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SpaceX IPO Hype Meets a Hot Jobs Report · The Financial Exchange Show

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  Speaker 1: and Mike Armstrong.
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  Speaker 2: Chuck, Mike and Sucker with you here, and as we
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  Speaker 2: kick things off today, stocks as a whole just it's
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  Speaker 2: not really their day so far. Well, interestingly enough, it
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  Speaker 2: actually is a lot of stocks day.
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  Speaker 3: It's just not the right stocks day.
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  Speaker 2: What I mean by that is the SP five hundreds
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  Speaker 2: down one point six percent right now, about eighty points.
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  Speaker 2: But but if you take a look at the index
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  Speaker 2: right now, fifty eight more S and P five hundred
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  Speaker 2: stocks are up than down. It's just the ones that
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  Speaker 2: are down are the big ones, the ones that occupy
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  Speaker 2: big chunks of the index. Little companies by the name
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  Speaker 2: of Broadcom down four point seven percent, in Vidia down
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  Speaker 2: three point nine, Meta down two, Microsoft down one and
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  Speaker 2: a half. It's just hard for the index to overcome that,
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  Speaker 2: which is why the last three years, the interesting thing,
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  Speaker 2: the safest place for the index to be has been
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  Speaker 2: with a small number of stocks leading the charge. But
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  Speaker 2: that also represents the biggest risk to the index because
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  Speaker 2: if that small group falters, things tend to not necessarily
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  Speaker 2: go well. It's what we've seen for the last few years,
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  Speaker 2: or guest, so it has to be five hundreds off
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  Speaker 2: about one point one percent. Dow's only off quarter percent
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  Speaker 2: because it doesn't have much in the way of semiconductors
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  Speaker 2: and stuff now's that can Positi, though down two percent,
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  Speaker 2: getting hit pretty hard. Tenure Treasury getting hit as well,
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  Speaker 2: off five point nine basis points to four point five
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  Speaker 2: three six percent.
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  Speaker 3: This on the back of a.
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  Speaker 2: Hot jobs report where we now have three jobs reports
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  Speaker 2: in a row with over one hundred and seventy five
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  Speaker 2: thousand jobs added. Thank you, Michael, I appreciate that.
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  Speaker 3: Uh.
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  Speaker 2: And so you've got a labor market that seems to
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  Speaker 2: be heating up right as inflation is heating up. With
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  Speaker 2: a new FED chair heading into his first meeting twelve
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  Speaker 2: days from now, it's going to be interesting to see
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  Speaker 2: what occurs on the seventeenth of June, dollar index rallying
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  Speaker 2: point four to one percent to ninety nine.
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  Speaker 3: Seven eighty five.
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  Speaker 2: This on the back of that hot jobs report and
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  Speaker 2: rising ten year yield gold as you would expect, getting
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  Speaker 2: bludgeoned down one hundred and twelve points or one hundred
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  Speaker 2: and twelve dollars rather to forty three to ninety three.
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  Speaker 2: We've got crude oil down one point seven eight dollars
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  Speaker 2: seventy eight I guess is how they say that in
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  Speaker 2: English dollars seventy eight off on crewe to ninety one
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  Speaker 2: to twenty six triple a national average for gas prices
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  Speaker 2: down another two point one cents, so we're at four
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  Speaker 2: to twenty two nationally. Based on where crude prices are,
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  Speaker 2: you can probably get into that four to fifteen range.
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  Speaker 3: So you got another six to seven cents to.
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  Speaker 2: Go in the short term before we hit bottoms if
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  Speaker 2: crude prices hold in this range. And that is what
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  Speaker 2: is moving in markets SpaceX IPO. It's gonna be next
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  Speaker 2: Friday and they're gonna be trying to raise seventy five
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  Speaker 2: billion dollars. It's you know, blah blah blah did even
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  Speaker 2: if you catch the news late yesterday though from Standard
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  Speaker 2: and Pores, the ones who run the five hundred I
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  Speaker 2: have not yeah, S and p announced their methodology changes
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  Speaker 2: for the index number one. The first consideration was for
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  Speaker 2: the IPO seasoning period to be reduced from six months
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  Speaker 2: to twelve months from twelve months to six months. Okay,
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  Speaker 2: the result of that change, no change instituted. They did
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  Speaker 2: not reduce the waiting time for an IPO to be seasoned.
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  Speaker 4: Sorry, so They proposed this and it failed, so they
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  Speaker 4: are keeping twelve month requirment.
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  Speaker 3: The way it's been before.
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  Speaker 2: IPOs needed to be traded on an eligible exchange for
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  Speaker 2: at least twelve months before being considered. They were considering
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  Speaker 2: reducing that to six. They said, no, we're not going
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  Speaker 2: to do that. The vestable weight factor that IWF minimum
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  Speaker 2: is waived for megacap companies. Companies passing a certain market
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  Speaker 2: cap criteria typically right now need to have a float
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  Speaker 2: adjusted market cap that's at least fifty percent of the
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  Speaker 2: total company value, so basically like half your The question was, hey,
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  Speaker 2: can we, you know, reduce that from fifty percent down
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  Speaker 2: to ten no change. They rejected that change as well. Finally,
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  Speaker 2: SP five hundred companies right now, at least to be
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  Speaker 2: considered for them, they have to be net income positive
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  Speaker 2: on generally accepted accounting principles. For the most recent quarter,
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  Speaker 2: in the sum of the foremost recent consecutive quarters, they
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  Speaker 2: were going to put in a financial viability exception for
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  Speaker 2: megacap companies. They did not make that change, which means
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  Speaker 2: Standard and Ports is the only one of the major
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  Speaker 2: indices that did not make changes to allow for SpaceX
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  Speaker 2: to be included in that index shortly after at IPOs.
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  Speaker 3: So this sets up.
