Latest / The Financial Exchange Show / Is Inflation About to Reheat? Markets Rally, AI vs Financial Planning & The Dow Debate

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Is Inflation About to Reheat? Markets Rally, AI vs Financial Planning & The Dow Debate · The Financial Exchange Show

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  Speaker 1: and Mike Armstrong.
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  Speaker 2: Chuck, Mike and Tucker here with you. And as we
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  Speaker 2: kick off another week, we've got stocks, well, they're they're
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  Speaker 2: moving as they they tend to.
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  Speaker 3: Some of them are up, some of them are down,
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  Speaker 3: some of them are flat. But at the on the whole, the.
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  Speaker 2: S ANDP is now up about half percent, thirty two points,
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  Speaker 2: the Dow is up forty six points, about a tenth percent,
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  Speaker 2: and the Nasdaq Composite up one hundred and eighty five
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  Speaker 2: points or point eight percent. So you got stocks continuing
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  Speaker 2: the rally that started on Friday tenure US Treasury not
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  Speaker 2: really doing much of anything. It's it I was up
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  Speaker 2: late watching the Super Bowl. I'm gonna sleep in a
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  Speaker 2: little bit. It's up four tenths of a basis point
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  Speaker 2: to four point two one percent, so not much movement there.
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  Speaker 2: The dollar though, saying yeah, I'm on the move today,
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  Speaker 2: down zero point seventy four percent to ninety six seventy eight.
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  Speaker 2: Gold responding in turn, up ninety nine to fifty an
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  Speaker 2: ounce to five thousand, seventy nine and thirty cents, so
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  Speaker 2: back above five thousand, and we'll get those cute, literal
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  Speaker 2: little silver people that are you know, bidden up the
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  Speaker 2: price of silver here gold investors are gold bugs? Are
• 2:20
  Speaker 2: there silver bugs? Their silver back guerrillas, reptiles.
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  Speaker 3: I don't know, I don't know.
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  Speaker 2: In any case, silver's up about seven percent as well
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  Speaker 2: as you got a rebound happening there. Crude oil West
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  Speaker 2: Texts Intermediate up sixty four cents a barrel to sixty
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  Speaker 2: four nineteen triple a national averageur gas prices up five
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  Speaker 2: tenths of ascent overnight to two ninety and two tenths
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  Speaker 2: after briefly dipping back down below that two ninety mark
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  Speaker 2: over the weekend. Peace from the Wall Street Journal, Why
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  Speaker 2: inflation may be about to come in?
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  Speaker 3: He let the.
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  Speaker 4: And follow on should we care? Maybe? Yeah.
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  Speaker 5: So. The reason they are the Wall Street Journal folk,
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  Speaker 5: the fine folks at the Wall Street Journal are warning
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  Speaker 5: you of this is that we've noticed some trends over
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  Speaker 5: the last few years where, especially in the early release
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  Speaker 5: of inflation, January can look a little bit roasty.
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  Speaker 4: Yeah, a little bit toasty because they try.
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  Speaker 5: To take out these seasonal adjustment factors and make it
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  Speaker 5: so that, yeah, if XYZ company raises their prices every
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  Speaker 5: January for inflation, that they don't really take that into
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  Speaker 5: account because it's not terribly useful if you're trying to
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  Speaker 5: factor in price adjustments. If you see prices shoot up
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  Speaker 5: every January, they try and take that out. Some economists
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  Speaker 5: have argued that they just can't fully do it properly,
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  Speaker 5: and so we have seen, for instance, in January of
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  Speaker 5: last year inflation and shot up to nearly three percent
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  Speaker 5: in that reading year over year, and in January of
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  Speaker 5: twenty twenty four, actually it declined off the December reading.
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  Speaker 4: So not the best example there.
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  Speaker 5: But we've seen a few of these where yeah, in
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  Speaker 5: January you get a hotter than expected reading and then
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  Speaker 5: you know, three months pass and oh, it was just
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  Speaker 5: a January spike that didn't actually signify anything.
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  Speaker 2: Here's where we stand on inflation right now, just to
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  Speaker 2: update everyone on the lay of the land. The Consumer
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  Speaker 2: Price Index the CPI currently sits a two point seven
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  Speaker 2: one percent year over year. Core CPI is at two
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  Speaker 2: six pc is at two seven seven. We do not
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  Speaker 2: have core PCE for full year because of actually sorry,
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  Speaker 2: both of those we don't have through December yet because
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  Speaker 2: of the shutdown.
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  Speaker 4: Yep UH.
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  Speaker 2: PPI is sitting at two nine to eight for the year.
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  Speaker 2: Core PPIs at three three one. So I think right
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  Speaker 2: now you can pretty conclusively say inflation is somewhere between
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  Speaker 2: two and three quarters and three and a quarter. Sure
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  Speaker 2: that it's in that ballpark. I don't like to get
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  Speaker 2: into like, oh, well, is it exactly? It doesn't matter
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  Speaker 2: exactly where it is. There's there's no fundamental difference between
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  Speaker 2: inflation at two eight and two nine. It's not a
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  Speaker 2: useful conversation to have.
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  Speaker 5: I'd be willing to theorize that it's maybe even as
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  Speaker 5: low as two and a half, but I can't get
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  Speaker 5: there because none of these numbers. I know the median
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  Speaker 5: forecast is two and a half percent year over year
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  Speaker 5: for this.
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  Speaker 2: Reading, So if it comes in, they're fine, But I
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  Speaker 2: can't get there because we don't have a single year
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  Speaker 2: over year number that's below two six right now. So
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  Speaker 2: I think ultimately what we're interested in is this. At
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  Speaker 2: the end of last year, the range that we were
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  Speaker 2: in for all of these different numbers, two four to
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  Speaker 2: two was the low end for the Producer Price Index.
