobody should have people should have no
• 23:08
  Speaker 3: cash at all, but I think frequently you and I
• 23:10
  Speaker 3: come across people that we work with who are sitting.
• 23:13
  Speaker 2: On entirely way too much.
• 23:15
  Speaker 3: How does your approach to cash, I guess change as
• 23:18
  Speaker 3: clients' lives change.
• 23:19
  Speaker 4: Yeah, so part of it has to be built on
• 23:23
  Speaker 4: their financial plan and whether they've amassed enough cash to
• 23:26
  Speaker 4: be invested as conservably as they are to withstand the
• 23:30
  Speaker 4: fact that inflation looms as the largest threat for anyone
• 23:33
  Speaker 4: who has a significant pile of cash.
• 23:35
  Speaker 3: Right and if you're over, your inflation is running three percent.
• 23:38
  Speaker 3: So I'm if I'm doing the absolute best and earning
• 23:41
  Speaker 3: four percent real you know, real earnings, here, I'm making
• 23:45
  Speaker 3: one percent on my cash right exactly.
• 23:47
  Speaker 4: And so I had a meeting with a perspective client
• 23:49
  Speaker 4: recently who had all of their money in cash, a
• 23:53
  Speaker 4: significant sum four to five hundred thousand in cash, and
• 23:57
  Speaker 4: had expenses on a monthly basis of about forty five
• 24:02
  Speaker 4: hundred bucks a month. And so if you kind of
• 24:05
  Speaker 4: extrapolate that, let's say it is, you know, five hundred grand,
• 24:08
  Speaker 4: collecting four percent interest on it, you're pulling twenty k
• 24:12
  Speaker 4: off of your your five hundred grand plus some social
• 24:15
  Speaker 4: Security gets you pretty close to the fifty.
• 24:17
  Speaker 2: Right.
• 24:18
  Speaker 4: It sounds like a good deal. The problem with that
• 24:20
  Speaker 4: is just what you mentioned before is that this person's
• 24:23
  Speaker 4: rent is not going to stay at twenty four hundred bucks. Well,
• 24:26
  Speaker 4: maybe if Boston puts in the rental the rent control,
• 24:29
  Speaker 4: then she might be in better shape. But the expenses
• 24:33
  Speaker 4: on her regular expenses for groceries and other arms, it
• 24:36
  Speaker 4: is not going to stay at that fixed you know,
• 24:39
  Speaker 4: forty five hundred bucks a month or five thousand bucks
• 24:42
  Speaker 4: a month. So the conversation I had with her is
• 24:43
  Speaker 4: I understand that you're reversed to risk and the fluctuation
• 24:47
  Speaker 4: of your assets makes you uncomfortable. But the current situation
• 24:51
  Speaker 4: that you have in place may be tenable today, but
• 24:54
  Speaker 4: I can assure you it's not tenable going forward because
• 24:57
  Speaker 4: inflation is going to make that lump sum you just
• 25:00
  Speaker 4: have it invested in cash not worth as much as
• 25:03
  Speaker 4: it is today in terms of real dollars.
• 25:04
  Speaker 3: Yeah, I say it over and over again to folks.
• 25:08
  Speaker 3: Most people that I meet their most concerned about a
• 25:14
  Speaker 3: stock market crash. The biggest item on their list when
• 25:17
  Speaker 3: they think about their financial well being is what if
• 25:19
  Speaker 3: the stock market crashes? And easily the biggest risk to
• 25:23
  Speaker 3: their financial future is not a stock market crash, it's
• 25:26
  Speaker 3: usually what if inflation runs two percentage points higher for
• 25:29
  Speaker 3: the rest of your life than it has for the
• 25:31
  Speaker 3: last three decades.
• 25:33
  Speaker 2: Easily a way bigger risk.
