July 26, 2024 • 38 mins
Chuck Zodda and Mike Armstrong discuss if the Fed's key inflation gauge coming in line with expectations could force the Fed to signal September rate cuts. Why are wealthier people slowing down their splurge spending? Did CrowdStrike slap their customers in the face by offering a $10 apology for the outage? Why you need to plan to spend your nest egg instead of just hoarding it.
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Episode Transcript
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Speaker 1 (00:00):
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is The Financial Exchange, with Chuck Zada and Mike Armstrong,
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(00:42):
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(01:04):
by Veterans Development Corporation This is the Financial Exchange with
Chuck Zutta and Mike Armstrong.
Speaker 2 (01:13):
Well, it's Friday here on the Financial Exchange. And if
you thought the last week was busy, just wait until
next week because Gollie g Willakers, there's a whole bunch
that we're gonna get to.
Speaker 1 (01:27):
Then.
Speaker 2 (01:27):
I know we have stuff to talk about from this morning,
but I was just looking at the calendar for next week,
and here's what we have on tap. Monday's pretty quiet,
so you can you can sleep in a bit on
Monday as long as you're not doing anything related to
you know, international markets, where there's some stuff that might
might might catch your eye. But then we get into Tuesday,
(01:49):
and just for earnings, we've got Microsoft reporting, so one
of the three biggest companies in the world. Tuesday, we
also have the Jolt Support, the Job Openings Report, the
S andp CA Shiller Home Prices, and the FHFA Home
Price Index. So that's Tuesday. Wednesday. There's a small bank
based out of twelve different locations. They get twelve branches
(02:09):
around the country called the Federal Reserve, and they're gonna
be announcing what they're gonna be doing with interest rates
and so that's Wednesday for economic data. We also have
Meta reporting earnings on Wednesday, so again pretty busy there.
Thursday we get ism, manufacturing data, and jobless claims, as
well as Amazon and Apple earnings with a side of Intel,
(02:32):
and then to cap it all off on Friday, we
get the jobs report for the month of July. I mean,
it's like, it's insane.
Speaker 1 (02:40):
What a week?
Speaker 2 (02:41):
What a week? I mean, my goodness, I'm gonna need
three shirts a day to get through this one. It's
just gonna be like, oh, my goodness because of all
the stress eatings, or it's just all the sweat just
from the excitement. It's just gonna be my, my goodness,
it's sweaty studio. Well, it's gonna be a sweaty week,
I'll tell you that. Especially it's gonna be like ninety
two by the end of the week, so buckle up
(03:01):
for that. It's gonna be like, well, the job report
is that that's not really a sweat sound. I don't
know why we're go in that direction, but in any case, okay, interesting,
how do you make a sound of sweat? That's what
I was trying to do real time.
Speaker 3 (03:18):
Just and then the sound of Chuck hitting the floor
from passing out from the heat and over talking. That's
what we're gonna do nowt that is, it's gonna be
a busy week this week. We have to talk this
fast in order to make all the news fit into
the two hour program this week.
Speaker 2 (03:32):
Just a little bit of data. This morning, we got
personal income and spending which came in a little bit
weaker than expected. Personal income point two percent gains for
the month compared to expectations of point four and personal
spending in line at point three percent. Now, remember, you
can't spend more than you earn forever. Eventually you're gonna
run out of money and borrowing power.
Speaker 3 (03:53):
I don't know, Chuck, We're American. We can do that
for a long time.
Speaker 2 (03:55):
It's true. If there's one thing you can say about
is as Americans, we've never met a debt we didn't like.
Speaker 3 (04:04):
We spend more than we take in, whether it's at
the household level the government level, it's yeah.
Speaker 2 (04:09):
Never met a debt we didn't like, or at least
we might not like it. But we've never met a
debt we wouldn't take on. So that's what we have
going on for personal income and spending. But the real
meat of this was the PCE price index, the Personal
consumption Expenditure Price Index. Why is that the real meat, chuck,
Because it's the Fed's preferred measure of inflation. You know,
(04:31):
all these other ones, if it's not the PCE price indecks,
it's not real inflation. Turn their nose out into that. Well,
they actually do care about the other ones. They just
like the PCE because they find it to be a
better predictor of future inflation than other indices. So here's
what we saw. The headline number came in at point
one percent for the month, in line with expectations. Core
(04:52):
came in at point two percent, just above expectations of
point one but still. You know, you print point two
over and over, you're gonna end up with two point
four percent inflation for the year and you win.
Speaker 3 (05:03):
Just to give you a sense for again, we talk
a lot about the CPI report, which came out earlier
in this month. Those same numbers minus point one on
headline CPI plus point one on core. So again similar
divergence between the two, but slightly different direction.
Speaker 2 (05:17):
Now this says, look, prices are not coming down, So
anyone out there saying, oh, gee, I want prices to
go back to twenty twenty. They're not not going to
they they never will. The only way you get prices
back to twenty twenty is if you get to like
twenty percent unemployment, which would be bad for all of us.
Speaker 3 (05:34):
Yeah, we don't.
Speaker 2 (05:35):
We don't want that.
Speaker 3 (05:35):
Don't want that.
Speaker 2 (05:36):
So we are seeing the rate of inflation continuing to moderate.
And if you look at the data that we have
for just twelve month inflation, which again is not necessarily
the most relevant, but it does matter. Consumer price index,
the headline is a two point nine to seven core.
Consumer price index is a three point two eight PCE.
(05:59):
Price indexs a two point five to one core PCE
at two point sixty.
Speaker 3 (06:02):
Three, and specifically for PCE, the preferred measure inflation, the
last five months in a row, both on core and
headline have been under three percent year over year numbers
for the year over year, yeah, year over your numbers,
they have all been under three percent for those numbers.
Speaker 2 (06:18):
Now you're gonna likely see the core numbers start to
tick up a little bit over the next couple of quarters.
The reason being if you go back and look at
the monthly numbers for core PCE in the second half
of last year that you're gonna be lapping what's commonly
called the base effects. What you see is er point
one percent point one percent point three point one point
(06:41):
one point two. So you got four point ones in
there that you're gonna have to repeat if you want,
you know, to stay down where you are. It's a
tall task in order to keep it there. But then
you come to January and you get this point five
that printed, and so you get some relief there as
long as you print lower. But this is all pointing
in my opinion at this point, given what the FED
has signaled about, Hey, they're not hesitating to consider September
(07:04):
as the first, you know, interest rate cut. Here, it's
all pointing towards that September meeting being a cut probably
twenty five basis points, but potentially fifty if the economy
worsens over the next six to seven weeks before them.
Speaker 3 (07:19):
Yeah, this report does nothing to contradict that point of view.
I would agree there. Whether you're looking at the year
over year numbers that I just quoted, whether you're taking
a six month rolling average all of these numbers, and
again regardless of which measure you're using the Fed's preferred
PCE or CPI. The most inflation that I'm seeing if
you annualize the last six months the first half of
(07:41):
this year is from the core CPI number, reading at
three point six percent, and the lowest is, you know,
stripping out that food and energy piece from CPI, you're
getting to two point six percent. So in all cases,
the trend has been lower, and those those numbers are
substantially lower if you just look at the last three
months and strip out what was a pretty big bump
in inflation in the first quarter.
Speaker 2 (08:02):
And really aside from Q one of this year, if
you look at not even like the last twelve, you're
gona look at the last thirteen months now and aside
from those three months, which again I know it's cherry
picking to a certain extent, but things are just a
little bit funky on that side. In the first quarter,
the other ten months average out to a two percent
rate of inflation encore PCE like it, it gets you there.
(08:27):
So when you've got ten out of thirteen that are
pointing you there, if the FED wants to cut, they can,
Does the data warrant them cutting at this point. I
think this is actually a really good question to ask,
like should they be cutting now? And I think there
(08:48):
are some tough ones that you need to sort through.
The first is, look, GDP growth for Q two came
in better than expected two point eight percent, and it
was bullied by people people spending money on goods somewhat.
I mean most of it did not come from there
by a large chunk. No, it was point four point
(09:08):
four came from that. Okay, yeah, it really wasn't a
big it was. It was point eight percent better than
what you saw in Q one, where it was negative
a negative point four percent contribution. But it's something where
point eight percent did come from inventories, which is something
where you look at and you're like, oh, that's going
to reverse and that's not going to be great. So
(09:29):
you say, okay, GDP was good, but is it coming
from sustainable sources? Not necessarily, So that's one part that
you look at. Other things. Hey, CPI is basically in
the same spot it was in at this point last year,
So if you haven't seen any movement there, what's the
need to cut? At this point? Jobs are still printing
(09:50):
rather strongly in terms of the headline number, but unemployment
has risen. Trying to think of just what else in
terms of you know, big picture economic things you have
out there, it's.
