June 11, 2024 • 36 mins
Mike Armstrong and Paul Lane wonder what happened to the supposed retail apocalypse. Pimco warns of more regional bank failures on property pain. The stock market rally has been all about large caps. As banking moves online, branch design takes cues from Starbucks. The postal service's $40B overhaul is off to a rough start.
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(01:07):
Exchange with Mike Armstrong and Paul Lane. Good morning, Good morning, and
welcome back to the Financial Exchange.Sorry my headphones are sounding a little bit
off, but welcome back to theFinancial Exchange. It's Mike Armstrong, Paul
Lane and Ben Kitchen with you ona Tuesday morning ahead of a Federal Reserve
meeting tomorrow, as well as aprint on inflation. We'll get the consumer
(01:29):
Price Index tomorrow morning at eight thirty. Expectations for all prices is a zero
point one percent increase that would makethe year over year rage of inflation hit
about three point four percent. Coreprices if expected to increase. When you
strip out the food and energy,which have been a bit of a drag
on inflation recently, you will seeprices increase by zero point three percent.
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According to the average by economists thatwere pulled. The core prices still expected
to increase by three and a halfpercent. It's the Federal Reserve in this
conundrum where inflation has dramatically decreased fromthe highest scene back in twenty twenty two,
however still well above their target levelplay of price increases, which is
for that two percent increase level andwhile they don't look at CPI as their
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preferred measure of inflation. Even thePCE numbers that are getting printed are still
in the high twos low threes,so not quite achieving their goals. Yet.
Markets are staging a bit of aturnaround in early trading here. We
now have the NASDAC up twenty fivepoints, or fifteen hundreds of a percent,
the SMP down eleven points, whichwould be a fifth of a percent,
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and the Dow Jones Industrial Average offtwo hundred points about half of a
percent. In early trading here,Apple moving the markets up as a whole,
still one of the largest companies outthere, if not the largest,
up this morning about five and aquarter percent after the release of their partnership
with Chat, GPT and open aiin regards to their phone adding a bit
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of a boost today up to twohundred and three dollars per share, which,
if I'm not mistaken, is anall time high on Apple share price.
So that was the one piece wewere talking about yesterday when it came
to Apple, was you know,all these articles being read about, oh,
the pressure is really on Apple toprove something when it comes to you
know, open ai and artificial intelligenceand catch up, and Jack and I
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are looking at each other. Thisis a company whose stock price is off
like one and a half percent fromall time highs. Who exactly is asking
these questions, because clearly it's notshareholders, right like you know, Southwest
has lost fifty percent of its valuein the last three years. Investors are
asking them tough questions. Nobody's askingApple tough questions right now, but nonetheless
responding yesterday with a rollout of anew AI system on their iPhones. Percent
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on the news, I guess exactly. Speaking of I think kind of unexpected
stories. Retail staging a bit ofa comeback right now, or perhaps just
a right sizing of the retail landscape. Vacancy, according to the New York
Times is the lowest it's been intwo decades, at five point four percent.
According to a recent report, propertiesare thriving even as you know retailers
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like Macy's are shuttering stores. Andobviously we've had a lot of large anchor
chains go belly up over the lastfew well decade, decade and a half.
And this runs directly in contrast toa lot of the stories I remember
from the beginning of COVID, right, which is, hey, is this
the death of in person shopping?You know? Are we just? You
know, so many more people areused to shopping online now And that part's
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definitely true, right, Like howmany people do you know, Paul,
who you know? Let's focus onfolks you know, maybe seventy and older
who had never shopped online before andlearned how to do it during COVID.
For me, it was a lotof people I knew in that age now
US adoption. Yeah, And youcould see by the transaction vallume e commerce
got up to I believe close totwenty five percent of all transactions, and
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I don't know where it sits today, but certainly a huge surge A decade's
worth of e commerce adoption, probablycondensed down to a couple of year period.
So you know, there's a fewquestions to this. One would be
how much of this is real demandfrom tenants to be in these spaces versus
you know, how many of thesecenters have just shut down and either been
converted or demolished. I think ofa few right off the top of my
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head. There's the uh, Ithink it's the crystal mall down in the
water Waterford, Connecticut area that's shutdown. There's the uh, what's the
one over on Root nine in theBoston area. I think that's Brookline or
Chestnut Hill that converted a few yearsmedical offices. So there's been a lot
of that over the last few years, of these of these buildings finding new
purpose, and so I would imaginesome of it as a overall net decrease
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in shopping square footage across the country. But for this they hit a multi
decade low of vacancy rates. Thatdoes say something, and I think it
speaks something to about the strength ofthe consumer. Maybe it doesn't speak directly
to you know, preferences, becausehey, the economy might just be ripping
on all cylinders right now. Andso even if preferences for in person shopping
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are lower than they were a coupledecades ago, they're still floating because spending
levels have just been so high.It's a repositioning of what the consumer wants.
It's more of an experiential sort ofdriven mantra for these shopping centers rather
than gone are the days. Mikeof the Machi's, the Macy's shopping center
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in the mall that takes up thousandsof square feet in a mall. Because
now, for the most part,and I'm generalizing here, apparel and food,
a lot of that is driven eitheryou know, directly at your grocery
store, which actually those are beingbuilt into some of these shopping centers here.
The shopping center always is going towant traffic, and certainly a grocery
store would do that. But thisidea of you know, these Abercamie and
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Fitches, these you know Forever twentyone, these physical store locations that have
so much in the wave square footage, that is a bygone era because there's
so much apparel that you can justpurchase online instead. But in its place
is more restaurants, more of ideaslike pickleball acts, throwing, experiential sort
of venues that will bring people inand perhaps will allow for them to shop
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at other places at their convenience.But what's bringing them in the door is
what they're going to do rather thanyou know, going to buy something.
Yeah, I think it's been amixed bag on some of those things.
I mean, we talked to yesterdayabout how landlords are really favoring restaurants right
now, and that just seems likea dangerous game to play because few businesses
fail as spectacularly and frequently as restaurants. So see how that goes long term.
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But I think about a local shoppingmall around here. They put a
Wegmans into one of the anchor spotsand lasted three years, and then that
thing closed out and Wegmans said,yeah, no, thank you, this
isn't really working for us. Sothey're testing new things out. Some of
it's working. The other thing thatjust sticks with me on this is,
you know, shopping malls. We'resupposed to just be the demise of the
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American real estate market, and everyall anybody wanted to talk about it in
the last decade. We'll look outfor those shopping malls. They're doing just
fine. They didn't sink the economy, they didn't destroy the real estate market,
and they're sitting at multi decade lowsin terms of vacancies right now.
So offices next. Yeah, SoI mean again, That's where I'm going
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with this is now everybody's so convincedthat offices are going to cause the next
recession and be this long term dragon the economy. Maybe they're right,
right, I'm not saying anybody iswrong about that. I don't. I
genuinely don't know. But it's interestingme to take a look at this story
of oh, we've got way toomuch shopping cenator square footage. I myself
have talked about how I think whenI looked at it. Last the square
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footage per capita of retail space inthe United States was something like twice as
high as any other country in theworld. I think Canada was second,
and it was still like half ofthese. Again, I'm looking at square
footage per person in the country,and it was something like twice even Canada's.