• 25:34
  Speaker 3: To most people that I meet with, is that inflation
• 25:37
  Speaker 3: just eating them alive over the course of their retirement
• 25:40
  Speaker 3: and stock market maybe it does average returns or slightly
• 25:44
  Speaker 3: below average returns, and suddenly you cannot afford the lifestyle
• 25:48
  Speaker 3: that you had become accustomed to.
• 25:52
  Speaker 2: Ultimately, you have to have enough. Where I always go
• 25:56
  Speaker 2: back to.
• 25:56
  Speaker 3: With clients is, look, you have to hold enough cash
• 25:59
  Speaker 3: for you to feel confident that I can stick with
• 26:02
  Speaker 3: the investment plan that I your investment advisor and building
• 26:05
  Speaker 3: for you. And so if it less you sleep at night,
• 26:07
  Speaker 3: then you've got to do it. But you know, at
• 26:09
  Speaker 3: least try and find a bank that's going to pay
• 26:10
  Speaker 3: you more than Bank of America will on their cash.
• 26:13
  Speaker 3: Sorry to pick on your Bank America, but I am
• 26:15
  Speaker 3: a customer and you don't.
• 26:16
  Speaker 2: Me as well.
• 26:17
  Speaker 3: You don't have any savings accounts that pay me any cash.
• 26:20
  Speaker 2: So ultimately that's what's most important.
• 26:23
  Speaker 3: But you know, there's lots of alternatives to consider there,
• 26:26
  Speaker 3: like if I've got dead cash not working for me,
• 26:28
  Speaker 3: are there at least CDs that I can look at
• 26:30
  Speaker 3: or US treasuries that you know I can look at
• 26:33
  Speaker 3: as a solution.
• 26:34
  Speaker 2: There. For many people, it's like.
• 26:36
  Speaker 3: Hey, you know, if I'm gonna have dead cash anyway,
• 26:38
  Speaker 3: would I be better off with insurance of some kind?
• 26:40
  Speaker 2: You know?
• 26:40
  Speaker 3: Could I beef up my my life insurance or my
• 26:42
  Speaker 3: long term care insurance? And the tricky part of this
• 26:44
  Speaker 3: too is it all changes depending on how.
• 26:47
  Speaker 2: Old you are.
• 26:48
  Speaker 3: Right like, you're forty five years old, you got three
• 26:51
  Speaker 3: kids at home that you're trying to put through school,
• 26:53
  Speaker 3: and you're a dual working household where either of you
• 26:55
  Speaker 3: could lose your job. That's a completely different cash need
• 26:59
  Speaker 3: than if you are fifty nine and a half, still working,
• 27:03
  Speaker 3: kids in college, and suddenly have access to your iras
• 27:07
  Speaker 3: without being penalized. So it's important that you just speak
• 27:12
  Speaker 3: with somebody about what the right allocation of cash, bondstocks,
• 27:17
  Speaker 3: other assets to have is going into these different stages
• 27:21
  Speaker 3: of life, because, like I mentioned, even just a year
• 27:24
  Speaker 3: like fifty eight versus fifty nine years old, can dramatically
• 27:28
  Speaker 3: change how much cash you should be sitting on in
• 27:29
  Speaker 3: the event of an emergency because of things like access
• 27:32
  Speaker 3: to retirement accounts, and people frequently fail to recognize it
• 27:36
  Speaker 3: and therefore miss out on a bunch of asset growth
• 27:39
  Speaker 3: that they could otherwise be achieving. If you have questions
• 27:42
  Speaker 3: along those lines, Hey, how much cash should I be
• 27:44
  Speaker 3: holding for this stage of my life? What are the
• 27:45
  Speaker 3: real risks that I face as I go into that
• 27:48
  Speaker 3: next stage of life? Give the Armstrong Advisory Group a
• 27:50
  Speaker 3: call numbers eight hundred and three nine three for zero
• 27:54
  Speaker 3: zero one. You can book a time for us to
• 27:56
  Speaker 3: call you back at Armstrong Advisory dot com. But that
• 27:59
  Speaker 3: number once again for your free consultation and free chat
• 28:02
  Speaker 3: is eight hundred three nine three four zero zero one.