Speaker 3 (10:01):
The openings number. I mean, you've talked about the unemployment report.
But if we're going on jobs, we'll get another jult
report on what you say Monday Tuesday.
Speaker 2 (10:08):
Yeah, here's the reason to cut. If you and again
you'll have more data buy September. If the economic data
continues to worsen, kind of the monthly stuff that we've
been getting in real time continues to worsen, it points
to conditions where recession becomes possible in Q four of
this year, Q one of next year. So because of
the lags in monetary policy actually mattering. Remember just because
(10:31):
the FED cuts interest rates on any given day, it
doesn't mean that the next day people wake up and
they're like, well, it's time to spend the money.
Speaker 3 (10:38):
You don't think it's possible we're already in a recession.
I mean, I know it won't be called today, but
I mean you've seen unemployment tick up by five tenths
or no, six tenths percent. You've seen GDP printed pretty hard.
But I mean we're now in July we're almost in August.
I think when I see those surveys of you know,
six and six and ten Americans or whatever it was
(10:59):
saying that we're in recession right now, it's the first
time in the last two years where I've said they
might not be far off.
Speaker 2 (11:07):
To say you're in recession right now. What's the evidence
of it?
Speaker 3 (11:13):
Because so far here the unemployment's the only p second
look at, and.
Speaker 2 (11:16):
Even on unemployment, it still is something where you're like, hey,
even though the unemployment rate is ticking up, we're still
adding net jobs and jobless claims have not ticked up
in any meaningful fashion. You know, you're not seeing anything
that is indicative of a broad based recession. You have
parts of the economy where you're like, yeah, there's definitely
a slow down happening in housing, there's definitely a slow
(11:38):
down happening in autos. There's a slowdown happening in travel. Okay,
there's something happening in terms of big ticket items. It's
not reflecting in other areas broadly right now, And that's
what's required for you to have a recession. Just because
people buy fewer cars doesn't mean session.
Speaker 3 (12:01):
Yeah, the question would be in my mind, if you're
at the five percent unemployment by January, that's a recession.
And when did it start?
Speaker 2 (12:11):
Well, yeah, I mean look, if you get to five percent,
you're going up zero point two percent for the next
five months. I mean like, that's yes, that's a screaming recession.
You're like, hey, guys, like, what are we doing here?
And this is why, if you're the Fed, you say, yeah,
we need to try to get ahead of this to
mitigate the potential impact of it. Is because the mechanism
by cutting interest rates in September is starting to you say, Okay,
(12:34):
if we get lower rates, you know, actually filtering into
the economy by Q one or Q two of this year,
then people say, yes, I am gonna buy that house
because mortgage rates are five and a half. I am
gonna buy that car because the interest rate is six
instead of eight. And you get that economic activity happening
that that averts it or at least minimizes it. That's
(12:55):
the case for it. I laid out the case against it,
and that look, it's not like the economy's slow that
much by most you know, other metrics. The other thing
that we do have to consider, maybe GDP growth is
being overstated. It is an estimate of what's going on.
It's not empirical. There is no actual measure GDP growth.
(13:16):
We do have a scale, it just doesn't measure GDP growth.
It tells me stop eating the chocolate in between you know, segments,
and I say no, I will continue. Let's take a
quick break when we come back. That's enough FED and
rates talk. Let's talk a little bit about so we
talk about why wealthier people aren't spending money right now
(13:37):
and why they're bad for not spending money now.
Speaker 3 (13:40):
Yes, let's slap the wealthy people's hands.
Speaker 2 (13:42):
Okay with fish?
Speaker 3 (13:44):
No, just with fish.
Speaker 2 (13:47):
Okay, you know you just a good fish slap. No, No,
Let's take a quick break, and when we return we
will discuss the wealthy people and why they aren't spending
money the way they used to.
Speaker 1 (13:59):
After this, the latest news on inflation, the FED, B economy,
and how the markets are reacting. Every morning right here
on the Financial Exchange Radio Network. Get up to the
minute market updates with Wall Street Watch week days at
ten thirty only here on the Financial Exchange Radio Network.
Speaker 4 (14:24):
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Speaker 2 (15:00):
Let's talk a little bit about wealthier people not splurging
the way they used to. This is from market Watch,
I believe correct, and what it's talking about here is
that when you look at the data from people spending
or earning more than one hundred thousand dollars a year,
they have seen the tightest contraction indiscretionary spending amongst that
(15:25):
group out of any demographic.
Speaker 3 (15:27):
So important. This is not from randomized credit card day.
This is a survey. So I want to caveat it
with we don't know some of this stuff is notoriously unreliable,
but the cohort of Americans that own their home and
make over one hundred thousand dollars seemingly were responsible for
(15:49):
a large portion of the continued excess spending that we
saw post COVID.
Speaker 2 (15:54):
There are still people trying to put in pools from
twenty twenty one because it was so backed up with
the pool builders.
Speaker 3 (15:59):
So there seemingly was that cohort that was continuing to spend, whereas, yeah,
the renter that's making less than one hundred thousand dollars.
Unfortunately in this economy, as we've talked about at length,
but it has been really left behind of the last
few years and has not been able to basically keep
pace with anything and certainly has not increased their spending.
I think the point that market watch is attempting to
(16:20):
make here if this survey data is correct, would be, look,
this is the last cohort of people who can afford
to continue spending on discretionary items and increasing spending. And
if they are pulling back, then automakers, pool makers, discretionary
you know, airlines, watch out because this would be kind
of the last remaining group that has money to spend.
Speaker 2 (16:41):
And to be fair, it does match what we're seeing
in the spending trends in high cost in like in
things that in big.
Speaker 3 (16:48):
Ticket end items, big ticket items we've seen, I.
Speaker 2 (16:51):
Mean, every single automaker that's reported earnings has been slammed.
I have not seen one where you've been like, hey,
look at them, They're up five percent after GM, Stilantis, Ford, Tesla,
Mercedes reported overnight. Like it's just things are not good
in the auto space anywhere right now.
Speaker 3 (17:11):
You kind of jokingly mentioned pooled installers. But the Wall
Street Journal or maybe the New York Times, I don't remember,
which has written a few pieces over the last few
months about interviewing pool installers that, oh, yeah, we are
significantly slowing down here and we're hoping that an inch
strike cut will boost business.
Speaker 2 (17:26):
Do you know why that's the case, Mic, Do you
know how freaking expensive it is to put in a pool?
Speaker 3 (17:30):
Now?
Speaker 2 (17:30):
I have someone who I have a buddy of mine
who is trying to man now and I'm listening to
the quotes he's given me. I'm like, why don't you
just buy another house that already has one?
Speaker 4 (17:39):
Yeah, isn't like pool liner like ten grand, It's just liner.
Speaker 2 (17:44):
I don't know, don't know, it's expensive whatever it is.
But like the quotes that he was telling me, He's like,
I'm trying to put a pool, and then he's like
nothing complicated, like no waterfalls, no, you know, hot tub,
no this and all that, and I'm listening to it.
I'm like, dude, just move to a house that has
a pool.
Speaker 3 (17:59):
Can I make an argument to your friend who shall
remain anonymous as a current pool owner. You get to
use it like two and a half months a year,
don't bother. No, you get to use it like five
five months a year. You get to use a pool
in the Boston area.
Speaker 2 (18:14):
Yes, it depends on it. If May, June, July, August, September.
Speaker 3 (18:18):
Nobody's swimming in their pool in early May, you're the
only person that's swimming in their pool.
Speaker 2 (18:22):
In early May. Is like ninety three degrees this year, Now,
I I you can just after Mother's Day that a pool.
Speaker 3 (18:33):
Is not a great investment in New England. But we digress.
There is some evidence that yeah, this cohort who has
been spending on overseas travel and all of these items
that we've talked about for the first half of this year,
should they slow down great news for inflation, but not
great news if you are any business that sells discretionary products.
Speaker 2 (18:53):
And specifically like high end ones. Yeah, you know, it's
another like another related area. I got a buddy of
mine really into watches, okay, and Brady's got their thing.
Everyone's got their thing. Like again, it might sound dumb
to again, there's plenty stuff that sounds dumb to me,
but I'm like, hey, if that's your thing, that's your thing.