I said, man, maybe thatjust needs to correct, and it
hasn't. We still have more squarefootage per capita of shopping space than any
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other country in the world, butthey seem to be again, comparatively healthy
at this point in time. Sowill office space follow a similar path.
We've talked about all the challenges inconverting that to something else, and I
don't know what you do with afifty story office tower other than put offices
in it. But look, shoppingmalls at least temporarily seem to have figured
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some of that stuff out. I'vealways been a proponent that we're at fifty
year lows in unemployment. The pendulum. At some point we'll swim back the
other way. I'm not saying thatoffices will be the best investment, but
there will become a time where theremote work will subside a little bit and
there'll be more focus on office speakingof which, like you said, recover
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these stories almost every week, butPIMCO is warning of more US regional bank
failure on exactly what we're talking about, which would be commercial office space primarily.
They also cite malls as a problem, which again apparently John Murray didn't
read the last story that we werejust covering. But to be clear about
this one, PIMCO probably benefits ifthis happens, and so again important to
(10:13):
kind of think about these things andread through beyond the headlines because the quote
from here from the PIMCO guy thatwe're talking about here quote, as stress
loans grow due to maturities, however, we expect that banks will start selling
these more challenged loans to reduce theirtroubled loan exposure, adding that his team
had been snapping up cre loans offloadedby some large US banks for the past
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eighteen months, so Sometimes you writeit. You know, a story like
this comes up and you say,okay, you know this, this independent
expert is talking about how banks aregoing to get into more trouble because of
commercial office space. Sometimes you readit and you say, okay, So
John, to be clear, areyou cheering this on? Because it seems
as though PIMCO would financially benefit ifmore of these regional banks did have to
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offload some of their loans, andso yeah, call into question a little.
They are so distressed that we findthem attractive from a buying perspective.
Yeah. Sure, hope more ofthese banks go belly up because we are
getting a steal on these loans.It seems to be some of the message
here breaking business and financial news firstthroughout the day, only here on the
(11:18):
Financial Exchange Radio Network. Missed oneof our shows, Catch up anytime by
asking your Alexis Smart speaker to playthe Financial Exchange. This is the Financial
Exchange Radio Network. A quick bitof breaking non financial news. Hunter Biden
has been found guilty of gun chargesby a federal court jury in Delaware.
Is becoming the first child of asitting US president to be convicted of crimes
(11:41):
in I'm sure we'll have a lotmore to learn about that in the coming
days. Not likely something we'll becovering on this show, but that is
the breaking news out of Delaware thismorning. The stock market rally this year.
We've talked about this once or twice. Paul has been in well,
(12:01):
almost entirely large cap. In fact, the differential between how large cap stocks
and small cap stocks are performing thisyear in particular has been pretty historic in
terms of that divergence and reasons forthis abound. People call out all sorts
of different reasons for why this maybe, and I'll be the first to
(12:24):
admit that other than observing the differenceand acknowledging its existence, I struggle myself
to come up with a clear,cohesive theory on why this is distinctly happening.
I've got plenty of, you know, potential theories. I just don't
know that there's any evidence to supportone versus the other. But to be
(12:45):
clear here, a year to date, the average turn on companies with one
trillion dollars plus of market capitalization hasbeen forty point nine percent. So thanks,
that's that's from Bespoke investment groups.Is that data? That's yeah,
like Paul mentioned mostly in video,whereas companies with less than one trillion dollars
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dollars worth of market capitalization are upless than half of one percent year to
date, of less than half ofone percent. Wow, So I mean
talk about concentration here. You've gota pretty significant portion of these returns coming
from very large companies. And ifyou break this out into de siles here,
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so let's see what did they whatdid they do here? This is
again by Bespoke. If you breakout the fifty largest stocks in the S
and P five hundred and then dothat with every fifty companies here, the
smallest fifty have declined by seven percent, whereas the largest fifty have increased by
fifteen point three percent. Again,this is data from Bespoke Investment in Group,
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and it follows a pretty clear trendline here if you look at it
from you know, scaling up withfew exceptions. The larger the company,
the better of the return this year. And I wonder if you have any
theory. One theory that's been floatedhas been the cost of debt. And
we talked about earlier on the program. How if your Microsoft or Apple higher
interest rates really haven't negatively impacted verymuch because you already locked in your interest
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rates back in twenty twenty and sohigher rates haven't been much of a problem.
I floated that theory to Fandetti,and he pulled up some data.
And the problem with that is thatin the seventies and eighties you had a
very strong period of outperformance by smallercap companies, and so kind of ran
aground that theory that hey, youknow, because of borrowing costs is why
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smaller companies are underperforming. This isfascinating me because it's a really longer term
trend than just this year. Mic, Yeah, look back, and I
love Mark VENDITTI actually did this usingMorningstad data. If you had invested one
dollar in large caps and small capsin two thousand through twenty twenty three,
so over a twenty three year period, that one dollar if it was small
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craps small caps, would grow toeight dollars. If it that one dollars
invested in large caps, it wouldgrow to about four point seven almost five
dollars, So one dollar to eightdollars for the small caps, one to
five for the large caps. However, if you look at the last thirteen
years from twenty ten post financial crisisthrough twenty twenty three, if you put
one dollar into large caps, thatdollar grew to about six dollars. Put
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into small caps grew to four dollars. So there's been this divergence that has
gone on over the last ten fifteenyears, and theories that I flowed in
my head that from an investing standpoint, it's always been critical from a long
term perspective to have exposure to smallcaps, because if you look back one
hundred years, the divergence that Imentioned gets even wider and stall cats outperform
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even greater. I just wonder ifthe public markets aren't being used as readily
early on. You have so manyof these companies that come out at IPOs
at such large valuations. I mean, I was reading today when we were
doing some of the open AI stuff. They're value to eighty billion dollars.
It's not a public company yet atall. You've got Facebook when they came
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out public back in twenty twelve.We can go on and on a list
of others that when they were goingpublic, typically small caps, and I
have to look at the valuations here. I'm sure they've been updated. Was
between one and three billion years agowhen I was looking at it. Maybe
it's a higher number now with inflation, but values of these companies going public
are not falling often in that buck, and I just wonder if the quality
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of companies is the same that itwas, you know, thirty years ago.
So I've seen different data sources notatedifferent things, But the number of
publicly traded companies in the United Statespeaked somewhere in the late nineties to early
two thousands. I've seen one numberthat was ninety six. One number there
was two thousand and two in termsof the peak of publicly traded companies.
But since then it's been on apretty steady decline, and I think it
(16:48):
hasn't I think it's below nineteen eightylevels of publicly traded companies. So certainly
I think private equity markets could bea piece of this, you know.
The other piece here just could bethat, Hey, our laws in the
United States, due to really poorperformance from the federal government and breaking up
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big companies that are considered monopolies bymany has been really unsuccessful over the last
two decades. Right the last bigbreakup of a major tech company you've had
was Microsoft in ninety something, right, So that could be the other piece
of this here is that our lawson the books today do a much worse
job of addressing monopolistic power than theydid in the seventies, eighties, and
(17:33):
nineties. You know, between thefewer public trade companies and our inability to
break up anti competitive behavior may explainsome of them, and the mergers and
acquisitions, which speaks to your pointabout how many companies were publicly listed at
one point twenty years ago versus whoare listed now, Because think about the
amount of mergers that we talk abouton a daily basis. It was quiet
over twenty three but the last fiveyears there's a lot of them out there.