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  Speaker 2: The high end was two nine for core CPI. So
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  Speaker 2: we've drifted up maybe a third of a percent in
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  Speaker 2: the aggregate. The question for twenty twenty six is do
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  Speaker 2: we continue to see enough disinflation in shelter and and
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  Speaker 2: you know, core services and things like that to bring
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  Speaker 2: this puppy back down into that two and a half range,
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  Speaker 2: or does the tailwind that helped us last year following
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  Speaker 2: energy prices, does that reverse this year and cause more
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  Speaker 2: problems because even though energy prices, you know, the core
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  Speaker 2: numbers exclude them, they seep.
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  Speaker 4: Into everything they do. I hate predicting energy price.
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  Speaker 5: Now year's an't is there any catalysts that would make
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  Speaker 5: us believe that that should happen this year.
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  Speaker 4: I don't think the price would move back up. I
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  Speaker 4: guess iroun action.
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  Speaker 2: Absent geopolitical whatevers. The potential that you have, in my opinion,
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  Speaker 2: is you've got less drilling that's going on in the
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  Speaker 2: United States right now because shale producers are your marginal
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  Speaker 2: producers of oil in the US, and they're looking at
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  Speaker 2: oil in the high fifties, low sixties and they're like, Nope,
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  Speaker 2: we're not putting the rigs in the ground for that. Yeah,
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  Speaker 2: not worth our time. We're gonna pass. So you've got that,
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  Speaker 2: coupled with the fact that expectations are that the economy
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  Speaker 2: is going to reaccelerate globally, and maybe you get a
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  Speaker 2: reacceleration in the US if the labor market turns up.
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  Speaker 2: And so if you have this reacceleration happening at the
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  Speaker 2: same time that there's less marginal supply coming online and
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  Speaker 2: older US h al wells are continuing to degrade at
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  Speaker 2: a faster clip, then you potentially get oil moving up,
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  Speaker 2: not to like a hundred, but remember all it takes
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  Speaker 2: is for oil to get to you know, seventy, and
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  Speaker 2: you got a ten percent move there, and it's like, oh,
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  Speaker 2: this is you know, something that's going to have a
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  Speaker 2: real impact. So that's the potential path. Does that happen?
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  Speaker 2: I'm not convinced. I think it's a maybe. I do
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  Speaker 2: think there are some structural factors that point to it being,
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  Speaker 2: you know, a legitimate.
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  Speaker 3: Possibility, But I don't know.
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  Speaker 2: I mean, no one ever knows what's gonna happen with
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  Speaker 2: energy because most of the price is controlled by you know,
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  Speaker 2: a dozen or so oligarchs who get together every few
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  Speaker 2: months and say, hey, how much oil should we pump
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  Speaker 2: out of our you know fields? And I don't get
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  Speaker 2: in their heads. I got they could be having a
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  Speaker 2: bad day.
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  Speaker 3: And the like, screw it, We're not gonna pump anything.
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  Speaker 3: Max the prices out, you.
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  Speaker 2: Know, like really tired from the Super Bowl yesterday. Yeah,
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  Speaker 2: I just gonna take a break. I had a bad parlay.
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  Speaker 2: We need to make this up. Cut the production, Jimmy, like,
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  Speaker 2: you know, it's this is the kind of stuff that
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  Speaker 2: you could see. So ultimately that's one possibility fame as.
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  Speaker 4: Huge NFL fans.
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  Speaker 3: Yeah, isn't there.
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  Speaker 2: There's not gonna be a game in Saudi Arabia next year,
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  Speaker 2: but it was Australia, right.
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  Speaker 6: Well, there's a flag football thing happening coming up, I.
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  Speaker 3: Think in Saudi Arabia.
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  Speaker 6: Yeah, yeah, but yeah, you're right about Australia.
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  Speaker 2: Yeah, we were covering the Australia game. And why I
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  Speaker 2: think it's the dumbest idea ever. You're gonna fly a
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  Speaker 2: bunch of three hundred pound people like to the other
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  Speaker 2: side of the world, try to deal with that jet lag.
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  Speaker 2: You can have a horrible football game and then when
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  Speaker 2: you're all beating up and Bruce, you're gonna fly right
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  Speaker 2: back and deal with all the swelling that happens on
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  Speaker 2: a twenty hour flight.
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  Speaker 3: Back at home.
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  Speaker 2: Really bad idea, Like it's a horrible idea for safety
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  Speaker 2: and the product.
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  Speaker 3: Yeah, I get that. You want to grow your game globally.
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  Speaker 5: Yeah, if you want to, and Australia does seem like
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  Speaker 5: a natural market for it, I'll give them that.
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  Speaker 3: Oh yeah, a lot of big dudes you like to
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  Speaker 3: hit people like, I understand that. Like I'm all for it.
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  Speaker 3: But maybe start in Australian league and call it Ausie
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  Speaker 3: rules football.
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  Speaker 4: Yeah, so yeah, it's good.
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  Speaker 6: It's gonna be the Niners playing the Rams in Melbourne, Australia.
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  Speaker 3: The Niners Rams.
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  Speaker 6: Yeah, and that's a significant game too.
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  Speaker 3: Well it is.
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  Speaker 2: And I guess they're saying, oh, it'll be you know,
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  Speaker 2: less travel because they're both West Coast teams.
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  Speaker 4: How do we get from oil to hear oil?
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  Speaker 6: Don't worry about it.
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  Speaker 5: Saudi Arabia flag football, yep, got it to naturally to
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  Speaker 5: going to play yep, got it?
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  Speaker 4: Okay, thank you, just make it sure.
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  Speaker 3: I want to track the steps, all fine.
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  Speaker 6: It doesn't matter.
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  Speaker 2: Let's take a audit the trail. It's like watching claudwork.
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  Speaker 2: You just have to see how like all the steps
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  Speaker 2: that takes. Let's take a quick break here. When we
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  Speaker 2: come back, we're gonna do a little bit of trivia,
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  Speaker 2: and then we're going to talk about the uncool stock
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  Speaker 2: index right after this.
