September 19, 2024 • 36 mins
Chuck Zodda and Mike Armstrong detail how the markets are responding to the Fed's rate cuts. Matt Gagnon, CEO - Maine Policy Institute, joins the show to discuss if we are taking a too-early victory lap on inflation. Boeing furloughs white-collar workers as strike crunch worsens. Tech jobs are drying up and aren't coming back anytime soon. Darden Restaurants earnings disappoint as Olive Garden, fine dining sales struggle.
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Episode Transcript
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Speaker 1 (00:01):
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(00:21):
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(00:43):
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(01:05):
Veterans Development Corporation. This is the Financial Exchange with Chuck
Zatta and Mike Armstrong.
Speaker 2 (01:13):
Kicking off the second hour the Financial Exchange. It's Chuck,
Mike and Sucker with you. And stocks are ripping. It's
the technical term. They're up three hundred and seventy six
points on the Dow. The S and P is up
eighty nine. Nas Deck's up four to forty five, So
anywhere between about a one and a two and a
half percent jump inequities today, where's it being led by
(01:37):
I'll give you three guesses, and none of them count
Michael rates.
Speaker 3 (01:43):
No, it's being led by tech. Sorry, the sector of
the market. Okay, it's fine. It was a little confusing.
Speaker 2 (01:49):
You got Nvidia up over four percent, Apple up over three,
Meta up over three, Tesla up over five, broad Come
up over three, a m D up over five. It's
tech that's ripping today. Places that are cruisin along. Energy
is up nicely, materials up nicely. What's lagging? You've got
consumer staples, utilities, real estate, healthcare, all kind of dragon
(02:13):
a little bit at the moment. In terms of other markets,
ten of US Treasury is up four and a half
basis points to three point seventy three two percent. So hey, great,
the Fed cut interest rates yesterday. Ten You went up
five basis points yesterday, four and a half today, so
almost ten basis points in about a day and a half.
You got oil up forty nine cents of barrel on
West Text Intermediate to seventy one forty and we've got
(02:35):
gold of seven dollars and thirty cents to twenty six
hundred and five dollars and ninety cents an ounce case
you missed it yesterday, which is really hard because I
even saw like non news outlets covering this.
Speaker 3 (02:50):
The Disney Channel was covering No, honestly, it's close.
Speaker 2 (02:54):
Slim I'm gonna test something.
Speaker 4 (02:58):
Oh my god, can you imagine Nickelodeon doing the same,
like version of slimming Powell.
Speaker 3 (03:06):
I want to see the Nickelodeon coverage of A J.
Powell count so badly. So I just checked.
Speaker 2 (03:12):
The FED rate cut decision is not currently on the
front page of People, so it didn't make it there.
I'm assuming it's not on ESPN, but look, it's basically everywhere,
like everyone in their grandmother's been talking about this. Yeah,
and so the FED did cut interest rates by half
a percent yesterday. They guided for two additional quarter percent
(03:35):
cuts by the end of this year and four quarter
percent cuts by the end of next year, so total
of two percentage points and cuts priced in by the
end of next year. The Fed thinks unemployment might continue
to rise a little bit more, up to four point
four percent, but they don't see it going higher than that.
They think inflation is going to continue to come down,
and so they're basically saying, hey, we think we're really
(03:56):
close to the soft landing, and we're just doing this
to prevent the labor market from weakening the way that
it potentially could if we took no action. Yeah, we
know people have questions.
Speaker 4 (04:06):
You can text the show at six one, seven, three, six,
two thirteen eighty five.
Speaker 3 (04:10):
Some questions we have answers to others we don't. But
I don't know what the meaning of life is.
Speaker 4 (04:15):
No, well, you speak for yourself, but you know happened
to you know, ponder questions and discuss them out loud,
and and you know kind of go back and forth
on this stuff. But you know, the key takeaway is
that the Fed did cut rates. They did a fifty
base point cut, which is not normal, it's not the
standard operating procedure. It's not what they prefer to do.
They like in a normal environment to do twenty five
(04:37):
and we will see where this thing goes ultimately. Also
interesting on the market side of things, with markets did
close down yesterday. They were up on the announcement, up
for the beginning of Powell's speech, and then as that
went on, ended up closing very slightly.
Speaker 3 (04:54):
Now we down quarter percent on the SMP up thereabouts. Yeah,
nothing huge, maybe like a third of a percent.
Speaker 4 (04:58):
So but to see this today, you know, sometimes you
just need overnight to digest what was actually said and
what it actually might mean. And traders this morning interpreting
it as growth.
Speaker 3 (05:10):
Well.
Speaker 2 (05:11):
And look, the other thing to remember, I know that
we're always very US focused because we live in the
United States. True, Look, the Bank Japan meets tomorrow. They
could pour a bunch of cold water on this in
a hurry if they do something unexpected there.
Speaker 3 (05:26):
So it's there's.
Speaker 2 (05:28):
Never any one story that's done. Like markets are always evolving,
they're always changing. There's always a new narrative that's coming up,
and so you have to evolve.
Speaker 3 (05:36):
Your views with them, otherwise you risk getting left behind
in markets.
Speaker 4 (05:42):
The other proof of you know, growth being the story
of the day. We've got the yield on the ten
year treasury. It was up yesterday and it's moving up
again today. So we're now, let's see you over a
full percentage point higher than where we were two days
ago on sorry, tenth of a percent atage point higher
on the ten year treasury deal.
Speaker 3 (06:02):
The full percentage point would be a pretty wild shift
for two days.
Speaker 4 (06:05):
But yeah, again speaks to that confidence about growth, soft landing,
and no recession that traders have this morning.
Speaker 2 (06:12):
Anyway, We'll see where things develop over the next three
to six months. But again we've been concerned about the
unemployment rate. Today we got weekly jobless claims. The seasonally
adjusted number came in at two hundred and nineteen thousand,
which is eleven thousand below where they were last week
(06:35):
and where they and below expectations. We also when we
look at the not seasonally adjusted numbers there, they came
in one hundred and eighty four thousand, which is right
in line with the past few years of normal economies.
I exclude basically twenty twenty through twenty twenty two because
things were abnormal then. But you look at twenty three
(06:56):
and twenty nineteen and eighteen, and this is basically the
same seasonal pattern we've been seeing, so there's no sign
of increased layoffs or unemployment claims on that side of things.
Speaker 4 (07:06):
I got a question from I think either an email
or the text line. Does a bank have to follow
a guideline for setting a mortgage rate or couldn't? In theory,
a bank set any rate they want because they're the
one lending out the money. Yeah, mortgage rates and what
banks choose to lend the money out on is entirely
a bank decision and has nothing to do with the
Federal Reserve. I mean, in theory, I guess it directionally
(07:28):
guides where the rates will be. But yeah, I mean,
if if a bank out there is really looking for
a whole bunch of new thirty year mortgage rates and
wants those loans, they can discount and say, hey, yeah,
we're we're offering mortgage rates at five seven five right now,
even though the average according to Mortgage News Daily today
is six point and.
Speaker 2 (07:50):
A couple things that banks have to deal with as
they're trying to set their rates. The first is, okay,
can we be profitable?
Speaker 3 (07:56):
At this rate.
Speaker 2 (07:57):
Their costs associated with running the bank, from just you know,
your basic overhead keeping the lights on, to the different
insurance that you need to have in order to operate it,
all of the.
Speaker 3 (08:08):
Stuff that you have to do.
Speaker 2 (08:08):
From a regulatory perspective, there's a whole bunch that goes
into actually running a bank. And so in theory, look,
a bank could come out and say, yeah, we want
to set our interest rate for thirty or fixed rate
mortgage at two percent, but they're probably not going to
be able to make money on that.
Speaker 4 (08:26):
And again, I mean two percent is an extreme. But
the reason why here does have to do with the
FED and this FED funds rate in that overnight I mean,
where does the FED interject that lending rate cost into
the bank.
Speaker 2 (08:43):
Well, it's really a bank needs to attract deposits, yea.
And because remember in banking everything's kind of backwards. So
even though you think of a deposit as like your
asset to the bank, the deposits a liability because it
can leave it anytime. And so if a bank says, okay,
we've got to attract a poss and if they're not
Bank of America where they can just pay zero points zero,
(09:03):
one or two percent because everyone's just.