(18:11):
Bringing the latest financial news straight toyour radio every day. It's the
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(18:33):
I don't go into bank branches veryfrequently, and I don't know that
either of you do. So youknow, if you have no insight on
this, then just let me know. But have you guys noticed that it
does seem that bank branches are justlooking more and more bougie, much sleeker.
Yes, yes, I miss thedays of just a grungy old bank
branch with the stained, dropped ceilingand you know, everything's behind plexiglass and
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just an unhappy teller behind there that'sthat's ready to work with you. And
that's not really what the experience isthese days. Like I was at a
bank from America, jeez, probablylike a year and a half ago,
and yeah, same story. Iwalked in. They asked me if I
had an appointment. I didn't.I didn't really realize I needed an appointment
for what I was doing. Saton a couch until somebody came and sat
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with me, and they were like, here, I'm you know, let's
bring you back here. We cangive me your account number and we'll just
take get this taken care of foryou. But very different experience compared to
a few years ago. And Iwonder in your mind, what's driving it.
I mean, certainly I can't bethe only person that's going into bank
branches less frequently. Nobody's using cashas much as they did a few decades
ago. So it's a response tothat is it just a response to I
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mean, these days, when Igo into a bank, it's less because
I need to make a transaction andmore because I need something complicated. And
for a lot of folks, theyprobably need advice on that complicated type of
transaction. Yeah, to me,our whole generation in general, it seems
like would have absolutely no reason orinclination to go to a bank branch.
I put myself in that camp.I don't know if you guys fall in
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there as well. I think fora lot of people though, like you
may be getting financial advice from yourbank, you may be going in because
you need advice on a maturing CD. You know, those are the only
reasons you go into one. Well, that's what it seems like. This
pivot point is right. It's moreof a focus on a meeting place,
a sort of extension of the advisorysort of business, and less so focus
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on deposits and withdrawals with ATMs atdrive throughs or just outside of your physical
brand's location, and limited use ofcash MIC to your point with Venmo and
just electronic payments in general. Iwould absolutely agree that if you look at
the teller transaction cited in this reportby City Group, the volume was down
forty percent in terms of what they'veseen there, So that is the focus
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much more now. It's appointments foradvisory consultation versus transaction. And almost every
bank branch that I've been into overthe last few years has had a financial
advisor located in them in some way, shape or form. Whether it's it
whether it's a broker or a financialadvisor, good question, and you check.
But you know, if it's aBank America branch, then you've got
a Meryl broker. If it's aI mean, most of the big banks
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these days have their own advisory business, Like even even Citizens, which is
not a huge bank but a prettybig regional one, has their own dedicated
financial advisor. It's a no brainor cross sell. If someone's sitting on,
you know, hundreds of thousands ofdollars in a checking account making low
bearing interest, it's so easy tojust say, gee, we have an
advisor right here, why don't yougo talk with them? And most people
that you talk with that have alarge balance in a bank, the bank
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teller is going to absolutely refer itthat way. It just makes makes sense.
But it is interesting to me.I thought the branches would just die
off. When I interned at Bankof America, like ten years ago,
there was a conscious effort to lessenthe amount of branches that they have penantry,
and now it's going the other direction. Yeah, Bank of America.
Both Bank of America and JP MorganChase pardon me, are expanding branch locations.
(22:03):
And JP Morgan Chase just came toBoston for the first time ever.
There's a branch in my town nowthe same thing in my town as well.
They're making a real intended effort tobe more of a presence here,
which is dominated so much by Bankof America. Revocable and irrevocable trusts are
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exchange show dot com. The proceedingwas paid for and the views expressed are
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other and are not affiliated. I'mgonna go a bit off script here and
do something we don't usual you do. Lois, can you hear me?
Give me a thumbs up? Okay, Lois can hear me? Lois is
our office manager here, and Ihave no experience working with the United States
(23:37):
Postal Service, so I'm gonna askher instead because she does have a lot
of experience. Would you say experiencehas gotten better or worse over the last
twelve months. That's a big thumbdown in terms of service from the United
States Postal Service. It's one hundredpercent gotten worse. I deal with this
in a part time side business Ihave where I'm constantly going to the post
office and getting packages in and shippingthem out. It's gotten exponentially worse in
(24:00):
the last eight, nine, tenmonths. Wow, unbelievably bad. So
the Postal Services undergoing a fairly significantoverhaul, and part of the reason is,
according to the head of the PostalAgency, Lewis to Joy, the
agency cannot afford to pause the overhaul, adding that if the Postal Service stays
put and pays all its bills,it will run out of money in three
(24:21):
to four years. So one moregovernment agency that can't pay its bills according
to things, and you know,they're doing a number of different things to
try and be more efficient here.They've also raised the price of a stamp.
What's a stamp going for these days? Costs seventy three cents for a
first class stamp these days, it'sa five cent increase from the previous price
of sixty eight. I don't againknow where they are competitive or not competitive
(24:45):
on price, but the idea thatI can ship a bunch of my Christmas
cards anywhere across the country, includingHawaii for seventy three cents would probably seem
like some low hanging fruit to me, Like, I know, you don't
have a lot of ability to youknow, increase prices if you're sending an
overnight package, right because if youjust get too expensive, I'm going to
(25:07):
go to FedEx, I'm going togo to UPS. But nobody in nobody
in private business is willing to senda letter for me across the continental or
non continental US for seventy three cents. So I know that there's a number
of people who are shaking their headand saying no. That's why the postal
service was set up, was sothat we could communicate with more tougher to
(25:32):
reach areas. And every town's gota post office and and that's the whole
benefit to this. Well, thatwas really important in the eighteen hundreds.
I'm going to say that that's notwhere I want my tax dollars going in
twenty twenty four, because of thisamazing new invention that you may have heard
of called the Internet, which allowsme to pretty readily communicate with people.
So again, my only exper todo it in our world, though mailing
(26:00):
business. It's still still part ofthe game with it, and it should
not cost me seventy three cents asa business owner to ship a letter from
this place to a customer in youknow, rural New Hampshire. Even you're
right, you're right, it's aneasy post I wonder you're losing money.
It's an easy punching bag to goafter the post office in terms of its
failure to adapt and make changes.But it's pretty unbelievable the prices that they
(26:23):
are what you can get. Yeah, of course it is again like as
a business and maybe that's what Ihate this idea because I don't think you
should, you know, penalize thebusinesses more heavily. But that is who's
filling up your mailbox with a bunchof junk? Is you know? If
you've got a corporate idea that you'vegot a post office relationship with, boost
up the price on regular mail.There. If you really want to subsidize
(26:45):
me sending my Christmas cards to Hawaiievery year, then you can still do
that and just charge businesses. Theyare a great scapegoat though, if you
ever are laid on sending something outto say, hey, probably lost the
mail Gramma didn't get her birthday car. Just it's the mill darned to joy
in the post office. I sentthat thing week ago. Yeah, let's
stay at quick Break. When wecome back, we're gonna have a little
(27:07):
bit of stacker. Let next onthe Financial Exchange business and financial news affecting
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(27:52):
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(28:18):
Typer For a bit of STACKERU,let hear, Paul, what do you
have for us to kick things off? Many of us are following the NBA
Finals with the Boston Celtics up twozero against the Dallas Mavericks. But the
WNBA is reporting record TV viewership forthe twenty twenty four season and its highest
game attendance in twenty six years.The WNBA is now averaging one point three
million viewers per game, tripling theirnumbers from last year. And it all
(28:42):
comes back to a rookie sensation,Caitlin Clark, who has come into the
league from Iowa. And there hasjust been a firestorm of media covers on
the sports side of the WNBA,both in positive and negative regards, which
is sports talk in general. Welcometo that world. But it's just is
incredible how one particular player can reallyraise the whole level of a league.