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• 12:11
  Speaker 2: The Dow Jones Industrial Average crossed fifty thousand in the
• 12:15
  Speaker 2: past week, and uh, this piece the Wall from the
• 12:17
  Speaker 2: Wall Street Journal, the Dow the uncool index has its
• 12:20
  Speaker 2: moment in the sun talks about how people are paying
• 12:23
  Speaker 2: attention to it because it crossed the fifty thousand mark.
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  Speaker 5: So is it uncool because it's a garbage index in
• 12:30
  Speaker 5: terms of how it works, or is it uncool because
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  Speaker 5: it's sucked wind compared to every other one for the
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  Speaker 5: last decade and a half.
• 12:36
  Speaker 4: It's both, Yeah, it can be both.
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  Speaker 3: Well, So here's the thing.
• 12:39
  Speaker 2: Let's let's be careful how we talk about the Dow
• 12:42
  Speaker 2: Jones Industrial Average Okah, okay, why because I'm just gonna
• 12:47
  Speaker 2: pull some stats for you here, Okay, that they might
• 12:50
  Speaker 2: surprise you a little bit, and I want you to
• 12:52
  Speaker 2: be surprised.
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  Speaker 5: Okay, for don't tell me to be surprised. Why be
• 13:00
  Speaker 5: surprised then, just go oh yeah, I didn't realize that
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  Speaker 5: that was what we were doing. Now, all right, So
• 13:06
  Speaker 5: if we look at.
• 13:08
  Speaker 2: The Dow over the last five years, total return for
• 13:13
  Speaker 2: the Dow is about sixty percent. Total return for the
• 13:15
  Speaker 2: S and P is about seventy seven. If you want
• 13:18
  Speaker 2: me to pull the Nasdaq, which I haven't done yet,
• 13:19
  Speaker 2: it's obviously way higher at oh no, sorry, Nasdag's up
• 13:24
  Speaker 2: sixty six percent. Okay, it was five last five just
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  Speaker 2: because things got so bad in twenty twenty two.
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  Speaker 3: That makes sense.
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  Speaker 2: Actually, if we go back another five years, and so
• 13:34
  Speaker 2: we're looking at the last ten years now, uh, the
• 13:37
  Speaker 2: NASDAG is up four hundred and forty two percent in
• 13:39
  Speaker 2: that time, the S and P's up two seventy five,
• 13:42
  Speaker 2: Dows up to twelve. The Dow like again during these timeframes, Yes,
• 13:47
  Speaker 2: it has lagged. If we go back as far as
• 13:50
  Speaker 2: I have data four, which is back to nineteen eighty
• 13:56
  Speaker 2: four November of eighty four, Dow's up about four thousand
• 14:00
  Speaker 2: percent during that time, the SMP's up about four thousand
• 14:03
  Speaker 2: and thirty percent. No, pretty close with it, within sniffing distance. Sure,
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  Speaker 2: the nasdak's up way more just because of you know, well,
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  Speaker 2: what's in it.
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  Speaker 4: Yep.
• 14:12
  Speaker 2: In any case, I don't think anyone looks at the
• 14:13
  Speaker 2: Nasdaq is like a representation of the broad US economy.
• 14:17
  Speaker 2: So you can make a case that over really long
• 14:20
  Speaker 2: periods of time, the Dow actually does get pretty close
• 14:22
  Speaker 2: to the S and P.
• 14:23
  Speaker 3: And that's that's fine.
• 14:25
  Speaker 2: What I am going to propose is that now that
• 14:27
  Speaker 2: the Dow is at fifty thousand, we gotta stop doing
• 14:30
  Speaker 2: the hats every thousand points, right right? A thousand points
• 14:35
  Speaker 2: is two percent now like it was one thing when
• 14:37
  Speaker 2: it went from like Dow ten thousand to Dow eleven.
• 14:40
  Speaker 4: Hey, that's a meaningful move. Yeah, forty nine to fifty
• 14:43
  Speaker 4: is not.
• 14:44
  Speaker 2: You can't do Dow fifty one thousand hats. Yeah, I
• 14:48
  Speaker 2: don't know if it's every twenty five hundred, but that's
• 14:50
  Speaker 2: not around number. I'm willing to go like five thousand
• 14:53
  Speaker 2: at a minimum. But ideally i'd like to see we
• 14:56
  Speaker 2: can't do hats until it gets to sixty thousand.
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  Speaker 5: I claimed that the is a garbage composition. What I
• 15:02
  Speaker 5: mean by that is the formula they use is done
• 15:05
  Speaker 5: to measure the DOO. I find to be stupid and
• 15:08
  Speaker 5: irrelevant because it is based solely on the price of
• 15:12
  Speaker 5: your shares, so that's how they weight it, rather than
• 15:17
  Speaker 5: looking at a more interesting formula, which would be the
• 15:21
  Speaker 5: price of your share is multiplied by how many shares
• 15:23
  Speaker 5: exist market cap if you will, yes, And one of
• 15:27
  Speaker 5: those things is pretty good at measuring the overall scale
• 15:32
  Speaker 5: and size of your company.
• 15:33
  Speaker 4: Another one is not. And the method of the Dow uses.
• 15:37
  Speaker 5: Is just not useful in terms of measuring the breadth
• 15:43
  Speaker 5: of the overall market. And I know that they don't
• 15:46
  Speaker 5: attempt to right. The folks at the Dow Jones Industrial
• 15:49
  Speaker 5: Average who select which companies will be in there strategically
• 15:53
  Speaker 5: move companies in and out based on what they believe
• 15:56
  Speaker 5: will be a good representation of the overall US economy.
• 16:00
  Speaker 5: So it is not attempting to do it.
• 16:01
  Speaker 4: The S and P. Five hundred does.
• 16:03
  Speaker 5: But I don't think enough people recognize that. And so
• 16:06
  Speaker 5: when you hear us say don't worry about what the
• 16:09
  Speaker 5: DAW is doing it. It's because of that it measures
• 16:11
  Speaker 5: thirty companies and it doesn't actually measure their value.
