November 1, 2024 • 38 mins
Chuck Zodda and Mike Armstrong discuss mortgage rates volatile couple of months and the guys share some important facts you need to know about the rates. Exxon and Chevron feel brunt of cheaper oil. Ted Rossman from Bankrate joins the show to chat about holiday impulse purchases. Intel posts more than $16B loss but says sales outlook is improving. Google employees pressure costumed execs at all-hands meeting for clarity on cost cuts. Paul LaMonica joins the show to chat about Amazon.
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Episode Transcript
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Speaker 1 (00:00):
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(00:44):
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(01:04):
Veterans Development Corporation. This is the Financial Exchange with Chuck
Zada and Mike Armstrong.
Speaker 2 (01:12):
Hour two of the Financial Exchange now in progress, and
as we kick off November, we've got stocks in the
green for your major US in disease. This in contrast
to October which actually finished down for the S and
P five hundred. I haven't looked at the down NASDAK
because who cares, didn't want to say it, but thanks
(01:35):
the Dow though today is up four hundred and seventy
three points, about one point one percent, the S and
P of fifty three about a little less than one percent,
and Nasdaq up one point two percent or two hundred
and seventeen points. So a little bit of a relief
rally after what was a rather future day for stocks yesterday.
I think that's probably the best way to describe it.
Ten year Treasury up five point seven basis points this
(01:58):
despite a weaker than expect did jobs report. Traders basically
saying nope, we're not paying any attention to that today.
That's kind of the message I'm getting at least. And
so you've got the ten year at four point three
four percent. That's likely going to push the thirty or
fixed rate mortgage up to around seven point one point
five and crazy. Yeah, we were at six one five
crazy a month and a half ago, so we had
(02:21):
seen nearly.
Speaker 3 (02:22):
A two percent decline in mortgage rates and then boom,
they're up one percent in the last month thirty days,
just right back up there. Yeah, realtors not really thrilled
at that, probably not.
Speaker 2 (02:33):
No Oil West Texas intermediaup ninety cents barrel to seventy
dollars sixteen cents, still floating right around that seventy mark.
The triple A national average four gas prices that is
continuing to slide though, down another nine tenths of ascent
to three twelve and two tenths of ascent. We got
a chance to get under three to ten over the weekend,
which is very exciting. You do have some states Texas
(02:56):
right now averaging two sixty six, Mississippi two eight. Those
are the lowest ones that I'm seeing out there. On
the other hand, highest gas price states Mike, Hawaii, California,
and Washington. California is still at four fifty five, Hawaii
at four fifty eight, Washington at four oh three.
Speaker 3 (03:15):
Back to interest rates for a moment. I think there's
a potentially good lesson in here. How many people did
we hear about? And from that said, I'm putting off
any big purchases like a car, a home until.
Speaker 2 (03:27):
The FED cuts rates.
Speaker 3 (03:28):
Well to the FED cuts rates are until after the election.
Speaker 2 (03:30):
How's that working out for you?
Speaker 3 (03:32):
If you did and you know you're eyeing that home
back in September October and you said, you know what,
I just can't pull the trigger on this. I want
to see if maybe commonly gives me that twenty five
thousand dollars first time home buyer credit. Well, you've eaten
all that up and more with the increase in interest
rates up over seven percent now, so again, politics matter,
(03:54):
but usually not for the reasons you think.
Speaker 2 (03:56):
And you can always refinance, yeah if if rates go down.
Let me tell you the best thing about thirty or
fixed rate mortgages. It is quite literally one way come.
It is rent control for homeowners with the ability to
change the contract if it moves in your favor.
Speaker 3 (04:16):
Right and only that direction.
Speaker 2 (04:19):
It's absolutely wild I steal. I don't know, well, I
do know why banks do this, but quite honestly, well,
can we explain why banks do this, Yes, because the
federal government covers them.
Speaker 3 (04:34):
Covers them, right, Not like the federal government comes in
and says, we will buy those mortgages off your balance
sheet and give you cash. Yeah, you go and issue
them because we believe that Americans they don't cover the
ones that they keep on their balance sheet.
Speaker 2 (04:44):
But yes, for the mortgage writers, who all they do
is yep, we underwrite it and then we sell it
off to someone else. Yeah, the federal government is taking
that risk. And so that's why they do it, is
because we've decided that the key to a healthy economy
is home ownership and home construction.
Speaker 3 (05:04):
Yep. And just but I just yeah, I just want
to make sure that was clear, because we tend to
sugarcoat and and say, oh, all government intervention is bad.
And I'll just say, the only reason you get a
thirty year fixed rate mortgage with the option to refinance down,
it's not free market. It's based on our government intervening
and saying we'll buy that stuff up. Otherwise that does
(05:25):
not exist.
Speaker 2 (05:25):
No, at least not at the rates that it currently.
It might still exist, it just it might be one
or two percentage points higher to be you know, like that.
Speaker 3 (05:32):
It might be nine percent otherwise. The reason if businesses
can't borrow this way, Yeah, I think they exactly. It's
uh yeah, no one goes to a business. Hey, do
you want a really long term loan that you can
get out of at any point if rates move lower?
Speaker 1 (05:47):
Oh?
Speaker 2 (05:47):
Sure, yeah, that's it sounds great.
Speaker 3 (05:49):
It's offered to like six companies Microsoft, Apple, basically the
ones that are more credit worthy of the United States government.
Those ones can do it. I was gonna say, like,
the US government doesn't even get this deal. They don't
homeowners are treated better than the US government. Not quite,
because the rates are a little higher, but not much. Yeah,
not much given the overall credit quality disparity that we see.
Speaker 2 (06:10):
Let's see. I want to talk a little bit about
oil here, because this is we're kind of a fascinating
juncture right now when it comes to energy prices. You've
got oil floating around right in the high sixties, low
seventies and can't really seem to get traction in either direction.
On one hand, you've got this idea that hey, there's
you know, economic malaise coming not just in the US
(06:31):
but around the globe, and so that's kind of capped
upside in the short term. On the other hand, you
got really low oil inventory levels domestically, and you still
have Middle East concerns that are out there, and so
it's kind of like, gee, well, how you know, every
time this thing starts getting cheap, something happens and you know,
kind of bounces off the sixty five level. So we've
(06:52):
been hanging out between you know, seventy five a barrel
and sixty five a barrel really for the last three
months or so now, since mid August, and I think
it's unclear exactly what direction we're going to move in next.
But we've got your big oil companies reporting earnings today
and Exceon and Chevron at least at this point saying, yeah,
(07:13):
this cheaper oil is impacting us simply because we're not
seeing as much flow through a volume you know, that
we would want to see, and where we are seeing it,
the margins aren't as good, and so yeah, it's not
it has not been a great quarter for our profits, right,
That's kind of what we're seeing there. But the thing
that's fascinating here is just the sheer amount of oil
(07:36):
that we are producing in the United States right now.
It's north of thirteen million barrels a day. It's forty
eight percent higher than Saudi Arabia. Let's put that like,
let's let's let's say that again, just because I think
oftentimes we're like, oh, we import all of our oil. Well,
the United States as of right now is producing forty
(07:59):
eight eight percent more oil per day than Saudi Arabia.
Speaker 3 (08:04):
And I think this is an important contextualization outside of
oil markets too. How many conversations have been had over
the last few years about well, we can't possibly change
to battery technology because look at all the rare earth materials,
where are we going to find them. They will never
be able to produce them domestically. We'll always be buying
from the Chinese. And the same things were said about
(08:26):
oil in the nineteen seventies. Yeah, and so I generally
find that when you put a market into something, you
find ways to get it. And that's the perfect example
here with oil. When you define a market, when you
have a free market price on something, if the market
determines that it's valuable, you'll go find it. It doesn't really
(08:47):
matter where it is. And here in the United States,
the innovation and changes you've seen in oil production in
the US are wild. I'm nowhere near an expert on
this subject. And you know, the ability to get the
oil out of the shale is fascinating engineering in and
of itself, not of finding that nobody actually wants to
go work in that industry, but it's a lot of
(09:10):
money to be made. Still wild in terms of the
development of the US oil industry.