Speaker 3 (09:06):
Inertia over there. And yes, I did just turn inertia
into a verb yep, which is great. By the way,
I'm gonna start using that more.
Speaker 2 (09:14):
If I am, you know, a small community bank, especially
one starting up, I might say, look, I might have
to pay three or four percent in order to attract
people to my bank, because there are other banks paying
that in deposits. Okay, if I'm paying out three or
four percent plus, I've got my operating costs maybe net
net on each dollar I'm paying five percent for you know,
all of my costs. Okay, that means I probably got
(09:37):
to set my rate at you know, five and a
half to six if I want profit in this environment,
and so I can do that. Or hey, if I'm
more cautious, I might set my rates higher just to
have a wider gap in case inflation comes back or
something unexpected happens. And that's how rates get set for
mortgage products and things like that. In the market right now.
Banks have always had one problem which reared its head
(09:59):
last year. Deposits are short term. They can come and go.
If you got a thirty year fixed rate mortgage on
your books. It's on your books. It's a long term
loan that you have, even though your deposits are short
term that you're holding. So that's one of the things
that banks have to navigate as well, and ultimately that's
what ended up blowing up Silicon Valley Bank last year
(10:20):
was a mismatch between loans and deposits, where deposits fled
and hey, we're still stuck with all these long term
loans that have now gone down in value.
Speaker 3 (10:30):
Kind of a problem. Let's take a quick break here.
Speaker 2 (10:32):
When we come back, we're gon be joined by Matt
Gagnan or Ganyon.
Speaker 3 (10:35):
I don't know, is it gang Ganon.
Speaker 2 (10:38):
Matt Gannon, chief executive officer of the Main Policy Institute.
Speaker 3 (10:42):
Oh, it's it's Matt. I spake to him like once
a week.
Speaker 1 (10:45):
I know.
Speaker 2 (10:45):
I saw it on the schedule here, very official on
the schedule. I know it looks more like more efficient
than I typically talk. So yeah, it's Matt Ganion from
UH the UH Main Policy in Students, the chief executive
officer there. He's also the wgan morning show host. And
Matt's going to join us right after this.
Speaker 1 (11:02):
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Speaker 4 (12:07):
Mcdunnon is the chief executive officer of the main policy Institute.
Speaker 3 (12:12):
He's also the host of.
Speaker 4 (12:14):
The WGA and Morning News, the show that precedes our
own up in Portland, Maine, from six to nine every
day on WGA and Matt.
Speaker 3 (12:21):
Thanks for joining us, appreciate it.
Speaker 6 (12:23):
It's pleaged to be back again.
Speaker 4 (12:25):
So, you know, Chuck and I do a lot of
talking pre and post Federal Reserve meeting. It kind of
gets the point where we see a lot of this stuff.
I to Ie, I'm curious, you know, from your perspective,
what were your main one or two takeaways from what
your own Powell had to say and do regarding interest
rates yesterday.
Speaker 6 (12:44):
That's a good question. I mean, I think that the
clear vibe that I was left with, if I can
call it a vibe, is that he's interested in being aggressive. Obviously,
the you know, the half point, you know break that
we got there is clearly on the more aggressive side.
But they also seem to be signaling that they're going
to continue to do so, and that to me signals
a couple things. I mean, for one, I think that
(13:05):
they feel like they have gotten a handle on inflation
enough that it is not terribly risky to do that.
Whether they're right about that it's a different conversation, probably,
But I think that they are seeing things in the
economy right now that worry them to the extent that
they want to be able to take aggressive action to
try to you know, blunt any problem with unemployment and
keep the economy running and keeping it out of procession.
(13:27):
So I think that it called in their minds for
something fairly. I don't know if I would call it bold,
but bolder than a lot of people might have been expecting.
Speaker 3 (13:35):
Yeah, I think it was bold.
Speaker 4 (13:36):
I think you know, we talked about before how this
was the first time you had a voting member contradict J.
Powell or any Federal Reserve chair since two thousand and five.
So that's not a common occurrence either. But on the
equity market side, at least you have markets responding with
a lot of optimism here about that boldness and seemingly
(13:57):
a lack of concern about either higher inflame or recession.
I mean, look, market, how markets react the day after
a federate cut should not be used to indicate much
of anything. But you know, are are we taking a
bit of a preemptive victory lap on the soft landing here?
Speaker 6 (14:14):
Yeah? I don't know we might be. I mean, the
thing is is that the reaction in the market is
obviously just psychological. It doesn't mean that they know anything
that you or I don't know. I think they're just
reacting to the positive news. Ultimately, this is a dangerous
thing to bank on if you're them, in my opinion,
because if you think that inflation has been whipped to
use an old term from the seventies, and then it
(14:37):
ends up not being I mean, it really undermines the
credibility of the Federal Reserve. You've got to go back
in time a little bit to the time before the
inflation problem really began to become an issue, before it
really exploded. You know, there were predictions that we were
going to be able to be stable, to largely avoid inflation.
When inflation began, you know, it was pitched by a
lot of these very same people as being somewhat temporary
(14:58):
and really not as big as it ended up being
in the end. And then that really cut into the
notion of these people being sort of the grand marionettes
of our economy. They're not. They don't have a crystal ball,
and really no one does. The economy is far too
large and far too complex to be able to truly
know how to direct it, to control it, to centrally plant,
(15:19):
and to manage it in the way that the Federal
Reserve oftentimes thinks that it is. So I hope they're right.
I do. I hope that they're right and the inflation
can stay in the low tos or even continue to drop.
Who knows, But I am not terribly comfortable. It's the
notion that it is, and we'll see. I mean, it's
very uncertain in my point of view, Matt.
Speaker 2 (15:40):
When we look at the impact of this cut on
families and households throughout the country. Obviously, you know, housing's
one area where high rates have you know, really hampered
you know, housing markets in recent years with much lower
volumes coming through. And so when we talk about the
economic activity that could be generated as a result of this, look,
(16:02):
long term interest rates and mortgage rates have come down
a lot. So one would think that there's the potential
setting up for the spring of next year to be
kind of a bumper housing season. And I think it's
all about, hey, does that materialize and does that start
to generate those inflationary pressures Again your thoughts.
Speaker 6 (16:19):
Yeah, it's entirely possible, that does. I mean, if it
does start to generate some fluidity in the housing market,
for instance, I mean, like I know on my block
right where I live, about four or five people who
were my wife and I are friends with who would
like to sell their house right now, but they just
think it's insanity. It's not a wise time to do it.
The interest rates being what they are, they have a
low rate now, and if they were to sell, they
(16:40):
would have to have a high rate for a much
more expensive house. So they're just sitting on it. So
if it suddenly loosens up and it becomes more financially
feasible for you to be able to kind of maybe
move your house and do that kind of thing, it
has I think the great potential to exacerbate the issues
that exist with inflation by really reintroducing a lot of
that additional supply into the and it's definitely additional demand
(17:03):
into the system. It might make things really hot, but
it might take longer than just a rate cut or
two to do that too. And remember that the tail
on this is not immediate. I mean, we're gonna see
virtually nothing happen to anything for a little while with
this rape cut, it's going to take a while to
have that baked into the pie. So you know, you're
definitely talking about early part of next year. You might
be talking about mid part of next year or late
next year where some of this stuff really starts to matter.
(17:25):
And then when it does, what does it ultimately do?
Speaker 4 (17:28):
Mc danion he is the chief executive officer of the
Main Policy Institute.
Speaker 3 (17:32):
He's all those also the host of.
Speaker 4 (17:33):
The WGAN Morning Show and join us today talk about
the Federal Reserve and their bold fifty basis point cut yesterday.
Speaker 3 (17:41):
Matt, thanks so much for joining us. Appreciate it and
talk to you again soon.
Speaker 6 (17:45):
Appreciate you, guys.
Speaker 2 (17:46):
Thanks taking a look at Mark. It's still a lot
of green on the board. The down now of four
hundred and forty three points, the S and P of
ninety six nasdaka four eighty two. So really just a
lot of green in your major indices. Still have some
individual names that are lagging behind, as always happens.
Speaker 3 (18:04):
But overall, pretty pretty strong day the day after the FED.