• 16:16
  Speaker 2: Yeah, it measures their price, which is not really equal
• 16:20
  Speaker 2: that the benefits to price waiting and the reason why
• 16:24
  Speaker 2: early indices were price weighted. It's easy to calculate. It's
• 16:28
  Speaker 2: a lot easier than doing a market cap weighted index.
• 16:32
  Speaker 2: The big downsides it's really arbitrary based on you know,
• 16:36
  Speaker 2: did you do a stock split or a verse split
• 16:38
  Speaker 2: that can manipulate how much your stock moves the index?
• 16:41
  Speaker 5: And you can't include certain companies that would be arguably
• 16:45
  Speaker 5: pretty representative of the overall US economy because their share
• 16:50
  Speaker 5: price might be too high.
• 16:51
  Speaker 2: Well, and there's only thirty companies, which also restricts it
• 16:54
  Speaker 2: as well. You know what I think would actually be
• 16:56
  Speaker 2: really interesting and I'm sure someone does this and I
• 16:58
  Speaker 2: just have never paid attention to it. If you actually
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  Speaker 2: wanted to measure, in my opinion, the the like the
• 17:07
  Speaker 2: stock market for the US economy, what would be the companies?
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  Speaker 3: Uh No, what would be the methodology?
• 17:14
  Speaker 2: I'd be interested in revenueated because ultimately you're talking about
• 17:19
  Speaker 2: how much economic activity you're generating, Like how much activity
• 17:22
  Speaker 2: you're participating in. And as an example, when we talk
• 17:26
  Speaker 2: about you know, Uber and uh, who is the one
• 17:30
  Speaker 2: that I talked to Coca Cola? So Uber does ten
• 17:33
  Speaker 2: percent more revenue than Coca Cola. Coca Cola is a
• 17:38
  Speaker 2: three hundred billion dollar company and change Uber is one
• 17:42
  Speaker 2: hundred and fifty four billion.
• 17:43
  Speaker 5: Wouldn't you also then have to say how much domestic revenue?
• 17:46
  Speaker 5: If you're trying to measure like you'd have to qualify
• 17:49
  Speaker 5: it even further. I think I want to know Cola
• 17:51
  Speaker 5: is what half of.
• 17:52
  Speaker 2: Their economic activity generated by US companies, you know, like
• 17:57
  Speaker 2: regardless of where it takes. I mean again, like we
• 18:00
  Speaker 2: say that the S and P five hundred is a
• 18:02
  Speaker 2: good measure of the US you know, stock market. Yeah,
• 18:04
  Speaker 2: even though a lot of that revenue is overseas. Anyways,
• 18:07
  Speaker 2: I mean, there are there any companies that just have
• 18:10
  Speaker 2: all their revenue in one country anymore that are in
• 18:13
  Speaker 2: large cap indices?
• 18:14
  Speaker 4: Probably not very few.
• 18:15
  Speaker 3: I can't imagine.
• 18:17
  Speaker 2: I can't imagine any are Yeah, I mean if I
• 18:21
  Speaker 2: mean other ways you could do it.
• 18:23
  Speaker 5: I suppose you could look at just the largest employers
• 18:26
  Speaker 5: and their stock prices in the country. Employee waited, I
• 18:30
  Speaker 5: don't know where that could be fun, yea, But yeah,
• 18:33
  Speaker 5: there's a lot of different ways to measure I think
• 18:37
  Speaker 5: really important just context. The stock market does not measure
• 18:41
  Speaker 5: the success or failure of the economy.
• 18:43
  Speaker 4: I think we've mentioned that enough, but it's it's worth.
• 18:46
  Speaker 5: Mentioning again that the stock market and the economy are
• 18:50
  Speaker 5: very different things, and you can have them go in
• 18:55
  Speaker 5: very different directions for periods of time.
• 18:58
  Speaker 2: It can be forward looking as to what it thinks
• 19:00
  Speaker 2: the economy is going to do, but obviously you know
• 19:05
  Speaker 2: different things you know at different points in time. Taking
• 19:08
  Speaker 2: a look at markets as we head towards the bottom
• 19:12
  Speaker 2: of the hour, looks like we still got a nice
• 19:14
  Speaker 2: rally happening in the Nasdaq about three quarters of percent
• 19:17
  Speaker 2: s and p F half percent. But the Dow while
• 19:20
  Speaker 2: we were talking about it, Michael, it's down twelve points.
• 19:24
  Speaker 3: Oh what are we gonna do? Do we have to
• 19:26
  Speaker 3: give our hats? Hats? Give back the hats? Quick Break
• 19:32
  Speaker 3: Trivia Answers.
• 19:33
  Speaker 1: Next, bringing the latest financial news straight to your radio.
• 19:44
  Speaker 1: Every day, It's the Financial Exchange on the Financial Exchange
• 19:48
  Speaker 1: Radio Network. Time Now for Wall Street. Watch a complete
• 19:54
  Speaker 1: look at what's moving markets so far today. Right here
• 19:57
  Speaker 1: on the Financial Exchange Radio network.
• 20:01
  Speaker 6: Well markets are mixed at the moment, the Nasdaq seeing
• 20:04
  Speaker 6: a nice little rally as traders ready for another busy
• 20:07
  Speaker 6: week highlighted by a delayed job support and a CPI
• 20:12
  Speaker 6: reading for the latest gauge on inflation. Right now, the
• 20:15
  Speaker 6: Dow is off by only ten points. SMP five hundred
• 20:18
  Speaker 6: is up half a percent, NASDAC up nearly one percent higher,
• 20:23
  Speaker 6: two hundred and seventeen points, RUSTED two thousand is up
• 20:26
  Speaker 6: about eight tenths of a percent ten. Your treasurrealed flat
• 20:29
  Speaker 6: at the moment at four point two point two percent,
• 20:32
  Speaker 6: and Crewe Oil up one on a third percent higher,
• 20:35
  Speaker 6: trading at sixty four dollars in thirty eight cents a barrel.