Speaker 2 (09:15):
And I just want to read one paragraph from this
Bloomberg piece just because this stuff's fascinating, Like this is
it's wild. What you can do now? Conventional wisdom called
for drilling four wells into the ground and then horizontally
to access layers of oil soaked rock, a technical feet
perfected by the US shale industry. So already you're talking
about like horizontal drilling, which twenty years ago impossible. People like,
(09:38):
how do we do it? This is talking about a
company Mattador Resources, and how they were trying to drill
in this one area. The pot of land, though, was
too narrow, limiting each well reach and likely making them unprofitable.
So engineers tried a novel concept, a U turn. After
boring vertically into the shale layer, they then went sideways
(09:59):
for a mile curve the well around and drilled back
to where it began. Mattador was able to pump the
oil with two wells instead of four, essentially cutting costs
in half. Listen, I'll say it over and over again.
I'm a broken record on this. Stress is what causes
every advance in human history, and that's what you're seeing
(10:20):
on this. Hey, how do we drill this? We can't
drill it cost competitively. Let's try something new. Oh, it worked, progress,
Like this is what it looks like. Quick break here.
When we come back, we're gonna joined by Ted Rossman
from bank Rate talking about holiday shopping and specifically those
impulse purchases where you're like, oh, I gotta get that
and that and that. Well, he'll talk to you about
(10:41):
what we're seeing for trends in America when we return.
Speaker 1 (10:45):
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Speaker 3 (11:19):
Joining us now is Ted Rossman from bankreag to talk
about the holiday shopping season and impulse purchases. Ted, thanks
for joining.
Speaker 4 (11:26):
Us, No problem, Thanks for having me so.
Speaker 3 (11:29):
I my neighbor Rob last night while we were trigger treating,
I think had the perfect description of the kickoff of
the holiday shopping season and the absurdity link to it.
He was in the home depot just a couple of
days ago and was staring down a chucky animatronic doll
type thing with a knife in its hand. Bloody knife
in its hand that's stabbing back and forth. And directly
(11:50):
next to said gory animatronic chucky was a nicely bearded
and rosy cheeked Santa Claus ready to hand out present.
That's where we've gotten here, is the holiday shopping season
has definitely kicked off if you go and look through
your home depots or probably just about everywhere else as well.
Walmart had their big, their big kickoff down in Orlando
(12:13):
with their employees a couple of weeks ago. I think, Now,
what sort of tips do you have for folks? As
the Christmas creep comes in here, and you know there's
more and more pressure as we get out there shopping
to fill those carts and any tips for shoppers.
Speaker 4 (12:29):
You're right, Christmas creep is a real thing. It is
encroaching on Halloween. The holiday shopping season is already well underway.
I mean a lot of big retailers started their best
sales a few weeks ago, and half of holiday shoppers
have already started.
Speaker 5 (12:43):
I actually like the early start.
Speaker 4 (12:45):
That's one of my tips is even if you're not
ready to start buying stuff, at least set a budget,
make a gift list, start setting money aside. You probably
still have four paychecks between now and the end of
the year. If you say a couple hundred dollars from
each of them, that gets you right around the National
Retail Federation's average projected expense of nine hundred dollars per shopper.
(13:09):
So that's a good tip to start early. Look to
stack discounts too. It is going to be a buyer's
market this year. Retailers are having to get aggressive on price.
Consumer spending has slowed in a lot of these holiday
favorites like clothes, toys, electronics.
Speaker 5 (13:25):
There are a lot of good deals.
Speaker 4 (13:26):
Out there, but don't stop with the thirty percent off
store promotion. Combine that with the rewards credit card that
you're hopefully pay in full and avoid interest. That could
be a second way to save on that same purchase.
A third way might be to go through an online
shopping portal, something like Racqueton or shop through Chase. You
could actually combine all three of those saving streams on
(13:48):
the same purchase.
Speaker 3 (13:49):
Ded this is a shortened holiday shopping season based on
where the Thanksgiving holiday falls, which is probably why they're
pushing things early. What are you hearing from retailers about
their own expectations other than what you just described of
rolling out discounts and trying to get shoppers in the
store early.
Speaker 4 (14:06):
A lot of the projections are for something like a
two or three percent.
Speaker 5 (14:09):
Gain over last year's sales.
Speaker 4 (14:11):
That's what the National Retail Federation and MasterCard and Deloitte
and others are saying. Now, that's pretty much in line
with inflation, so you could probably spend that either way.
You know, yes, it is growth, but it's not exceptional growth,
and a lot of it is just because things cost more,
and that's where consumers are feeling reluctant about the economy
(14:32):
that even though the job market's been pretty good and
GDP and consumer spending and all this data, people don't
feel like they're getting ahead. They feel like whatever wage
gains they're making are being gobbled up by higher prices.
Speaker 5 (14:45):
Even though wage growth.
Speaker 4 (14:46):
Continues to go up and inflation's coming down, we still
haven't totally caught up there. We found that only one
in four holiday shoppers are planning to spend more than
they did last year, so it's a relatively frugal consumer.
This year year, holiday spending is going to be pretty good.
I mean it's not going to fall off a cliff,
but because it's sort of treading water with respect to inflation,
(15:08):
retailers are having to get aggressive on price. When people
are splurging these days, it's more likely to be on
experiences like travel and dining than on physical goods.
Speaker 3 (15:18):
It's Ted Rossman from Bank Great joining us to talk
about the kickoff of the holiday shopping season and trends
that we're seeing amongst consumers. Ted, thanks so much for
joining us. Sure we'll talk again soon and before the holidays,
so thanks, have a great one and we'll talk to
you soon.
Speaker 5 (15:33):
Sounds good, Thanks you too, all right.
Speaker 6 (15:36):
Time for trivia here on the Financial Exchange, and it's
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You'll get a free appetizer just for signing up. Now
that's eating good in the neighborhood void weard prohibited dye
in only. Now that Halloween is over, let's do a
run of presidential trivia leading up to the election here
on Tuesday. In nineteen twenty six, President Calvin Coolidge pardon
an animal that was sent to the White House to
be served at Thanksgiving dinner. Coolidge pardon the animal and
(16:19):
kept her as a pet until the animal's death three
years later. Trivia question today, which animal did President Coolidge
pardon and later keep as a pet at the White House?
Speaker 7 (16:30):
Interesting question?
Speaker 6 (16:32):
Which animal did President Coolidge pardon and later keep as
a pet at the White House? Be the third person
today to text us at six one seven, three six,
two thirteen eighty five. With the correct answer, you'll win
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sure to include the keyword Applebee's in your text and
(16:53):
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segment six one seven three six two thirteen eighty five,
and the third correct response will be our winner. See
complete contest rules at Financial Exchange Show dot com.
Speaker 2 (17:06):
Mike, do you want to talk Intel here?
Speaker 3 (17:08):
Yeah, let's go Intel, because they're they're having a big
day today, up eight percent, which carves their losses or
pairs them back to only fifty one percent for the
year so far, having lost half of their value now
since January first of this year on I guess less
bad than expected.
Speaker 2 (17:28):
Yeah, here's a big describe it. It's a big thing.
They took a sixteen billion dollar loss for the quarter,
but it really is an accounting gimmick. The loss has
been accumulating over years. They just finally said okay, like
we're gonna realize this and move on, and ultimately their
revenue was still down six percent from the prior year,
but a little bit above the forecasts. And Intel also
(17:50):
gave guidance for the current quarter that is above expectations.
So it's basically the hope I think is, hey, they're
bottoming out.
Speaker 3 (18:00):
Dump all the bad news into a quarter and kitchen
sink it, and then hey, let's let's move on and
go from here. And really, the next two years are
gonna make or break Pat Gelsinger's tenure at the company.
It's either, hey, we've got these new fabs that are
opening up and we're gonna be able to actually make
money from them and our you know, foundry business. Maybe
we can get that working or sell it off, depending
(18:22):
on how you want.
Speaker 2 (18:22):
To approach it. But this is the next two years
are it for Intel in terms.
Speaker 3 (18:29):
Of can you turn around? Can you turn around?
Speaker 2 (18:31):
Can you get there? Because otherwise my concern with them
is that they're far enough behind then that they can't
catch up. It's kind of what it feels like, you know,
as you look at them. Taking a look at markets,
as we head towards the bottom of the hour, we
still have all three major US indices well into positive territory.