Speaker 2 (18:08):
Again, it doesn't necessarily mean anything about where things go
from here, but looking like we got a realistic chance
at new all time highs for the close on the
s and P five hundred by the end of the
day Quick Break.
Speaker 1 (18:25):
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Speaker 2 (18:48):
Boeing is in the midst of a strike of its
unionized workers in Washington State, and as a result, they
are are well, they're trying to do a whole bunch
of stuff.
Speaker 4 (19:02):
But they're trying to avoid a credit down grade. Yeah,
ultimately is what they're trying.
Speaker 2 (19:06):
They're going to start furlowing employees for one week out
of every four weeks as long as the strike continues.
Speaker 4 (19:11):
These are and these are by the way, not blue
collar workers. In part, they are furlowing some of their
white collar workers to cut costs here, because yes, if
you're not manufacturing planes, then you're kind of sitting there
twiddling your thumbs, even if you're not on the assembly line.
Speaker 3 (19:25):
Correct.
Speaker 2 (19:26):
Also, the executive team is going to be taking a
twenty five percent pay cut. I know it's not you know, Okay,
let's be honest here. If you're in the C suite
at Boeing, you're getting paid pretty well. Sure you should
not take a pay cut that is commensurate with everyone else.
(19:47):
It should be larger, even if it's just symbolic, I guess.
But on the other hand, the CEO got here like yesterday,
it's fine.
Speaker 3 (19:55):
He knew what knew he's getting into. Listen, you're the
CEO of Boeing.
Speaker 2 (20:01):
You don't get sympathy for me, like, oh, you got
to take a pay cut after you just got shigned
up there, You're not gonna be too bad. No, Like, dude,
you knew what you were getting into. Yeah, you knew
that this was a possibility.
Speaker 3 (20:12):
Yeah, the guy.
Speaker 2 (20:13):
The guy's sixty five years old. I think you're fifty.
Like he's in his late fifties early sixties. It's not
someone where you're like, oh, I feel bad that he's
gonna have to take a pay cut. He just signed
up to be the CEO of Boeing sixty four sixty four,
thank you. Like again, he kind of knew the job
was gonna suck.
Speaker 4 (20:30):
Yeah, well it's sucking. It is, So it's following through
on that promise. Yes, do you think he's woken up
every day this week? Like?
Speaker 3 (20:40):
Why did I do this?
Speaker 4 (20:42):
Hard to say, probably not they if you're of the
if you are.
Speaker 3 (20:46):
A CEO of a company as large as Boeing, there's
a little bit. But he was retired. Man, why do
you come back to do? I get it.
Speaker 4 (20:55):
But if you are the CEO of a company like this,
I mean there's been a lot written about this, Like
normal things don't impact you in terms of, you know,
stuff that would bother you and I there's a sociopath
type of quality that comes to a lot of these
American CEOs.
Speaker 2 (21:14):
Maybe, but still you like two weeks ago, you were
sitting on the beach sipping my ties potentially for the
rest of your life. Yeah, and now this is what
you're dealing with.
Speaker 4 (21:25):
Yeah, but if I turn it around, then my name
will be written in the history of books. That's what's
going through your mind as the CEO of Bowing. Not
this is annoying. I could be sipping my ties. You're
probably miserable sipping my ties. If you are willing to
take the job at Boeing you were, it's absolutely miserable
sitting on the beach, sipping my ties. You hated your
(21:46):
life and that's why you did this. Probably this is
Mike trying to assess Kelly or Berg's psychological well being.
So I don't know that any of this is accurate,
but yeah, that's what I imagine with you know, Fortune,
five hundred CEOs of American public trading companies.
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Speaker 4 (23:11):
I I'm gonna come out there and say Tucker that
I think my tie might be one of my least
favorite cocktails out there.
Speaker 3 (23:17):
Honestly, don't think I've ever had one.
Speaker 5 (23:18):
You good for one and then you're like, Okay, I
can just have another one.
Speaker 3 (23:22):
Don't think like teeth itch because it's so sweet. Give
me the mojito over my tie. What goes into my tie?
I honestly don't.
Speaker 4 (23:29):
I've got a recipe right here. Pineapple juice, orange juice,
spiced rum, coconut rum, grenadine.
Speaker 3 (23:35):
No, Yeah, more refreshing in either case. Yeah, not for me.
I'll pass uh.
Speaker 2 (23:43):
Piece in the Wall Street Journal, tech jobs have dried
up and aren't coming back soon. And we we talked
about this a little bit yesterday with Amazon and their
return to work.
Speaker 3 (23:56):
Five day a week. Yeah. Yeah.
Speaker 4 (23:58):
My theory is it's stealth lay off. Yeah, it's an
easy way to do it.
Speaker 2 (24:03):
You know, it's hey, if you don't like it, go
somewhere else, and we can not fill your role, and
that's how we're going to cut headcount.
Speaker 3 (24:10):
Yeah.
Speaker 4 (24:10):
I think there's a lot of companies that are doing Now.
You've heard of a number of companies really getting granular
with their tracking data of their employees, ensuring that they're
actually showing up to those days of the week that
they're expected to be in the office, which in Amazon's
case is every day of the week. But my wife
works for a company who just upped their work in
the office policy, and I'm sure that they are tracking
(24:32):
that and you know, including it for their certainly their
performance and bonus reviews. But you know, in the event
that they decide, hey, we've got to reduce headcount, where
we're going to go. We're going to go to the
ones that are not following policy of being in the
office and working and.
Speaker 2 (24:47):
Overall, according to layoffs, do fyi the tech industry has
shed about one hundred and thirty seven thousand jobs since January.
That's not net because this doesn't show which companies have
also been, you know, hiring, it's just tracking that are announced.
But that is still a meaningful number there. It's it's
lower than what we saw in twenty twenty two pretty significantly,
(25:09):
but you still do have some layoffs that are poking
up there and more. I think we're just seeing companies
where when someone leaves, they're really taking a look at, hey,
do we actually need to backfill that position and bring
someone new in or does that position not really have
a purpose here anymore.
Speaker 4 (25:25):
I've got a couple questions, and the first one is
how much of this might be AI related? And I
don't necessarily mean that AI is replacing these jobs. I
just more mean that it might be a different skill
set than the industry average coder for I don't know. Yeah,
I'm not sure about that either. The second question, how
do you feel about the strategy of Glenn Kugelman who
(25:48):
lost his job and printed off one hundred and fifty
flyers advertising recently laid off looking for a new job
with a QR code linking to his LinkedIn page and
duct taped them to telephone polls all across New York City.
Speaker 2 (26:04):
Well, I feel kind of bad for Glenn because the
fact that he's been interviewed for this piece means he
hasn't been hired, true, which means it probably hasn't worked
that well.
Speaker 3 (26:16):
While I think this is tacky, I love the innovative.
Speaker 4 (26:19):
Remember they I don't even know if it's a true story,
but you remember the story of the guy who started
delivering donuts with his resume printed on the box to
a bunch of offices to try and get a job.
No again, I love these innovative ways of getting your
foot in the door because anybody that's had to apply
to a job in the last decade sucks can tell
(26:39):
you it is terrible. You know, your your resume oftentimes
does not even get read by a human. They have
an AI system or a pre screening tool that's automatically
going to filter you out. Plenty of people tell you like, yeah,
you applied one hundred plus jobs these days in order
to get one interview. So I applaud it, even if
it didn't necessarily in this case, land him the job
(27:01):
he was looking for.
Speaker 2 (27:02):
Yeah, it's look, it's a challenging market for tech workers
right now, and all of the money is heading to AI.
And so if you're in an auxiliary role, which is
pretty much anything other than someone directly on the front
lines for AI or you know, sales for AI, you're
kind of Even if someone has an open position, that
(27:26):
position might be kind.
Speaker 3 (27:27):
Of on the back burner in a lot of cases.
I want to know.
Speaker 4 (27:31):
Where in the college education process is artificial intelligence training
right now. I would imagine most top of the line
universities are already including that in some form of course work,
because quite honestly, if you're a graduating senior right now
and you don't know how to prompt an artificial intelligence
large language model, in my mind, you're behind the eight ball.
Speaker 2 (27:54):
I'm curious just because I haven't actually looked at this.