(19:13):
And he was telling me in like twenty twenty one,
like all these watch prices were going through the roof
because it was you know, crypto people were buying them
and investments were up in this and that. And I
was talking to him last week about it. I'm like,
you know, like, what what's the deal with with the watches?
Speaker 4 (19:27):
Man?
Speaker 2 (19:27):
He's like, prices are off sixty to seventy percent from
their peak. I'm like, oh, boats at RV's Yeah, like
again another big ticket discretionary item. Quick break here Wall
Street Watches next.
Speaker 1 (19:44):
Like us on Facebook and follow us on Twitter. Act
TFE show breaking business news is always first right here
on the Financial Exchange Radio Network. Time Now for Wall
Street Watch a complete look at what's moving markets so
far into theay. Right here on the Financial Exchange Radio network.
Speaker 4 (20:05):
The markets are in rally mode again to wrap up
the week, as Wall Street digests this morning's core PC index,
which climb two point six percent annually, slightly above estimates
of two point five percent. Right now, the Dow is
up by one and a quarter percent, or five hundred
and three points. S and P five hundred is up
by three quarters of a percent, and the Nasdaq up
(20:28):
by half a percent. RUSSA two thousand up over one
and a half percent as well. Tenure Treasure yield is
down by five basis points now at four point one
nine percent, and crude oiled down by two percent, trading
a seventy six dollars in sixty nine cents a barrel.
Several chip makers are rebounding after their recent skid. In Nvidia, AMD, Broadcom,
(20:52):
and Micron Technology are all seeing gains of about one
and a half percent so far today. Meanwhile, f after
its recent plummet shares and Crowdstriker up by a third
of a percent after CEO George Kurtz said that more
than ninety seven percent of Windows sensors we're back online
one week after the cybersecurity company's update resulted in a
(21:13):
worldwide IT outage. Paul A Monica of Barons will join
us at eleven forty five to give his take on
CrowdStrike elsewhere. Diabetes device maker dex Com cut its fiscal
twenty twenty four revenue outlook, where its chief executives set
a shortage of new patients was part of the problem
(21:34):
that stock tanking by forty percent. Deckers increase its annual
profitability outlook as a result of strong demand for its
Hoca and ug footwear brands, sending that stock up by
eight percent. Three M lifted the floor of its full
year outlook, where it's quarterly sales and earnings topped expectations,
that stock up by sixteen percent, and Boston Beer shares
(21:56):
are up by five percent after the Sam Adams Brewer
fell short of second quarter earnings and revenue expectations. I'm
Tucker Silvan, that's Wallstree watch, Chuck.
Speaker 3 (22:06):
I missed the show on Wednesday? Did you guys cover
what CrowdStrike was doing for their affected customers?
Speaker 2 (22:12):
Was this where they were giving them the uh? Was
it uber eats credits? Is it ten dollars? Uber Eats
gift card was was that confirmed to be real? I
heard it pretty widely reported.
Speaker 3 (22:25):
I don't remember seeing comments from CrowdStrike on the subject.
But if it is, can you even get a five
dollars McDonald's value menu.
Speaker 2 (22:36):
Picked this got picked up by Mashable and tech Radar,
so it's probably it's real. And tech Crunch picked it
up also, and like, these are three publications that are
legitimate technology publications.
Speaker 4 (22:49):
So ten dollars uber, I get twenty five dollars promotions from.
Speaker 2 (22:53):
I'm gonna I'm gonna quote here from Mashable. The email
containing the vouchers appears to have gone out on Tuesday.
Crowdstrikes attached Mesterge acknowledge that the glitch had led to
quote additional work, and offered quote heartfelt thanks and apologies
for the inconvenience. To make it up to users, The
email said your next cup of coffee or late night
snack is on us, and then provided instructions for redeeming
the gift card online if you're.
Speaker 3 (23:13):
Going to I just like corporate gosh, companies make such
big missteps. Sometimes a nicely written apology is going to
go further than something like this, because this is when
you do something like this, that's a kind of meaningless
(23:34):
number on an individual basis, it's kind of a slap
in the face. You're better off with a really sincere
written apology saying we screwed up, we acknowledge it, we're
going to do better in the future and find ways
to make this better for you and your teams, or
you have to give something meaningful, because ten dollars is
a bit of a slap in the face.
Speaker 2 (23:55):
Hey, we screwed up. We know that this cost you
the last week and made this harder. We're gonna extend
your contract for a month at no cost to you. Yeah, there,
that's it. You know we value your business. Please stick
with us. We'll stick with you ten dollars.
Speaker 3 (24:13):
Yeah, ten dollar breas is just and again, now they're
gonna have to do something else because that's such a
bad shoun.
Speaker 2 (24:18):
We say ten we met twenty is that you can't
even get a freaking Chipotle for that.
Speaker 3 (24:24):
It reminds me of the apologies from BP after they
spilled all the oil.
Speaker 2 (24:29):
I don't remember those.
Speaker 3 (24:30):
We're sorry. They just kept saying like we're so sorry,
and then just worst up kept happening, like the oil
was still spilling into the Gulf, and they're just.
Speaker 2 (24:39):
Like, ah, you know that was over a decade ago. Now, yeah,
it's a long time back piece from the New York Times.
Twenty twenty five could be a great time to be
president economically speaking, Is this.
Speaker 3 (24:50):
Not the article that gets written right before a recession?
Speaker 2 (24:54):
Feels like the first thing that I thought. I'm like,
I don't know about that quote. The next couple of
years are shaping up to be solid for the US economy. Okay,
inflation is returning to normal. Great as that happens. The
federal reserves planning to cut interest rates.
Speaker 3 (25:11):
Oh why are they doing that? Interest right? Kind of gas?
Speaker 1 (25:14):
You know?
Speaker 2 (25:14):
It's burst of infrastructure spending under the Biden administration has
taking time to ramp up and project but projects both
small and largeer likely to make break ground in ernest
in twenty twenty five and twenty six. Good first paragraph.
Then things can always go wrong. The job market could
cool more than expected, financial market problems could surface, and
risks tied to the election of November could still uncertainty.
(25:35):
But the base case outlook is bright. The base case
outlook is always bright because no one ever predicts recessions. Accurately.
For the last two years, people have been predicting recession
left and right. Hasn't shown up yet in the economic data.
So if we're now projecting.
Speaker 3 (25:53):
That everything's gonna be fine, warm and fuzzy.
Speaker 2 (25:55):
Maybe that should It's it's what's the movie where there's
some character who goes when they tell you everything's fine,
that's when you need to panic? Is it twenty twelve?
Speaker 3 (26:04):
I don't know.
Speaker 2 (26:06):
I think it's that with what's the guy's name? He
plays like the crazy conspiracy theorist radio host, the ham
radio guy. He plays like crazy characters in a lot
of movies.
Speaker 4 (26:17):
Oh, guy, you're probably not helping.
Speaker 3 (26:20):
Coming out blank. Yeah. In any case, Chuck, Look, it's
not to say that everything's terrible right now, like whatdy Harrelson.
Oh okay, but.
Speaker 2 (26:31):
He plays like kind of offbeat crazy characters in most movies.
Speaker 3 (26:33):
Yeahs offbeating crazy that description. So to Genus Milex's credit here,
inflation has come way down, we are not currently in
a recession, and there is a lot of infrastructure money
to be spent over the last few years. So, like,
I do get her position on this, but it does
(26:55):
just it just begs for a recession to happen right
afterwards when you when you write something like this and yeah,
she tries to acknowledge the potential for surprise. And that's
it is. Nobody ever expects a recession to be right
around the corner, and you never know until it's, you know,
a year behind you. And that's the trouble with any
piece like this of saying, oh, it sure could be rosy.
Speaker 2 (27:17):
Yeah, it could be.
Speaker 3 (27:18):
It could be rosy. There's a lot of things that
are currently trending in the right direction if all goes perfectly.
Speaker 2 (27:27):
Yeah. The two things that I struggle with on this
Number one, Hey, trying to project out that far in
terms of what the economy is going to look like
kind of tough, yeap, kind of. I mean, it's it's
really tough. And the other piece that's kind of related
to that is the economy is never stagnant. It's never
in one place for an extended period of time. It's
(27:47):
always evolving and always changing, which is why over the
course of this year, I think of just the different
regimes that we've gone through this year from a market
and economic perspective. Q One was gee that inflation is resurging,
is fed gonna have to hike more. Q two has
been Hey, inflation's fading. The Fed's gonna be able to
cut Q three. It's been four weeks so far and
(28:09):
it's hey. Tech stocks are getting pummeled in small caps
are rising. You know. It's we've been through three distinct
market regimes just this year already. Who knows what we're
gonna go through by the middle of next year. Take
a quick break. When we come back, we'll talk a
little bit about h index funds and also spending your
(28:30):
nest egg. All that money that you save for retirement.