The Dow is now five hundred and forty nine point
(18:52):
of Rooney's one point three percent, smp is up sixty
two points, and the Nasdaq up two hundred and fifty
nine points. So you got all three indices massively in
positive territory. And it's not just a few small stocks
that are, you know, lifting the thing. I'm looking at
the S and P five hundred just right now. You
maybe have forty or fifty companies that are in negative
(19:13):
territory at the moment. So it's a pretty wide rally.
Actually maybe about sixty sixty five companies, So still a
pretty wide rally that you're seeing overall, and you know,
not just hey, big tech lifts all. Let's take a
quick break here. When we come back, we've got the
trivia answer after this.
Speaker 1 (19:40):
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(20:02):
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This is the Financial Exchange Radio Network.
Speaker 6 (20:11):
Trivia question today was which animal did President Coolidge pardon
and later keep as a pet at the White House.
There'll be a raccoon. President Coolidge was sent to raccoon
by a farmer to be served as part of the
Thanksgiving dinner held at the White House. Coolidge had no
desire to eat a raccoon and instead kept her as
a pet and named her Rebecca. We have two winners
(20:35):
two announced today. Winner of the Financial Exchange Show T
shirt was John from Providence, Rhode Island, and the weekly
winner of the one hundred dollars gift card two Applebee's
was Joshua from Portland, Maine. Some congrats to both winners.
There and Trivia is brought to you by Applebee's. Enjoy
Happrice late night appetizers after nine pm and join Club
Applebee's to enjoy exclusive deals and specials.
Speaker 7 (20:57):
You'll get a free appetizer just for signing up. Now
that's eating good in the neighborhood. Void were prohibited dying
in Only you.
Speaker 2 (21:04):
Ever tasted raccoon? No, I mean neither.
Speaker 3 (21:07):
Well. I really like silly names for pat's. I had
a dog named Pretzel once. I prefer very serious names
for pets, like Rebecca, You're just like a dog named John.
Speaker 7 (21:19):
Yeah. I would tend to lean in that direction too.
Speaker 2 (21:22):
Do you guys know what day Calvin Coolis was born on?
Speaker 3 (21:25):
No, Independence Day?
Speaker 2 (21:27):
Fourth July is the only president who have ever been
born on Independence Day. But good guess, Mike, did you
know that three out of the first five US presidents
died on Independence Day?
Speaker 3 (21:37):
I think I do remember that.
Speaker 2 (21:38):
Jefferson, Adams, and Monroe all died on Independence Day. Yeah, so, uh,
there's that.
Speaker 6 (21:46):
Do Rebecca also died on Independence Day?
Speaker 2 (21:48):
Oh it's unclear.
Speaker 7 (21:49):
We'll find out she was eating on July fifth.
Speaker 2 (21:53):
Coolige, I believe, was also the first president to ever
visit Cuba.
Speaker 3 (21:59):
Okay, there you have it, put it out there. Yeah,
just continuing American history major. Yeah, we'll just history. No,
not just American, No, got.
Speaker 2 (22:06):
It, the whole world, global history. Global. Let's talk about
this piece of the New York Times that is really
quite sad. It's titled They're giving scammers all their money
and the kids can't stop them. And it opens with
an anecdote about man by the name of Chris Mansonelli
and his dad was seventy nine years old and died
(22:29):
last year and it talks about he goes up to
the refrigerator and he sees, you know, all the pictures
of the guy's grandkids, his children, and then there is
a picture of and I'm not a wrestling person, so
I don't even know who this is. Alexa Bliss, who's
a someone in professional wrestling, is pinned up on the
refrigerator as well, and it turns out that this guy's
(22:53):
father had ended up basically losing like a million dollars
in a romance scam where he thought he was dating
this woman when in fact he was just being scammed
out of all of his money.
Speaker 3 (23:11):
About a million dollars too, among other scams, this was
one of them. And it's yeah, incredibly sad, disturbing and
on many levels, and unfortunately, I'll tell you repeated on
many occasions, through many different scams that I've seen firsthand.
Speaker 2 (23:29):
And according to the FBI's Center on Internet Crime, Americans
lost estimated twelve and a half billion dollars to online
criminals last year, six hundred and fifty two million of
that was through romance scams and things like that. And
this is just for what they know of that's actually
been reported, and pretty much what you see is that
there's a lot of cases where, look, kids know that
(23:52):
their parents, their elderly parents are being scammed out of
their money and are trying to stop them, but they
have no legal authority to do so.
Speaker 3 (24:00):
Actually, yeah, this case was actually pointed out where the
son knew what was going on, probably I'm guessing based
on the taglines, and the story had power of attorney
over His father removed money from his father, took it away,
one hundred thousand dollars, his last one hundred thousand. He
removed it and said, you're not scamming this away anymore.
His father sued him. Yeah, his father was convinced that
(24:21):
this was reality. His father sued him. I don't know
if he regained control of the money, if the son
just gave up at that stage. But the tools that
family members have to deal with this sort of thing
are kind of crap, to be quite honest, they're pretty garbage,
and I understand why because they are. You know, the
more power you give, the more potential for abuse that
(24:42):
exists there. But the tools are not great. If you
find a loved one in this situation, pretty much your
only option if it gets this severe is to bring
that person to court and have them declared incompetent by
the court, which is not easy but also not always
the case. No, right, Like, just because you're falling for
a scam, doesn't mean that you have no competence.
Speaker 2 (25:02):
Correct, That's what I meant by not like. It's not
just like, oh like, that doesn't mean you're incompetent. It
just means that you're gullible, right, which is completely different.
And Look, I know that we all think that this
can't happen to us, because we all think that we're
so smart.
Speaker 3 (25:18):
And this specific one might never happen to you, But
I'll give another one. Like, I know somebody first hand
who has been funneling tens of thousands of dollars onto
subscriptions for Get your Rich Quick schemes, Yeah, and subscriptions
to bogus newsletters and things that are just absolute garbage
(25:39):
out there, And the ability for that person's family to
control it in any meaningful way is tough.
Speaker 2 (25:48):
And there's tons of different ones out there. Look, you've
got romance scams out there. You've got scammers pretending to
be you know, the bank saying hey, your account's going
to be closed unless you put money into a new accountant,
like sending wads of cash and this like it's it's
it's really. There's all kinds of different ones out there.
And the biggest thing that I can say on any
(26:11):
of this like is he always keep your guard up
when it comes to like the second anyone asks you
for money, make sure you know exactly who you're talking
to first and foremost, but second, regardless of who you
think it is, whether it is a family member, someone
claiming to be from a financial institution, someone claiming to
(26:34):
be from the government, whoever it might be, whatever, whoever
that person is, calmly hang up the phone, you know,
say hey, I'll call you back in just a minute.
Something else is going on, find a number somewhere else
for that person or institution, confirm that it's the right
number to call, and then call that number. Because it's
(26:56):
so easy to spoof phone numbers and voices and all
kinds of stuff these days. That and they do their
best to create a sense of urgency. Oh no, you
can't hang up, because we need to nothing needs to
be done right now.
Speaker 3 (27:08):
Yeah, ever, I mean outline another one of these, A
thirty eight year old software engineer went to go visit
his father in San Jose for his eightieth birthday. Father
was deeply involved with an investment scheme offered through a
woman who claimed to be from South Korea. He was
up one morning like laser, focused on real time chats
and charts tracking gold Spot market. The next day, the
(27:30):
whole thing was a hoax, The whole platform was fake.
The money that he had wired into quote unquote in
an account was gone. And yeah, you know, the father
had been convinced that his account had grown to five
million bucks very next day. Can't get any of the
money out. Million dollars gone gone.
Speaker 2 (27:51):
And always if it sounds either too good to be
true or too bad to be true, usually it's not true.
You know, it's it's kind of what it is. So
I just I can't stress enough. You unfortunately have to
be vigilant on this stuff all the time. Yeah, you
just do, because there's so many different ways that people
can scam you.
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Speaker 2 (29:10):
Piece from CNBC today, Google, I guess had an all
hands meeting yesterday and they this one just kind of
more humorous than anything else.
Speaker 3 (29:20):
And humorously dystopian. But yeah, I don't.
Speaker 2 (29:24):
Think this is as bad as a lot of the
other stuff that we've covered about companies handling things badly
in recent years.