So I'm going to check what Dartmouth, I just for uh,
their their stuff on this. They do have a whole
course on artificial intelligence. They they got a few different ones.
It kind of depends on what you're looking for here,
But I'm just looking at like the upcoming uh winter
(28:16):
stuff that they have there, and you've got, you know,
a couple of different courses on machine learning. Let's see,
there's actually the only one that's on artificial intelligence.
Speaker 3 (28:26):
Is looks like it was a fall course that was
offered spring.
Speaker 4 (28:31):
I'm seeing one from my alma mater as well. I
don't know the details of the course, but yeah, again,
an artificial intelligence.
Speaker 2 (28:39):
They got one of They got a couple of things
that are kind of cool here. They got one on
music and artificial intelligence, which must be kind of a
party course, like that's got to be awesome.
Speaker 3 (28:49):
Uh.
Speaker 2 (28:49):
And then deep learning generalization and robustness gets into probably
some pretty heavy stuff, a bunch of machine learning and
and and all kinds of stuff there. But you know,
the you've got to be adapting your curriculum, Like computer
science is one area where you've got to be adapting,
probably on like a two to three year timeline, like
adding courses pretty consistently.
Speaker 3 (29:09):
You know. It's it's it's not math. Yeah, it's math.
It's kind of like, well, we still have calculus. This
is what Pythagoras came up with, and it's still true.
Speaker 2 (29:19):
You know, here's philosophy. This is what they thought back
when the Greeks were roaming around and everything. Yeah, computer
science is moving a little faster. By the way, you missed. Yesterday, Mike,
we covered the uh.
Speaker 3 (29:34):
Who was it you?
Speaker 2 (29:34):
Goov did a poll on the un Americans thoughts about
the different ancient empires that existed. They pulled Americans on
like favorable unfavorable for ancient empires.
Speaker 3 (29:48):
They actually did this. I'm not making this up. Okay,
it's a real thing.
Speaker 2 (29:52):
But the Huns had the the most underwater favorability rankings
at fourteen percent favorable and forty three percent unf favorable,
whereas ancient Athens was the strongest at fifty four percent
favorable ten percent unfavorable.
Speaker 3 (30:07):
Great infrastructure. America is very anti Hun these days.
Speaker 4 (30:11):
Yeah, clearly very anti Hun. That tillah huh at Atilla,
I really just ruined the brand.
Speaker 2 (30:18):
Well you know that Attila he actually played football too.
Actually it was it was Jaba who played football, got it,
Jaba the hot Hot Hike.
Speaker 3 (30:28):
Yeah. Anyways, it played better yesterday.
Speaker 2 (30:30):
Sorry, It's never as good the second time you tell it,
like this is why no one should be a stand
up is because like, oh, it hits once and you're like, yeah,
I got it.
Speaker 3 (30:39):
No, you can never replicate it. Thank you, Tucker.
Speaker 2 (30:43):
Let's take a quick break to recover from that, and
when we return, we've got stack Roulette after this.
Speaker 1 (30:49):
The Financial Exchange streams live on YouTube. Like our page
and stay up to date on breaking business news all morning.
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Financial Exchange Radio Network.
Speaker 3 (31:17):
Like what you got for me for stack Roulettes. Darn Restaurants.
Not a great year for their stock.
Speaker 4 (31:23):
Stock is now up about five and a quarter percent
for the year and up about seven percent today. Tucker
mentioned they reported earnings overnight or was it this morning?
Speaker 3 (31:32):
This morning?
Speaker 4 (31:33):
This morning they reported earnings. You're a restaurant company. You
should report earnings after the bell at the night.
Speaker 3 (31:39):
Now, that's that's right in the middle of the busy period. Yeah,
I guess you're trying to wait tables. Yeah, reporting.
Speaker 4 (31:46):
Big misses really across the board here and nonetheless stock
moving up on really commentary from the CEO. But earnings missed,
and I do wonder what exactly it speaks to in
terms of consumers willingness to spend. They represent a broad
swath of different types of restaurants from Olive Garden to
what's their high end steakhouse, Capitol Grill, Capitol Grill, and
(32:09):
you know, seeing a pullback and spending here. I also
do openly wonder you mentioned Tucker what a partnership with
Uber eats Geordash.
Speaker 3 (32:18):
Yeah, at the end of this year, how do you
get zuber eats? How do you get unlimited breadsticks with
Uber Eats.
Speaker 4 (32:23):
I don't think that's gonna work out too well, but
I be interested to keep an eye on a good question. Yeah,
tough to get ulimited breadsticks. The guy's not gonna go
back and forth all day to get to your unimited.
Speaker 3 (32:37):
The whole back seats filled with them.
Speaker 4 (32:38):
This is one of very few companies that's publicly traded
in the sit down restaurant space. There's not a lot
of other ones that give them a good viewpoint into
how consumers are spending. And so I do find this
significance just in terms of what it tells you about
American's ability and willingness to spend at restaurants right now.
Speaker 2 (33:00):
Yeah, it's it's it's tough also to get a read
because they're in so many different categories.
Speaker 3 (33:05):
Yeah, of course, I mean, you know, quite high high.
I mean.
Speaker 2 (33:08):
But the piece that is interesting is that they said
the only division that reported same store sales growth was
Longhorn Steakhouse. Everything else, whether it's Olive Garden, whether it's
Capital Grill, Yard House, everything else, they had same store
sale declines. Yeah, So that I think is something that's
that's notable.
Speaker 4 (33:27):
And none of their brands occupy the McDonald's space, I
think is the other point here. There's no there there's
no brand that they have that you can look at
for the segment and say, oh, that's the place to
get a really cheap dinner.
Speaker 2 (33:41):
I mean, Olive Garden to some extent occupies. They've also
got no fast casual right space. Like, there's no Chipotle
in there, there's no Panera in there. It's it's it's
it's different fundamentally from both of those. Also, So there's
that piece in Bloomberg. It's titled Salesforce is a dark
horse in the AI race. First, I take exception with
(34:01):
one of the thirty companies that's included the Dow Jones
Industrial Average being called a dark horse for anything like that.
Speaker 3 (34:10):
That's just not what a dark horse I heard of.
This company Salesforce.
Speaker 2 (34:14):
That's like, well, Microsoft is a dark horse to you know,
have crab legs delivered to all employees, Like, I don't
know like they could do that. They're a sleep Yeah,
so the Salesforce isn't really a dark horse. What it's
talking about is, Hey, all the hype for AI right
now is going towards one company quite honestly, yea Open AI. Yeah,
(34:36):
Like who talks about Google's AI these days? Aside from
did I don't think we ever covered it?
Speaker 3 (34:43):
Well, there's open Ai.
Speaker 4 (34:45):
Then the next tier down is Microsoft, Google and Facebook
Open That is Microsoft, like it's viewed one day of saying,
and then the tier down from that would be companies
like Salesforce that nobody's really talking about when it comes
to AI. So I think part of it is just
that open ai is sucked up all the ox gin
in the room. But I did want to make sure
we cover just tangentially, did we ever cover any of
the creepiness about what Google is putting together for its
(35:09):
like photos app for Android now no where you can
delete and add stuff to photos using AI, Like hey,
put a dog in this picture?
Speaker 3 (35:18):
And I can't imagine any nefarious purposes that could be
used like why do we need that, we don't.
Speaker 2 (35:26):
This is so stupid that we are now giving people
the ability to just add stuff that wasn't there into.
Speaker 3 (35:34):
Photos a photoshop.
Speaker 2 (35:36):
Well, yes, but you need to have some skill to
do that, which is why most people don't pay for it.
Speaker 3 (35:42):
And so this is just it's gonna get.
Speaker 2 (35:45):
Where we're going is no one is going to trust
any online information, even from their friends anymore.
Speaker 3 (35:51):
You won't be able to.
Speaker 2 (35:53):
We are going to kill the Internet, start it over,
reset the We're gonna have to move to the outernet,
unplug it, plug it back in, folks.
Speaker 3 (36:03):
Yeah, the outer nets coming. Once the Internet died, it's
gonna be like the Internet. But out stocks remain positive.
As we conclude the show today, hope you all have
a great rest of the day and we'll see you tomorrow.