Eventually you're gonna spend it, because that's why you're saving it.
How do you plan to do so most effectively? We'll
talk about that when we return.
Speaker 1 (28:40):
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Speaker 1 (29:32):
Mike.
Speaker 2 (29:33):
There's a piece of Barrens from this week. It's titled
Someday You'll have to spend your nest egg Why you
need to plan ahead for that? And it really talks
a little bit about Hey, the reason that you save
money again, it's basically its most core principle. Hey, the
reason that you save money is because you are taking
(29:54):
spending power from today and you're transferring that spending power
into the future. That's ultimately what it is. Not me,
I'm more of a Scrooge McDuck, just like to swim
in it. What stroke do you do when you're diving
through the poster money press stroke? I'm more of a butterfly,
of course.
Speaker 3 (30:08):
I mean it actually is this psychological thing to get over.
But transitioning at some point to the stage where you recognize,
oh wow, I'm really not adding anything else to this,
and I am going to actually start spending all this
money that I've spent my lifetime saving up for is
a bit of a psychological hurdle to get over.
Speaker 2 (30:26):
It is, and I've seen with retirees it can often
take like six to eighteen months for them to get
comfortable with that idea because for forty years it's been
drilled into your head. Save money, save money, don't touch it,
don't touch it. And now you get to retirement and
you're like, wait, you you want me to do what
with this? And it's important to remember that that is
(30:48):
why you save the money. It's not just to have
it sit there. It's so that you can basically replace
your paycheck with a new one that comes out of
your social security, your portfolio, and that portfolio being the
one piece where you really see, hey, this accumulated pool
of money can offer me the toughest one for people
to psychologically deal with as they start to tap into it.
Speaker 3 (31:11):
I've talked about this a fair bit, but the decisions
you actually have to make at that stage, believe it
or not, are quite a bit more complicated than the
ones that you're making when saving. It's not that saving
for retirement is easy. It's a challenge. You have to budget,
you have to be disciplined. But the solutions that you
have are pretty simple. Yeah, when you're retired and it's
(31:32):
about taking the money out, it is more complicated. It
is much more about when do I tap when? How
do I do deal with Social Security? Should I tap
my four to one K, my savings, my roth? There
are more complicated questions to answer there that make the
scenario a little bit trickier than just the savings phase.
But here's an even more basic level to start. Do
(31:53):
you actually know where all of your different four one
ks and investment accounts are? Can you view them all
in one place? Do you know how much money you
made or lost last year on your investments? Do you
know how much money you will need to make in
the future in order to maintain your lifestyle? And are
(32:17):
you hitting those goals right? I know that sounds really simple,
but I'll tell you, in my experience, maybe one in
ten have a spreadsheet built of this is where all
my stuff is, this is how much it was worth
on January first of last year and December thirty first
of this year, and this is how much money I
made or lost. That that's not exactly rocket science, but
(32:39):
it has to be the basic first step if you're
going to start building this stuff out right.
Speaker 2 (32:46):
You don't need to get granular in terms of like
you don't need to be like, well, my cable bill
is this much? Simple things, Hey, do you have a
general sense of what number you're closest to on a
monthly basis in spending? Is it one thousand dollars? Is
it two? Is it three? What are you spending there?
Things like that are a great place to start if
you're not in tune with exactly how things are moving
(33:07):
for your finances. So it's those two components that's say,
what have I saved and what do I need to
spend on a monthly basis. There are some people who
love getting into the weeds on this stuff. I mean,
look at engineer. I mean I'm not an engineer.
Speaker 3 (33:21):
I'm one of the people that likes getting into the weeds,
but yeah, those are the mindsets that love doing this
time exactly.
Speaker 2 (33:26):
There are other people who are just, hey, you know
what I don't need to know how it all works,
but you still need to understand the general concept of Hey,
if you get into a car, you push the gas
to go and the break to stop.
Speaker 3 (33:37):
If you're finding yourself maybe approaching that stage of retirement
or at least starting to think about it, and if
anything that I just said kind of rings true in
your situation, Yeah, I do have some stuff scattered all
over the place. I'm not sure how to track it.
I know I get dividend checks or quarterly statements, but
I couldn't potentially log in and go see all that stuff,
(33:59):
or I can't to see it all in one place,
and I don't know how much money I've made or
earned over the last couple of years. It's time to
start getting your financial house in order, and it starts
with baby steps. And if you could use a little
bit of direction on those baby steps in terms of
where to go next with your own personal financial situation,
the Armstrong Advisory Group would love to guide you through it.
(34:21):
We have locations scattered throughout New England, so we can
sit down somewhere local to you and start collecting all
of this into a cohesive and coherent plan for your future.
If you'd like to chat with somebody at the Armstrong
Advisory Group to discuss next steps along those lines, give
us a ring at eight hundred three nine three four
zero zero one. If you're not available right now. There
(34:41):
isn't get started button on our website where you can
book a time for us to call you back at
Armstrong Advisory dot com. But once again, that phone number
is eight hundred three nine three four zero zero one.
Speaker 1 (34:53):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
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Speaker 2 (35:09):
Like the Olympics officially kick off tonight with the opening ceremony,
which I've always been confused as to why there are
events that start before the opening ceremonies.
Speaker 4 (35:18):
Enough time, Chuck, Yeah, we were watching handball and soccer
yesterday where I was like, where were the ceremonies.
Speaker 2 (35:24):
I'm just trying to figure out why they do it
that way. Why not just start those events after after
this ceremony earlier. It's not like you have a certain
number of days need to take place. You can just
have it be an extra couple days later.
Speaker 3 (35:40):
They couldn't get Snoop to the ceremony early enough, so
they had to delay it a day or two. Snoop's
going to the thinking.
Speaker 4 (35:47):
I heard Celine Dion is going to be there.
Speaker 2 (35:49):
I heard that too. My my wife was too excited
about that. Yeah, yeah, she was at a Bruins game.
I was at this year's well, got a huge ovation
from the crowd. Yes.
Speaker 3 (35:58):
I was going to go off on a tangent for
a it's not nice.
Speaker 2 (36:01):
We're gonna go. We're gonna go and say that every
sporting event in history is better if you play the
Titanic soundtrack over it.
Speaker 3 (36:06):
I was going to say that I thought that Snoop
Dogg was actually banned from parts of the European Union
for carrying cannabis into the country or into the continent
too frequently.
Speaker 2 (36:15):
Is that accurate?
Speaker 3 (36:16):
I thought that was the case a few years ago,
but I want to check my reference on that. That's
why I didn't go there.
Speaker 2 (36:21):
In any case, the Olympics not off to a great start,
as trains to and from Paris are disrupted by a
widespread arson attack this morning that has caused the major
operator of those trains, TGV, to suspend operations on up
to a quarter of those train lines at this point.
(36:45):
So it remains to be seen exactly who perpetrate this,
and you know what's going on here, but in what
may or may not be a related development. It is
also being reported this morning by a number of different
outlets that a I'll just quote here from the New
York Post, a former Russian reality TV chef and suspected
spy was arrested in France overnight after he reportedly bragged
(37:08):
about an alleged plot to cause mayhem at the Paris
Olympics during a drunken rant. That's the quote from the
New York Post. So you've got this going on as well,
So not quite what you want to see also in
terms of things that are just not great for the
start of the Olympics. In sporting related news there, the
head coach of the Canadian women's soccer team was suspended
(37:30):
from the remainder of the Paris Olympics by her own
federation because the Canadian team was found to be flying
drones over competitors' practices leading up to their games, and
the Canadian Association found that it was more likely than
not that the head coach was aware of the drone
use in trying to scout opponent practices.
Speaker 3 (37:52):
I didn't know Belichick was coaching soccer these days.
Speaker 2 (37:55):
And finally, I guess if you want some good news, Okay,
Simone Biles the most deck rated gymnasts basically in the universe. Yeah,
she decided that for an encorese she's debuting a new
skill at this Olympics, which, if she does, it will
be the sixth move that she has named after her,
six things that she's done for the first time ever
(38:17):
that no one else has ever done it, So just
kind of wild there. Let's take a quick break. We
had our two of the financial Exchange coming up in
a little bit.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor that provides investment advisory services. All opinions
expressed are solely those of the hosts, do not reflect
the opinions of Armstrong Advisory or anyone else, and do
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not offer any specific financial or investment advice. Please consult
(00:21):
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(01:04):
by Veterans Development Corporation This is the Financial Exchange with
Chuck Zutta and Mike Armstrong.