Speaker 6 (29:29):
I'm sorry it says they had an all hands meeting
on Wednesday, which is the weird part because.
Speaker 2 (29:35):
The executives were all dressed up in Halloween costumes.
Speaker 3 (29:38):
Quote Google's chief scientist Jeff Dean were a starfish costume.
Speaker 7 (29:42):
But it was Wednesday, like yesterday was Halloween.
Speaker 3 (29:45):
People wear costumes all week on Halloween week. The CEO
I wore one on Wednesday. Oh yeah, wore a black
T shirt that read ERA.
Speaker 2 (29:52):
Four four when I was working for Google.
Speaker 3 (29:56):
So anyway, the all hands meeting was scheduled in reaction
to their earnings call where they talked about cost cutting,
and then the executive team showed up in Halloween costumes
to tell people that, I mean, hey, we're not laying
you off today, but yeah, the costcuts are real and
you should be aware that we're thinking about this.
Speaker 2 (30:13):
To be fair, The reason that I say this isn't
as bad as like other places if someone showed up
in like the Grim Reaper outfit. Oh god, you know,
like Sender Purchas in the Grim Reaper costume, Like okay
that now we're talking. You know, we got some real problems.
Speaker 3 (30:27):
I know, but if I'm going to be told that
I might lose my job, I really don't want to
hear it from a starfish.
Speaker 7 (30:31):
Yeah, or Harry Potter or SpongeBob or something.
Speaker 3 (30:33):
I just I really don't. I know, we're all trying
to become more relatable. Does it matter who tells you
you're going to lose your job? Like, yeah, I think
if I if I've worked for a company for a
decade and you're gonna tell me that I lose my job,
at least you can do is wear a suit. But
they're not actually firing anyone here, get it, But I
don't love it.
Speaker 7 (30:51):
Not a great conversation.
Speaker 2 (30:52):
I don't think this is as bad as some of
the other stuff.
Speaker 3 (30:55):
I think there's plenty worse stuff out I think it's
a stupid oversight.
Speaker 2 (31:00):
But there have been far worse HR blunders in the
last couple of years than this.
Speaker 3 (31:04):
One hundred percent. You know, don't cry to your employees
when you're telling them that you're firing them all like agree,
there have been far worse blunders. But it's not like
this meeting was out of the blue. You knew that
you were going to have all hands meeting telling your
employees about cost cuts, and you decided to wear halloween costumes.
It's not a funny topic. No kind of a problem. Yeah,
it's it's not great. Yeah, that's all I leave with.
Speaker 1 (31:27):
Not great.
Speaker 2 (31:28):
Let's take a quick break here. When we come back,
paul A Monica joins us right after this.
Speaker 1 (31:32):
Text us six one seven, three, six two thirteen eighty
five with your comments and questions about today's show, and
let us know what you think about the stories we
are covering. This is the Financial Exchange Radio Network. If
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(31:54):
for the Financial Exchange. This is your home for breaking
business and financial news. This is the Financial Exchange Radio Network.
Ladies and gentlemen, the weekend as problems.
Speaker 2 (32:10):
We're now joined by Paul Monica from Barons. Paul, how
are you today?
Speaker 8 (32:16):
I'm good?
Speaker 5 (32:17):
Thanks? How are you?
Speaker 8 (32:17):
A nice little rally we've got going into the weekend.
Speaker 2 (32:20):
I know it makes everyone feel a little bit better
after yesterday at least, So let's let's talk a little
bit about Amazon, who is one of the companies rallying
the most today. By my math, they are up somewhere
in the ballpark of one hundred and sixty billion dollars,
So adding you know, just a Verizon to their market
cap on it on a day. What what went right
(32:42):
for them this quarter?
Speaker 8 (32:44):
Yeah, seven game the market caps back above two trillion.
I think what went right for them is that, you know,
the guidance obviously is pretty solid going into the holidays.
The sales growth was healthy above forecasts. But when you
really look at it, I think, you know, the AI
investments are paying off, and particularly I think when it
(33:07):
comes to AI features for Amazon Web Services AWS is
just a beast. I mean, this is a company that
you look at the total numbers, twenty seven and a
half billion in revenue for ADWS, that's up nearly twenty percent.
(33:28):
And what's really just mind boggling is that the net
the operating profit excuse me for AWS is end point
five billions. So the margins are just phenomenal for that
part of Amazon, and I think that's what investors have
been valuing the company on probably for some time, not
(33:52):
so much the core retail business.
Speaker 2 (33:54):
When we talk about that that cloud space. Everyone these
days is talking about how they're implementing AI in cloud.
What are Amazon? What's Amazon specifically doing and are there
any signs that they're starting to generate additional revenue specifically
from AI at this point?
Speaker 8 (34:09):
Yeah, I think all of the companies that are trying
to add AI offerings to their various various services, and hey,
Amazon's doing it both with shopping as well as on
the cloud side. You know, it's an open debate whether
or not these companies are spending too much. I mean,
(34:30):
it was only yesterday that Microsoft and Meta got punished
by Wall Street for appearing to have AI investments that
weren't really panning out. But I think, you know, the
Amazon results today, it's a testament to the fact that
if you are putting up strong earnings and revenue growth
while continuing to spend, Wall Street will probably be more
(34:53):
forgiving in that scenario. And I think that's what we happened.
What happened with alphabet numbers earlier this week as well.
You know, the Google YouTube giants also had some pretty solid,
you know numbers, so that's a big reason why that
stock had a nice pop as well.
Speaker 2 (35:09):
Paul what's going on with kind of the original core
business for Amazon, which is selling a bunch of stuff
to people. What does that look like these days in
terms of growth and or margins?
Speaker 8 (35:20):
Yeah, I mean, margins are still a little bit tight
on the core retail side because it's you know, retail.
I mean, so that's something that I think investors have
you grown to accept. But you know, Amazon has done
a very solid job still gaining market share. I think
(35:41):
for many consumers right now and investors, it's perceived as
a two horse race with Amazon and Walmart really dominating
the consumer shopping experience. Right now. We're heading into the holidays,
a lot of people are going to be spending on
gifts and that's why I think, you know, one of
the reasons why the fourth quarter outlook was pretty healthy is.
Speaker 2 (36:00):
Well, what about the streaming business that they have. Does
that contribute anything materially to the company or do we
just not really know what's going on because of how
they structure their units.
Speaker 8 (36:11):
Yeah, I think it's hard to necessarily say. I mean,
there is an advertising component that comes in to streaming
that you know, gives them a little as well from
the streaming side, but you know, clearly. You know, Amazon
is looking at streaming things like the NFL and some
(36:32):
of their other exclusive offerings as a way to just
boost the Prime memberships. And that's something that you know,
Prime members are continuing to grow. Amazon's a little bit
opaque with the exact number of memberships, you know, the
consternation of you know, some analysts out there, but by
(36:53):
all accounts, prime memberships are you know, continuing to grow
pretty dramatically. And I think the streaming aspect one part
of it. I mean, if you're already going to be
considering watching NFL on Thursday nights and shopping at Whole Foods,
for example, why not get that annual Prime membership, which
(37:15):
they've also shown an ability to boost the subscription for
and not really lose much in the way of revenue.
Speaker 2 (37:23):
Fantastic, Paul, appreciate you joining us, have a great weekend,
and we'll talk to you soon.
Speaker 8 (37:29):
Thanks a lot, appreciate it.
Speaker 2 (37:31):
That is Paul Monica from Barons talking about Amazon taking
a look at markets. As we head towards the top
of the hour, The dial up four hundred and sixty
eight points, the S and pup forty eight, the nasdag
up two hundred and thirteen points, so a lot of
green on the board. This despite a jobs report that
was disappointing, with twelve thousand jobs added this morning, though
the caveat Hey it was during a time where we
(37:53):
had two hurricanes that had just come through, so we
don't really know what this one actually means, and we'll
have to look for more clarity in the coming months.
We are done for the day and for the week,
but we'll be back on Monday. We will, Yeah, I'll
be here, and so I hope you all have a
great weekend and we'll see you Monday on the Financial
(38:16):
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(01:04):
Veterans Development Corporation. This is the Financial Exchange with Chuck
Zada and Mike Armstrong.