Speaker 2 (36:16):
To finish up the week on the Financial Exchange,
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:21):
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(01:05):
Veterans Development Corporation. This is the Financial Exchange with Chuck
Zatta and Mike Armstrong.
Speaker 2 (01:13):
Kicking off the second hour the Financial Exchange. It's Chuck,
Mike and Sucker with you. And stocks are ripping. It's
the technical term. They're up three hundred and seventy six
points on the Dow. The S and P is up
eighty nine. Nas Deck's up four to forty five, So
anywhere between about a one and a two and a
half percent jump inequities today, where's it being led by
(01:37):
I'll give you three guesses, and none of them count
Michael rates.
Speaker 3 (01:43):
No, it's being led by tech. Sorry, the sector of
the market. Okay, it's fine. It was a little confusing.
Speaker 2 (01:49):
You got Nvidia up over four percent, Apple up over three,
Meta up over three, Tesla up over five, broad Come
up over three, a m D up over five. It's
tech that's ripping today. Places that are cruisin along. Energy
is up nicely, materials up nicely. What's lagging? You've got
consumer staples, utilities, real estate, healthcare, all kind of dragon
(02:13):
a little bit at the moment. In terms of other markets,
ten of US Treasury is up four and a half
basis points to three point seventy three two percent. So hey, great,
the Fed cut interest rates yesterday. Ten You went up
five basis points yesterday, four and a half today, so
almost ten basis points in about a day and a half.
You got oil up forty nine cents of barrel on
West Text Intermediate to seventy one forty and we've got
(02:35):
gold of seven dollars and thirty cents to twenty six
hundred and five dollars and ninety cents an ounce case
you missed it yesterday, which is really hard because I
even saw like non news outlets covering this.
Speaker 3 (02:50):
The Disney Channel was covering No, honestly, it's close.
Speaker 2 (02:54):
Slim I'm gonna test something.
Speaker 4 (02:58):
Oh my god, can you imagine Nickelodeon doing the same,
like version of slimming Powell.
Speaker 3 (03:06):
I want to see the Nickelodeon coverage of A J.
Powell count so badly. So I just checked.
Speaker 2 (03:12):
The FED rate cut decision is not currently on the
front page of People, so it didn't make it there.
I'm assuming it's not on ESPN, but look, it's basically everywhere,
like everyone in their grandmother's been talking about this. Yeah,
and so the FED did cut interest rates by half
a percent yesterday. They guided for two additional quarter percent
(03:35):
cuts by the end of this year and four quarter
percent cuts by the end of next year, so total
of two percentage points and cuts priced in by the
end of next year. The Fed thinks unemployment might continue
to rise a little bit more, up to four point
four percent, but they don't see it going higher than that.
They think inflation is going to continue to come down,
and so they're basically saying, hey, we think we're really
(03:56):
close to the soft landing, and we're just doing this
to prevent the labor market from weakening the way that
it potentially could if we took no action. Yeah, we
know people have questions.
Speaker 4 (04:06):
You can text the show at six one, seven, three, six,
two thirteen eighty five.
Speaker 3 (04:10):
Some questions we have answers to others we don't. But
I don't know what the meaning of life is.
Speaker 4 (04:15):
No, well, you speak for yourself, but you know happened
to you know, ponder questions and discuss them out loud,
and and you know kind of go back and forth
on this stuff. But you know, the key takeaway is
that the Fed did cut rates. They did a fifty
base point cut, which is not normal, it's not the
standard operating procedure. It's not what they prefer to do.
They like in a normal environment to do twenty five
(04:37):
and we will see where this thing goes ultimately. Also
interesting on the market side of things, with markets did
close down yesterday. They were up on the announcement, up
for the beginning of Powell's speech, and then as that
went on, ended up closing very slightly.
Speaker 3 (04:54):
Now we down quarter percent on the SMP up thereabouts. Yeah,
nothing huge, maybe like a third of a percent.
Speaker 4 (04:58):
So but to see this today, you know, sometimes you
just need overnight to digest what was actually said and
what it actually might mean. And traders this morning interpreting
it as growth.
Speaker 3 (05:10):
Well.
Speaker 2 (05:11):
And look, the other thing to remember, I know that
we're always very US focused because we live in the
United States. True, Look, the Bank Japan meets tomorrow. They
could pour a bunch of cold water on this in
a hurry if they do something unexpected there.
Speaker 3 (05:26):
So it's there's.
Speaker 2 (05:28):
Never any one story that's done. Like markets are always evolving,
they're always changing. There's always a new narrative that's coming up,
and so you have to evolve.
Speaker 3 (05:36):
Your views with them, otherwise you risk getting left behind
in markets.
Speaker 4 (05:42):
The other proof of you know, growth being the story
of the day. We've got the yield on the ten
year treasury. It was up yesterday and it's moving up
again today. So we're now, let's see you over a
full percentage point higher than where we were two days
ago on sorry, tenth of a percent atage point higher
on the ten year treasury deal.
Speaker 3 (06:02):
The full percentage point would be a pretty wild shift
for two days.
Speaker 4 (06:05):
But yeah, again speaks to that confidence about growth, soft landing,
and no recession that traders have this morning.
Speaker 2 (06:12):
Anyway, We'll see where things develop over the next three
to six months. But again we've been concerned about the
unemployment rate. Today we got weekly jobless claims. The seasonally
adjusted number came in at two hundred and nineteen thousand,
which is eleven thousand below where they were last week
(06:35):
and where they and below expectations. We also when we
look at the not seasonally adjusted numbers there, they came
in one hundred and eighty four thousand, which is right
in line with the past few years of normal economies.
I exclude basically twenty twenty through twenty twenty two because
things were abnormal then. But you look at twenty three
(06:56):
and twenty nineteen and eighteen, and this is basically the
same seasonal pattern we've been seeing, so there's no sign
of increased layoffs or unemployment claims on that side of things.
Speaker 4 (07:06):
I got a question from I think either an email
or the text line. Does a bank have to follow
a guideline for setting a mortgage rate or couldn't? In theory,
a bank set any rate they want because they're the
one lending out the money. Yeah, mortgage rates and what
banks choose to lend the money out on is entirely
a bank decision and has nothing to do with the
Federal Reserve. I mean, in theory, I guess it directionally
(07:28):
guides where the rates will be. But yeah, I mean,
if if a bank out there is really looking for
a whole bunch of new thirty year mortgage rates and
wants those loans, they can discount and say, hey, yeah,
we're we're offering mortgage rates at five seven five right now,
even though the average according to Mortgage News Daily today
is six point and.
Speaker 2 (07:50):
A couple things that banks have to deal with as
they're trying to set their rates. The first is, okay,
can we be profitable?
Speaker 3 (07:56):
At this rate.
Speaker 2 (07:57):
Their costs associated with running the bank, from just you know,
your basic overhead keeping the lights on, to the different
insurance that you need to have in order to operate it,
all of the.
Speaker 3 (08:08):
Stuff that you have to do.
Speaker 2 (08:08):
From a regulatory perspective, there's a whole bunch that goes
into actually running a bank. And so in theory, look,
a bank could come out and say, yeah, we want
to set our interest rate for thirty or fixed rate
mortgage at two percent, but they're probably not going to
be able to make money on that.
Speaker 4 (08:26):
And again, I mean two percent is an extreme. But
the reason why here does have to do with the
FED and this FED funds rate in that overnight I mean,
where does the FED interject that lending rate cost into
the bank.
Speaker 2 (08:43):
Well, it's really a bank needs to attract deposits, yea.
And because remember in banking everything's kind of backwards. So
even though you think of a deposit as like your
asset to the bank, the deposits a liability because it
can leave it anytime. And so if a bank says, okay,
we've got to attract a poss and if they're not
Bank of America where they can just pay zero points zero,
(09:03):
one or two percent because everyone's just.
Speaker 3 (09:06):
Inertia over there. And yes, I did just turn inertia
into a verb yep, which is great. By the way,
I'm gonna start using that more.