• 28:06
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 28:08
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 28:11
  Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
• 28:14
  Speaker 1: your own financial tax into state planning advisors before making
• 28:17
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 28:20
  Speaker 1: advisory services.
• 28:21
  Speaker 2: You guys excited about buying your next car on Amazon?
• 28:24
  Speaker 5: Oh yeah, I'm not fully closing the door in it. No,
• 28:28
  Speaker 5: no in interest me.
• 28:32
  Speaker 2: I have never bought a car that didn't first test drive.
• 28:34
  Speaker 5: Sure, you can go test drive it somewhere else and
• 28:36
  Speaker 5: then go buy it at Amazon. Yeah, just kind of
• 28:39
  Speaker 5: like you do if you go into a Dick Sporting
• 28:42
  Speaker 5: Goods or a Best Buy or something, you look up
• 28:44
  Speaker 5: the price while you're there, see the product in person,
• 28:47
  Speaker 5: trying your sneakers, and then order it on all.
• 28:49
  Speaker 2: Right, So then a few questions.
• 28:50
  Speaker 3: One, can Amazon actually get me into the car that
• 28:52
  Speaker 3: I'm test driving at the Hundai dealership cheaper than they're
• 28:56
  Speaker 3: willing to give it to me at the Hundai dealership?
• 28:58
  Speaker 5: I mean, how can you be safe?
• 28:59
  Speaker 2: Because if not that and it's a non.
• 29:00
  Speaker 5: Starter, I think that's their only route here, right, Is
• 29:04
  Speaker 5: it lightly cheaper or some sort of incentive.
• 29:07
  Speaker 2: In which case? In which case why.
• 29:10
  Speaker 4: But if you're the car manufacturer, why would you allow
• 29:13
  Speaker 4: them to list it NOEP or how are they getting
• 29:16
  Speaker 4: that cost advantage?
• 29:18
  Speaker 3: Imagine your dealers coming back to you and saying, I
• 29:21
  Speaker 3: have this MSRP listed at forty three thousand, five hundred.
• 29:25
  Speaker 3: I'm trying to negotiate a sale, and the customer keeps
• 29:29
  Speaker 3: opening up their Amazon app and showing me the exact
• 29:32
  Speaker 3: same car and the exact same color with all the
• 29:34
  Speaker 3: same features for forty one thousand, five hundred. I don't
• 29:37
  Speaker 3: know that they're going to be delivered. They'd be able
• 29:39
  Speaker 3: to deliver on vehicles at a cheaper price point.
• 29:43
  Speaker 2: I hope they do. But I don't see why anyone
• 29:46
  Speaker 2: would go for it.
• 29:48
  Speaker 4: Particularly when there's some competitors in this space too. I
• 29:51
  Speaker 4: don't know.
• 29:51
  Speaker 2: I mean the customer would go for it.
• 29:53
  Speaker 3: Again, like the customer, I would buy the car from
• 29:55
  Speaker 3: Amazon if they're going to offer it to me for
• 29:57
  Speaker 3: a cheaper price point. But if I'm the dealer in
• 30:00
  Speaker 3: this case, which is, by the way, in the US,
• 30:02
  Speaker 3: like autosystem, the entity that has all the power with
• 30:05
  Speaker 3: the manufacturers, they're gonna say screw you unless you're willing
• 30:11
  Speaker 3: to completely cut off your dealer supply. I don't see
• 30:15
  Speaker 3: how this works. Like it's one thing when you're Amazon
• 30:19
  Speaker 3: and you can create a you know, proprietary USB cable
• 30:22
  Speaker 3: that you can sell for half the price of the
• 30:24
  Speaker 3: one at best Buy because it's you know, off brand
• 30:26
  Speaker 3: and not mentioned. But that's not what you can do here.