Speaker 2 (01:12):
Hour two of the Financial Exchange now in progress, and
as we kick off November, we've got stocks in the
green for your major US in disease. This in contrast
to October which actually finished down for the S and
P five hundred. I haven't looked at the down NASDAK
because who cares, didn't want to say it, but thanks
(01:35):
the Dow though today is up four hundred and seventy
three points, about one point one percent, the S and
P of fifty three about a little less than one percent,
and Nasdaq up one point two percent or two hundred
and seventeen points. So a little bit of a relief
rally after what was a rather future day for stocks yesterday.
I think that's probably the best way to describe it.
Ten year Treasury up five point seven basis points this
(01:58):
despite a weaker than expect did jobs report. Traders basically
saying nope, we're not paying any attention to that today.
That's kind of the message I'm getting at least. And
so you've got the ten year at four point three
four percent. That's likely going to push the thirty or
fixed rate mortgage up to around seven point one point
five and crazy. Yeah, we were at six one five
crazy a month and a half ago, so we had
(02:21):
seen nearly.
Speaker 3 (02:22):
A two percent decline in mortgage rates and then boom,
they're up one percent in the last month thirty days,
just right back up there. Yeah, realtors not really thrilled
at that, probably not.
Speaker 2 (02:33):
No Oil West Texas intermediaup ninety cents barrel to seventy
dollars sixteen cents, still floating right around that seventy mark.
The triple A national average four gas prices that is
continuing to slide though, down another nine tenths of ascent
to three twelve and two tenths of ascent. We got
a chance to get under three to ten over the weekend,
which is very exciting. You do have some states Texas
(02:56):
right now averaging two sixty six, Mississippi two eight. Those
are the lowest ones that I'm seeing out there. On
the other hand, highest gas price states Mike, Hawaii, California,
and Washington. California is still at four fifty five, Hawaii
at four fifty eight, Washington at four oh three.
Speaker 3 (03:15):
Back to interest rates for a moment. I think there's
a potentially good lesson in here. How many people did
we hear about? And from that said, I'm putting off
any big purchases like a car, a home until.
Speaker 2 (03:27):
The FED cuts rates.
Speaker 3 (03:28):
Well to the FED cuts rates are until after the election.
Speaker 2 (03:30):
How's that working out for you?
Speaker 3 (03:32):
If you did and you know you're eyeing that home
back in September October and you said, you know what,
I just can't pull the trigger on this. I want
to see if maybe commonly gives me that twenty five
thousand dollars first time home buyer credit. Well, you've eaten
all that up and more with the increase in interest
rates up over seven percent now, so again, politics matter,
(03:54):
but usually not for the reasons you think.
Speaker 2 (03:56):
And you can always refinance, yeah if if rates go down.
Let me tell you the best thing about thirty or
fixed rate mortgages. It is quite literally one way come.
It is rent control for homeowners with the ability to
change the contract if it moves in your favor.
Speaker 3 (04:16):
Right and only that direction.
Speaker 2 (04:19):
It's absolutely wild I steal. I don't know, well, I
do know why banks do this, but quite honestly, well,
can we explain why banks do this, Yes, because the
federal government covers them.
Speaker 3 (04:34):
Covers them, right, Not like the federal government comes in
and says, we will buy those mortgages off your balance
sheet and give you cash. Yeah, you go and issue
them because we believe that Americans they don't cover the
ones that they keep on their balance sheet.
Speaker 2 (04:44):
But yes, for the mortgage writers, who all they do
is yep, we underwrite it and then we sell it
off to someone else. Yeah, the federal government is taking
that risk. And so that's why they do it, is
because we've decided that the key to a healthy economy
is home ownership and home construction.
Speaker 3 (05:04):
Yep. And just but I just yeah, I just want
to make sure that was clear, because we tend to
sugarcoat and and say, oh, all government intervention is bad.
And I'll just say, the only reason you get a
thirty year fixed rate mortgage with the option to refinance down,
it's not free market. It's based on our government intervening
and saying we'll buy that stuff up. Otherwise that does
(05:25):
not exist.
Speaker 2 (05:25):
No, at least not at the rates that it currently.
It might still exist, it just it might be one
or two percentage points higher to be you know, like that.
Speaker 3 (05:32):
It might be nine percent otherwise. The reason if businesses
can't borrow this way, Yeah, I think they exactly. It's
uh yeah, no one goes to a business. Hey, do
you want a really long term loan that you can
get out of at any point if rates move lower?
Speaker 1 (05:47):
Oh?
Speaker 2 (05:47):
Sure, yeah, that's it sounds great.
Speaker 3 (05:49):
It's offered to like six companies Microsoft, Apple, basically the
ones that are more credit worthy of the United States government.
Those ones can do it. I was gonna say, like,
the US government doesn't even get this deal. They don't
homeowners are treated better than the US government. Not quite,
because the rates are a little higher, but not much. Yeah,
not much given the overall credit quality disparity that we see.
Speaker 2 (06:10):
Let's see. I want to talk a little bit about
oil here, because this is we're kind of a fascinating
juncture right now when it comes to energy prices. You've
got oil floating around right in the high sixties, low
seventies and can't really seem to get traction in either direction.
On one hand, you've got this idea that hey, there's
you know, economic malaise coming not just in the US
(06:31):
but around the globe, and so that's kind of capped
upside in the short term. On the other hand, you
got really low oil inventory levels domestically, and you still
have Middle East concerns that are out there, and so
it's kind of like, gee, well, how you know, every
time this thing starts getting cheap, something happens and you know,
kind of bounces off the sixty five level. So we've
(06:52):
been hanging out between you know, seventy five a barrel
and sixty five a barrel really for the last three
months or so now, since mid August, and I think
it's unclear exactly what direction we're going to move in next.
But we've got your big oil companies reporting earnings today
and Exceon and Chevron at least at this point saying, yeah,
(07:13):
this cheaper oil is impacting us simply because we're not
seeing as much flow through a volume you know, that
we would want to see, and where we are seeing it,
the margins aren't as good, and so yeah, it's not
it has not been a great quarter for our profits, right,
That's kind of what we're seeing there. But the thing
that's fascinating here is just the sheer amount of oil
(07:36):
that we are producing in the United States right now.
It's north of thirteen million barrels a day. It's forty
eight percent higher than Saudi Arabia. Let's put that like,
let's let's let's say that again, just because I think
oftentimes we're like, oh, we import all of our oil. Well,
the United States as of right now is producing forty
(07:59):
eight eight percent more oil per day than Saudi Arabia.
Speaker 3 (08:04):
And I think this is an important contextualization outside of
oil markets too. How many conversations have been had over
the last few years about well, we can't possibly change
to battery technology because look at all the rare earth materials,
where are we going to find them. They will never
be able to produce them domestically. We'll always be buying
from the Chinese. And the same things were said about
(08:26):
oil in the nineteen seventies. Yeah, and so I generally
find that when you put a market into something, you
find ways to get it. And that's the perfect example
here with oil. When you define a market, when you
have a free market price on something, if the market
determines that it's valuable, you'll go find it. It doesn't really
(08:47):
matter where it is. And here in the United States,
the innovation and changes you've seen in oil production in
the US are wild. I'm nowhere near an expert on
this subject. And you know, the ability to get the
oil out of the shale is fascinating engineering in and
of itself, not of finding that nobody actually wants to
go work in that industry, but it's a lot of
(09:10):
money to be made. Still wild in terms of the
development of the US oil industry.
Speaker 2 (09:15):
And I just want to read one paragraph from this
Bloomberg piece just because this stuff's fascinating, Like this is
it's wild. What you can do now? Conventional wisdom called
for drilling four wells into the ground and then horizontally
to access layers of oil soaked rock, a technical feet
perfected by the US shale industry. So already you're talking
about like horizontal drilling, which twenty years ago impossible. People like,
(09:38):
how do we do it? This is talking about a
company Mattador Resources, and how they were trying to drill
in this one area. The pot of land, though, was
too narrow, limiting each well reach and likely making them unprofitable.
So engineers tried a novel concept, a U turn. After
boring vertically into the shale layer, they then went sideways
(09:59):
for a mile curve the well around and drilled back
to where it began. Mattador was able to pump the
oil with two wells instead of four, essentially cutting costs
in half. Listen, I'll say it over and over again.