• 20:40
  Speaker 6: Novo nord his shares jumping over three percent after Hins
• 20:43
  Speaker 6: and Hers pulled its we Go VI copycat weight loss
• 20:46
  Speaker 6: pill off the market after Novo threatened legal action against
• 20:50
  Speaker 6: the telehealth firm Hymns and herstock tumbling about twenty five
• 20:54
  Speaker 6: percent on that news. Meanwhile, Bloomberg reported this morning that
• 20:58
  Speaker 6: Alphabet is looking to raise about fifteen billion dollars from
• 21:01
  Speaker 6: a US high grade dollar bond sale. Alphabet shares are
• 21:04
  Speaker 6: up about one percent. Elsewhere, Oracle rising about nine percent
• 21:09
  Speaker 6: after the tech company received an upgrade to buy from
• 21:12
  Speaker 6: neutral from DA Davidson. Grocery giant Kroger named former Walmart
• 21:17
  Speaker 6: executive Greg Forran as its next CEO. Kroger's stock is
• 21:22
  Speaker 6: up about six percent, while Walmart shares a down one percent.
• 21:26
  Speaker 6: And tomorrow morning, ahead of the opening bell, ask Forzenca,
• 21:29
  Speaker 6: Coca Cola, BP, CBS Health, Marriott, and Spotify among those
• 21:33
  Speaker 6: who will post their quarterly results. I'm Tucker Silva, and
• 21:38
  Speaker 6: that is Wall Street.
• 21:39
  Speaker 4: Watch Mike.
• 21:40
  Speaker 2: There's a piece in the New York Times feeling amateur
• 21:44
  Speaker 2: at retirement planning, they asked AI for help. More people
• 21:48
  Speaker 2: were turning to chatbots for advice, inquiring about high stakes
• 21:51
  Speaker 2: decisions such as saving for retirement, even if they eventually
• 21:55
  Speaker 2: turn to a human, what.
• 21:58
  Speaker 4: Do you think better or worse than TikTok?
• 21:59
  Speaker 2: Financial advice depends what you put into it, quite honestly.
• 22:04
  Speaker 3: And as I was reading.
• 22:07
  Speaker 2: This, I pulled up an AI prompt and said, Okay,
• 22:12
  Speaker 2: here's what I gave, And I said, pretend I'm a
• 22:14
  Speaker 2: sixty five year old looking to retire. I have four
• 22:18
  Speaker 2: hundred thousand investible assets and a four hundred thousand dollars home.
• 22:21
  Speaker 2: I spend forty thousand dollars a year. Walk me through
• 22:24
  Speaker 2: a detailed analysis of building a financial plan and the
• 22:27
  Speaker 2: questions I need to answer in order to not run
• 22:29
  Speaker 2: out of money in retirement. And it did a pretty
• 22:32
  Speaker 2: good job of like summarizing a lot of the questions
• 22:35
  Speaker 2: that I need to ask.
• 22:37
  Speaker 3: I didn't ask it to actually solve.
• 22:39
  Speaker 2: Any of them for me, because I'd have to put
• 22:41
  Speaker 2: in a whole lot more information. And this, I think
• 22:45
  Speaker 2: is the place where a lot of people would run
• 22:48
  Speaker 2: into trouble is unless you actually know what information you
• 22:54
  Speaker 2: need to have in order to be able to put
• 22:56
  Speaker 2: this in, you're not going to get the result that
• 22:59
  Speaker 2: you want of it, and it's not going to be accurate.
• 23:03
  Speaker 5: Here's where I think that AI could be helpful, and
• 23:07
  Speaker 5: it can also be wrong. By the way, right, we've
• 23:09
  Speaker 5: talked at length about this, AI is frequently wrong.
• 23:12
  Speaker 4: I had one just from.
• 23:14
  Speaker 2: Like very simple financial thing that I asked it last
• 23:16
  Speaker 2: week just to like see if it knew.
• 23:18
  Speaker 3: I was like, what is the.
• 23:19
  Speaker 2: Maximum gift allowance in twenty twenty six without having to,
• 23:25
  Speaker 2: you know, file anything for taxes, it's just wrong.
• 23:28
  Speaker 3: It told me eighteen thousand instead of nineteen thousand.
• 23:30
  Speaker 4: Yeah.
• 23:31
  Speaker 5: Math is oftentimes also not great at and so if
• 23:35
  Speaker 5: you're trying to use it for a calculator of some sort,
• 23:37
  Speaker 5: it can it can pose problems.
• 23:40
  Speaker 4: There.
• 23:40
  Speaker 5: Where I think it might be useful is if you
• 23:42
  Speaker 5: have a highly specific financial question.
• 23:45
  Speaker 3: Yes, like.