Speaker 2 (01:13):
Well, it's Friday here on the Financial Exchange. And if
you thought the last week was busy, just wait until
next week because Gollie g Willakers, there's a whole bunch
that we're gonna get to.
Speaker 1 (01:27):
Then.
Speaker 2 (01:27):
I know we have stuff to talk about from this morning,
but I was just looking at the calendar for next week,
and here's what we have on tap. Monday's pretty quiet,
so you can you can sleep in a bit on
Monday as long as you're not doing anything related to
you know, international markets, where there's some stuff that might
might might catch your eye. But then we get into Tuesday,
(01:49):
and just for earnings, we've got Microsoft reporting, so one
of the three biggest companies in the world. Tuesday, we
also have the Jolt Support, the Job Openings Report, the
S andp CA Shiller Home Prices, and the FHFA Home
Price Index. So that's Tuesday. Wednesday. There's a small bank
based out of twelve different locations. They get twelve branches
(02:09):
around the country called the Federal Reserve, and they're gonna
be announcing what they're gonna be doing with interest rates
and so that's Wednesday for economic data. We also have
Meta reporting earnings on Wednesday, so again pretty busy there.
Thursday we get ism, manufacturing data, and jobless claims, as
well as Amazon and Apple earnings with a side of Intel,
(02:32):
and then to cap it all off on Friday, we
get the jobs report for the month of July. I mean,
it's like, it's insane.
Speaker 1 (02:40):
What a week?
Speaker 2 (02:41):
What a week? I mean, my goodness, I'm gonna need
three shirts a day to get through this one. It's
just gonna be like, oh, my goodness because of all
the stress eatings, or it's just all the sweat just
from the excitement. It's just gonna be my, my goodness,
it's sweaty studio. Well, it's gonna be a sweaty week,
I'll tell you that. Especially it's gonna be like ninety
two by the end of the week, so buckle up
(03:01):
for that. It's gonna be like, well, the job report
is that that's not really a sweat sound. I don't
know why we're go in that direction, but in any case, okay, interesting,
how do you make a sound of sweat? That's what
I was trying to do real time.
Speaker 3 (03:18):
Just and then the sound of Chuck hitting the floor
from passing out from the heat and over talking. That's
what we're gonna do nowt that is, it's gonna be
a busy week this week. We have to talk this
fast in order to make all the news fit into
the two hour program this week.
Speaker 2 (03:32):
Just a little bit of data. This morning, we got
personal income and spending which came in a little bit
weaker than expected. Personal income point two percent gains for
the month compared to expectations of point four and personal
spending in line at point three percent. Now, remember, you
can't spend more than you earn forever. Eventually you're gonna
run out of money and borrowing power.
Speaker 3 (03:53):
I don't know, Chuck, We're American. We can do that
for a long time.
Speaker 2 (03:55):
It's true. If there's one thing you can say about
is as Americans, we've never met a debt we didn't like.
Speaker 3 (04:04):
We spend more than we take in, whether it's at
the household level the government level, it's yeah.
Speaker 2 (04:09):
Never met a debt we didn't like, or at least
we might not like it. But we've never met a
debt we wouldn't take on. So that's what we have
going on for personal income and spending. But the real
meat of this was the PCE price index, the Personal
consumption Expenditure Price Index. Why is that the real meat, chuck,
Because it's the Fed's preferred measure of inflation. You know,
(04:31):
all these other ones, if it's not the PCE price indecks,
it's not real inflation. Turn their nose out into that. Well,
they actually do care about the other ones. They just
like the PCE because they find it to be a
better predictor of future inflation than other indices. So here's
what we saw. The headline number came in at point
one percent for the month, in line with expectations. Core
(04:52):
came in at point two percent, just above expectations of
point one but still. You know, you print point two
over and over, you're gonna end up with two point
four percent inflation for the year and you win.
Speaker 3 (05:03):
Just to give you a sense for again, we talk
a lot about the CPI report, which came out earlier
in this month. Those same numbers minus point one on
headline CPI plus point one on core. So again similar
divergence between the two, but slightly different direction.
Speaker 2 (05:17):
Now this says, look, prices are not coming down, So
anyone out there saying, oh, gee, I want prices to
go back to twenty twenty. They're not not going to
they they never will. The only way you get prices
back to twenty twenty is if you get to like
twenty percent unemployment, which would be bad for all of us.
Speaker 3 (05:34):
Yeah, we don't.
Speaker 2 (05:35):
We don't want that.
Speaker 3 (05:35):
Don't want that.
Speaker 2 (05:36):
So we are seeing the rate of inflation continuing to moderate.
And if you look at the data that we have
for just twelve month inflation, which again is not necessarily
the most relevant, but it does matter. Consumer price index,
the headline is a two point nine to seven core.
Consumer price index is a three point two eight PCE.
(05:59):
Price indexs a two point five to one core PCE
at two point sixty.
Speaker 3 (06:02):
Three, and specifically for PCE, the preferred measure inflation, the
last five months in a row, both on core and
headline have been under three percent year over year numbers
for the year over year, yeah, year over your numbers,
they have all been under three percent for those numbers.
Speaker 2 (06:18):
Now you're gonna likely see the core numbers start to
tick up a little bit over the next couple of quarters.
The reason being if you go back and look at
the monthly numbers for core PCE in the second half
of last year that you're gonna be lapping what's commonly
called the base effects. What you see is er point
one percent point one percent point three point one point
(06:41):
one point two. So you got four point ones in
there that you're gonna have to repeat if you want,
you know, to stay down where you are. It's a
tall task in order to keep it there. But then
you come to January and you get this point five
that printed, and so you get some relief there as
long as you print lower. But this is all pointing
in my opinion at this point, given what the FED
has signaled about, Hey, they're not hesitating to consider September
(07:04):
as the first, you know, interest rate cut. Here, it's
all pointing towards that September meeting being a cut probably
twenty five basis points, but potentially fifty if the economy
worsens over the next six to seven weeks before them.
Speaker 3 (07:19):
Yeah, this report does nothing to contradict that point of view.
I would agree there. Whether you're looking at the year
over year numbers that I just quoted, whether you're taking
a six month rolling average all of these numbers, and
again regardless of which measure you're using the Fed's preferred
PCE or CPI. The most inflation that I'm seeing if
you annualize the last six months the first half of
(07:41):
this year is from the core CPI number, reading at
three point six percent, and the lowest is, you know,
stripping out that food and energy piece from CPI, you're
getting to two point six percent. So in all cases,
the trend has been lower, and those those numbers are
substantially lower if you just look at the last three
months and strip out what was a pretty big bump
in inflation in the first quarter.
Speaker 2 (08:02):
And really aside from Q one of this year, if
you look at not even like the last twelve, you're
gona look at the last thirteen months now and aside
from those three months, which again I know it's cherry
picking to a certain extent, but things are just a
little bit funky on that side. In the first quarter,
the other ten months average out to a two percent
rate of inflation encore PCE like it, it gets you there.
(08:27):
So when you've got ten out of thirteen that are
pointing you there, if the FED wants to cut, they can,
Does the data warrant them cutting at this point. I
think this is actually a really good question to ask,
like should they be cutting now? And I think there
(08:48):
are some tough ones that you need to sort through.
The first is, look, GDP growth for Q two came
in better than expected two point eight percent, and it
was bullied by people people spending money on goods somewhat.
I mean most of it did not come from there
by a large chunk. No, it was point four point
(09:08):
four came from that. Okay, yeah, it really wasn't a
big it was. It was point eight percent better than
what you saw in Q one, where it was negative
a negative point four percent contribution. But it's something where
point eight percent did come from inventories, which is something
where you look at and you're like, oh, that's going
to reverse and that's not going to be great. So
(09:29):
you say, okay, GDP was good, but is it coming
from sustainable sources? Not necessarily, So that's one part that
you look at. Other things. Hey, CPI is basically in
the same spot it was in at this point last year,
So if you haven't seen any movement there, what's the
need to cut? At this point? Jobs are still printing
(09:50):
rather strongly in terms of the headline number, but unemployment
has risen. Trying to think of just what else in
terms of you know, big picture economic things you have
out there, it's.
Speaker 3 (10:01):
The openings number. I mean, you've talked about the unemployment report.
But if we're going on jobs, we'll get another jult
report on what you say Monday Tuesday.