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  Speaker 2: A fascinating, fascinating experiment here that quite honestly, we've never
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  Speaker 2: seen something like this before. It's going to be really
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  Speaker 2: interesting to watch how the major indices diverge over the
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  Speaker 2: next twelve to twenty four months when SpaceX is included
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  Speaker 2: in places like the Nasdaq and the Russell one thousand
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  Speaker 2: and things like that. Yeah, but not included in the
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  Speaker 2: S and P five hundred. So the S and P
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  Speaker 2: five hundred is not an investable index. No, So just
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  Speaker 2: to you see it on the TV, it reports there
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  Speaker 2: are a number of funds that are designed to track
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  Speaker 2: said index.
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  Speaker 4: Yes, but the S and P five hundred in and
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  Speaker 4: of itself, you can't go. You can't invest in an index.
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  Speaker 4: It's on every financial disclosure effort. I am not convinced
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  Speaker 4: that every fund company is going to continue to track that.
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  Speaker 3: What do you mean?
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  Speaker 4: So you have S and P five hundred funds from Vanguard,
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  Speaker 4: you have them from State Street, you have them from
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  Speaker 4: black Rock, Fidelity, everybody, everyone does. They don't need to
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  Speaker 4: do what S and P Global is saying. They can say, hey,
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  Speaker 4: we are making this exception and we are no longer
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  Speaker 4: going to track the S and P five hundred.
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  Speaker 2: I would imagine that they would have to change, like
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  Speaker 2: the name of the fund, not just the entire perspectives
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  Speaker 2: has to be changed.
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  Speaker 3: Yeah, but why would you do that?
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  Speaker 4: I don't Again, I don't know, but I'd be surprised
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  Speaker 4: if some of them don't follow that, because again, sp
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  Speaker 4: global is massive. It's not just the S and P
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  Speaker 4: five hundred funds presumably that are tracking this, but all
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  Speaker 4: of the sector funds that SMP builds as well are
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  Speaker 4: going to reject this holding from the index as well.
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  Speaker 3: I would assume.
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  Speaker 2: Yeah, I'm trying to understand. What, so you think that
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  Speaker 2: some of these funds are going to say, no, we're
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  Speaker 2: not going to do that.
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  Speaker 3: Yeah.
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  Speaker 4: I think some of them are going to say we're
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  Speaker 4: going to build a new custom one or we're going
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  Speaker 4: to change the rules of our own index fund to
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  Speaker 4: not not follow this rule.
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  Speaker 3: I maybe I'm wrong. Why would they do that?
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  Speaker 4: Because they want to attract flows from people looking to
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  Speaker 4: buy the SpaceX ipo after it goes.
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  Speaker 2: I'm so, but who's gonna buy it if it's not
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  Speaker 2: an S and P five hundred, Like, think about where
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  Speaker 2: most flows come from to S and P five hundred funds,
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  Speaker 2: it's four one ks yep and individuals wanting to buy
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  Speaker 2: the S and P five hundred. So where's the Where's
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  Speaker 2: the person that wants the that if SpaceX isn't in
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  Speaker 2: says no, give me the S and P five hundred,
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  Speaker 2: but with SpaceX and doesn't just go buy the Nasdaq.
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  Speaker 3: Ah, I don't know.
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  Speaker 4: I think that person might exist, Like I think you
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  Speaker 4: might be successful in marketing in sm P five hundred
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  Speaker 4: plus SpaceX fund. I'm kind we're gonna say, like, we're
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  Speaker 4: gonna see this is a again, whether you like the
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  Speaker 4: rule or dislike the rule, this is a pretty big
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  Speaker 4: stand that SMP is making, and it is going to cause,
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  Speaker 4: like you said, much wider divergence on the S and
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  Speaker 4: P five hundred compared to other indices that track the markets.
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  Speaker 3: I don't think.
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  Speaker 4: And I also think because they all already have products
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  Speaker 4: that are going to capture space at Yeah, maybe anyone
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  Speaker 4: who wants to invest in SpaceX in a mutual funder
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  Speaker 4: in ETF.
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  Speaker 3: Can go buy the fund that.
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  Speaker 2: You can go buy the Nasdaq. You can go buy
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  Speaker 2: the Russell one thousand, like you can go buy all
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  Speaker 2: these different ones.
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  Speaker 3: Maybe. Yeah, it's going to be interesting.
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  Speaker 4: It's gonna be it's gonna be a weird period of time.
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  Speaker 4: And I also, you know, other than the people listening
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  Speaker 4: to our show, who listen all the time, I don't
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  Speaker 4: think the public's gonna be aware that SpaceX is not
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  Speaker 4: being tracked in these indices.
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  Speaker 3: No, of course not. They're gonna have no idea, no there.
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  Speaker 4: They are going to generally assume that because I own
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  Speaker 4: a broad fund on that tracks the S and P
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  Speaker 4: five hundred, naturally I would own one of the largest
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  Speaker 4: companies in the world.
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  Speaker 2: And they won't take a quick break when we return.
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  Speaker 3: Let's see we covered that. Oh we're gonna play trivia
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  Speaker 3: when we return. Yeah, I know.
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  Speaker 2: I'm trying to build a multi piece ts because you know,
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  Speaker 2: some people like the trivia, some people like what comes
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  Speaker 2: after the trivia, and so you're just gonna have to
• 10:28
  Speaker 2: stick around to see what's next, because it's gonna be something.
• 10:32
  Speaker 3: And it was to be a guest, but then they
• 10:34
  Speaker 3: canceled during the intro show. Hey it was great. Hey,
• 10:39
  Speaker 3: it's gonna be just fine. We got plenty to cover.
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  Speaker 3: Let's go to break right now.
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• 12:31
  Speaker 2: Americans on GLP ones are overwhelming retailers with their non
• 12:35
  Speaker 2: stop returns. This is the headline from the Wall Street Journal.
• 12:39
  Speaker 2: And yeah, look if you look at the data, the uh,
• 12:43
  Speaker 2: the average weight loss on GLP ones right now is
• 12:46
  Speaker 2: pretty significant.
• 12:47
  Speaker 3: What are talking like forty to fifty pounds?