I'm a broken record on this. Stress is what causes
every advance in human history, and that's what you're seeing
(10:20):
on this. Hey, how do we drill this? We can't
drill it cost competitively. Let's try something new. Oh, it worked, progress,
Like this is what it looks like. Quick break here.
When we come back, we're gonna joined by Ted Rossman
from bank Rate talking about holiday shopping and specifically those
impulse purchases where you're like, oh, I gotta get that
and that and that. Well, he'll talk to you about
(10:41):
what we're seeing for trends in America when we return.
Speaker 1 (10:45):
Tune in for Trivia brought to you by Applebee's every
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(11:07):
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Speaker 3 (11:19):
Joining us now is Ted Rossman from bankreag to talk
about the holiday shopping season and impulse purchases. Ted, thanks
for joining.
Speaker 4 (11:26):
Us, No problem, Thanks for having me so.
Speaker 3 (11:29):
I my neighbor Rob last night while we were trigger treating,
I think had the perfect description of the kickoff of
the holiday shopping season and the absurdity link to it.
He was in the home depot just a couple of
days ago and was staring down a chucky animatronic doll
type thing with a knife in its hand. Bloody knife
in its hand that's stabbing back and forth. And directly
(11:50):
next to said gory animatronic chucky was a nicely bearded
and rosy cheeked Santa Claus ready to hand out present.
That's where we've gotten here, is the holiday shopping season
has definitely kicked off if you go and look through
your home depots or probably just about everywhere else as well.
Walmart had their big, their big kickoff down in Orlando
(12:13):
with their employees a couple of weeks ago. I think, Now,
what sort of tips do you have for folks? As
the Christmas creep comes in here, and you know there's
more and more pressure as we get out there shopping
to fill those carts and any tips for shoppers.
Speaker 4 (12:29):
You're right, Christmas creep is a real thing. It is
encroaching on Halloween. The holiday shopping season is already well underway.
I mean a lot of big retailers started their best
sales a few weeks ago, and half of holiday shoppers
have already started.
Speaker 5 (12:43):
I actually like the early start.
Speaker 4 (12:45):
That's one of my tips is even if you're not
ready to start buying stuff, at least set a budget,
make a gift list, start setting money aside. You probably
still have four paychecks between now and the end of
the year. If you say a couple hundred dollars from
each of them, that gets you right around the National
Retail Federation's average projected expense of nine hundred dollars per shopper.
(13:09):
So that's a good tip to start early. Look to
stack discounts too. It is going to be a buyer's
market this year. Retailers are having to get aggressive on price.
Consumer spending has slowed in a lot of these holiday
favorites like clothes, toys, electronics.
Speaker 5 (13:25):
There are a lot of good deals.
Speaker 4 (13:26):
Out there, but don't stop with the thirty percent off
store promotion. Combine that with the rewards credit card that
you're hopefully pay in full and avoid interest. That could
be a second way to save on that same purchase.
A third way might be to go through an online
shopping portal, something like Racqueton or shop through Chase. You
could actually combine all three of those saving streams on
(13:48):
the same purchase.
Speaker 3 (13:49):
Ded this is a shortened holiday shopping season based on
where the Thanksgiving holiday falls, which is probably why they're
pushing things early. What are you hearing from retailers about
their own expectations other than what you just described of
rolling out discounts and trying to get shoppers in the
store early.
Speaker 4 (14:06):
A lot of the projections are for something like a
two or three percent.
Speaker 5 (14:09):
Gain over last year's sales.
Speaker 4 (14:11):
That's what the National Retail Federation and MasterCard and Deloitte
and others are saying. Now, that's pretty much in line
with inflation, so you could probably spend that either way.
You know, yes, it is growth, but it's not exceptional growth,
and a lot of it is just because things cost more,
and that's where consumers are feeling reluctant about the economy
(14:32):
that even though the job market's been pretty good and
GDP and consumer spending and all this data, people don't
feel like they're getting ahead. They feel like whatever wage
gains they're making are being gobbled up by higher prices.
Speaker 5 (14:45):
Even though wage growth.
Speaker 4 (14:46):
Continues to go up and inflation's coming down, we still
haven't totally caught up there. We found that only one
in four holiday shoppers are planning to spend more than
they did last year, so it's a relatively frugal consumer.
This year year, holiday spending is going to be pretty good.
I mean it's not going to fall off a cliff,
but because it's sort of treading water with respect to inflation,
(15:08):
retailers are having to get aggressive on price. When people
are splurging these days, it's more likely to be on
experiences like travel and dining than on physical goods.
Speaker 3 (15:18):
It's Ted Rossman from Bank Great joining us to talk
about the kickoff of the holiday shopping season and trends
that we're seeing amongst consumers. Ted, thanks so much for
joining us. Sure we'll talk again soon and before the holidays,
so thanks, have a great one and we'll talk to
you soon.
Speaker 5 (15:33):
Sounds good, Thanks you too, all right.
Speaker 6 (15:36):
Time for trivia here on the Financial Exchange, and it's
brought to you by Applebee's. Take your friends or family
to any area Applebe's and enjoy half priced late at
appetizers after nine pm, including bonus wing spinach and artichoke
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forget to join Club Applebee's to enjoy exclusive deals and specials.
(15:56):
You'll get a free appetizer just for signing up. Now
that's eating good in the neighborhood void weard prohibited dye
in only. Now that Halloween is over, let's do a
run of presidential trivia leading up to the election here
on Tuesday. In nineteen twenty six, President Calvin Coolidge pardon
an animal that was sent to the White House to
be served at Thanksgiving dinner. Coolidge pardon the animal and
(16:19):
kept her as a pet until the animal's death three
years later. Trivia question today, which animal did President Coolidge
pardon and later keep as a pet at the White House?
Speaker 7 (16:30):
Interesting question?
Speaker 6 (16:32):
Which animal did President Coolidge pardon and later keep as
a pet at the White House? Be the third person
today to text us at six one seven, three six,
two thirteen eighty five. With the correct answer, you'll win
a Financial Exchange Show t shirt. Am B registered to
win a one hundred dollars gift card two Applebee's. Be
sure to include the keyword Applebee's in your text and
(16:53):
we'll give away that Applebee's gift card in the next
segment six one seven three six two thirteen eighty five,
and the third correct response will be our winner. See
complete contest rules at Financial Exchange Show dot com.
Speaker 2 (17:06):
Mike, do you want to talk Intel here?
Speaker 3 (17:08):
Yeah, let's go Intel, because they're they're having a big
day today, up eight percent, which carves their losses or
pairs them back to only fifty one percent for the
year so far, having lost half of their value now
since January first of this year on I guess less
bad than expected.
Speaker 2 (17:28):
Yeah, here's a big describe it. It's a big thing.
They took a sixteen billion dollar loss for the quarter,
but it really is an accounting gimmick. The loss has
been accumulating over years. They just finally said okay, like
we're gonna realize this and move on, and ultimately their
revenue was still down six percent from the prior year,
but a little bit above the forecasts. And Intel also
(17:50):
gave guidance for the current quarter that is above expectations.
So it's basically the hope I think is, hey, they're
bottoming out.
Speaker 3 (18:00):
Dump all the bad news into a quarter and kitchen
sink it, and then hey, let's let's move on and
go from here. And really, the next two years are
gonna make or break Pat Gelsinger's tenure at the company.
It's either, hey, we've got these new fabs that are
opening up and we're gonna be able to actually make
money from them and our you know, foundry business. Maybe
we can get that working or sell it off, depending
(18:22):
on how you want.
Speaker 2 (18:22):
To approach it. But this is the next two years
are it for Intel in terms.
Speaker 3 (18:29):
Of can you turn around? Can you turn around?
Speaker 2 (18:31):
Can you get there? Because otherwise my concern with them
is that they're far enough behind then that they can't
catch up. It's kind of what it feels like, you know,
as you look at them. Taking a look at markets,
as we head towards the bottom of the hour, we
still have all three major US indices well into positive territory.