Speaker 2 (10:08):
Yeah, here's the reason to cut. If you and again
you'll have more data buy September. If the economic data
continues to worsen, kind of the monthly stuff that we've
been getting in real time continues to worsen, it points
to conditions where recession becomes possible in Q four of
this year, Q one of next year. So because of
the lags in monetary policy actually mattering. Remember just because
(10:31):
the FED cuts interest rates on any given day, it
doesn't mean that the next day people wake up and
they're like, well, it's time to spend the money.
Speaker 3 (10:38):
You don't think it's possible we're already in a recession.
I mean, I know it won't be called today, but
I mean you've seen unemployment tick up by five tenths
or no, six tenths percent. You've seen GDP printed pretty hard.
But I mean we're now in July we're almost in August.
I think when I see those surveys of you know,
six and six and ten Americans or whatever it was
(10:59):
saying that we're in recession right now, it's the first
time in the last two years where I've said they
might not be far off.
Speaker 2 (11:07):
To say you're in recession right now. What's the evidence
of it?
Speaker 3 (11:13):
Because so far here the unemployment's the only p second
look at, and.
Speaker 2 (11:16):
Even on unemployment, it still is something where you're like, hey,
even though the unemployment rate is ticking up, we're still
adding net jobs and jobless claims have not ticked up
in any meaningful fashion. You know, you're not seeing anything
that is indicative of a broad based recession. You have
parts of the economy where you're like, yeah, there's definitely
a slow down happening in housing, there's definitely a slow
(11:38):
down happening in autos. There's a slowdown happening in travel. Okay,
there's something happening in terms of big ticket items. It's
not reflecting in other areas broadly right now, And that's
what's required for you to have a recession. Just because
people buy fewer cars doesn't mean session.
Speaker 3 (12:01):
Yeah, the question would be in my mind, if you're
at the five percent unemployment by January, that's a recession.
And when did it start?
Speaker 2 (12:11):
Well, yeah, I mean look, if you get to five percent,
you're going up zero point two percent for the next
five months. I mean like, that's yes, that's a screaming recession.
You're like, hey, guys, like, what are we doing here?
And this is why, if you're the Fed, you say, yeah,
we need to try to get ahead of this to
mitigate the potential impact of it. Is because the mechanism
by cutting interest rates in September is starting to you say, Okay,
(12:34):
if we get lower rates, you know, actually filtering into
the economy by Q one or Q two of this year,
then people say, yes, I am gonna buy that house
because mortgage rates are five and a half. I am
gonna buy that car because the interest rate is six
instead of eight. And you get that economic activity happening
that that averts it or at least minimizes it. That's
(12:55):
the case for it. I laid out the case against it,
and that look, it's not like the economy's slow that
much by most you know, other metrics. The other thing
that we do have to consider, maybe GDP growth is
being overstated. It is an estimate of what's going on.
It's not empirical. There is no actual measure GDP growth.
(13:16):
We do have a scale, it just doesn't measure GDP growth.
It tells me stop eating the chocolate in between you know, segments,
and I say no, I will continue. Let's take a
quick break when we come back. That's enough FED and
rates talk. Let's talk a little bit about so we
talk about why wealthier people aren't spending money right now
(13:37):
and why they're bad for not spending money now.
Speaker 3 (13:40):
Yes, let's slap the wealthy people's hands.
Speaker 2 (13:42):
Okay with fish?
Speaker 3 (13:44):
No, just with fish.
Speaker 2 (13:47):
Okay, you know you just a good fish slap. No, No,
Let's take a quick break, and when we return we
will discuss the wealthy people and why they aren't spending
money the way they used to.
Speaker 1 (13:59):
After this, the latest news on inflation, the FED, B economy,
and how the markets are reacting. Every morning right here
on the Financial Exchange Radio Network. Get up to the
minute market updates with Wall Street Watch week days at
ten thirty only here on the Financial Exchange Radio Network.
Speaker 4 (14:24):
The Financial Exchange has built an incredible partnership with the
disabled American Veterans Department of Massachusetts. We can't wait to
take part in this year's DAV five K, set for Saturday,
November ninth at FDA Independence on Castle Island, and registrations
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Speaker 2 (15:00):
Let's talk a little bit about wealthier people not splurging
the way they used to. This is from market Watch,
I believe correct, and what it's talking about here is
that when you look at the data from people spending
or earning more than one hundred thousand dollars a year,
they have seen the tightest contraction indiscretionary spending amongst that
(15:25):
group out of any demographic.
Speaker 3 (15:27):
So important. This is not from randomized credit card day.
This is a survey. So I want to caveat it
with we don't know some of this stuff is notoriously unreliable,
but the cohort of Americans that own their home and
make over one hundred thousand dollars seemingly were responsible for
(15:49):
a large portion of the continued excess spending that we
saw post COVID.
Speaker 2 (15:54):
There are still people trying to put in pools from
twenty twenty one because it was so backed up with
the pool builders.
Speaker 3 (15:59):
So there seemingly was that cohort that was continuing to spend, whereas, yeah,
the renter that's making less than one hundred thousand dollars.
Unfortunately in this economy, as we've talked about at length,
but it has been really left behind of the last
few years and has not been able to basically keep
pace with anything and certainly has not increased their spending.
I think the point that market watch is attempting to
(16:20):
make here if this survey data is correct, would be, look,
this is the last cohort of people who can afford
to continue spending on discretionary items and increasing spending. And
if they are pulling back, then automakers, pool makers, discretionary
you know, airlines, watch out because this would be kind
of the last remaining group that has money to spend.
Speaker 2 (16:41):
And to be fair, it does match what we're seeing
in the spending trends in high cost in like in
things that in big.
Speaker 3 (16:48):
Ticket end items, big ticket items we've seen, I.
Speaker 2 (16:51):
Mean, every single automaker that's reported earnings has been slammed.
I have not seen one where you've been like, hey,
look at them, They're up five percent after GM, Stilantis, Ford, Tesla,
Mercedes reported overnight. Like it's just things are not good
in the auto space anywhere right now.
Speaker 3 (17:11):
You kind of jokingly mentioned pooled installers. But the Wall
Street Journal or maybe the New York Times, I don't remember,
which has written a few pieces over the last few
months about interviewing pool installers that, oh, yeah, we are
significantly slowing down here and we're hoping that an inch
strike cut will boost business.
Speaker 2 (17:26):
Do you know why that's the case, Mic, Do you
know how freaking expensive it is to put in a pool?
Speaker 3 (17:30):
Now?
Speaker 2 (17:30):
I have someone who I have a buddy of mine
who is trying to man now and I'm listening to
the quotes he's given me. I'm like, why don't you
just buy another house that already has one?
Speaker 4 (17:39):
Yeah, isn't like pool liner like ten grand, It's just liner.
Speaker 2 (17:44):
I don't know, don't know, it's expensive whatever it is.
But like the quotes that he was telling me, He's like,
I'm trying to put a pool, and then he's like
nothing complicated, like no waterfalls, no, you know, hot tub,
no this and all that, and I'm listening to it.
I'm like, dude, just move to a house that has
a pool.
Speaker 3 (17:59):
Can I make an argument to your friend who shall
remain anonymous as a current pool owner. You get to
use it like two and a half months a year,
don't bother. No, you get to use it like five
five months a year. You get to use a pool
in the Boston area.
Speaker 2 (18:14):
Yes, it depends on it. If May, June, July, August, September.
Speaker 3 (18:18):
Nobody's swimming in their pool in early May, you're the
only person that's swimming in their pool.
Speaker 2 (18:22):
In early May. Is like ninety three degrees this year, Now,
I I you can just after Mother's Day that a pool.
Speaker 3 (18:33):
Is not a great investment in New England. But we digress.
There is some evidence that yeah, this cohort who has
been spending on overseas travel and all of these items
that we've talked about for the first half of this year,
should they slow down great news for inflation, but not
great news if you are any business that sells discretionary products.
Speaker 2 (18:53):
And specifically like high end ones. Yeah, you know, it's
another like another related area. I got a buddy of
mine really into watches, okay, and Brady's got their thing.
Everyone's got their thing. Like again, it might sound dumb
to again, there's plenty stuff that sounds dumb to me,
but I'm like, hey, if that's your thing, that's your thing.
(19:13):
And he was telling me in like twenty twenty one,
like all these watch prices were going through the roof
because it was you know, crypto people were buying them
and investments were up in this and that. And I
was talking to him last week about it. I'm like,
you know, like, what what's the deal with with the watches?
Speaker 4 (19:27):
Man?