(29:07):
And the controversy that started up recentlyin regards to Kailyn Clark is her omission
from the US Women's Olympics team forParis in twenty twenty four, many people
pushing back saying that she would sheshould absolutely be on the roster. If
she's not good enough, she shouldbe on the roster. That's the whole
thing is that ultimately, these entitiesare businesses when it comes down to it.
They are entertainment businesses, but theyare businesses and you want as many
(29:32):
eyeballs on your product as possible.And whether or not she was going to
get minutes and play for the team, that was the argument that was made,
is that she wouldn't really pay thatmuch. But someone made a counterpoint
that I saw the other day,sold doesn't the US blow all these teams
out by twenty or thirty points anyway? You don't think they have. I
don't think the US women have everlost, So you're basically saying that,
so why couldn't they find tailent?Ark is rudy, No, no,
(29:56):
no, no. I actually sawsomething on this, and you know,
far be it from me from beingany sort of sports commentary. But there's
a tweet from who was or sheplays for Chicago, Angel Reese, you
know, was fighting back on theclaim that you know, the only reason
for the growth and popularity was CaitlynClark. And so somebody took a look
(30:21):
at the attendance at non Caitlin ClarkWNBA games and Caitlin Clark ones. And
so seventy five hundred, four thousand, ten thousand, seven thousand, three
thousand, ten thousand, seven thousandwere the attendants for the non Kaitlin Clark
games over the past weekend and theCaitlin Clark games seventeen thousand and seventeen thousand,
So double a triple. Yeah.Statistics, Well, there's lies,
(30:45):
damn lies and statistics. So maybeit was something else, But it seems
as though Caitlin Clark is doubling attendanceat her games for Indiana. Is it
Indiana? Yes, Anti woke shareare going after corporate boards, and boards
are reacting. Target has dramatically changedwhat they have in their stores. You've
(31:07):
seen changes from bud Light and othercompanies the direction that they're going on.
All this, by the way,you may find interesting. I mean,
the reason that all of the adson the Super Bowl are incredibly boring is
mainly because of stuff like this,is that you can't say anything as a
corporation without pissing off half your customers. But with advertising being so nuanced today
(31:30):
and being so customizable, they're basicallydoing the same type of advertising and they're
just directing who sees it. Right, So if you want to do an
advertisement that's really in favor of PrideMonth for June, you just pick out
customers that you know are not goingto be offended by a Pride Month ad
and you deliver it to their cellphones, their Facebook feeds and not you
(31:52):
know, people that follow conservative mediafor example. So this stuff isn't going
away, like trust me, come, but they still want to get down
to your level and feed you topicsthat are interesting to you. They're just
so easily able to customize it basedon your browsing history that you aren't going
to see the topic that offends you. So that's my main takeaway is,
(32:13):
yeah, you know bud Light willhave a conservative targeted ad, a religious
targeted ad, a non religious,a trans gay like, they will customize
everything and you will never see theones that you're not supposed to see.
Is how they're going to continue toadvertise it. This isn't new, They've
been doing this for quite some time. You know, you think that bud
(32:34):
Lights shouldn't have to tailor their adstoo much because it fundamentally just comes back
to drink our beer at the endof the day. Yeah, but I'm
not disagreeing that there's a need forthat in this climate, but it should
be a little simpler. And maybeI am just nostalgic for the two thousands
and nineties where you just had thosecores Light ads and those bud Light ads
(32:54):
that were very simple. Frogs.You just bring back bears for Coca Cola,
Like it just seems like the CocaCola polar bears hated them. Yeah,
what's wrong with that? Just soboring. It's just a family of
polar bears drinking Coca Cola. There'sa whole lot worse of ads out there,
Like, come on, give mesomething. It's better than the Medes.
(33:17):
Clydes are worse. The Clyde Stalesaren't that great. I mean,
I got nothing against polar bears,but you just you've told me nothing with
this advertisement other than some nearly extinctbears like your product? What do you
have? What else do you havefor us, Paul? I mean,
anything else? Catch your eye instack ro letter you want me? Pat
Sajak, the iconic Wheel of Fortunehost, says farewell after more than forty
(33:42):
years Wheel of Fortune just two legendaryhosts, Sajack and uh Bob Barker for
prices right over the last five tenyears, hanging it up after a phenomenal
career. Sajac took over in nineteeneighty one and has been a mainstay for
American TVs for millions of viewers foryears and years. And uh, I
don't know if you'll have I guessJeopardy will continue to carry on the legacy
(34:05):
and Wheel Fortune these things are stillon. But uh, Jeopardy they'll still,
they'll still. I don't think they'regoing anywhere. I'm sorry, I'm
having a total brain farm. Whois the Jeopardy host who passed away?
Trebek? Right? Yeah? Whatdo they have a host plan already set
up for Wheel of Fortune? Who'sgoing to tryan Seacrest? Ryan Seacrest is
(34:27):
taking over? Oh? I didn'tknow that. Doesn't he have enough jobs
already? Apparently? Well, no, he's only busy one day a year
on New Year's Eve. No,No, it doesn't. He host a
radio show radio show. He's involvedwith the American Idols still anymore. I
have no idea on I don't knowif he's on. You're a live radio
host, so okay, you've gotlike three hours maxim day. This is
(34:51):
a lot of work. I don'tdisagree. But we all have day jobs
too. It's kind of a parttime gig. I'm going to look up
what else Ryan's secret does. Ifeel like he's got a lot on his
plate. He does a lot ofdifferent hats. Okay, Paul, taking
a look here at markets. TheDow Jones Industrial Average off two hundred and
ten points, approximately one half ofone percent, SMP off about fifteen points
(35:15):
or a quarter of a percent,and the NASDAC basically flat for the day,
five one hundreds of a percent off. It's yesterday close. The rustle
two thousand to off a little bitless than nine tenths of a percent.
As we approach the noon hour hereyield in the tenure Treasury's sitting at four
point four five one percent. Asare reminder of folks, eight thirty am
(35:35):
tomorrow will have a CPI release.Two thirty pm tomorrow, Jerome Powell and
the Federal Reserve will be addressing thenation with their press conference and their interest
rates setting policy. Will be backat it covering all that and more.
Have a great afternoon, enjoy thiswonderful ten day forecast, and we will
talk to you soon
The Financial Exchanges produced by Money MattersRadio and is hosted by employees of the
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(00:20):
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(01:07):
Exchange with Mike Armstrong and Paul Lane. Good morning, Good morning, and
welcome back to the Financial Exchange.Sorry my headphones are sounding a little bit
off, but welcome back to theFinancial Exchange. It's Mike Armstrong, Paul
Lane and Ben Kitchen with you ona Tuesday morning ahead of a Federal Reserve
meeting tomorrow, as well as aprint on inflation. We'll get the consumer
(01:29):
Price Index tomorrow morning at eight thirty. Expectations for all prices is a zero
point one percent increase that would makethe year over year rage of inflation hit
about three point four percent. Coreprices if expected to increase. When you
strip out the food and energy,which have been a bit of a drag
on inflation recently, you will seeprices increase by zero point three percent.