Speaker 2 (09:14):
If I am, you know, a small community bank, especially
one starting up, I might say, look, I might have
to pay three or four percent in order to attract
people to my bank, because there are other banks paying
that in deposits. Okay, if I'm paying out three or
four percent plus, I've got my operating costs maybe net
net on each dollar I'm paying five percent for you know,
all of my costs. Okay, that means I probably got
(09:37):
to set my rate at you know, five and a
half to six if I want profit in this environment,
and so I can do that. Or hey, if I'm
more cautious, I might set my rates higher just to
have a wider gap in case inflation comes back or
something unexpected happens. And that's how rates get set for
mortgage products and things like that. In the market right now.
Banks have always had one problem which reared its head
(09:59):
last year. Deposits are short term. They can come and go.
If you got a thirty year fixed rate mortgage on
your books. It's on your books. It's a long term
loan that you have, even though your deposits are short
term that you're holding. So that's one of the things
that banks have to navigate as well, and ultimately that's
what ended up blowing up Silicon Valley Bank last year
(10:20):
was a mismatch between loans and deposits, where deposits fled
and hey, we're still stuck with all these long term
loans that have now gone down in value.
Speaker 3 (10:30):
Kind of a problem. Let's take a quick break here.
Speaker 2 (10:32):
When we come back, we're gon be joined by Matt
Gagnan or Ganyon.
Speaker 3 (10:35):
I don't know, is it gang Ganon.
Speaker 2 (10:38):
Matt Gannon, chief executive officer of the Main Policy Institute.
Speaker 3 (10:42):
Oh, it's it's Matt. I spake to him like once
a week.
Speaker 1 (10:45):
I know.
Speaker 2 (10:45):
I saw it on the schedule here, very official on
the schedule. I know it looks more like more efficient
than I typically talk. So yeah, it's Matt Ganion from
UH the UH Main Policy in Students, the chief executive
officer there. He's also the wgan morning show host. And
Matt's going to join us right after this.
Speaker 1 (11:02):
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Speaker 4 (12:07):
Mcdunnon is the chief executive officer of the main policy Institute.
Speaker 3 (12:12):
He's also the host of.
Speaker 4 (12:14):
The WGA and Morning News, the show that precedes our
own up in Portland, Maine, from six to nine every
day on WGA and Matt.
Speaker 3 (12:21):
Thanks for joining us, appreciate it.
Speaker 6 (12:23):
It's pleaged to be back again.
Speaker 4 (12:25):
So, you know, Chuck and I do a lot of
talking pre and post Federal Reserve meeting. It kind of
gets the point where we see a lot of this stuff.
I to Ie, I'm curious, you know, from your perspective,
what were your main one or two takeaways from what
your own Powell had to say and do regarding interest
rates yesterday.
Speaker 6 (12:44):
That's a good question. I mean, I think that the
clear vibe that I was left with, if I can
call it a vibe, is that he's interested in being aggressive. Obviously,
the you know, the half point, you know break that
we got there is clearly on the more aggressive side.
But they also seem to be signaling that they're going
to continue to do so, and that to me signals
a couple things. I mean, for one, I think that
(13:05):
they feel like they have gotten a handle on inflation
enough that it is not terribly risky to do that.
Whether they're right about that it's a different conversation, probably,
But I think that they are seeing things in the
economy right now that worry them to the extent that
they want to be able to take aggressive action to
try to you know, blunt any problem with unemployment and
keep the economy running and keeping it out of procession.
(13:27):
So I think that it called in their minds for
something fairly. I don't know if I would call it bold,
but bolder than a lot of people might have been expecting.
Speaker 3 (13:35):
Yeah, I think it was bold.
Speaker 4 (13:36):
I think you know, we talked about before how this
was the first time you had a voting member contradict J.
Powell or any Federal Reserve chair since two thousand and five.
So that's not a common occurrence either. But on the
equity market side, at least you have markets responding with
a lot of optimism here about that boldness and seemingly
(13:57):
a lack of concern about either higher inflame or recession.
I mean, look, market, how markets react the day after
a federate cut should not be used to indicate much
of anything. But you know, are are we taking a
bit of a preemptive victory lap on the soft landing here?
Speaker 6 (14:14):
Yeah? I don't know we might be. I mean, the
thing is is that the reaction in the market is
obviously just psychological. It doesn't mean that they know anything
that you or I don't know. I think they're just
reacting to the positive news. Ultimately, this is a dangerous
thing to bank on if you're them, in my opinion,
because if you think that inflation has been whipped to
use an old term from the seventies, and then it
(14:37):
ends up not being I mean, it really undermines the
credibility of the Federal Reserve. You've got to go back
in time a little bit to the time before the
inflation problem really began to become an issue, before it
really exploded. You know, there were predictions that we were
going to be able to be stable, to largely avoid inflation.
When inflation began, you know, it was pitched by a
lot of these very same people as being somewhat temporary
(14:58):
and really not as big as it ended up being
in the end. And then that really cut into the
notion of these people being sort of the grand marionettes
of our economy. They're not. They don't have a crystal ball,
and really no one does. The economy is far too
large and far too complex to be able to truly
know how to direct it, to control it, to centrally plant,
(15:19):
and to manage it in the way that the Federal
Reserve oftentimes thinks that it is. So I hope they're right.
I do. I hope that they're right and the inflation
can stay in the low tos or even continue to drop.
Who knows, But I am not terribly comfortable. It's the
notion that it is, and we'll see. I mean, it's
very uncertain in my point of view, Matt.
Speaker 2 (15:40):
When we look at the impact of this cut on
families and households throughout the country. Obviously, you know, housing's
one area where high rates have you know, really hampered
you know, housing markets in recent years with much lower
volumes coming through. And so when we talk about the
economic activity that could be generated as a result of this, look,
(16:02):
long term interest rates and mortgage rates have come down
a lot. So one would think that there's the potential
setting up for the spring of next year to be
kind of a bumper housing season. And I think it's
all about, hey, does that materialize and does that start
to generate those inflationary pressures Again your thoughts.
Speaker 6 (16:19):
Yeah, it's entirely possible, that does. I mean, if it
does start to generate some fluidity in the housing market,
for instance, I mean, like I know on my block
right where I live, about four or five people who
were my wife and I are friends with who would
like to sell their house right now, but they just
think it's insanity. It's not a wise time to do it.
The interest rates being what they are, they have a
low rate now, and if they were to sell, they
(16:40):
would have to have a high rate for a much
more expensive house. So they're just sitting on it. So
if it suddenly loosens up and it becomes more financially
feasible for you to be able to kind of maybe
move your house and do that kind of thing, it
has I think the great potential to exacerbate the issues
that exist with inflation by really reintroducing a lot of
that additional supply into the and it's definitely additional demand
(17:03):
into the system. It might make things really hot, but
it might take longer than just a rate cut or
two to do that too. And remember that the tail
on this is not immediate. I mean, we're gonna see
virtually nothing happen to anything for a little while with
this rape cut, it's going to take a while to
have that baked into the pie. So you know, you're
definitely talking about early part of next year. You might
be talking about mid part of next year or late
next year where some of this stuff really starts to matter.
(17:25):
And then when it does, what does it ultimately do?
Speaker 4 (17:28):
Mc danion he is the chief executive officer of the
Main Policy Institute.
Speaker 3 (17:32):
He's all those also the host of.
Speaker 4 (17:33):
The WGAN Morning Show and join us today talk about
the Federal Reserve and their bold fifty basis point cut yesterday.
Speaker 3 (17:41):
Matt, thanks so much for joining us. Appreciate it and
talk to you again soon.
Speaker 6 (17:45):
Appreciate you, guys.
Speaker 2 (17:46):
Thanks taking a look at Mark. It's still a lot
of green on the board. The down now of four
hundred and forty three points, the S and P of
ninety six nasdaka four eighty two. So really just a
lot of green in your major indices. Still have some
individual names that are lagging behind, as always happens.
Speaker 3 (18:04):
But overall, pretty pretty strong day the day after the FED.
Speaker 2 (18:08):
Again, it doesn't necessarily mean anything about where things go
from here, but looking like we got a realistic chance
at new all time highs for the close on the
s and P five hundred by the end of the
day Quick Break.
Speaker 1 (18:25):
Bringing the latest financial news straight to your radio every day.
It's The Financial Exchange on the Financial Exchange Radio Network.
Miss any of the show. The Financial Exchange Show podcast
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(18:45):
the Financial Exchange Radio Network.