• 12:49
  Speaker 2: Yeah, and the next generation of them, you're talking like
• 12:51
  Speaker 2: seventy to eighty pounds that are being shown in the
• 12:54
  Speaker 2: recent trials. And apparently people don't know what size to
• 12:58
  Speaker 2: buy when they lose that much. Wait, I get it,
• 13:01
  Speaker 2: I mean I I totally understand. So here's what we're
• 13:07
  Speaker 2: seeing right now. And again this is not just you know,
• 13:11
  Speaker 2: like in there's not you know, people just shopping online more.
• 13:14
  Speaker 1: Uh.
• 13:15
  Speaker 2: A guy who runs the budget suit retailer flex Suits
• 13:19
  Speaker 2: has seen a fifty percent I don't know.
• 13:22
  Speaker 5: This reminds me of flex seals, and that's what the
• 13:25
  Speaker 5: suits are made out of.
• 13:26
  Speaker 4: It's not terribly breatheable, but it Yeah, you won't leak.
• 13:35
  Speaker 3: They've they've seen a fifty increase in returns in the
• 13:39
  Speaker 3: past year.
• 13:42
  Speaker 2: Like, that's it's not an There's also quote when a
• 13:46
  Speaker 2: customer orders the same suit in two or three sizes,
• 13:49
  Speaker 2: that's a red flag.
• 13:50
  Speaker 4: The owner said, yeah, I could see that, you know. Yeah,
• 13:53
  Speaker 4: there's also nothing you can do about it.
• 13:55
  Speaker 2: No, the problem is that because of the shipping, they're
• 13:59
  Speaker 2: you know, the guy says he's losing money on it. Well,
• 14:02
  Speaker 2: you're gonna have to change a ship and costs then,
• 14:04
  Speaker 2: like it's it's that or hey, you can only buy like.
• 14:10
  Speaker 3: I don't.
• 14:10
  Speaker 4: I don't have a lot of pity because you know,
• 14:12
  Speaker 4: this is the consequence of moving so much of our
• 14:15
  Speaker 4: retail online.
• 14:17
  Speaker 2: Right, if you don't want to have returns like that
• 14:19
  Speaker 2: as a suit salesman sell your suits and stores.
• 14:21
  Speaker 4: Yeah, so you know, I'm sure this happens in stores
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  Speaker 4: to a larger degree now too, because you know they're
• 14:30
  Speaker 4: they're they're situations where other people are buying clothes. There's
• 14:33
  Speaker 4: situations where you're suddenly a new size, or you've just
• 14:36
  Speaker 4: gone on the GLP what like all of these things
• 14:38
  Speaker 4: I'm sure are occurring in store too, But yeah, I
• 14:41
  Speaker 4: mean like you killed the shopping mall and sorry, now
• 14:45
  Speaker 4: you have to deal with excess returns because of new
• 14:49
  Speaker 4: inventive weight loss drug.
• 14:50
  Speaker 3: Yeah, it's uh, it is.
• 14:53
  Speaker 2: Can we just talk about some trends in shopping that
• 14:56
  Speaker 2: we're seeing just because I just saw an interesting stat please,
• 15:00
  Speaker 2: It's not related to shopping so much. It's more about
• 15:03
  Speaker 2: food and food trends. When's the last time that you
• 15:09
  Speaker 2: waited thirty minutes or more in line to eat a
• 15:14
  Speaker 2: specific food or at a specific restaurant, Not like, oh,
• 15:19
  Speaker 2: we got there early and our reservation wasn't for a while,
• 15:21
  Speaker 2: but you said, no, I need to stand in line
• 15:25
  Speaker 2: for over thirty minutes to wait at this place.
• 15:29
  Speaker 4: Ever, probably the closest I've ever come was, you know,
• 15:32
  Speaker 4: at one of those festivals where there's food trucks and
• 15:35
  Speaker 4: there's massive lines to go.
• 15:38
  Speaker 3: To the food. Yeah, but that doesn'tcount.
• 15:39
  Speaker 2: You've had like a a half dozen beers and you're like, oh,
• 15:42
  Speaker 2: I've only been here for two minutes, Like it's fine.
• 15:45
  Speaker 2: So here's the deal h This was a question asked
• 15:49
  Speaker 2: by I don't know who asked the question, but they
• 15:53
  Speaker 2: surveyed three thousand people across gen Z, Millennials, gen Xers,
• 15:57
  Speaker 2: and boomers. Of boomers know I have not waited half
• 16:01
  Speaker 2: an hour in line to eat a certain food or
• 16:05
  Speaker 2: certain food at a certain food place. Sixty six percent
• 16:09
  Speaker 2: of gen xers said no, haven't done that in the
• 16:11
  Speaker 2: last year. Only forty four percent of millennials said they
• 16:16
  Speaker 2: hadn't done it, and only forty two percent of gen
• 16:19
  Speaker 2: Zers said they haven't done it half.
• 16:22
  Speaker 4: An hour a more for some trendy food item, presumably
• 16:25
  Speaker 4: what you're getting here.
• 16:28
  Speaker 2: I think what's interesting to me is that for and
• 16:32
  Speaker 2: this is not entirely my own insight, this is kind
• 16:35
  Speaker 2: of a conversation that's going on on, you know, a
• 16:37
  Speaker 2: couple social media platforms.
• 16:39
  Speaker 4: Sorry, before you go on, I will say that this
• 16:41
  Speaker 4: kind of financially economically makes sense. Younger people value their
• 16:44
  Speaker 4: time of the value of time a lot less than
• 16:48
  Speaker 4: older people do.
• 16:49
  Speaker 2: Maybe, but does this say something about how people are
• 16:54
  Speaker 2: willing to spend their time.
• 16:55
  Speaker 3: Also in that.
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  Speaker 2: You've got gen Zers again, they're the highest one, but
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  Speaker 2: millennials too that are saying, yeah, I'm willing to go
• 17:05
  Speaker 2: somewhere and wait just to try what it is, whereas
• 17:09
  Speaker 2: jen exters and boomers are saying, no, I haven't done that.
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  Speaker 3: Why did I do that? I think this all has
• 17:14
  Speaker 3: to go to the time value of money. I don't
• 17:16
  Speaker 3: think it does.