The Dow is now five hundred and forty nine point
(18:52):
of Rooney's one point three percent, smp is up sixty
two points, and the Nasdaq up two hundred and fifty
nine points. So you got all three indices massively in
positive territory. And it's not just a few small stocks
that are, you know, lifting the thing. I'm looking at
the S and P five hundred just right now. You
maybe have forty or fifty companies that are in negative
(19:13):
territory at the moment. So it's a pretty wide rally.
Actually maybe about sixty sixty five companies, So still a
pretty wide rally that you're seeing overall, and you know,
not just hey, big tech lifts all. Let's take a
quick break here. When we come back, we've got the
trivia answer after this.
Speaker 1 (19:40):
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, catch up at your convenience
by visiting Financial Exchange show dot com and clicking the
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in full. Show face is your home for the latest
(20:02):
business and financial news in New England and around the country.
This is the Financial Exchange Radio Network.
Speaker 6 (20:11):
Trivia question today was which animal did President Coolidge pardon
and later keep as a pet at the White House.
There'll be a raccoon. President Coolidge was sent to raccoon
by a farmer to be served as part of the
Thanksgiving dinner held at the White House. Coolidge had no
desire to eat a raccoon and instead kept her as
a pet and named her Rebecca. We have two winners
(20:35):
two announced today. Winner of the Financial Exchange Show T
shirt was John from Providence, Rhode Island, and the weekly
winner of the one hundred dollars gift card two Applebee's
was Joshua from Portland, Maine. Some congrats to both winners.
There and Trivia is brought to you by Applebee's. Enjoy
Happrice late night appetizers after nine pm and join Club
Applebee's to enjoy exclusive deals and specials.
Speaker 7 (20:57):
You'll get a free appetizer just for signing up. Now
that's eating good in the neighborhood. Void were prohibited dying
in Only you.
Speaker 2 (21:04):
Ever tasted raccoon? No, I mean neither.
Speaker 3 (21:07):
Well. I really like silly names for pat's. I had
a dog named Pretzel once. I prefer very serious names
for pets, like Rebecca, You're just like a dog named John.
Speaker 7 (21:19):
Yeah. I would tend to lean in that direction too.
Speaker 2 (21:22):
Do you guys know what day Calvin Coolis was born on?
Speaker 3 (21:25):
No, Independence Day?
Speaker 2 (21:27):
Fourth July is the only president who have ever been
born on Independence Day. But good guess, Mike, did you
know that three out of the first five US presidents
died on Independence Day?
Speaker 3 (21:37):
I think I do remember that.
Speaker 2 (21:38):
Jefferson, Adams, and Monroe all died on Independence Day. Yeah, so, uh,
there's that.
Speaker 6 (21:46):
Do Rebecca also died on Independence Day?
Speaker 2 (21:48):
Oh it's unclear.
Speaker 7 (21:49):
We'll find out she was eating on July fifth.
Speaker 2 (21:53):
Coolige, I believe, was also the first president to ever
visit Cuba.
Speaker 3 (21:59):
Okay, there you have it, put it out there. Yeah,
just continuing American history major. Yeah, we'll just history. No,
not just American, No, got.
Speaker 2 (22:06):
It, the whole world, global history. Global. Let's talk about
this piece of the New York Times that is really
quite sad. It's titled They're giving scammers all their money
and the kids can't stop them. And it opens with
an anecdote about man by the name of Chris Mansonelli
and his dad was seventy nine years old and died
(22:29):
last year and it talks about he goes up to
the refrigerator and he sees, you know, all the pictures
of the guy's grandkids, his children, and then there is
a picture of and I'm not a wrestling person, so
I don't even know who this is. Alexa Bliss, who's
a someone in professional wrestling, is pinned up on the
refrigerator as well, and it turns out that this guy's
(22:53):
father had ended up basically losing like a million dollars
in a romance scam where he thought he was dating
this woman when in fact he was just being scammed
out of all of his money.
Speaker 3 (23:11):
About a million dollars too, among other scams, this was
one of them. And it's yeah, incredibly sad, disturbing and
on many levels, and unfortunately, I'll tell you repeated on
many occasions, through many different scams that I've seen firsthand.
Speaker 2 (23:29):
And according to the FBI's Center on Internet Crime, Americans
lost estimated twelve and a half billion dollars to online
criminals last year, six hundred and fifty two million of
that was through romance scams and things like that. And
this is just for what they know of that's actually
been reported, and pretty much what you see is that
there's a lot of cases where, look, kids know that
(23:52):
their parents, their elderly parents are being scammed out of
their money and are trying to stop them, but they
have no legal authority to do so.
Speaker 3 (24:00):
Actually, yeah, this case was actually pointed out where the
son knew what was going on, probably I'm guessing based
on the taglines, and the story had power of attorney
over His father removed money from his father, took it away,
one hundred thousand dollars, his last one hundred thousand. He
removed it and said, you're not scamming this away anymore.
His father sued him. Yeah, his father was convinced that
(24:21):
this was reality. His father sued him. I don't know
if he regained control of the money, if the son
just gave up at that stage. But the tools that
family members have to deal with this sort of thing
are kind of crap, to be quite honest, they're pretty garbage,
and I understand why because they are. You know, the
more power you give, the more potential for abuse that
(24:42):
exists there. But the tools are not great. If you
find a loved one in this situation, pretty much your
only option if it gets this severe is to bring
that person to court and have them declared incompetent by
the court, which is not easy but also not always
the case. No, right, Like, just because you're falling for
a scam, doesn't mean that you have no competence.
Speaker 2 (25:02):
Correct, That's what I meant by not like. It's not
just like, oh like, that doesn't mean you're incompetent. It
just means that you're gullible, right, which is completely different.
And Look, I know that we all think that this
can't happen to us, because we all think that we're
so smart.
Speaker 3 (25:18):
And this specific one might never happen to you, But
I'll give another one. Like, I know somebody first hand
who has been funneling tens of thousands of dollars onto
subscriptions for Get your Rich Quick schemes, Yeah, and subscriptions
to bogus newsletters and things that are just absolute garbage
(25:39):
out there, And the ability for that person's family to
control it in any meaningful way is tough.
Speaker 2 (25:48):
And there's tons of different ones out there. Look, you've
got romance scams out there. You've got scammers pretending to
be you know, the bank saying hey, your account's going
to be closed unless you put money into a new accountant,
like sending wads of cash and this like it's it's
it's really. There's all kinds of different ones out there.
And the biggest thing that I can say on any
(26:11):
of this like is he always keep your guard up
when it comes to like the second anyone asks you
for money, make sure you know exactly who you're talking
to first and foremost, but second, regardless of who you
think it is, whether it is a family member, someone
claiming to be from a financial institution, someone claiming to
(26:34):
be from the government, whoever it might be, whatever, whoever
that person is, calmly hang up the phone, you know,
say hey, I'll call you back in just a minute.
Something else is going on, find a number somewhere else
for that person or institution, confirm that it's the right
number to call, and then call that number. Because it's
(26:56):
so easy to spoof phone numbers and voices and all
kinds of stuff these days. That and they do their
best to create a sense of urgency. Oh no, you
can't hang up, because we need to nothing needs to
be done right now.
Speaker 3 (27:08):
Yeah, ever, I mean outline another one of these, A
thirty eight year old software engineer went to go visit
his father in San Jose for his eightieth birthday. Father
was deeply involved with an investment scheme offered through a
woman who claimed to be from South Korea. He was
up one morning like laser, focused on real time chats
and charts tracking gold Spot market. The next day, the
(27:30):
whole thing was a hoax, The whole platform was fake.
The money that he had wired into quote unquote in
an account was gone. And yeah, you know, the father
had been convinced that his account had grown to five
million bucks very next day. Can't get any of the
money out. Million dollars gone gone.
Speaker 2 (27:51):
And always if it sounds either too good to be
true or too bad to be true, usually it's not true.
You know, it's it's kind of what it is. So
I just I can't stress enough. You unfortunately have to
be vigilant on this stuff all the time. Yeah, you
just do, because there's so many different ways that people
can scam you.
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Speaker 2 (29:10):
Piece from CNBC today, Google, I guess had an all
hands meeting yesterday and they this one just kind of
more humorous than anything else.
Speaker 3 (29:20):
And humorously dystopian. But yeah, I don't.
Speaker 2 (29:24):
Think this is as bad as a lot of the
other stuff that we've covered about companies handling things badly
in recent years.