Speaker 2 (18:48):
Boeing is in the midst of a strike of its
unionized workers in Washington State, and as a result, they
are are well, they're trying to do a whole bunch
of stuff.
Speaker 4 (19:02):
But they're trying to avoid a credit down grade. Yeah,
ultimately is what they're trying.
Speaker 2 (19:06):
They're going to start furlowing employees for one week out
of every four weeks as long as the strike continues.
Speaker 4 (19:11):
These are and these are by the way, not blue
collar workers. In part, they are furlowing some of their
white collar workers to cut costs here, because yes, if
you're not manufacturing planes, then you're kind of sitting there
twiddling your thumbs, even if you're not on the assembly line.
Speaker 3 (19:25):
Correct.
Speaker 2 (19:26):
Also, the executive team is going to be taking a
twenty five percent pay cut. I know it's not you know, Okay,
let's be honest here. If you're in the C suite
at Boeing, you're getting paid pretty well. Sure you should
not take a pay cut that is commensurate with everyone else.
(19:47):
It should be larger, even if it's just symbolic, I guess.
But on the other hand, the CEO got here like yesterday,
it's fine.
Speaker 3 (19:55):
He knew what knew he's getting into. Listen, you're the
CEO of Boeing.
Speaker 2 (20:01):
You don't get sympathy for me, like, oh, you got
to take a pay cut after you just got shigned
up there, You're not gonna be too bad. No, Like, dude,
you knew what you were getting into. Yeah, you knew
that this was a possibility.
Speaker 3 (20:12):
Yeah, the guy.
Speaker 2 (20:13):
The guy's sixty five years old. I think you're fifty.
Like he's in his late fifties early sixties. It's not
someone where you're like, oh, I feel bad that he's
gonna have to take a pay cut. He just signed
up to be the CEO of Boeing sixty four sixty four,
thank you. Like again, he kind of knew the job
was gonna suck.
Speaker 4 (20:30):
Yeah, well it's sucking. It is, So it's following through
on that promise. Yes, do you think he's woken up
every day this week? Like?
Speaker 3 (20:40):
Why did I do this?
Speaker 4 (20:42):
Hard to say, probably not they if you're of the
if you are.
Speaker 3 (20:46):
A CEO of a company as large as Boeing, there's
a little bit. But he was retired. Man, why do
you come back to do? I get it.
Speaker 4 (20:55):
But if you are the CEO of a company like this,
I mean there's been a lot written about this, Like
normal things don't impact you in terms of, you know,
stuff that would bother you and I there's a sociopath
type of quality that comes to a lot of these
American CEOs.
Speaker 2 (21:14):
Maybe, but still you like two weeks ago, you were
sitting on the beach sipping my ties potentially for the
rest of your life. Yeah, and now this is what
you're dealing with.
Speaker 4 (21:25):
Yeah, but if I turn it around, then my name
will be written in the history of books. That's what's
going through your mind as the CEO of Bowing. Not
this is annoying. I could be sipping my ties. You're
probably miserable sipping my ties. If you are willing to
take the job at Boeing you were, it's absolutely miserable
sitting on the beach, sipping my ties. You hated your
(21:46):
life and that's why you did this. Probably this is
Mike trying to assess Kelly or Berg's psychological well being.
So I don't know that any of this is accurate,
but yeah, that's what I imagine with you know, Fortune,
five hundred CEOs of American public trading companies.
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Speaker 4 (23:11):
I I'm gonna come out there and say Tucker that
I think my tie might be one of my least
favorite cocktails out there.
Speaker 3 (23:17):
Honestly, don't think I've ever had one.
Speaker 5 (23:18):
You good for one and then you're like, Okay, I
can just have another one.
Speaker 3 (23:22):
Don't think like teeth itch because it's so sweet. Give
me the mojito over my tie. What goes into my tie?
I honestly don't.
Speaker 4 (23:29):
I've got a recipe right here. Pineapple juice, orange juice,
spiced rum, coconut rum, grenadine.
Speaker 3 (23:35):
No, Yeah, more refreshing in either case. Yeah, not for me.
I'll pass uh.
Speaker 2 (23:43):
Piece in the Wall Street Journal, tech jobs have dried
up and aren't coming back soon. And we we talked
about this a little bit yesterday with Amazon and their
return to work.
Speaker 3 (23:56):
Five day a week. Yeah. Yeah.
Speaker 4 (23:58):
My theory is it's stealth lay off. Yeah, it's an
easy way to do it.
Speaker 2 (24:03):
You know, it's hey, if you don't like it, go
somewhere else, and we can not fill your role, and
that's how we're going to cut headcount.
Speaker 3 (24:10):
Yeah.
Speaker 4 (24:10):
I think there's a lot of companies that are doing Now.
You've heard of a number of companies really getting granular
with their tracking data of their employees, ensuring that they're
actually showing up to those days of the week that
they're expected to be in the office, which in Amazon's
case is every day of the week. But my wife
works for a company who just upped their work in
the office policy, and I'm sure that they are tracking
(24:32):
that and you know, including it for their certainly their
performance and bonus reviews. But you know, in the event
that they decide, hey, we've got to reduce headcount, where
we're going to go. We're going to go to the
ones that are not following policy of being in the
office and working and.
Speaker 2 (24:47):
Overall, according to layoffs, do fyi the tech industry has
shed about one hundred and thirty seven thousand jobs since January.
That's not net because this doesn't show which companies have
also been, you know, hiring, it's just tracking that are announced.
But that is still a meaningful number there. It's it's
lower than what we saw in twenty twenty two pretty significantly,
(25:09):
but you still do have some layoffs that are poking
up there and more. I think we're just seeing companies
where when someone leaves, they're really taking a look at, hey,
do we actually need to backfill that position and bring
someone new in or does that position not really have
a purpose here anymore.
Speaker 4 (25:25):
I've got a couple questions, and the first one is
how much of this might be AI related? And I
don't necessarily mean that AI is replacing these jobs. I
just more mean that it might be a different skill
set than the industry average coder for I don't know. Yeah,
I'm not sure about that either. The second question, how
do you feel about the strategy of Glenn Kugelman who
(25:48):
lost his job and printed off one hundred and fifty
flyers advertising recently laid off looking for a new job
with a QR code linking to his LinkedIn page and
duct taped them to telephone polls all across New York City.
Speaker 2 (26:04):
Well, I feel kind of bad for Glenn because the
fact that he's been interviewed for this piece means he
hasn't been hired, true, which means it probably hasn't worked
that well.
Speaker 3 (26:16):
While I think this is tacky, I love the innovative.
Speaker 4 (26:19):
Remember they I don't even know if it's a true story,
but you remember the story of the guy who started
delivering donuts with his resume printed on the box to
a bunch of offices to try and get a job.
No again, I love these innovative ways of getting your
foot in the door because anybody that's had to apply
to a job in the last decade sucks can tell
(26:39):
you it is terrible. You know, your your resume oftentimes
does not even get read by a human. They have
an AI system or a pre screening tool that's automatically
going to filter you out. Plenty of people tell you like, yeah,
you applied one hundred plus jobs these days in order
to get one interview. So I applaud it, even if
it didn't necessarily in this case, land him the job
(27:01):
he was looking for.
Speaker 2 (27:02):
Yeah, it's look, it's a challenging market for tech workers
right now, and all of the money is heading to AI.
And so if you're in an auxiliary role, which is
pretty much anything other than someone directly on the front
lines for AI or you know, sales for AI, you're
kind of Even if someone has an open position, that
(27:26):
position might be kind.
Speaker 3 (27:27):
Of on the back burner in a lot of cases.
I want to know.
Speaker 4 (27:31):
Where in the college education process is artificial intelligence training
right now. I would imagine most top of the line
universities are already including that in some form of course work,
because quite honestly, if you're a graduating senior right now
and you don't know how to prompt an artificial intelligence
large language model, in my mind, you're behind the eight ball.
Speaker 2 (27:54):
I'm curious just because I haven't actually looked at this.
So I'm going to check what Dartmouth, I just for uh,
their their stuff on this. They do have a whole
course on artificial intelligence. They they got a few different ones.