• 17:19
  Speaker 4: I have a twenty seven year old, oh pair that
• 17:21
  Speaker 4: lives with us, and she on her birthday took the
• 17:25
  Speaker 4: entire day to go around from retailer to retailer to
• 17:27
  Speaker 4: take advantage of all the birthday deals and came home
• 17:30
  Speaker 4: with all this stuff.
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  Speaker 3: Sure, no chance in hell I would do that.
• 17:35
  Speaker 4: And I think that all has to do with again,
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  Speaker 4: how you value your time so and what dollar about
• 17:40
  Speaker 4: you put on an hour of your time?
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  Speaker 3: And for a twenty year old, that's a lot less
• 17:45
  Speaker 3: than a seventy year old. I don't think like that.
• 17:47
  Speaker 2: And I know that like this is like a money show,
• 17:49
  Speaker 2: but like I don't sit there and I'm like, well,
• 17:51
  Speaker 2: how much money is it going to cost me waiting
• 17:53
  Speaker 2: for this?
• 17:53
  Speaker 3: I'm like, no, like I wanted.
• 17:55
  Speaker 2: Case in point, there is a fantastic local bagel place
• 17:59
  Speaker 2: that if if you want to get bagels on a
• 18:02
  Speaker 2: Sunday morning from it, they open it eight. If you're
• 18:05
  Speaker 2: not there at seven thirty, you're gonna be waiting an
• 18:08
  Speaker 2: hour in line instead of a half hour. So I've
• 18:10
  Speaker 2: gotten there multiple times, like seven twenty, so I'm the
• 18:13
  Speaker 2: first person in line for when they open. And because
• 18:17
  Speaker 2: it's the only way to do it, I don't sit
• 18:18
  Speaker 2: there and say, well, this is going to cost me
• 18:21
  Speaker 2: x dollars waiting in line.
• 18:23
  Speaker 4: It's like, I don't think anybody thinks that way, but
• 18:26
  Speaker 4: I do think that when Yeah, the older and more
• 18:31
  Speaker 4: mature you are, I think the less willing you are
• 18:35
  Speaker 4: to spend a whole bunch of your time sitting in
• 18:37
  Speaker 4: a line doing nothing.
• 18:40
  Speaker 2: Because you're wasting proportionally to the time you have left
• 18:44
  Speaker 2: a lie.
• 18:45
  Speaker 4: Yeah, I don't know if it's dollars or death, but
• 18:46
  Speaker 4: I think one of those two is I'm not going
• 18:48
  Speaker 4: to waste before I die.
• 18:51
  Speaker 3: Yeah, I'm not sure which one of this.
• 18:53
  Speaker 4: Also, you're just busier as a human being when you're
• 18:55
  Speaker 4: in your sixties.
• 18:56
  Speaker 3: Boomers, what do you mean you're busier? Half the boomers
• 18:58
  Speaker 3: are retired. Now.
• 18:59
  Speaker 4: When was the last time we talked to one of
• 19:00
  Speaker 4: your boomer clients and then they told you that they
• 19:04
  Speaker 4: are not busy anything.
• 19:05
  Speaker 3: I want to talk to you, like, I don't know
• 19:07
  Speaker 3: how I've ever had time to trust me, Like my
• 19:09
  Speaker 3: parents are busy.
• 19:10
  Speaker 2: But it's like we've got Canasta this way, I've got
• 19:12
  Speaker 2: majong this day.
• 19:13
  Speaker 3: Like again, let's put it in perspective. You can wait
• 19:16
  Speaker 3: in line.
• 19:18
  Speaker 4: Sorry, mom, I'm confused. Are you arguing for or against
• 19:22
  Speaker 4: waiting in line four? I'm very pro waiting in line
• 19:25
  Speaker 4: for things that are worth it?
• 19:26
  Speaker 3: Got it? And I just found this interesting.
• 19:28
  Speaker 2: Let's take a quick break and when we return, We've
• 19:31
  Speaker 2: got the Trivia Answer.
• 19:39
  Speaker 1: Bringing the latest financial news straight to your radio. Every day.
• 19:43
  Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
• 19:49
  Speaker 1: Tell you out full, whoa Street watch treking the stocks,
• 19:52
  Speaker 1: the data and the headlines driving markets so far today
• 19:55
  Speaker 1: right here on the Financial Exchange Radio Network.
• 19:58
  Speaker 5: Sell off and tech is accelerat dating by midday after
• 20:01
  Speaker 5: the made Jaws report this morning revealed one hundred and
• 20:04
  Speaker 5: seventy two thousand jobs were added last month, higher than
• 20:07
  Speaker 5: estimates of eighty eight thousand. Unemployment rate held steady at
• 20:11
  Speaker 5: four point three percent. Treasure reels are climbing higher in
• 20:14
  Speaker 5: reaction to the Jaws report. In anticipation of a potential
• 20:18
  Speaker 5: rate hike from the Fed this year. Right now, the
• 20:20
  Speaker 5: Dow is down just over a third of a percent,
• 20:22
  Speaker 5: SMP five hundred down one and a quarter percent, Nasdaq
• 20:26
  Speaker 5: selling off two point two percent or six hundred and
• 20:30
  Speaker 5: seven points lower, Rust of two thousand down one point
• 20:32
  Speaker 5: eight percent, Tenure Treasureel jumping six basis points at four
• 20:36
  Speaker 5: point five to three percent, and Oiled down two percent,
• 20:40
  Speaker 5: trading at ninety one dollars a barrel after plunging thirteen
• 20:44
  Speaker 5: percent yesterday and reaction to its underwhelming sales forecast. Broadcom
• 20:48
  Speaker 5: down another five percent today. Other chip makers, including AMD
• 20:52
  Speaker 5: and Video and Intel, seeing.
• 20:54
  Speaker 3: Losses as well.
• 20:55
  Speaker 5: Lululemon tumbling eight percent after the retailer reduced its full
• 20:59
  Speaker 5: year earnings and revenue guidance, citing headwinds, including negative commentary
• 21:04
  Speaker 5: around the brand in a weak response to new products elsewhere.