• 23:48
  Speaker 5: When I saw the other day, I am saving money
• 23:51
  Speaker 5: for my kids college and we are thinking about this,
• 23:57
  Speaker 5: that or the other, and how it will affect our
• 24:01
  Speaker 5: financial aid application process. Can you walk me through how
• 24:05
  Speaker 5: this aspect of my income is put on the financial
• 24:09
  Speaker 5: aid applications? And you know, it can probably do a
• 24:13
  Speaker 5: pretty good job of telling you about the differences on
• 24:16
  Speaker 5: the FAFT set versus the CSS profile, both of which
• 24:19
  Speaker 5: are used for filing for financial aid. I think if
• 24:23
  Speaker 5: you generally put it in there and ask a question
• 24:25
  Speaker 5: like you did Chuck, where you say I'm sixty five
• 24:28
  Speaker 5: and have this much money and want to save for retirements,
• 24:30
  Speaker 5: you know, can you build me a financial plan? I'd
• 24:34
  Speaker 5: be very concerned about it. The software, the AI itself
• 24:40
  Speaker 5: doing all the calculations correctly, and you having enough information
• 24:45
  Speaker 5: to input in there and then contextualize what it's spitting
• 24:47
  Speaker 5: back out right, like, would you know to ask, Okay,
• 24:52
  Speaker 5: what is the average return that you are using for
• 24:54
  Speaker 5: the investment portfolio? Would it have any context to say,
• 24:59
  Speaker 5: am I in the right investment mix for what I'm
• 25:03
  Speaker 5: trying to accomplish right now? Yeah, both of which are
• 25:06
  Speaker 5: brought up in this New York Times piece, and I'm
• 25:08
  Speaker 5: just unclear that those would be all that good. The
• 25:12
  Speaker 5: case here was a thirty two year old who happened
• 25:15
  Speaker 5: to have her entire retirement plan in a what's referred
• 25:20
  Speaker 5: to as a target date fund that was built for
• 25:23
  Speaker 5: somebody who retires in twenty fifteen, which is not Again,
• 25:27
  Speaker 5: if you're thirty two, that's not exactly lining up probably
• 25:30
  Speaker 5: with your objectives. And so you can see a big
• 25:32
  Speaker 5: problem there, And that might be AI might be good at, like, hey,
• 25:36
  Speaker 5: I'm in this. Is it designed for somebody my age? Like, yeah,
• 25:39
  Speaker 5: AI can probably answer that, But a big broader building
• 25:43
  Speaker 5: of a model for something as important as your financial
• 25:46
  Speaker 5: future unless you have the expertise to put the right
• 25:49
  Speaker 5: things in there in the first place, like we've talked
• 25:51
  Speaker 5: about right, Like, I don't think AI is going to
• 25:54
  Speaker 5: allow you to file your own taxes or build your
• 25:56
  Speaker 5: own financial plan unless you have the pre existing contact
• 26:00
  Speaker 5: of how to build software and how to build a
• 26:04
  Speaker 5: financial plan.
• 26:05
  Speaker 3: If you have, as you said, if you have a
• 26:06
  Speaker 3: very simple question that.
• 26:08
  Speaker 2: You wanted to answer, I think it can usually answer
• 26:11
  Speaker 2: that pretty correctly. If you are very tech savvy and
• 26:16
  Speaker 2: want to use CAD code to go and build out,
• 26:20
  Speaker 2: you know, a personalized piece of financial planning software, you
• 26:25
  Speaker 2: can use it to do that. If you're in that
• 26:28
  Speaker 2: ninety five percent in the middle where you don't have
• 26:30
  Speaker 2: the advanced skills but no more than the basic questions,
• 26:35
  Speaker 2: it can get complicated to make sure you're getting the
• 26:38
  Speaker 2: most out of it that you need.
• 26:39
  Speaker 5: I'll be the first to say I do think that
• 26:41
  Speaker 5: AI is going to reshape just about every industry out
• 26:45
  Speaker 5: there as we've talked about it, and financial planning is
• 26:47
  Speaker 5: no exception.
• 26:48
  Speaker 3: It totally will. There will be large groups of people
• 26:52
  Speaker 3: that will be able to say I can use this
• 26:55
  Speaker 3: to do my financial planning.
• 26:57
  Speaker 5: One hundred percent and so that is not in irrelevant
• 27:01
  Speaker 5: development here, and I think it will change. It'll probably
• 27:04
  Speaker 5: change the software that I as a financial planner use,
• 27:07
  Speaker 5: like no doubt all of those things are going to shift.
• 27:09
  Speaker 5: But when it comes to things as important as say
• 27:14
  Speaker 5: your taxes or your retirement plan. What you have to
• 27:18
  Speaker 5: ask yourself before using one of these tools is will
• 27:21
  Speaker 5: I feel confident enough to go and execute a financial
• 27:25
  Speaker 5: strategy based on its recommendations?
• 27:27
  Speaker 3: Right?
• 27:27
  Speaker 5: And unless you feel some of those categories like we
• 27:30
  Speaker 5: talked about, I find it unlikely that the average person will.
• 27:34
  Speaker 5: If you're going down that road and want to check
• 27:36
  Speaker 5: in on the work that you're already doing, Armstrong would
• 27:39
  Speaker 5: love to help there. We work with folks with all
• 27:42
  Speaker 5: different backgrounds to try and structure their financial future. Some
• 27:46
  Speaker 5: of whom have already done a lot of the legwork
• 27:48
  Speaker 5: and that's great and we can pick it up and
• 27:49
  Speaker 5: bring it across the finish line. Others need a full
• 27:52
  Speaker 5: build out of what their financial future may come to
• 27:55
  Speaker 5: look like. If you fall in any of those categories,
• 27:57
  Speaker 5: we'd love to chat with you too. The numbers eight
• 28:00
  Speaker 5: hundred three nine three for zero zero one. You can
• 28:03
  Speaker 5: go check out our website where you can book a
• 28:05
  Speaker 5: time for us to call you back at Armstrong Advisory
• 28:07
  Speaker 5: dot com or again that number eight hundred three nine
• 28:11
  Speaker 5: three for zero zero one.
• 28:13
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group. A
• 28:16
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 28:18
  Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
• 28:22
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 28:24
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 28:27
  Speaker 1: advisory services.
• 28:30
  Speaker 2: Let's see, Oh, Chinese cars, Yes, let's talk about Chinese cars, Mike.
• 28:34
  Speaker 5: Ah, Yes, so peace from Bloomberg. Chinese cars are coming
• 28:38
  Speaker 5: to the US, like it or not. I think this
• 28:41
  Speaker 5: mainly is a commentary on the statement that the President
• 28:44
  Speaker 5: made the other day, sorry, last month, when he was
• 28:47
  Speaker 5: in Detroit. President Trump said that if Chinese automakers wanted
• 28:52
  Speaker 5: to build plants in the US, he would quote love that.
• 28:55
  Speaker 5: And so then this piece jumps along that, hey, we
• 28:58
  Speaker 5: are going to allow these into the United States. Now,
• 29:02
  Speaker 5: a few things about Chinese owned and manufactured cars. One,
• 29:07
  Speaker 5: we tear if the living heck out of them right now.