Speaker 2 (19:27):
He's like, prices are off sixty to seventy percent from
their peak. I'm like, oh, boats at RV's Yeah, like
again another big ticket discretionary item. Quick break here Wall
Street Watches next.
Speaker 1 (19:44):
Like us on Facebook and follow us on Twitter. Act
TFE show breaking business news is always first right here
on the Financial Exchange Radio Network. Time Now for Wall
Street Watch a complete look at what's moving markets so
far into theay. Right here on the Financial Exchange Radio network.
Speaker 4 (20:05):
The markets are in rally mode again to wrap up
the week, as Wall Street digests this morning's core PC index,
which climb two point six percent annually, slightly above estimates
of two point five percent. Right now, the Dow is
up by one and a quarter percent, or five hundred
and three points. S and P five hundred is up
by three quarters of a percent, and the Nasdaq up
(20:28):
by half a percent. RUSSA two thousand up over one
and a half percent as well. Tenure Treasure yield is
down by five basis points now at four point one
nine percent, and crude oiled down by two percent, trading
a seventy six dollars in sixty nine cents a barrel.
Several chip makers are rebounding after their recent skid. In Nvidia, AMD, Broadcom,
(20:52):
and Micron Technology are all seeing gains of about one
and a half percent so far today. Meanwhile, f after
its recent plummet shares and Crowdstriker up by a third
of a percent after CEO George Kurtz said that more
than ninety seven percent of Windows sensors we're back online
one week after the cybersecurity company's update resulted in a
(21:13):
worldwide IT outage. Paul A Monica of Barons will join
us at eleven forty five to give his take on
CrowdStrike elsewhere. Diabetes device maker dex Com cut its fiscal
twenty twenty four revenue outlook, where its chief executives set
a shortage of new patients was part of the problem
(21:34):
that stock tanking by forty percent. Deckers increase its annual
profitability outlook as a result of strong demand for its
Hoca and ug footwear brands, sending that stock up by
eight percent. Three M lifted the floor of its full
year outlook, where it's quarterly sales and earnings topped expectations,
that stock up by sixteen percent, and Boston Beer shares
(21:56):
are up by five percent after the Sam Adams Brewer
fell short of second quarter earnings and revenue expectations. I'm
Tucker Silvan, that's Wallstree watch, Chuck.
Speaker 3 (22:06):
I missed the show on Wednesday? Did you guys cover
what CrowdStrike was doing for their affected customers?
Speaker 2 (22:12):
Was this where they were giving them the uh? Was
it uber eats credits? Is it ten dollars? Uber Eats
gift card was was that confirmed to be real? I
heard it pretty widely reported.
Speaker 3 (22:25):
I don't remember seeing comments from CrowdStrike on the subject.
But if it is, can you even get a five
dollars McDonald's value menu.
Speaker 2 (22:36):
Picked this got picked up by Mashable and tech Radar,
so it's probably it's real. And tech Crunch picked it
up also, and like, these are three publications that are
legitimate technology publications.
Speaker 4 (22:49):
So ten dollars uber, I get twenty five dollars promotions from.
Speaker 2 (22:53):
I'm gonna I'm gonna quote here from Mashable. The email
containing the vouchers appears to have gone out on Tuesday.
Crowdstrikes attached Mesterge acknowledge that the glitch had led to
quote additional work, and offered quote heartfelt thanks and apologies
for the inconvenience. To make it up to users, The
email said your next cup of coffee or late night
snack is on us, and then provided instructions for redeeming
the gift card online if you're.
Speaker 3 (23:13):
Going to I just like corporate gosh, companies make such
big missteps. Sometimes a nicely written apology is going to
go further than something like this, because this is when
you do something like this, that's a kind of meaningless
(23:34):
number on an individual basis, it's kind of a slap
in the face. You're better off with a really sincere
written apology saying we screwed up, we acknowledge it, we're
going to do better in the future and find ways
to make this better for you and your teams, or
you have to give something meaningful, because ten dollars is
a bit of a slap in the face.
Speaker 2 (23:55):
Hey, we screwed up. We know that this cost you
the last week and made this harder. We're gonna extend
your contract for a month at no cost to you. Yeah, there,
that's it. You know we value your business. Please stick
with us. We'll stick with you ten dollars.
Speaker 3 (24:13):
Yeah, ten dollar breas is just and again, now they're
gonna have to do something else because that's such a
bad shoun.
Speaker 2 (24:18):
We say ten we met twenty is that you can't
even get a freaking Chipotle for that.
Speaker 3 (24:24):
It reminds me of the apologies from BP after they
spilled all the oil.
Speaker 2 (24:29):
I don't remember those.
Speaker 3 (24:30):
We're sorry. They just kept saying like we're so sorry,
and then just worst up kept happening, like the oil
was still spilling into the Gulf, and they're just.
Speaker 2 (24:39):
Like, ah, you know that was over a decade ago. Now, yeah,
it's a long time back piece from the New York Times.
Twenty twenty five could be a great time to be
president economically speaking, Is this.
Speaker 3 (24:50):
Not the article that gets written right before a recession?
Speaker 2 (24:54):
Feels like the first thing that I thought. I'm like,
I don't know about that quote. The next couple of
years are shaping up to be solid for the US economy. Okay,
inflation is returning to normal. Great as that happens. The
federal reserves planning to cut interest rates.
Speaker 3 (25:11):
Oh why are they doing that? Interest right? Kind of gas?
Speaker 1 (25:14):
You know?
Speaker 2 (25:14):
It's burst of infrastructure spending under the Biden administration has
taking time to ramp up and project but projects both
small and largeer likely to make break ground in ernest
in twenty twenty five and twenty six. Good first paragraph.
Then things can always go wrong. The job market could
cool more than expected, financial market problems could surface, and
risks tied to the election of November could still uncertainty.
(25:35):
But the base case outlook is bright. The base case
outlook is always bright because no one ever predicts recessions. Accurately.
For the last two years, people have been predicting recession
left and right. Hasn't shown up yet in the economic data.
So if we're now projecting.
Speaker 3 (25:53):
That everything's gonna be fine, warm and fuzzy.
Speaker 2 (25:55):
Maybe that should It's it's what's the movie where there's
some character who goes when they tell you everything's fine,
that's when you need to panic? Is it twenty twelve?
Speaker 3 (26:04):
I don't know.
Speaker 2 (26:06):
I think it's that with what's the guy's name? He
plays like the crazy conspiracy theorist radio host, the ham
radio guy. He plays like crazy characters in a lot
of movies.
Speaker 4 (26:17):
Oh, guy, you're probably not helping.
Speaker 3 (26:20):
Coming out blank. Yeah. In any case, Chuck, Look, it's
not to say that everything's terrible right now, like whatdy Harrelson.
Oh okay, but.
Speaker 2 (26:31):
He plays like kind of offbeat crazy characters in most movies.
Speaker 3 (26:33):
Yeahs offbeating crazy that description. So to Genus Milex's credit here,
inflation has come way down, we are not currently in
a recession, and there is a lot of infrastructure money
to be spent over the last few years. So, like,
I do get her position on this, but it does
(26:55):
just it just begs for a recession to happen right
afterwards when you when you write something like this and yeah,
she tries to acknowledge the potential for surprise. And that's
it is. Nobody ever expects a recession to be right
around the corner, and you never know until it's, you know,
a year behind you. And that's the trouble with any
piece like this of saying, oh, it sure could be rosy.
Speaker 2 (27:17):
Yeah, it could be.
Speaker 3 (27:18):
It could be rosy. There's a lot of things that
are currently trending in the right direction if all goes perfectly.
Speaker 2 (27:27):
Yeah. The two things that I struggle with on this
Number one, Hey, trying to project out that far in
terms of what the economy is going to look like
kind of tough, yeap, kind of. I mean, it's it's
really tough. And the other piece that's kind of related
to that is the economy is never stagnant. It's never
in one place for an extended period of time. It's
(27:47):
always evolving and always changing, which is why over the
course of this year, I think of just the different
regimes that we've gone through this year from a market
and economic perspective. Q One was gee that inflation is resurging,
is fed gonna have to hike more. Q two has
been Hey, inflation's fading. The Fed's gonna be able to
cut Q three. It's been four weeks so far and
(28:09):
it's hey. Tech stocks are getting pummeled in small caps
are rising. You know. It's we've been through three distinct
market regimes just this year already. Who knows what we're
gonna go through by the middle of next year. Take
a quick break. When we come back, we'll talk a
little bit about h index funds and also spending your
(28:30):
nest egg. All that money that you save for retirement.