• 21:08
  Speaker 5: Electric signature company DocuSign lifted its revenue guidance, where its
• 21:12
  Speaker 5: AI powered platform helped increase its profit in revenue in
• 21:15
  Speaker 5: the previous quarter. However, the stock down by six percent.
• 21:18
  Speaker 5: In JP Morgan upgraded Chipotle to overweight from equal weight,
• 21:23
  Speaker 5: citing the company same store sales growth in the first quarter,
• 21:26
  Speaker 5: Chipotle climbing about five percent. On that news from JP Morgan,
• 21:33
  Speaker 5: I'm Tucker Silvan. That is Wall Street watching. In the
• 21:35
  Speaker 5: previous segment, we asked you the trivia question, Uh, where
• 21:39
  Speaker 5: is it? Which country is Edward Snowden currently living in?
• 21:43
  Speaker 5: Now it would be Russia and Scott from Denham, Mass
• 21:48
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• 21:50
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• 21:54
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• 21:59
  Speaker 5: at Financial liks Shangshow dot com.
• 22:01
  Speaker 3: The mail's here. Here's the mail that n the mails.
• 22:04
  Speaker 3: It makes me what the wag matail? Where that comes?
• 22:07
  Speaker 3: I want to whale.
• 22:10
  Speaker 1: You've got questions, We've got answers. It's time for the
• 22:13
  Speaker 1: Money Matters Mailbag. We are tackling your calls and emails
• 22:17
  Speaker 1: on everything from economic policy to global markets and everything
• 22:21
  Speaker 1: in between. Leave us a voicemail at three three nine
• 22:23
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• 22:26
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• 22:28
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• 22:33
  Speaker 1: time for the Moneymatters mail bag.
• 22:37
  Speaker 5: All right, we got two questions into the Moneymatters mail
• 22:41
  Speaker 5: bag on this week's edition.
• 22:43
  Speaker 3: So let's start the first.
• 22:45
  Speaker 5: One here, Chuck and Mike. This is from I don't
• 22:49
  Speaker 5: have a name here. My wife's father passed away and
• 22:53
  Speaker 5: left her about two hundred and thirty thousand dollars in
• 22:56
  Speaker 5: an IRA account. We have our four to one K
• 23:00
  Speaker 5: through our jobs and plan on maxing out our ROTS
• 23:03
  Speaker 5: this year. We just need some guidance on what to
• 23:05
  Speaker 5: do with money we thought we would never have.
• 23:10
  Speaker 2: I'll start sure first, just some things that you're going
• 23:13
  Speaker 2: to need to be aware of. If you inherit an
• 23:16
  Speaker 2: IRA from someone who is not your spouse, unless you
• 23:20
  Speaker 2: qualify in a couple specific situations, that account is going
• 23:25
  Speaker 2: to have to be exhausted, fully emptied, and the tax
• 23:28
  Speaker 2: is paid on the proceeds within ten years. In addition
• 23:33
  Speaker 2: to that, a chunk of that is going to have
• 23:35
  Speaker 2: to come out each year as well. It's not ten,
• 23:39
  Speaker 2: but there is a required distribution that you'll have to
• 23:42
  Speaker 2: make each year based on your age, and so that's
• 23:46
  Speaker 2: something to be aware of, just to make sure you
• 23:47
  Speaker 2: don't run into tax penalties that would result in any
• 23:52
  Speaker 2: problems there. Beyond that, when it comes to like, hey,
• 23:56
  Speaker 2: what you know, what do I actually do with this.
• 23:58
  Speaker 2: It's a question of, hey, do you need the money
• 24:00
  Speaker 2: in order to bolster your income in any given year,
• 24:02
  Speaker 2: like you're going to use that for spending right now,
• 24:05
  Speaker 2: or is that money that, hey, even after you withdraw
• 24:08
  Speaker 2: it from the IRA in order to pay the taxes
• 24:12
  Speaker 2: that you want to keep invested somewhere because you have
• 24:14
  Speaker 2: longer term goals that you're trying to accomplish. And so
• 24:18
  Speaker 2: it's going to depend on what those needs are. Because
• 24:21
  Speaker 2: if you need that money annually in order to you know,
• 24:24
  Speaker 2: use it for income, that portfolio likely has to be
• 24:28
  Speaker 2: much more conservative. Given immediate income needs. Then hey, I'm
• 24:33
  Speaker 2: not going to touch this for twenty years aside from
• 24:36
  Speaker 2: needing to pay the taxes on it.
• 24:37
  Speaker 4: But there's some interesting tax scenarios here. Again, we don't
• 24:39
  Speaker 4: know your age, so that adds to it. But let's
• 24:42
  Speaker 4: say your plan was to retire in five years and
• 24:45
  Speaker 4: you've got this account that has to be emptied in ten.
• 24:47
  Speaker 4: You know, one strategy could be take the minimum for
• 24:51
  Speaker 4: the next five and then empty that thing out in
• 24:53
  Speaker 4: the last five to balance out your taxes yep. Or
• 24:56
  Speaker 4: another one could be, hey, take the money out, but
• 24:59
  Speaker 4: can tribute a whole lot more to the four oh
• 25:01
  Speaker 4: one K to offset the tax impact of having those
• 25:04
  Speaker 4: withdrawals out of the IRA. They can't go into the
• 25:07
  Speaker 4: four oh one K because only your income from work can,
• 25:10
  Speaker 4: but you can effectively, you know, use one for what
• 25:13
  Speaker 4: the other would have covered anyway. So yeah, there's some
• 25:17
  Speaker 4: interesting tax scenarios to consider when you're walking into an
• 25:20
  Speaker 4: inherited retirement account, specifically especially if it's you know, needs.
• 25:25
  Speaker 3: To be taxed. Good question, though, what else we.