• 29:10
  Speaker 5: And I don't think that they would even allowed to
• 29:12
  Speaker 5: be allowed to be registered if you decide to import
• 29:14
  Speaker 5: your own Chinese made vehicle from overseas and pay the
• 29:17
  Speaker 5: import tax on them. Volvo though, just you know, so
• 29:22
  Speaker 5: we're all aware, is a subsidiary of a Chinese company.
• 29:25
  Speaker 5: They do manufacture cars in the US, They're looked at
• 29:27
  Speaker 5: very differently than say, what's what's some of the big
• 29:31
  Speaker 5: ones over there. Shoomi is one of the car manud
• 29:35
  Speaker 5: China byd I guess the question what I personally very
• 29:41
  Speaker 5: much hope that we don't allow Chinese automobiles to be
• 29:46
  Speaker 5: sold in the United States, even if they are manufactured
• 29:48
  Speaker 5: and assembled here in the United States. I purely am
• 29:52
  Speaker 5: basing that off of national security concerns. But I think
• 29:55
  Speaker 5: the way that people are going to position it is,
• 29:59
  Speaker 5: is this any bigger of a security threat than the
• 30:02
  Speaker 5: pre existing threats from TikTok televisions, all sorts of networking
• 30:06
  Speaker 5: devices that go into equipment all across the country. I
• 30:09
  Speaker 5: would argue yes, but I think plenty of people would argue.
• 30:12
  Speaker 2: Now, I think the big thing that would prevent me
• 30:17
  Speaker 2: from ever buying a Chinese vehicle is the fact that look, ultimately,
• 30:22
  Speaker 2: if there are Chinese components, which there are in every
• 30:26
  Speaker 2: single electronics thing that you own, it is sitting at
• 30:30
  Speaker 2: your house, the vehicle poses all kinds of different risks
• 30:35
  Speaker 2: from a locationtive perspective, privacy perspective, like there's a whole
• 30:41
  Speaker 2: different element there, and this is before you even get
• 30:44
  Speaker 2: into having you know, your mobility tied into potentially being
• 30:50
  Speaker 2: restricted by the Chinese government if they decided to, you know,
• 30:54
  Speaker 2: shut it down, shut it down for whatever reason, which
• 30:57
  Speaker 2: I would imagine that they can. I know that might
• 31:01
  Speaker 2: be speculative, but.
• 31:03
  Speaker 5: The cars are increasingly of electronic devices that are controlled
• 31:08
  Speaker 5: by a server, and so you can do this. It's
• 31:10
  Speaker 5: entirely possible, and I firmly believe it would never happen
• 31:15
  Speaker 5: outside of a all out conflict between the US and China.
• 31:18
  Speaker 4: You know.
• 31:19
  Speaker 2: So it's uh again, it's a concern on my end.
• 31:23
  Speaker 3: Let's take a quick break. When we come back, let's
• 31:25
  Speaker 3: do a little bit of stack roulette.
• 31:26
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  Speaker 6: a couple segments ago, we asked you the trivia question.
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  Speaker 6: Joe Peshi won his only Academy Award for his performance
• 32:49
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• 32:52
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• 33:04
  Speaker 2: Mike, I want to talk about this piece from the
• 33:05
  Speaker 2: Wall Street Journal. It's titled Where Did all the Cheap
• 33:09
  Speaker 2: Restaurants Go? And it's talking about the pricing compression that
• 33:12
  Speaker 2: you're seeing between casual, fast casual, and sit down restaurants.
• 33:18
  Speaker 5: And so let's define one that fits into each category.
• 33:22
  Speaker 2: Casual is McDonald's, Fast casual is let's even stick with
• 33:28
  Speaker 2: just burger places. Fast casual is five guys.
• 33:31
  Speaker 4: You that distinction I would okay.
• 33:34
  Speaker 3: And sit down would be Applebe's or Chili's. I'll have burgers.
• 33:40
  Speaker 2: If you took me back to my college days, you
• 33:43
  Speaker 2: could go into McDonald's and you can get a meal
• 33:45
  Speaker 2: for four to five dollars. You could go into five
• 33:48
  Speaker 2: Guys and you would get a burger for nine to
• 33:50
  Speaker 2: ten dollars. You would go to Applebee's and you'd get
• 33:53
  Speaker 2: a burger for thirteen to fifteen dollars.
• 33:58
  Speaker 4: So different price components, different price part Clearly.
• 34:01
  Speaker 2: Today you go to McDonald's and you're probably paying somewhere
• 34:05
  Speaker 2: in the ten to eleven range for you know, a
• 34:09
  Speaker 2: full you know, a burger and fries. You go to
• 34:14
  Speaker 2: a five guys you're paying fifteen sixteen. You go to Applebee's,
• 34:18
  Speaker 2: you're paying fifteen to eighteen. And so the only one
• 34:22
  Speaker 2: that has impress that's happened there.
• 34:24
  Speaker 5: Yeah, I was gonna say, the one that seemingly has
• 34:27
  Speaker 5: developed value. I don't think, you know, I think the
• 34:31
  Speaker 5: one that has really shown value a casual.
• 34:33
  Speaker 3: Has been like chain.
• 34:35
  Speaker 5: No, the one that's developed sorry, like chain, sit down,
• 34:37
  Speaker 5: sit down, chain, sit down, Applebe's, Chili's. That's the value
• 34:40
  Speaker 5: that group, that's that the one is the one that
• 34:43
  Speaker 5: has shown its value.
• 34:44
  Speaker 2: Which is the opposite of how we used to think
• 34:46
  Speaker 2: of them. It used to be if I need something cheap,
• 34:49
  Speaker 2: I'm going to McDonald's. Now it's well, they're all kind
• 34:52
  Speaker 2: of in the same ballparking. It used to be the
• 34:54
  Speaker 2: McDonald's burger was a third of the cost of the
• 34:57
  Speaker 2: Applebe's one, and now it's like there may be like
• 35:01
  Speaker 2: is a sixty it's sixty percent of the apple piece one.