(01:52):
According to the average by economists thatwere pulled. The core prices still expected
to increase by three and a halfpercent. It's the Federal Reserve in this
conundrum where inflation has dramatically decreased fromthe highest scene back in twenty twenty two,
however still well above their target levelplay of price increases, which is
for that two percent increase level andwhile they don't look at CPI as their
(02:16):
preferred measure of inflation. Even thePCE numbers that are getting printed are still
in the high twos low threes,so not quite achieving their goals. Yet.
Markets are staging a bit of aturnaround in early trading here. We
now have the NASDAC up twenty fivepoints, or fifteen hundreds of a percent,
the SMP down eleven points, whichwould be a fifth of a percent,
(02:38):
and the Dow Jones Industrial Average offtwo hundred points about half of a
percent. In early trading here,Apple moving the markets up as a whole,
still one of the largest companies outthere, if not the largest,
up this morning about five and aquarter percent after the release of their partnership
with Chat, GPT and open aiin regards to their phone adding a bit
(03:00):
of a boost today up to twohundred and three dollars per share, which,
if I'm not mistaken, is anall time high on Apple share price.
So that was the one piece wewere talking about yesterday when it came
to Apple, was you know,all these articles being read about, oh,
the pressure is really on Apple toprove something when it comes to you
know, open ai and artificial intelligenceand catch up, and Jack and I
(03:22):
are looking at each other. Thisis a company whose stock price is off
like one and a half percent fromall time highs. Who exactly is asking
these questions, because clearly it's notshareholders, right like you know, Southwest
has lost fifty percent of its valuein the last three years. Investors are
asking them tough questions. Nobody's askingApple tough questions right now, but nonetheless
responding yesterday with a rollout of anew AI system on their iPhones. Percent
(03:46):
on the news, I guess exactly. Speaking of I think kind of unexpected
stories. Retail staging a bit ofa comeback right now, or perhaps just
a right sizing of the retail landscape. Vacancy, according to the New York
Times is the lowest it's been intwo decades, at five point four percent.
According to a recent report, propertiesare thriving even as you know retailers
(04:11):
like Macy's are shuttering stores. Andobviously we've had a lot of large anchor
chains go belly up over the lastfew well decade, decade and a half.
And this runs directly in contrast toa lot of the stories I remember
from the beginning of COVID, right, which is, hey, is this
the death of in person shopping?You know? Are we just? You
know, so many more people areused to shopping online now And that part's
(04:34):
definitely true, right, Like howmany people do you know, Paul,
who you know? Let's focus onfolks you know, maybe seventy and older
who had never shopped online before andlearned how to do it during COVID.
For me, it was a lotof people I knew in that age now
US adoption. Yeah, And youcould see by the transaction vallume e commerce
got up to I believe close totwenty five percent of all transactions, and
(04:58):
I don't know where it sits today, but certainly a huge surge A decade's
worth of e commerce adoption, probablycondensed down to a couple of year period.
So you know, there's a fewquestions to this. One would be
how much of this is real demandfrom tenants to be in these spaces versus
you know, how many of thesecenters have just shut down and either been
converted or demolished. I think ofa few right off the top of my
(05:18):
head. There's the uh, Ithink it's the crystal mall down in the
water Waterford, Connecticut area that's shutdown. There's the uh, what's the
one over on Root nine in theBoston area. I think that's Brookline or
Chestnut Hill that converted a few yearsmedical offices. So there's been a lot
of that over the last few years, of these of these buildings finding new
purpose, and so I would imaginesome of it as a overall net decrease
(05:42):
in shopping square footage across the country. But for this they hit a multi
decade low of vacancy rates. Thatdoes say something, and I think it
speaks something to about the strength ofthe consumer. Maybe it doesn't speak directly
to you know, preferences, becausehey, the economy might just be ripping
on all cylinders right now. Andso even if preferences for in person shopping
(06:03):
are lower than they were a coupledecades ago, they're still floating because spending
levels have just been so high.It's a repositioning of what the consumer wants.
It's more of an experiential sort ofdriven mantra for these shopping centers rather
than gone are the days. Mikeof the Machi's, the Macy's shopping center
(06:23):
in the mall that takes up thousandsof square feet in a mall. Because
now, for the most part,and I'm generalizing here, apparel and food,
a lot of that is driven eitheryou know, directly at your grocery
store, which actually those are beingbuilt into some of these shopping centers here.
The shopping center always is going towant traffic, and certainly a grocery
store would do that. But thisidea of you know, these Abercamie and
(06:47):
Fitches, these you know Forever twentyone, these physical store locations that have
so much in the wave square footage, that is a bygone era because there's
so much apparel that you can justpurchase online instead. But in its place
is more restaurants, more of ideaslike pickleball acts, throwing, experiential sort
of venues that will bring people inand perhaps will allow for them to shop
(07:10):
at other places at their convenience.But what's bringing them in the door is
what they're going to do rather thanyou know, going to buy something.
Yeah, I think it's been amixed bag on some of those things.
I mean, we talked to yesterdayabout how landlords are really favoring restaurants right
now, and that just seems likea dangerous game to play because few businesses
fail as spectacularly and frequently as restaurants. So see how that goes long term.
(07:34):
But I think about a local shoppingmall around here. They put a
Wegmans into one of the anchor spotsand lasted three years, and then that
thing closed out and Wegmans said,yeah, no, thank you, this
isn't really working for us. Sothey're testing new things out. Some of
it's working. The other thing thatjust sticks with me on this is,
you know, shopping malls. We'resupposed to just be the demise of the
(07:57):
American real estate market, and everyall anybody wanted to talk about it in
the last decade. We'll look outfor those shopping malls. They're doing just
fine. They didn't sink the economy, they didn't destroy the real estate market,
and they're sitting at multi decade lowsin terms of vacancies right now.
So offices next. Yeah, SoI mean again, That's where I'm going
(08:18):
with this is now everybody's so convincedthat offices are going to cause the next
recession and be this long term dragon the economy. Maybe they're right,
right, I'm not saying anybody iswrong about that. I don't. I
genuinely don't know. But it's interestingme to take a look at this story
of oh, we've got way toomuch shopping cenator square footage. I myself
have talked about how I think whenI looked at it. Last the square
(08:41):
footage per capita of retail space inthe United States was something like twice as
high as any other country in theworld. I think Canada was second,
and it was still like half ofthese. Again, I'm looking at square
footage per person in the country,and it was something like twice even Canada's.
I said, man, maybe thatjust needs to correct, and it
hasn't. We still have more squarefootage per capita of shopping space than any
(09:07):
other country in the world, butthey seem to be again, comparatively healthy
at this point in time. Sowill office space follow a similar path.
We've talked about all the challenges inconverting that to something else, and I
don't know what you do with afifty story office tower other than put offices
in it. But look, shoppingmalls at least temporarily seem to have figured
(09:28):
some of that stuff out. I'vealways been a proponent that we're at fifty
year lows in unemployment. The pendulum. At some point we'll swim back the
other way. I'm not saying thatoffices will be the best investment, but
there will become a time where theremote work will subside a little bit and
there'll be more focus on office speakingof which, like you said, recover
(09:50):
these stories almost every week, butPIMCO is warning of more US regional bank
failure on exactly what we're talking about, which would be commercial office space primarily.