• 25:28
  Speaker 5: Got to telling the final question for this week's Money
• 25:31
  Speaker 5: Matters mail bag. I'm currently about eighteen thousand dollars in
• 25:36
  Speaker 5: debt from a car loan and credit cards. I've been
• 25:39
  Speaker 5: hearing a lot about the snowball effect, where I tackle
• 25:42
  Speaker 5: the smallest loan or credit card and then move on
• 25:45
  Speaker 5: to the next, and so on and so forth. Some
• 25:47
  Speaker 5: other people have told me to do the avalanche effect,
• 25:51
  Speaker 5: where I pay off my highest interest debts.
• 25:54
  Speaker 3: Which method do you prefer, so I'll start here.
• 25:58
  Speaker 4: When I started my career, I thought that the snowball
• 26:01
  Speaker 4: strategy was frankly stupid. In some cases end up paying
• 26:06
  Speaker 4: off debt with a very low interest rate in favor
• 26:10
  Speaker 4: of getting it behind you. So you can focus on
• 26:13
  Speaker 4: other things next. I think, if I'm not mistaken, Dave
• 26:17
  Speaker 4: Ramsey is a big fan of this strategy to try
• 26:21
  Speaker 4: and tackle one by one and start small and get
• 26:23
  Speaker 4: to the big stuff. I thought that was kind of dumb,
• 26:27
  Speaker 4: because you might end up sitting there with a thirty
• 26:29
  Speaker 4: percent interest credit card and just ignoring it and paying
• 26:32
  Speaker 4: the minimum payments on it in order to get a
• 26:34
  Speaker 4: lower interest rate down. Having now worked with folks and
• 26:39
  Speaker 4: seeing the psychology of this sort of thing over the
• 26:41
  Speaker 4: course of the last sixteen years or so, I will
• 26:45
  Speaker 4: now admit that there can be some psychological benefit to
• 26:48
  Speaker 4: getting those smaller items behind you so you can work
• 26:50
  Speaker 4: on the bigger ones. So I've come around to that
• 26:52
  Speaker 4: thinking a little bit. I think it depends on your situation.
• 26:56
  Speaker 3: Right.
• 26:56
  Speaker 4: If you've had a change in your financial situation where
• 26:59
  Speaker 4: you know without any reasonable doubt that you've made the
• 27:02
  Speaker 4: changes to your life that you're going to be able
• 27:04
  Speaker 4: to pay off that sixteen thousand dollars a debt, I
• 27:06
  Speaker 4: would absolutely go with the avalanche method of paying off
• 27:09
  Speaker 4: the highest interest first and working your way down. If
• 27:14
  Speaker 4: there is some degree of uncertainty to all of that,
• 27:16
  Speaker 4: your job stability, isn't there and you've found yourself in
• 27:19
  Speaker 4: this situation before, I think there is some compelling reason
• 27:23
  Speaker 4: to consider.
• 27:24
  Speaker 3: Hey, let's tackle the smallest thing first.
• 27:26
  Speaker 4: Get it behind us, close out, clip out that credit card,
• 27:28
  Speaker 4: and move.
• 27:29
  Speaker 3: On to the next one after that.
• 27:31
  Speaker 2: I think it also depends on just the scale of
• 27:33
  Speaker 2: like what we're talking about on the relative sizes. If
• 27:37
  Speaker 2: the smallest one is going to take you two months
• 27:40
  Speaker 2: to pay off and there's you know, it's at you know,
• 27:42
  Speaker 2: a six percent interest rate, and the bigger one is
• 27:45
  Speaker 2: going to take you three years, it's at a fourteen
• 27:48
  Speaker 2: percent interest rate. Okay, Like the small one's not going
• 27:51
  Speaker 2: to like two up too.
• 27:52
  Speaker 3: Much time, So it's fine.
• 27:54
  Speaker 2: If the smaller one is you know, a ten percent
• 27:57
  Speaker 2: higher interest I'm sorry, ten percent lower interest eight but
• 28:01
  Speaker 2: it's gonna take you sixteen months to do, and the
• 28:02
  Speaker 2: other one's gonna take you twenty four months to do
• 28:04
  Speaker 2: when it's ten percent higher. Well, it's kind of tough
• 28:07
  Speaker 2: to say do the smaller Like it's all relative on that, Yeah, agreed, Yep,
• 28:11
  Speaker 2: it's if the smaller ones are actually quick and you
• 28:14
  Speaker 2: can then like move through them. Yeah, I think that
• 28:16
  Speaker 2: makes sense if it's well one of them is forty
• 28:19
  Speaker 2: percent of my debt and the other sixty percent, Well,
• 28:23
  Speaker 2: I don't know about that.
• 28:24
  Speaker 3: Like that's a it's a tougher Putton. Yeah.
• 28:26
  Speaker 4: From a purely mathematical perspective, tackling the high interest one
• 28:29
  Speaker 4: first makes a heck of a lot of sense. But
• 28:32
  Speaker 4: if all that happens at the end of that is
• 28:34
  Speaker 4: you wind up in more credit card debt because you
• 28:35
  Speaker 4: didn't put one of them behind you, then the math
• 28:37
  Speaker 4: behind it is irrelevant.
• 28:41
  Speaker 3: Take a quick break.
• 28:42
  Speaker 2: When we return, we've got Paul A Monica joining us
• 28:45
  Speaker 2: next o Gay Real.
• 28:46
  Speaker 1: Time Financial in Insight as news breaks. The Financial Exchange
• 28:50
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• 28:53
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• 28:55
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• 29:00
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• 29:03
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• 29:07
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• 29:09
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• 29:13
  Speaker 5: Ladies and gentlemen, the weekend.
• 29:25
  Speaker 2: As promise, we're now joined by the one, the Only,
• 29:32
  Speaker 2: Paul Monica from Barons, here to talk a little bit
• 29:35
  Speaker 2: about SpaceX. Paul, how you doing today?
• 29:38
  Speaker 6: I'm good thanks. How you guys doing.
• 29:40
  Speaker 2: We're doing well. You're flying high after that Knick's winning
• 29:42
  Speaker 2: game one, I bet.
• 29:45
  Speaker 6: Yes, indeed, look forward to tonight as well.
• 29:49
  Speaker 2: Yeah, Friday night, I know this one. It's still in
• 29:52
  Speaker 2: San Antonio for tonight, right.