It kind of depends on what you're looking for here,
But I'm just looking at like the upcoming uh winter
(28:16):
stuff that they have there, and you've got, you know,
a couple of different courses on machine learning. Let's see,
there's actually the only one that's on artificial intelligence.
Speaker 3 (28:26):
Is looks like it was a fall course that was
offered spring.
Speaker 4 (28:31):
I'm seeing one from my alma mater as well. I
don't know the details of the course, but yeah, again,
an artificial intelligence.
Speaker 2 (28:39):
They got one of They got a couple of things
that are kind of cool here. They got one on
music and artificial intelligence, which must be kind of a
party course, like that's got to be awesome.
Speaker 3 (28:49):
Uh.
Speaker 2 (28:49):
And then deep learning generalization and robustness gets into probably
some pretty heavy stuff, a bunch of machine learning and
and and all kinds of stuff there. But you know,
the you've got to be adapting your curriculum, Like computer
science is one area where you've got to be adapting,
probably on like a two to three year timeline, like
adding courses pretty consistently.
Speaker 3 (29:09):
You know. It's it's it's not math. Yeah, it's math.
It's kind of like, well, we still have calculus. This
is what Pythagoras came up with, and it's still true.
Speaker 2 (29:19):
You know, here's philosophy. This is what they thought back
when the Greeks were roaming around and everything. Yeah, computer
science is moving a little faster. By the way, you missed. Yesterday, Mike,
we covered the uh.
Speaker 3 (29:34):
Who was it you?
Speaker 2 (29:34):
Goov did a poll on the un Americans thoughts about
the different ancient empires that existed. They pulled Americans on
like favorable unfavorable for ancient empires.
Speaker 3 (29:48):
They actually did this. I'm not making this up. Okay,
it's a real thing.
Speaker 2 (29:52):
But the Huns had the the most underwater favorability rankings
at fourteen percent favorable and forty three percent unf favorable,
whereas ancient Athens was the strongest at fifty four percent
favorable ten percent unfavorable.
Speaker 3 (30:07):
Great infrastructure. America is very anti Hun these days.
Speaker 4 (30:11):
Yeah, clearly very anti Hun. That tillah huh at Atilla,
I really just ruined the brand.
Speaker 2 (30:18):
Well you know that Attila he actually played football too.
Actually it was it was Jaba who played football, got it,
Jaba the hot Hot Hike.
Speaker 3 (30:28):
Yeah. Anyways, it played better yesterday.
Speaker 2 (30:30):
Sorry, It's never as good the second time you tell it,
like this is why no one should be a stand
up is because like, oh, it hits once and you're like, yeah,
I got it.
Speaker 3 (30:39):
No, you can never replicate it. Thank you, Tucker.
Speaker 2 (30:43):
Let's take a quick break to recover from that, and
when we return, we've got stack Roulette after this.
Speaker 1 (30:49):
The Financial Exchange streams live on YouTube. Like our page
and stay up to date on breaking business news all morning.
Long Base is the Financial Exchange Radio Network business and
financial news affecting the markets and your wallet. We've got
it all straight from Wall Street right here on the
Financial Exchange Radio Network.
Speaker 3 (31:17):
Like what you got for me for stack Roulettes. Darn Restaurants.
Not a great year for their stock.
Speaker 4 (31:23):
Stock is now up about five and a quarter percent
for the year and up about seven percent today. Tucker
mentioned they reported earnings overnight or was it this morning?
Speaker 3 (31:32):
This morning?
Speaker 4 (31:33):
This morning they reported earnings. You're a restaurant company. You
should report earnings after the bell at the night.
Speaker 3 (31:39):
Now, that's that's right in the middle of the busy period. Yeah,
I guess you're trying to wait tables. Yeah, reporting.
Speaker 4 (31:46):
Big misses really across the board here and nonetheless stock
moving up on really commentary from the CEO. But earnings missed,
and I do wonder what exactly it speaks to in
terms of consumers willingness to spend. They represent a broad
swath of different types of restaurants from Olive Garden to
what's their high end steakhouse, Capitol Grill, Capitol Grill, and
(32:09):
you know, seeing a pullback and spending here. I also
do openly wonder you mentioned Tucker what a partnership with
Uber eats Geordash.
Speaker 3 (32:18):
Yeah, at the end of this year, how do you
get zuber eats? How do you get unlimited breadsticks with
Uber Eats.
Speaker 4 (32:23):
I don't think that's gonna work out too well, but
I be interested to keep an eye on a good question. Yeah,
tough to get ulimited breadsticks. The guy's not gonna go
back and forth all day to get to your unimited.
Speaker 3 (32:37):
The whole back seats filled with them.
Speaker 4 (32:38):
This is one of very few companies that's publicly traded
in the sit down restaurant space. There's not a lot
of other ones that give them a good viewpoint into
how consumers are spending. And so I do find this
significance just in terms of what it tells you about
American's ability and willingness to spend at restaurants right now.
Speaker 2 (33:00):
Yeah, it's it's it's tough also to get a read
because they're in so many different categories.
Speaker 3 (33:05):
Yeah, of course, I mean, you know, quite high high.
I mean.
Speaker 2 (33:08):
But the piece that is interesting is that they said
the only division that reported same store sales growth was
Longhorn Steakhouse. Everything else, whether it's Olive Garden, whether it's
Capital Grill, Yard House, everything else, they had same store
sale declines. Yeah, So that I think is something that's
that's notable.
Speaker 4 (33:27):
And none of their brands occupy the McDonald's space, I
think is the other point here. There's no there there's
no brand that they have that you can look at
for the segment and say, oh, that's the place to
get a really cheap dinner.
Speaker 2 (33:41):
I mean, Olive Garden to some extent occupies. They've also
got no fast casual right space. Like, there's no Chipotle
in there, there's no Panera in there. It's it's it's
it's different fundamentally from both of those. Also, So there's
that piece in Bloomberg. It's titled Salesforce is a dark
horse in the AI race. First, I take exception with
(34:01):
one of the thirty companies that's included the Dow Jones
Industrial Average being called a dark horse for anything like that.
Speaker 3 (34:10):
That's just not what a dark horse I heard of.
This company Salesforce.
Speaker 2 (34:14):
That's like, well, Microsoft is a dark horse to you know,
have crab legs delivered to all employees, Like, I don't
know like they could do that. They're a sleep Yeah,
so the Salesforce isn't really a dark horse. What it's
talking about is, Hey, all the hype for AI right
now is going towards one company quite honestly, yea Open AI. Yeah,
(34:36):
Like who talks about Google's AI these days? Aside from
did I don't think we ever covered it?
Speaker 3 (34:43):
Well, there's open Ai.
Speaker 4 (34:45):
Then the next tier down is Microsoft, Google and Facebook
Open That is Microsoft, like it's viewed one day of saying,
and then the tier down from that would be companies
like Salesforce that nobody's really talking about when it comes
to AI. So I think part of it is just
that open ai is sucked up all the ox gin
in the room. But I did want to make sure
we cover just tangentially, did we ever cover any of
the creepiness about what Google is putting together for its
(35:09):
like photos app for Android now no where you can
delete and add stuff to photos using AI, Like hey,
put a dog in this picture?
Speaker 3 (35:18):
And I can't imagine any nefarious purposes that could be
used like why do we need that, we don't.
Speaker 2 (35:26):
This is so stupid that we are now giving people
the ability to just add stuff that wasn't there into.
Speaker 3 (35:34):
Photos a photoshop.
Speaker 2 (35:36):
Well, yes, but you need to have some skill to
do that, which is why most people don't pay for it.
Speaker 3 (35:42):
And so this is just it's gonna get.
Speaker 2 (35:45):
Where we're going is no one is going to trust
any online information, even from their friends anymore.
Speaker 3 (35:51):
You won't be able to.
Speaker 2 (35:53):
We are going to kill the Internet, start it over,
reset the We're gonna have to move to the outernet,
unplug it, plug it back in, folks.
Speaker 3 (36:03):
Yeah, the outer nets coming. Once the Internet died, it's
gonna be like the Internet. But out stocks remain positive.
As we conclude the show today, hope you all have
a great rest of the day and we'll see you tomorrow.
Speaker 2 (36:16):
To finish up the week on the Financial Exchange,
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