• 30:28
  Speaker 3: You're not gonna come up with the Amazon car. I
• 30:30
  Speaker 3: don't I don't know.
• 30:32
  Speaker 2: I'm not sure this is gonna be successful.
• 30:34
  Speaker 5: Well, Hyundai has been the number one or the car
• 30:38
  Speaker 5: that started it with the Amazon and now Ford recently
• 30:40
  Speaker 5: at an announcement. I don't know if it's new, but
• 30:43
  Speaker 5: it's used cars. I don't know when that goes.
• 30:46
  Speaker 3: If it's used cars, then that's a different story that
• 30:48
  Speaker 3: actually works because there's there is no definitive price point
• 30:52
  Speaker 3: for a used car, so like Carvana. So I mean
• 30:55
  Speaker 3: if that's the case, then Carvan is screwed. Oh yeah,
• 30:58
  Speaker 3: but yeah, I don't know.
• 31:00
  Speaker 4: For me, the touch and feel, the test start thing
• 31:02
  Speaker 4: is is really not that important. I was thinking back
• 31:04
  Speaker 4: at some of my cars. I've sat in them, but
• 31:07
  Speaker 4: haven't really drove them around whatever.
• 31:09
  Speaker 2: For a used car, I don't think i'd be willing
• 31:12
  Speaker 2: to buy it because that's.
• 31:13
  Speaker 4: I have a relationship with a If not for a
• 31:15
  Speaker 4: relationship family friend relationship, then yes, I would be more
• 31:19
  Speaker 4: focused on it.
• 31:20
  Speaker 2: Yeah, I mean with a used car.
• 31:22
  Speaker 3: I know how Carvana works, Like you've got the seven
• 31:24
  Speaker 3: day trial period, but you know you still have to
• 31:26
  Speaker 3: get the insurance. It's still gonna be a giant pain
• 31:28
  Speaker 3: if you have to return the thing because you don't
• 31:30
  Speaker 3: like it. I would not be willing to do so
• 31:32
  Speaker 3: on a used car, and I don't understand how the
• 31:34
  Speaker 3: new car business would work, So I don't know.
• 31:36
  Speaker 5: Text out of the five aweight says Amazon has volume
• 31:39
  Speaker 5: and has repeatedly taken a loss to corner the market.
• 31:42
  Speaker 2: Agreed, right right, Like I absolutely agreed.
• 31:45
  Speaker 3: So I think they would be willing to take a
• 31:47
  Speaker 3: loss on this, and I think on the used cars
• 31:49
  Speaker 3: they'd be willing to put carbon out of business for it.
• 31:52
  Speaker 3: But on new cars, I just don't know if the
• 31:55
  Speaker 3: manufacturer is going to be willing to bankrupt their dealers
• 31:57
  Speaker 3: in order to go do.
• 31:58
  Speaker 5: This textra that they let you try and shoes for free.
• 32:01
  Speaker 5: The same thing is coming for cars.
• 32:03
  Speaker 2: Yeah, all right.
• 32:04
  Speaker 4: I hate buying cars. So if Amazon can make that
• 32:07
  Speaker 4: easier too than.
• 32:08
  Speaker 5: Any any anything, then the current process of buying a car,
• 32:14
  Speaker 5: because it's dog crap and it needs to change, and
• 32:18
  Speaker 5: all you dealers need to get your crap together because
• 32:20
  Speaker 5: it's an awful, awful, awful process.
• 32:22
  Speaker 4: Stop going to the back room to your manager.
• 32:25
  Speaker 5: It's it's awful. My mother in law just spent like
• 32:28
  Speaker 5: for a used truck, spent literally seven hours at the
• 32:32
  Speaker 5: dealership to get the best possible price.
• 32:35
  Speaker 2: It's what what are we doing?
• 32:37
  Speaker 4: It's like a hostage situation, it is.