• 29:54
  Speaker 6: That is correct. Yeah, I'll be back at the garden
• 29:56
  Speaker 6: this weekend, I guess.
• 29:58
  Speaker 3: Yeah.
• 29:59
  Speaker 2: So let's talk SpaceX. We've got the the IPOs a
• 30:02
  Speaker 2: week from today.
• 30:03
  Speaker 3: Correct.
• 30:04
  Speaker 6: Correct?
• 30:05
  Speaker 2: And I'm curious, because you you've been through a number
• 30:08
  Speaker 2: of these IPO cycles. Have you seen any individual companies
• 30:14
  Speaker 2: that have gotten to this level of hype previously? The
• 30:18
  Speaker 2: only one that I know, and again like the only
• 30:21
  Speaker 2: thing that I can compare it to when Facebook went
• 30:23
  Speaker 2: public that had like so much interest as well. But
• 30:27
  Speaker 2: I'm curious to get your take just in terms of
• 30:30
  Speaker 2: overall hype and interest levels.
• 30:32
  Speaker 6: Yeah, I mean there's a difference between hype and then
• 30:36
  Speaker 6: the sheer size and scale. So to answer your question,
• 30:40
  Speaker 6: have we ever seen an IPO like this? The answer
• 30:43
  Speaker 6: clearly is no, because no company in history, say for
• 30:47
  Speaker 6: Saudi Aramco, has gone public with evaluation of this magnitude.
• 30:53
  Speaker 6: I mean, one point seventy five trillion. It's just staggering.
• 30:57
  Speaker 6: There was a lot of hype about the face Facebook
• 31:00
  Speaker 6: IPO and a lot of skepticism going into it. I mean,
• 31:02
  Speaker 6: it's it's almost comical to think now that remember when
• 31:05
  Speaker 6: Facebook went public, there were a lot of people saying, oh,
• 31:08
  Speaker 6: why did Mark Zuckerberg pay all that money for Instagram?
• 31:11
  Speaker 6: They spent too much?
• 31:12
  Speaker 3: How are they gonna pay?
• 31:14
  Speaker 6: Yeah, exactly, you're gonna Pavot the mobile that'll never work.
• 31:16
  Speaker 6: Everyone's still on their desktop. Facebook. Uh yeah, he's having
• 31:20
  Speaker 6: the last laugh there.
• 31:21
  Speaker 1: Uh.
• 31:22
  Speaker 6: And then Alphabet Google. You know, that was a widely
• 31:25
  Speaker 6: hyped IPO, but neither of them were selling at evaluation
• 31:31
  Speaker 6: uh you know, near their you know, the trillion dollar
• 31:34
  Speaker 6: levels that they're they're at now. So this is unprecedented
• 31:38
  Speaker 6: for SpaceX to be looking to go public at the
• 31:41
  Speaker 6: valuation it's already at, because it's already appreciated so much
• 31:45
  Speaker 6: the private marks.
• 31:46
  Speaker 2: What are different brokerage firms saying about the ability of
• 31:51
  Speaker 2: the IPO for retail investors who want to get involved, like, what,
• 31:57
  Speaker 2: what what avenues are available? Is just going to be hey,
• 32:00
  Speaker 2: you got to buy at the market price after at IPOs?
• 32:02
  Speaker 2: Is there any way for retail investors to get in, like,
• 32:05
  Speaker 2: what's what's the situation.
• 32:06
  Speaker 3: Yeah, you have.
• 32:07
  Speaker 6: Five brokerages that are working on allocations for individual investors,
• 32:12
  Speaker 6: and it sounds like, you know, Elon Musk really wants
• 32:14
  Speaker 6: retail to be a part of it, so that there's
• 32:16
  Speaker 6: going to be a bigger portion than usual allocated to retail.
• 32:21
  Speaker 6: I still don't think that means there's a great chance
• 32:23
  Speaker 6: people will get as much as they want, because the
• 32:27
  Speaker 6: demand is probably going to be extremely high. But Fidelity, Schwab,
• 32:34
  Speaker 6: Robin Hood, so Far, and Morgan Stanley's E Trade are
• 32:38
  Speaker 6: the five brokers that will have retail allocations. It's interesting Fidelity.
• 32:43
  Speaker 6: I wrote a story earlier this week about how Fidelity
• 32:46
  Speaker 6: usually has a five hundred thousand dollars minimum for most
• 32:52
  Speaker 6: IPOs that you need in a brokerage account. They've relaxed
• 32:55
  Speaker 6: that and cut it to two thousand. So that's clearly
• 32:59
  Speaker 6: for just for SpaceX, So clearly they're expecting and trying
• 33:03
  Speaker 6: to get retail investor demand for this operator. At last check,
• 33:08
  Speaker 6: Schwab still had a one hundred thousand dollars minimum account balance.
• 33:12
  Speaker 6: That's the highest then of the five. Because e Trade,
• 33:16
  Speaker 6: Robinhood and so Far say that they do not are
• 33:20
  Speaker 6: not going to have minimum balance requirements. Again, that doesn't
• 33:23
  Speaker 6: mean you're going to get an allocation Robin who says
• 33:27
  Speaker 6: it's going to be random in terms of how they
• 33:29
  Speaker 6: allocate it. But I think there's a lot of speculation
• 33:31
  Speaker 6: after the other brokerages. If you have higher balances, you
• 33:35
  Speaker 6: probably have a better chance. If you are a more
• 33:38
  Speaker 6: active trader, you probably have a a better chance as well.
• 33:42
  Speaker 6: And in the case of so far and I suspect
• 33:44
  Speaker 6: this is going to be with the other brokerages as well.
• 33:47
  Speaker 6: They are strongly urging investors to not flip this IPO.
• 33:52
  Speaker 3: If you get a piece, they don't want.