• 35:05
  Speaker 2: And so it's just this compression that's happened. And I
• 35:09
  Speaker 2: think what you end up getting then is for people
• 35:12
  Speaker 2: that aren't choosing to go to McDonald's purely for economic reasons,
• 35:16
  Speaker 2: like hey, I can't afford to go to Applebee's. It's okay,
• 35:20
  Speaker 2: that middle piece is being squeezed, which is why we
• 35:22
  Speaker 2: see Chipotle with you know, sales down year over year,
• 35:25
  Speaker 2: which five guys is in public, But I'm guessing they're
• 35:28
  Speaker 2: seeing something similar. That's why we see Sweet Green getting
• 35:31
  Speaker 2: eaten a line. Yeah, what about Shakeshack right, same boat?
• 35:35
  Speaker 2: If Panera was still publicly traded, I'm sure they'd be
• 35:37
  Speaker 2: showing the same stuff as well.
• 35:39
  Speaker 5: Whereas I think that if you're truly looking for bottom
• 35:42
  Speaker 5: of the barrel pricing, you still might associate Burger King,
• 35:45
  Speaker 5: Wendy's at McDonald's with Hey, I just need a really
• 35:49
  Speaker 5: cheap meal fast, even though the difference between the two
• 35:52
  Speaker 5: is narrow.
• 35:52
  Speaker 3: The savings isn't as much.
• 35:53
  Speaker 4: Yeah. Yeah.
• 35:56
  Speaker 5: By the way, if I want the cheapest meal available
• 35:58
  Speaker 5: to these days, I think the cheapest place can go
• 36:00
  Speaker 5: for a meal as pizza.
• 36:02
  Speaker 3: Yeah, Pizza's got an expensive man.
• 36:04
  Speaker 5: Yeah, but plenty of places still offer you a slice
• 36:07
  Speaker 5: and a soda for a very like you can get
• 36:09
  Speaker 5: a slice in a soda for the price that you
• 36:11
  Speaker 5: get that fast food meal.
• 36:12
  Speaker 3: Use is a slice of meal?
• 36:14
  Speaker 4: Yeah, depends on the slice.
• 36:16
  Speaker 3: I'm a two slice guy.
• 36:17
  Speaker 5: Yeah, Yeah, well, even then, I bet you can go
• 36:19
  Speaker 5: to plenty of local pizza joints get two slices in
• 36:22
  Speaker 5: a soda for under seven bucks.
• 36:24
  Speaker 3: Maybe I don't do that often.
• 36:25
  Speaker 4: Yeah, me either, but I think there are plenty of
• 36:28
  Speaker 4: places that would offer that.
• 36:29
  Speaker 2: But I do know if I'm getting a pie on
• 36:31
  Speaker 2: a Friday night, it's twenty, it's twenty.
• 36:34
  Speaker 5: You know, it's not twelve or thirteen. But imagine ordering
• 36:38
  Speaker 5: McDonald's for your whole family. Would you make me do
• 36:42
  Speaker 5: that again? Just think about that, right, Like, think about
• 36:44
  Speaker 5: the price differential on getting each of the kids a
• 36:46
  Speaker 5: happy meal and you and your wife a McDonald's meal
• 36:49
  Speaker 5: if you're looking at thirty to forty bucks there, whereas
• 36:51
  Speaker 5: you're looking at twenty for the pizza.
• 36:52
  Speaker 4: Pizza. Pizza is the cheap what you don't want a
• 36:56
  Speaker 4: happy meal.
• 36:58
  Speaker 5: My happiness level is Mike's unhappy not it's not high
• 37:01
  Speaker 5: enough media that can make me happy.
• 37:07
  Speaker 3: Happy.
• 37:07
  Speaker 2: I have a melancholy meal every day.
• 37:11
  Speaker 3: Dismal.
• 37:13
  Speaker 4: Uh. Best Super Bowl ad? You guys have a favorite?
• 37:16
  Speaker 4: Quite on best and worst.
• 37:17
  Speaker 3: I really didn't watch many.
• 37:20
  Speaker 2: Yeah, I was at a bunch of people at the
• 37:22
  Speaker 2: house for the game and was mostly trying to clean
• 37:25
  Speaker 2: up during the commercials.
• 37:26
  Speaker 4: I haven't judged which ones are the best.
• 37:28
  Speaker 5: I think the ones that clearly got my attention most
• 37:31
  Speaker 5: were Ben Stiller's ad for AI. Yeah, probably it was Instacard,
• 37:40
  Speaker 5: and then the other one was the duncan Ad. Got
• 37:43
  Speaker 5: my attention because bright colors and a ton of famous people,
• 37:47
  Speaker 5: and honestly, that's kind of the goal, right, get my
• 37:50
  Speaker 5: attention for thirty seconds.
• 37:51
  Speaker 6: The one that stood out was the Backstreet Boys karaoke
• 37:53
  Speaker 6: one coin based yeah.
• 37:55
  Speaker 4: Commercial like no terble whatsoever.
• 37:58
  Speaker 2: But again, yeah, there were a lot of audible groans
• 38:00
  Speaker 2: in my house when that happened.
• 38:04
  Speaker 3: Really killed the vibe.
• 38:06
  Speaker 5: Also, I told you that potato chips are going to
• 38:07
  Speaker 5: try and convince us that they're healthy.
• 38:10
  Speaker 2: Yeah, they were talking potato chips.
• 38:14
  Speaker 4: Actually, yes they were.
• 38:15
  Speaker 2: Oh good. Let's take a quick break for the rest
• 38:18
  Speaker 2: of the day. Uh, we'll be back tomorrow with some
• 38:21
  Speaker 2: retail sales data.
• 38:22
  Speaker 3: We'll see you then,