• 32:39
  Speaker 3: It's like who's gonna bend for It's just that when
• 32:42
  Speaker 3: I bought our new Miniva, it was actually a very
• 32:44
  Speaker 3: pleasant buying experience. That was in part because they had
• 32:47
  Speaker 3: me completely over a barrel because they had the.
• 32:48
  Speaker 2: Only new sienna for available.
• 32:50
  Speaker 3: Yeah, they knew available for sale in the entire state
• 32:52
  Speaker 3: of Massachusetts. So there was got I was paying it.
• 32:55
  Speaker 3: But it was very pleasant.
• 32:57
  Speaker 5: I'm sure it was.
• 32:58
  Speaker 3: Let's oh yeah, let's take a quick break where we
• 33:02
  Speaker 3: come back of it as Stack roulettas next.
• 33:05
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• 33:08
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• 33:11
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• 33:39
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• 33:43
  Speaker 5: This year's DAB five K was another incredible success, with
• 33:46
  Speaker 5: over fifteen hundred runners and walkers, all supporting the Disabled
• 33:50
  Speaker 5: American Veterans Department of Massachusetts. The race results in photo
• 33:54
  Speaker 5: galleries are available to see and if you didn't have
• 33:56
  Speaker 5: a chance to participate but would still like to support
• 33:59
  Speaker 5: our great American heroes, please visit DAV fivek dot Boston.
• 34:03
  Speaker 5: Early access registration for next year's race is now open
• 34:08
  Speaker 5: through November thirtieth, so just a few days left. Discounts
• 34:12
  Speaker 5: are available to head over to DAV fivek dot Boston
• 34:16
  Speaker 5: and register today. That's DAV fivek dot Boston. Then, before
• 34:21
  Speaker 5: we hit stack Roulette, just a couple of follow up
• 34:23
  Speaker 5: texts on the previous conversation regarding the car buying process
• 34:28
  Speaker 5: and Amazon being you know, involved in that scenario. One
• 34:33
  Speaker 5: text says Amazon's going to get into the insurance and
• 34:36
  Speaker 5: registration process as well. Another texter said, if I'm buying
• 34:40
  Speaker 5: a used car, I need to get in it and
• 34:43
  Speaker 5: smell it, which I completely agree with.
• 34:45
  Speaker 3: Yeah, that's it's a real problem for used car business
• 34:50
  Speaker 3: that it's like the cigarette smell it you get every
• 34:53
  Speaker 3: once in a while.
• 34:54
  Speaker 2: That's just not easy to get out.
• 34:56
  Speaker 5: Oh, Jerry couldn't get rid of the smell bo and
• 34:58
  Speaker 5: a sob.
• 34:59
  Speaker 3: Yeah, big problem the insurance and registration piece. I guess
• 35:04
  Speaker 3: I don't fully understand what goes into all of that.
• 35:06
  Speaker 3: But you know, I know you have to do all
• 35:08
  Speaker 3: of that as part of the registration piece. The interesting
• 35:11
  Speaker 3: question to me would be does Amazon want to ensure cars?
• 35:13
  Speaker 1: Don't?
• 35:14
  Speaker 2: I don't think so.
• 35:16
  Speaker 3: That was the piece of Tesla's business that was always
• 35:18
  Speaker 3: like out there as the big compelling item was, Oh,
• 35:22
  Speaker 3: Tesla's because the self driving features are going to be
• 35:25
  Speaker 3: so good at driving that the insurance costs are going
• 35:28
  Speaker 3: to go down, and so Tesla is going to build
• 35:30
  Speaker 3: out this own insurance business to capture that lower risk.
• 35:33
  Speaker 3: And the exact opposite happened. It wasn't that there, you know,
• 35:37
  Speaker 3: more accidents. It's just that the cars were so technologically
• 35:42
  Speaker 3: forward that every time there was an accident, the insurance
• 35:44
  Speaker 3: cost was through the roof. And because of all the replacements,
• 35:47
  Speaker 3: all the replacement costs, the battery damage that could be done,
• 35:50
  Speaker 3: like all those things were really really expensive in Tesla's
• 35:53
  Speaker 3: and so the whole theory was, hey, we'll be able
• 35:55
  Speaker 3: to ensure these cars for less because of self driving,
• 35:59
  Speaker 3: and the exact dopset happened to it.