• 33:54
  Speaker 6: You selling it immediately or in the case of you know, immediately,
• 33:59
  Speaker 6: in this respect, that probably means within the first thirty
• 34:01
  Speaker 6: days of trading, because that I think sends you know,
• 34:05
  Speaker 6: a signal that you know, you might be more of
• 34:08
  Speaker 6: a speculative trader or investor as opposed to a long
• 34:11
  Speaker 6: term buy and hold investor, which is the type of
• 34:14
  Speaker 6: investor that I think Elon wants for SpaceX. So if
• 34:18
  Speaker 6: you get an allocation, be careful, don't flip it, because
• 34:22
  Speaker 6: then the chances of you getting an allocation for another
• 34:24
  Speaker 6: hot IPO like anthropic or open aye down the road
• 34:28
  Speaker 6: will diminish because those brokers don't want to see people
• 34:32
  Speaker 6: flipping these you know, the space X IPM.
• 34:34
  Speaker 2: Can we talk about a couple of things here. First,
• 34:38
  Speaker 2: why do they want to hire retail participation in this?
• 34:42
  Speaker 1: Like?
• 34:42
  Speaker 3: What what would be the reasons for that?
• 34:45
  Speaker 6: Yeah, I think that, you know, Elon Musk is savvy
• 34:49
  Speaker 6: enough to know that there are a lot of fanboys
• 34:54
  Speaker 6: and fan girls, if you will, that love all things Elon.
• 34:59
  Speaker 6: They are fans of Tesla, they are fans of SpaceX
• 35:03
  Speaker 6: and some of Musk's other ventures, which now includes X
• 35:07
  Speaker 6: the former Twitter. So I think Musk realizes that trying
• 35:13
  Speaker 6: to have retail interest will go a long way towards also,
• 35:19
  Speaker 6: you know, keeping the company in the eye of you know,
• 35:23
  Speaker 6: retail traders going forward. If there is this perception that
• 35:26
  Speaker 6: the only people in the world that will be able
• 35:29
  Speaker 6: to have access to SpaceX stock are the large institutional
• 35:34
  Speaker 6: money managers, then that might alienate some of the retail
• 35:38
  Speaker 6: investors that have been part of this kind of meme
• 35:41
  Speaker 6: stock revolution of the past couple of years, which you know,
• 35:44
  Speaker 6: I think Tesla has been caught up in every now
• 35:46
  Speaker 6: and then so I think it's a savvy move on
• 35:49
  Speaker 6: Musk's part. And you know, again, I think Fidelity recognizes
• 35:53
  Speaker 6: that having a five hundred thousand dollars minimum balance are
• 35:57
  Speaker 6: that you know, excludes a lot of people who have
• 36:00
  Speaker 6: smaller budgets to be invested.
• 36:04
  Speaker 2: Next, who is the broker that said if you get
• 36:07
  Speaker 2: this allocation, don't try to flip it.
• 36:11
  Speaker 6: SOAPI specifically said that, I think Fidelity has on their
• 36:15
  Speaker 6: website some guidelines for the SPACEXIPO.
• 36:20
  Speaker 3: You know, that includes the new two.
• 36:22
  Speaker 6: Thousand dollars minimum where they discourage people from flipping as well. So,
• 36:27
  Speaker 6: you know, I think that's going to be, you know,
• 36:29
  Speaker 6: something that all the brokerages are going to discourage. But
• 36:33
  Speaker 6: you know, finally, I don't know if you want to
• 36:34
  Speaker 6: ask about this, but I think it's worth noting that
• 36:37
  Speaker 6: there are some funds ETFs and other types of funds
• 36:41
  Speaker 6: that already have SpaceX at the pre IPO levels that
• 36:46
  Speaker 6: might be a better, slightly safer way to get in,
• 36:50
  Speaker 6: although a lot of those funds have already run up
• 36:52
  Speaker 6: as well because of the SpaceX tide.
• 36:54
  Speaker 3: Paul, appreciate you joining us, Thanks so much for the time.
• 36:57
  Speaker 6: Thanks a lot. I have a good one.
• 36:59
  Speaker 4: Guys.
• 36:59
  Speaker 3: It's from Barons.
• 37:03
  Speaker 2: Look, maybe I've just seen the end of boiler Room
• 37:05
  Speaker 2: too many times, but I'm just picturing the scene where
• 37:10
  Speaker 2: he walks into the CEO's office and he's like, Okay,
• 37:12
  Speaker 2: you can have the IPO allocation, but tell me you
• 37:14
  Speaker 2: can't sell like good luck?
• 37:18
  Speaker 3: Doesn't it?
• 37:19
  Speaker 4: Just that doesn't feel good when someone's like, you can
• 37:22
  Speaker 4: have this, but you're not allowed to sell it or
• 37:25
  Speaker 4: will punish you if you do like that, that doesn't
• 37:28
  Speaker 4: feel great. I'm not saying like there's nothing scammy going
• 37:32
  Speaker 4: on here, It's just like, why can't I sell it
• 37:34
  Speaker 4: if it makes money?
• 37:36
  Speaker 3: Twenty seconds?
• 37:36
  Speaker 4: Can we talk about something about the Nicks Spurs. Yeah,
• 37:41
  Speaker 4: get in the door on stub Hub right now for
• 37:44
  Speaker 4: the Monday night game at Madison Square Garden. Eight grand
• 37:47
  Speaker 4: a ticket for if you want to get in the
• 37:49
  Speaker 4: door for tonight in San Antonio, well, I guess twelve hundred,
• 37:54
  Speaker 4: six hundred and forty dollars. Yeah, you can fly for it. Well,
• 37:56
  Speaker 4: you can't get there from New York right now? Is
• 37:58
  Speaker 4: the problem? You cannot get a NonStop fl or Not
• 38:01
  Speaker 4: about the morning, But it's about being I know, it's
• 38:03
  Speaker 4: about being seen.
• 38:04
  Speaker 3: It's not being seen.
• 38:06
  Speaker 2: It's about being in the garden first, about being seen. Yeah,
• 38:12
  Speaker 2: but Ben Stiller can afford the tickets, shall Let's take
• 38:16
  Speaker 2: a quick break here for the entire weekend. Hope you
• 38:19
  Speaker 2: all have a great one, and we'll see you back
• 38:21
  Speaker 2: here on Monday.