They also cite malls as a problem, which again apparently John Murray didn't
read the last story that we werejust covering. But to be clear about
this one, PIMCO probably benefits ifthis happens, and so again important to
(10:13):
kind of think about these things andread through beyond the headlines because the quote
from here from the PIMCO guy thatwe're talking about here quote, as stress
loans grow due to maturities, however, we expect that banks will start selling
these more challenged loans to reduce theirtroubled loan exposure, adding that his team
had been snapping up cre loans offloadedby some large US banks for the past
(10:35):
eighteen months, so Sometimes you writeit. You know, a story like
this comes up and you say,okay, you know this, this independent
expert is talking about how banks aregoing to get into more trouble because of
commercial office space. Sometimes you readit and you say, okay, So
John, to be clear, areyou cheering this on? Because it seems
as though PIMCO would financially benefit ifmore of these regional banks did have to
(10:58):
offload some of their loans, andso yeah, call into question a little.
They are so distressed that we findthem attractive from a buying perspective.
Yeah. Sure, hope more ofthese banks go belly up because we are
getting a steal on these loans.It seems to be some of the message
here breaking business and financial news firstthroughout the day, only here on the
(11:18):
Financial Exchange Radio Network. Missed oneof our shows, Catch up anytime by
asking your Alexis Smart speaker to playthe Financial Exchange. This is the Financial
Exchange Radio Network. A quick bitof breaking non financial news. Hunter Biden
has been found guilty of gun chargesby a federal court jury in Delaware.
Is becoming the first child of asitting US president to be convicted of crimes
(11:41):
in I'm sure we'll have a lotmore to learn about that in the coming
days. Not likely something we'll becovering on this show, but that is
the breaking news out of Delaware thismorning. The stock market rally this year.
We've talked about this once or twice. Paul has been in well,
(12:01):
almost entirely large cap. In fact, the differential between how large cap stocks
and small cap stocks are performing thisyear in particular has been pretty historic in
terms of that divergence and reasons forthis abound. People call out all sorts
of different reasons for why this maybe, and I'll be the first to
(12:24):
admit that other than observing the differenceand acknowledging its existence, I struggle myself
to come up with a clear,cohesive theory on why this is distinctly happening.
I've got plenty of, you know, potential theories. I just don't
know that there's any evidence to supportone versus the other. But to be
(12:45):
clear here, a year to date, the average turn on companies with one
trillion dollars plus of market capitalization hasbeen forty point nine percent. So thanks,
that's that's from Bespoke investment groups.Is that data? That's yeah,
like Paul mentioned mostly in video,whereas companies with less than one trillion dollars
(13:05):
dollars worth of market capitalization are upless than half of one percent year to
date, of less than half ofone percent. Wow, So I mean
talk about concentration here. You've gota pretty significant portion of these returns coming
from very large companies. And ifyou break this out into de siles here,
(13:26):
so let's see what did they whatdid they do here? This is
again by Bespoke. If you breakout the fifty largest stocks in the S
and P five hundred and then dothat with every fifty companies here, the
smallest fifty have declined by seven percent, whereas the largest fifty have increased by
fifteen point three percent. Again,this is data from Bespoke Investment in Group,
(13:50):
and it follows a pretty clear trendline here if you look at it
from you know, scaling up withfew exceptions. The larger the company,
the better of the return this year. And I wonder if you have any
theory. One theory that's been floatedhas been the cost of debt. And
we talked about earlier on the program. How if your Microsoft or Apple higher
interest rates really haven't negatively impacted verymuch because you already locked in your interest
(14:13):
rates back in twenty twenty and sohigher rates haven't been much of a problem.
I floated that theory to Fandetti,and he pulled up some data.
And the problem with that is thatin the seventies and eighties you had a
very strong period of outperformance by smallercap companies, and so kind of ran
aground that theory that hey, youknow, because of borrowing costs is why
(14:35):
smaller companies are underperforming. This isfascinating me because it's a really longer term
trend than just this year. Mic, Yeah, look back, and I
love Mark VENDITTI actually did this usingMorningstad data. If you had invested one
dollar in large caps and small capsin two thousand through twenty twenty three,
so over a twenty three year period, that one dollar if it was small
(14:56):
craps small caps, would grow toeight dollars. If it that one dollars
invested in large caps, it wouldgrow to about four point seven almost five
dollars, So one dollar to eightdollars for the small caps, one to
five for the large caps. However, if you look at the last thirteen
years from twenty ten post financial crisisthrough twenty twenty three, if you put
one dollar into large caps, thatdollar grew to about six dollars. Put
(15:22):
into small caps grew to four dollars. So there's been this divergence that has
gone on over the last ten fifteenyears, and theories that I flowed in
my head that from an investing standpoint, it's always been critical from a long
term perspective to have exposure to smallcaps, because if you look back one
hundred years, the divergence that Imentioned gets even wider and stall cats outperform
(15:43):
even greater. I just wonder ifthe public markets aren't being used as readily
early on. You have so manyof these companies that come out at IPOs
at such large valuations. I mean, I was reading today when we were
doing some of the open AI stuff. They're value to eighty billion dollars.
It's not a public company yet atall. You've got Facebook when they came
(16:03):
out public back in twenty twelve.We can go on and on a list
of others that when they were goingpublic, typically small caps, and I
have to look at the valuations here. I'm sure they've been updated. Was
between one and three billion years agowhen I was looking at it. Maybe
it's a higher number now with inflation, but values of these companies going public
are not falling often in that buck, and I just wonder if the quality
(16:25):
of companies is the same that itwas, you know, thirty years ago.
So I've seen different data sources notatedifferent things, But the number of
publicly traded companies in the United Statespeaked somewhere in the late nineties to early
two thousands. I've seen one numberthat was ninety six. One number there
was two thousand and two in termsof the peak of publicly traded companies.
But since then it's been on apretty steady decline, and I think it
(16:48):
hasn't I think it's below nineteen eightylevels of publicly traded companies. So certainly
I think private equity markets could bea piece of this, you know.
The other piece here just could bethat, Hey, our laws in the
United States, due to really poorperformance from the federal government and breaking up
(17:08):
big companies that are considered monopolies bymany has been really unsuccessful over the last
two decades. Right the last bigbreakup of a major tech company you've had
was Microsoft in ninety something, right, So that could be the other piece
of this here is that our lawson the books today do a much worse
job of addressing monopolistic power than theydid in the seventies, eighties, and
(17:33):
nineties. You know, between thefewer public trade companies and our inability to
break up anti competitive behavior may explainsome of them, and the mergers and
acquisitions, which speaks to your pointabout how many companies were publicly listed at
one point twenty years ago versus whoare listed now, Because think about the
amount of mergers that we talk abouton a daily basis. It was quiet
over twenty three but the last fiveyears there's a lot of them out there.
(18:11):
Bringing the latest financial news straight toyour radio every day. It's the
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(18:33):
I don't go into bank branches veryfrequently, and I don't know that
either of you do. So youknow, if you have no insight on
this, then just let me know. But have you guys noticed that it
does seem that bank branches are justlooking more and more bougie, much sleeker.