Speaker 6 (29:29):
I'm sorry it says they had an all hands meeting
on Wednesday, which is the weird part because.
Speaker 2 (29:35):
The executives were all dressed up in Halloween costumes.
Speaker 3 (29:38):
Quote Google's chief scientist Jeff Dean were a starfish costume.
Speaker 7 (29:42):
But it was Wednesday, like yesterday was Halloween.
Speaker 3 (29:45):
People wear costumes all week on Halloween week. The CEO
I wore one on Wednesday. Oh yeah, wore a black
T shirt that read ERA.
Speaker 2 (29:52):
Four four when I was working for Google.
Speaker 3 (29:56):
So anyway, the all hands meeting was scheduled in reaction
to their earnings call where they talked about cost cutting,
and then the executive team showed up in Halloween costumes
to tell people that, I mean, hey, we're not laying
you off today, but yeah, the costcuts are real and
you should be aware that we're thinking about this.
Speaker 2 (30:13):
To be fair, The reason that I say this isn't
as bad as like other places if someone showed up
in like the Grim Reaper outfit. Oh god, you know,
like Sender Purchas in the Grim Reaper costume, Like okay
that now we're talking. You know, we got some real problems.
Speaker 3 (30:27):
I know, but if I'm going to be told that
I might lose my job, I really don't want to
hear it from a starfish.
Speaker 7 (30:31):
Yeah, or Harry Potter or SpongeBob or something.
Speaker 3 (30:33):
I just I really don't. I know, we're all trying
to become more relatable. Does it matter who tells you
you're going to lose your job? Like, yeah, I think
if I if I've worked for a company for a
decade and you're gonna tell me that I lose my job,
at least you can do is wear a suit. But
they're not actually firing anyone here, get it, But I
don't love it.
Speaker 7 (30:51):
Not a great conversation.
Speaker 2 (30:52):
I don't think this is as bad as some of
the other stuff.
Speaker 3 (30:55):
I think there's plenty worse stuff out I think it's
a stupid oversight.
Speaker 2 (31:00):
But there have been far worse HR blunders in the
last couple of years than this.
Speaker 3 (31:04):
One hundred percent. You know, don't cry to your employees
when you're telling them that you're firing them all like agree,
there have been far worse blunders. But it's not like
this meeting was out of the blue. You knew that
you were going to have all hands meeting telling your
employees about cost cuts, and you decided to wear halloween costumes.
It's not a funny topic. No kind of a problem. Yeah,
it's it's not great. Yeah, that's all I leave with.
Speaker 1 (31:27):
Not great.
Speaker 2 (31:28):
Let's take a quick break here. When we come back,
paul A Monica joins us right after this.
Speaker 1 (31:32):
Text us six one seven, three, six two thirteen eighty
five with your comments and questions about today's show, and
let us know what you think about the stories we
are covering. This is the Financial Exchange Radio Network. If
you missed any of today's show, catch up whenever you
want on our YouTube page. Find daily show segments and
full shows. Just go to YouTube dot com and search
(31:54):
for the Financial Exchange. This is your home for breaking
business and financial news. This is the Financial Exchange Radio Network.
Ladies and gentlemen, the weekend as problems.
Speaker 2 (32:10):
We're now joined by Paul Monica from Barons. Paul, how
are you today?
Speaker 8 (32:16):
I'm good?
Speaker 5 (32:17):
Thanks? How are you?
Speaker 8 (32:17):
A nice little rally we've got going into the weekend.
Speaker 2 (32:20):
I know it makes everyone feel a little bit better
after yesterday at least, So let's let's talk a little
bit about Amazon, who is one of the companies rallying
the most today. By my math, they are up somewhere
in the ballpark of one hundred and sixty billion dollars,
So adding you know, just a Verizon to their market
cap on it on a day. What what went right
(32:42):
for them this quarter?
Speaker 8 (32:44):
Yeah, seven game the market caps back above two trillion.
I think what went right for them is that, you know,
the guidance obviously is pretty solid going into the holidays.
The sales growth was healthy above forecasts. But when you
really look at it, I think, you know, the AI
investments are paying off, and particularly I think when it
(33:07):
comes to AI features for Amazon Web Services AWS is
just a beast. I mean, this is a company that
you look at the total numbers, twenty seven and a
half billion in revenue for ADWS, that's up nearly twenty percent.
(33:28):
And what's really just mind boggling is that the net
the operating profit excuse me for AWS is end point
five billions. So the margins are just phenomenal for that
part of Amazon, and I think that's what investors have
been valuing the company on probably for some time, not
(33:52):
so much the core retail business.
Speaker 2 (33:54):
When we talk about that that cloud space. Everyone these
days is talking about how they're implementing AI in cloud.
What are Amazon? What's Amazon specifically doing and are there
any signs that they're starting to generate additional revenue specifically
from AI at this point?
Speaker 8 (34:09):
Yeah, I think all of the companies that are trying
to add AI offerings to their various various services, and hey,
Amazon's doing it both with shopping as well as on
the cloud side. You know, it's an open debate whether
or not these companies are spending too much. I mean,
(34:30):
it was only yesterday that Microsoft and Meta got punished
by Wall Street for appearing to have AI investments that
weren't really panning out. But I think, you know, the
Amazon results today, it's a testament to the fact that
if you are putting up strong earnings and revenue growth
while continuing to spend, Wall Street will probably be more
(34:53):
forgiving in that scenario. And I think that's what we happened.
What happened with alphabet numbers earlier this week as well.
You know, the Google YouTube giants also had some pretty solid,
you know numbers, so that's a big reason why that
stock had a nice pop as well.
Speaker 2 (35:09):
Paul what's going on with kind of the original core
business for Amazon, which is selling a bunch of stuff
to people. What does that look like these days in
terms of growth and or margins?
Speaker 8 (35:20):
Yeah, I mean, margins are still a little bit tight
on the core retail side because it's you know, retail.
I mean, so that's something that I think investors have
you grown to accept. But you know, Amazon has done
a very solid job still gaining market share. I think
(35:41):
for many consumers right now and investors, it's perceived as
a two horse race with Amazon and Walmart really dominating
the consumer shopping experience. Right now. We're heading into the holidays,
a lot of people are going to be spending on
gifts and that's why I think, you know, one of
the reasons why the fourth quarter outlook was pretty healthy is.
Speaker 2 (36:00):
Well, what about the streaming business that they have. Does
that contribute anything materially to the company or do we
just not really know what's going on because of how
they structure their units.
Speaker 8 (36:11):
Yeah, I think it's hard to necessarily say. I mean,
there is an advertising component that comes in to streaming
that you know, gives them a little as well from
the streaming side, but you know, clearly. You know, Amazon
is looking at streaming things like the NFL and some
(36:32):
of their other exclusive offerings as a way to just
boost the Prime memberships. And that's something that you know,
Prime members are continuing to grow. Amazon's a little bit
opaque with the exact number of memberships, you know, the
consternation of you know, some analysts out there, but by
(36:53):
all accounts, prime memberships are you know, continuing to grow
pretty dramatically. And I think the streaming aspect one part
of it. I mean, if you're already going to be
considering watching NFL on Thursday nights and shopping at Whole Foods,
for example, why not get that annual Prime membership, which
(37:15):
they've also shown an ability to boost the subscription for
and not really lose much in the way of revenue.
Speaker 2 (37:23):
Fantastic, Paul, appreciate you joining us, have a great weekend,
and we'll talk to you soon.
Speaker 8 (37:29):
Thanks a lot, appreciate it.
Speaker 2 (37:31):
That is Paul Monica from Barons talking about Amazon taking
a look at markets. As we head towards the top
of the hour, The dial up four hundred and sixty
eight points, the S and pup forty eight, the nasdag
up two hundred and thirteen points, so a lot of
green on the board. This despite a jobs report that
was disappointing, with twelve thousand jobs added this morning, though
the caveat Hey it was during a time where we
(37:53):
had two hurricanes that had just come through, so we
don't really know what this one actually means, and we'll
have to look for more clarity in the coming months.
We are done for the day and for the week,
but we'll be back on Monday. We will, Yeah, I'll
be here, and so I hope you all have a
great weekend and we'll see you Monday on the Financial
(38:16):
Exchange
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