Eventually you're gonna spend it, because that's why you're saving it.
How do you plan to do so most effectively? We'll
talk about that when we return.
Speaker 1 (28:40):
This is your home for the most comprehensive coverage of
the economy and the trends on Wall Street. This is
the Financial Exchange Radio Network. Find daily interviews and full
shows of the Financial Exchange on our YouTube page. Like
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(29:00):
Radio Network.
Speaker 4 (29:07):
This segment of The Financial Exchange is brought to you
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The US Virgin Islands is the perfect destination for your
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Speaker 1 (29:32):
Mike.
Speaker 2 (29:33):
There's a piece of Barrens from this week. It's titled
Someday You'll have to spend your nest egg Why you
need to plan ahead for that? And it really talks
a little bit about Hey, the reason that you save
money again, it's basically its most core principle. Hey, the
reason that you save money is because you are taking
(29:54):
spending power from today and you're transferring that spending power
into the future. That's ultimately what it is. Not me,
I'm more of a Scrooge McDuck, just like to swim
in it. What stroke do you do when you're diving
through the poster money press stroke? I'm more of a butterfly,
of course.
Speaker 3 (30:08):
I mean it actually is this psychological thing to get over.
But transitioning at some point to the stage where you recognize,
oh wow, I'm really not adding anything else to this,
and I am going to actually start spending all this
money that I've spent my lifetime saving up for is
a bit of a psychological hurdle to get over.
Speaker 2 (30:26):
It is, and I've seen with retirees it can often
take like six to eighteen months for them to get
comfortable with that idea because for forty years it's been
drilled into your head. Save money, save money, don't touch it,
don't touch it. And now you get to retirement and
you're like, wait, you you want me to do what
with this? And it's important to remember that that is
(30:48):
why you save the money. It's not just to have
it sit there. It's so that you can basically replace
your paycheck with a new one that comes out of
your social security, your portfolio, and that portfolio being the
one piece where you really see, hey, this accumulated pool
of money can offer me the toughest one for people
to psychologically deal with as they start to tap into it.
Speaker 3 (31:11):
I've talked about this a fair bit, but the decisions
you actually have to make at that stage, believe it
or not, are quite a bit more complicated than the
ones that you're making when saving. It's not that saving
for retirement is easy. It's a challenge. You have to budget,
you have to be disciplined. But the solutions that you
have are pretty simple. Yeah, when you're retired and it's
(31:32):
about taking the money out, it is more complicated. It
is much more about when do I tap when? How
do I do deal with Social Security? Should I tap
my four to one K, my savings, my roth? There
are more complicated questions to answer there that make the
scenario a little bit trickier than just the savings phase.
But here's an even more basic level to start. Do
(31:53):
you actually know where all of your different four one
ks and investment accounts are? Can you view them all
in one place? Do you know how much money you
made or lost last year on your investments? Do you
know how much money you will need to make in
the future in order to maintain your lifestyle? And are
(32:17):
you hitting those goals right? I know that sounds really simple,
but I'll tell you, in my experience, maybe one in
ten have a spreadsheet built of this is where all
my stuff is, this is how much it was worth
on January first of last year and December thirty first
of this year, and this is how much money I
made or lost. That that's not exactly rocket science, but
(32:39):
it has to be the basic first step if you're
going to start building this stuff out right.
Speaker 2 (32:46):
You don't need to get granular in terms of like
you don't need to be like, well, my cable bill
is this much? Simple things, Hey, do you have a
general sense of what number you're closest to on a
monthly basis in spending? Is it one thousand dollars? Is
it two? Is it three? What are you spending there?
Things like that are a great place to start if
you're not in tune with exactly how things are moving
(33:07):
for your finances. So it's those two components that's say,
what have I saved and what do I need to
spend on a monthly basis. There are some people who
love getting into the weeds on this stuff. I mean,
look at engineer. I mean I'm not an engineer.
Speaker 3 (33:21):
I'm one of the people that likes getting into the weeds,
but yeah, those are the mindsets that love doing this
time exactly.
Speaker 2 (33:26):
There are other people who are just, hey, you know
what I don't need to know how it all works,
but you still need to understand the general concept of Hey,
if you get into a car, you push the gas
to go and the break to stop.
Speaker 3 (33:37):
If you're finding yourself maybe approaching that stage of retirement
or at least starting to think about it, and if
anything that I just said kind of rings true in
your situation, Yeah, I do have some stuff scattered all
over the place. I'm not sure how to track it.
I know I get dividend checks or quarterly statements, but
I couldn't potentially log in and go see all that stuff,
(33:59):
or I can't to see it all in one place,
and I don't know how much money I've made or
earned over the last couple of years. It's time to
start getting your financial house in order, and it starts
with baby steps. And if you could use a little
bit of direction on those baby steps in terms of
where to go next with your own personal financial situation,
the Armstrong Advisory Group would love to guide you through it.
(34:21):
We have locations scattered throughout New England, so we can
sit down somewhere local to you and start collecting all
of this into a cohesive and coherent plan for your future.
If you'd like to chat with somebody at the Armstrong
Advisory Group to discuss next steps along those lines, give
us a ring at eight hundred three nine three four
zero zero one. If you're not available right now. There
(34:41):
isn't get started button on our website where you can
book a time for us to call you back at
Armstrong Advisory dot com. But once again, that phone number
is eight hundred three nine three four zero zero one.
Speaker 1 (34:53):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (35:09):
Like the Olympics officially kick off tonight with the opening ceremony,
which I've always been confused as to why there are
events that start before the opening ceremonies.
Speaker 4 (35:18):
Enough time, Chuck, Yeah, we were watching handball and soccer
yesterday where I was like, where were the ceremonies.
Speaker 2 (35:24):
I'm just trying to figure out why they do it
that way. Why not just start those events after after
this ceremony earlier. It's not like you have a certain
number of days need to take place. You can just
have it be an extra couple days later.
Speaker 3 (35:40):
They couldn't get Snoop to the ceremony early enough, so
they had to delay it a day or two. Snoop's
going to the thinking.
Speaker 4 (35:47):
I heard Celine Dion is going to be there.
Speaker 2 (35:49):
I heard that too. My my wife was too excited
about that. Yeah, yeah, she was at a Bruins game.
I was at this year's well, got a huge ovation
from the crowd. Yes.
Speaker 3 (35:58):
I was going to go off on a tangent for
a it's not nice.
Speaker 2 (36:01):
We're gonna go. We're gonna go and say that every
sporting event in history is better if you play the
Titanic soundtrack over it.
Speaker 3 (36:06):
I was going to say that I thought that Snoop
Dogg was actually banned from parts of the European Union
for carrying cannabis into the country or into the continent
too frequently.
Speaker 2 (36:15):
Is that accurate?
Speaker 3 (36:16):
I thought that was the case a few years ago,
but I want to check my reference on that. That's
why I didn't go there.
Speaker 2 (36:21):
In any case, the Olympics not off to a great start,
as trains to and from Paris are disrupted by a
widespread arson attack this morning that has caused the major
operator of those trains, TGV, to suspend operations on up
to a quarter of those train lines at this point.
(36:45):
So it remains to be seen exactly who perpetrate this,
and you know what's going on here, but in what
may or may not be a related development. It is
also being reported this morning by a number of different
outlets that a I'll just quote here from the New
York Post, a former Russian reality TV chef and suspected
spy was arrested in France overnight after he reportedly bragged
(37:08):
about an alleged plot to cause mayhem at the Paris
Olympics during a drunken rant. That's the quote from the
New York Post. So you've got this going on as well,
So not quite what you want to see also in
terms of things that are just not great for the
start of the Olympics. In sporting related news there, the
head coach of the Canadian women's soccer team was suspended
(37:30):
from the remainder of the Paris Olympics by her own
federation because the Canadian team was found to be flying
drones over competitors' practices leading up to their games, and
the Canadian Association found that it was more likely than
not that the head coach was aware of the drone
use in trying to scout opponent practices.
Speaker 3 (37:52):
I didn't know Belichick was coaching soccer these days.
Speaker 2 (37:55):
And finally, I guess if you want some good news, Okay,
Simone Biles the most deck rated gymnasts basically in the universe. Yeah,
she decided that for an encorese she's debuting a new
skill at this Olympics, which, if she does, it will
be the sixth move that she has named after her,
six things that she's done for the first time ever
(38:17):
that no one else has ever done it, So just
kind of wild there. Let's take a quick break. We
had our two of the financial Exchange coming up in
a little bit.
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