Yes, yes, I miss thedays of just a grungy old bank
branch with the stained, dropped ceilingand you know, everything's behind plexiglass and
(18:59):
just an unhappy teller behind there that'sthat's ready to work with you. And
that's not really what the experience isthese days. Like I was at a
bank from America, jeez, probablylike a year and a half ago,
and yeah, same story. Iwalked in. They asked me if I
had an appointment. I didn't.I didn't really realize I needed an appointment
for what I was doing. Saton a couch until somebody came and sat
(19:21):
with me, and they were like, here, I'm you know, let's
bring you back here. We cangive me your account number and we'll just
take get this taken care of foryou. But very different experience compared to
a few years ago. And Iwonder in your mind, what's driving it.
I mean, certainly I can't bethe only person that's going into bank
branches less frequently. Nobody's using cashas much as they did a few decades
ago. So it's a response tothat is it just a response to I
(19:44):
mean, these days, when Igo into a bank, it's less because
I need to make a transaction andmore because I need something complicated. And
for a lot of folks, theyprobably need advice on that complicated type of
transaction. Yeah, to me,our whole generation in general, it seems
like would have absolutely no reason orinclination to go to a bank branch.
I put myself in that camp.I don't know if you guys fall in
(20:07):
there as well. I think fora lot of people though, like you
may be getting financial advice from yourbank, you may be going in because
you need advice on a maturing CD. You know, those are the only
reasons you go into one. Well, that's what it seems like. This
pivot point is right. It's moreof a focus on a meeting place,
a sort of extension of the advisorysort of business, and less so focus
(20:30):
on deposits and withdrawals with ATMs atdrive throughs or just outside of your physical
brand's location, and limited use ofcash MIC to your point with Venmo and
just electronic payments in general. Iwould absolutely agree that if you look at
the teller transaction cited in this reportby City Group, the volume was down
forty percent in terms of what they'veseen there, So that is the focus
(20:52):
much more now. It's appointments foradvisory consultation versus transaction. And almost every
bank branch that I've been into overthe last few years has had a financial
advisor located in them in some way, shape or form. Whether it's it
whether it's a broker or a financialadvisor, good question, and you check.
But you know, if it's aBank America branch, then you've got
a Meryl broker. If it's aI mean, most of the big banks
(21:15):
these days have their own advisory business, Like even even Citizens, which is
not a huge bank but a prettybig regional one, has their own dedicated
financial advisor. It's a no brainor cross sell. If someone's sitting on,
you know, hundreds of thousands ofdollars in a checking account making low
bearing interest, it's so easy tojust say, gee, we have an
advisor right here, why don't yougo talk with them? And most people
that you talk with that have alarge balance in a bank, the bank
(21:38):
teller is going to absolutely refer itthat way. It just makes makes sense.
But it is interesting to me.I thought the branches would just die
off. When I interned at Bankof America, like ten years ago,
there was a conscious effort to lessenthe amount of branches that they have penantry,
and now it's going the other direction. Yeah, Bank of America.
Both Bank of America and JP MorganChase pardon me, are expanding branch locations.
(22:03):
And JP Morgan Chase just came toBoston for the first time ever.
There's a branch in my town nowthe same thing in my town as well.
They're making a real intended effort tobe more of a presence here,
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(23:14):
exchange show dot com. The proceedingwas paid for and the views expressed are
solely those of Cushing and Dolan.Cushing and Dolan and or Armstrong Advisory may
contact you offering legal or investment services. Cushing and Armstrong do not endorse each
other and are not affiliated. I'mgonna go a bit off script here and
do something we don't usual you do. Lois, can you hear me?
Give me a thumbs up? Okay, Lois can hear me? Lois is
our office manager here, and Ihave no experience working with the United States
(23:37):
Postal Service, so I'm gonna askher instead because she does have a lot
of experience. Would you say experiencehas gotten better or worse over the last
twelve months. That's a big thumbdown in terms of service from the United
States Postal Service. It's one hundredpercent gotten worse. I deal with this
in a part time side business Ihave where I'm constantly going to the post
office and getting packages in and shippingthem out. It's gotten exponentially worse in
(24:00):
the last eight, nine, tenmonths. Wow, unbelievably bad. So
the Postal Services undergoing a fairly significantoverhaul, and part of the reason is,
according to the head of the PostalAgency, Lewis to Joy, the
agency cannot afford to pause the overhaul, adding that if the Postal Service stays
put and pays all its bills,it will run out of money in three
(24:21):
to four years. So one moregovernment agency that can't pay its bills according
to things, and you know,they're doing a number of different things to
try and be more efficient here.They've also raised the price of a stamp.
What's a stamp going for these days? Costs seventy three cents for a
first class stamp these days, it'sa five cent increase from the previous price
of sixty eight. I don't againknow where they are competitive or not competitive
(24:45):
on price, but the idea thatI can ship a bunch of my Christmas
cards anywhere across the country, includingHawaii for seventy three cents would probably seem
like some low hanging fruit to me, Like, I know, you don't
have a lot of ability to youknow, increase prices if you're sending an
overnight package, right because if youjust get too expensive, I'm going to
(25:07):
go to FedEx, I'm going togo to UPS. But nobody in nobody
in private business is willing to senda letter for me across the continental or
non continental US for seventy three cents. So I know that there's a number
of people who are shaking their headand saying no. That's why the postal
service was set up, was sothat we could communicate with more tougher to
(25:32):
reach areas. And every town's gota post office and and that's the whole
benefit to this. Well, thatwas really important in the eighteen hundreds.
I'm going to say that that's notwhere I want my tax dollars going in
twenty twenty four, because of thisamazing new invention that you may have heard
of called the Internet, which allowsme to pretty readily communicate with people.
So again, my only exper todo it in our world, though mailing
(26:00):
business. It's still still part ofthe game with it, and it should
not cost me seventy three cents asa business owner to ship a letter from
this place to a customer in youknow, rural New Hampshire. Even you're
right, you're right, it's aneasy post I wonder you're losing money.
It's an easy punching bag to goafter the post office in terms of its
failure to adapt and make changes.But it's pretty unbelievable the prices that they
(26:23):
are what you can get. Yeah, of course it is again like as
a business and maybe that's what Ihate this idea because I don't think you
should, you know, penalize thebusinesses more heavily. But that is who's
filling up your mailbox with a bunchof junk? Is you know? If
you've got a corporate idea that you'vegot a post office relationship with, boost
up the price on regular mail.There. If you really want to subsidize
(26:45):
me sending my Christmas cards to Hawaiievery year, then you can still do
that and just charge businesses. Theyare a great scapegoat though, if you
ever are laid on sending something outto say, hey, probably lost the
mail Gramma didn't get her birthday car. Just it's the mill darned to joy
in the post office. I sentthat thing week ago. Yeah, let's
stay at quick Break. When wecome back, we're gonna have a little
(27:07):
bit of stacker. Let next onthe Financial Exchange business and financial news affecting
the markets and your wallet. We'vegot it all straight from Wall Street right
here on the Financial Exchange Radio Network. Miss any of the show, catch
up at your convenience by visiting FinancialExchange show dot com and clicking the on
demand icon, where you'll find allof our interviews in full shows. This
(27:32):
is your home for the latest businessand financial news in New England and around
the country. This is the FinancialExchange Radio Network. The Financial Exchange has
built an incredible partnership with the DisabledAmerican Veterans Department of Massachusetts. We can't
wait to take part in this year'sDAV five k, set for Saturday November
(27:52):
ninth at Ford Independence on Castle Island, and registration is now open. You
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DAVFIVEK dot Boston. The DAV fiveK Boston is presented by Veterans Development Corporation
(28:18):
Typer For a bit of STACKERU,let hear, Paul, what do you
have for us to kick things off? Many of us are following the NBA
Finals with the Boston Celtics up twozero against the Dallas Mavericks. But the
WNBA is reporting record TV viewership forthe twenty twenty four season and its highest
game attendance in twenty six years.The WNBA is now averaging one point three
million viewers per game, tripling theirnumbers from last year. And it all
(28:42):
comes back to a rookie sensation,Caitlin Clark, who has come into the
league from Iowa. And there hasjust been a firestorm of media covers on
the sports side of the WNBA,both in positive and negative regards, which
is sports talk in general. Welcometo that world. But it's just is
incredible how one particular player can reallyraise the whole level of a league.