• 36:01
  Speaker 2: What do you have for us for stack with that ball?
• 36:03
  Speaker 4: Your turkey is cheaper this Thanksgiving? That's about it.
• 36:07
  Speaker 2: I need to buy one of those, like, now, do
• 36:09
  Speaker 2: I still have time.
• 36:09
  Speaker 4: To follow you?
• 36:10
  Speaker 2: Yeah? About that? Yeah?
• 36:12
  Speaker 4: You still got time?
• 36:14
  Speaker 5: Microwave it be fine.
• 36:17
  Speaker 4: Several estimates of Thanksgiving meal costs that listed out it
• 36:22
  Speaker 4: was there's two different ways of looking at it. A
• 36:25
  Speaker 4: President Trump had said that it's twenty five percent cheaper
• 36:28
  Speaker 4: than twenty twenty four Thanksgiving dinner. But apparently according to
• 36:32
  Speaker 4: US Peace in Bloomberg, this was just fifteen items compared
• 36:36
  Speaker 4: to the traditional twenty nine items last year.
• 36:40
  Speaker 2: So if I buy half the stuff, then it's twenty
• 36:41
  Speaker 2: five percent cheaper.
• 36:42
  Speaker 4: Correct. The consulting firm Jeloyd estimated that the cost of
• 36:47
  Speaker 4: a home cooked meal of turkey, stuffing, mass potatoes, sweet potato,
• 36:51
  Speaker 4: cast role, green bean castrole, dinner, rolls, cranberry sauce, and
• 36:54
  Speaker 4: pump pie was up zero point six percent over twenty
• 36:58
  Speaker 4: twenty four.
• 37:00
  Speaker 3: Right, So basically prices are slightly somewhere between down five
• 37:04
  Speaker 3: percent according to the American Farm Bureau and up two
• 37:07
  Speaker 3: to three percent according to Wells Fargo. Correct, So somewhere
• 37:10
  Speaker 3: between down five and up three either way.
• 37:13
  Speaker 5: We know it costs money that we have cogot.
• 37:16
  Speaker 3: It, folks, you can take that to the bank. Prices
• 37:20
  Speaker 3: are somewhere up or down around eight percent of where
• 37:23
  Speaker 3: they were last year.
• 37:24
  Speaker 4: I hope that.
• 37:26
  Speaker 2: Yeah, I hope that's really useful information for you.
• 37:28
  Speaker 3: As we close out the program today. Taking a look
• 37:31
  Speaker 3: around at markets, we've got the Dow and SMP strongly
• 37:34
  Speaker 3: in positive territory now, Dow up nine tenths and percent,
• 37:36
  Speaker 3: SMP up four tenths and percent. The Nasdaq still holding
• 37:40
  Speaker 3: on to some losses here. We've got the NAZAC down
• 37:42
  Speaker 3: sixteen points a little bit less than one tenth of
• 37:45
  Speaker 3: one percent. Oil was moving earlier on rumors of an
• 37:48
  Speaker 3: agreement at least from the Ukrainian side for a piece deal.
• 37:53
  Speaker 3: Oil price is still today down to fifty seven dollars
• 37:55
  Speaker 3: and fifty six cents. That's off two percent compared to yesterday.
• 38:00
  Speaker 3: We'll be back at it tomorrow for our Wednesday program.
• 38:04
  Speaker 3: Hope everyone traveling for Thanksgiving does so safely and has
• 38:06
  Speaker 3: a lovely Thanksgiving, Happy Thanksgiving, and we'll be back at
• 38:09
  Speaker 3: it tomorrow