(29:07):
And the controversy that started up recentlyin regards to Kailyn Clark is her omission
from the US Women's Olympics team forParis in twenty twenty four, many people
pushing back saying that she would sheshould absolutely be on the roster. If
she's not good enough, she shouldbe on the roster. That's the whole
thing is that ultimately, these entitiesare businesses when it comes down to it.
They are entertainment businesses, but theyare businesses and you want as many
(29:32):
eyeballs on your product as possible.And whether or not she was going to
get minutes and play for the team, that was the argument that was made,
is that she wouldn't really pay thatmuch. But someone made a counterpoint
that I saw the other day,sold doesn't the US blow all these teams
out by twenty or thirty points anyway? You don't think they have. I
don't think the US women have everlost, So you're basically saying that,
so why couldn't they find tailent?Ark is rudy, No, no,
(29:56):
no, no. I actually sawsomething on this, and you know,
far be it from me from beingany sort of sports commentary. But there's
a tweet from who was or sheplays for Chicago, Angel Reese, you
know, was fighting back on theclaim that you know, the only reason
for the growth and popularity was CaitlynClark. And so somebody took a look
(30:21):
at the attendance at non Caitlin ClarkWNBA games and Caitlin Clark ones. And
so seventy five hundred, four thousand, ten thousand, seven thousand, three
thousand, ten thousand, seven thousandwere the attendants for the non Kaitlin Clark
games over the past weekend and theCaitlin Clark games seventeen thousand and seventeen thousand,
So double a triple. Yeah.Statistics, Well, there's lies,
(30:45):
damn lies and statistics. So maybeit was something else, But it seems
as though Caitlin Clark is doubling attendanceat her games for Indiana. Is it
Indiana? Yes, Anti woke shareare going after corporate boards, and boards
are reacting. Target has dramatically changedwhat they have in their stores. You've
(31:07):
seen changes from bud Light and othercompanies the direction that they're going on.
All this, by the way,you may find interesting. I mean,
the reason that all of the adson the Super Bowl are incredibly boring is
mainly because of stuff like this,is that you can't say anything as a
corporation without pissing off half your customers. But with advertising being so nuanced today
(31:30):
and being so customizable, they're basicallydoing the same type of advertising and they're
just directing who sees it. Right, So if you want to do an
advertisement that's really in favor of PrideMonth for June, you just pick out
customers that you know are not goingto be offended by a Pride Month ad
and you deliver it to their cellphones, their Facebook feeds and not you
(31:52):
know, people that follow conservative mediafor example. So this stuff isn't going
away, like trust me, come, but they still want to get down
to your level and feed you topicsthat are interesting to you. They're just
so easily able to customize it basedon your browsing history that you aren't going
to see the topic that offends you. So that's my main takeaway is,
(32:13):
yeah, you know bud Light willhave a conservative targeted ad, a religious
targeted ad, a non religious,a trans gay like, they will customize
everything and you will never see theones that you're not supposed to see.
Is how they're going to continue toadvertise it. This isn't new, They've
been doing this for quite some time. You know, you think that bud
(32:34):
Lights shouldn't have to tailor their adstoo much because it fundamentally just comes back
to drink our beer at the endof the day. Yeah, but I'm
not disagreeing that there's a need forthat in this climate, but it should
be a little simpler. And maybeI am just nostalgic for the two thousands
and nineties where you just had thosecores Light ads and those bud Light ads
(32:54):
that were very simple. Frogs.You just bring back bears for Coca Cola,
Like it just seems like the CocaCola polar bears hated them. Yeah,
what's wrong with that? Just soboring. It's just a family of
polar bears drinking Coca Cola. There'sa whole lot worse of ads out there,
Like, come on, give mesomething. It's better than the Medes.
(33:17):
Clydes are worse. The Clyde Stalesaren't that great. I mean,
I got nothing against polar bears,but you just you've told me nothing with
this advertisement other than some nearly extinctbears like your product? What do you
have? What else do you havefor us, Paul? I mean,
anything else? Catch your eye instack ro letter you want me? Pat
Sajak, the iconic Wheel of Fortunehost, says farewell after more than forty
(33:42):
years Wheel of Fortune just two legendaryhosts, Sajack and uh Bob Barker for
prices right over the last five tenyears, hanging it up after a phenomenal
career. Sajac took over in nineteeneighty one and has been a mainstay for
American TVs for millions of viewers foryears and years. And uh, I
don't know if you'll have I guessJeopardy will continue to carry on the legacy
(34:05):
and Wheel Fortune these things are stillon. But uh, Jeopardy they'll still,
they'll still. I don't think they'regoing anywhere. I'm sorry, I'm
having a total brain farm. Whois the Jeopardy host who passed away?
Trebek? Right? Yeah? Whatdo they have a host plan already set
up for Wheel of Fortune? Who'sgoing to tryan Seacrest? Ryan Seacrest is
(34:27):
taking over? Oh? I didn'tknow that. Doesn't he have enough jobs
already? Apparently? Well, no, he's only busy one day a year
on New Year's Eve. No,No, it doesn't. He host a
radio show radio show. He's involvedwith the American Idols still anymore. I
have no idea on I don't knowif he's on. You're a live radio
host, so okay, you've gotlike three hours maxim day. This is
(34:51):
a lot of work. I don'tdisagree. But we all have day jobs
too. It's kind of a parttime gig. I'm going to look up
what else Ryan's secret does. Ifeel like he's got a lot on his
plate. He does a lot ofdifferent hats. Okay, Paul, taking
a look here at markets. TheDow Jones Industrial Average off two hundred and
ten points, approximately one half ofone percent, SMP off about fifteen points
(35:15):
or a quarter of a percent,and the NASDAC basically flat for the day,
five one hundreds of a percent off. It's yesterday close. The rustle
two thousand to off a little bitless than nine tenths of a percent.
As we approach the noon hour hereyield in the tenure Treasury's sitting at four
point four five one percent. Asare reminder of folks, eight thirty am
(35:35):
tomorrow will have a CPI release.Two thirty pm tomorrow, Jerome Powell and
the Federal Reserve will be addressing thenation with their press conference and their interest
rates setting policy. Will be backat it covering all that and more.
Have a great afternoon, enjoy thiswonderful ten day forecast, and we will
talk to you soon
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