January 3, 2025 • 38 mins
Mike Armstrong and Paul Lane discuss if the US is still number one in all areas that matter. Is Musk going to get a chance to do that hard part of making the government more efficient? Why is 'Big Retail' only getting bigger? Have American's snacking habits really changed for the better? Paul LaMonica from Barron's joins the show to chat about Caesar's and their place in the sports betting world.
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Episode Transcript
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Speaker 1 (00:00):
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(00:43):
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(01:06):
Armstrong and Paul Lane.
Speaker 2 (01:09):
Welcome back to the Financial Exchange. If you didn't like yesterday,
you're gonna love what you see today. Dow up two
hundred twenty seven points half a percent, SMP up.
Speaker 3 (01:17):
Forty six points or three quarters.
Speaker 2 (01:19):
Of percent, and Nasdaq up one hundred and ninety six
points or one full percentage points. Russell two thousand, up
about nine tenths of a point. The ten year yield
on the US Treasury down to four point five seven
to three percent. We've got oil coming in at seventy
three dollars eighty two cents per barrel. That brings us
(01:40):
to the national average for gas prices, which, if you'll
give me just about six seconds, we're sitting at a
national average of three dollars and seven cents per gallon,
with most of New England actually below that average other
than Vermont. Let's see, I got a fine Rhode Island here,
(02:01):
and Rhode Island is also also below the national average.
So only Vermont sitting up there above the national average
here in New England? Anything else catching your eye this morning?
After yesterday's scary Apple and Tesla sell off.
Speaker 4 (02:18):
The US Surgeon General issued an advisory warning Friday about
the link between alcohol consumption and increased cancerousk Can't I
just came across my desk.
Speaker 2 (02:26):
Can't I just brew some moonshine in my backyard without
the government being all up in my business.
Speaker 3 (02:36):
Yeah, I don't know.
Speaker 4 (02:36):
It's gonna sol me down tonight going off to dinner.
But does he make me pause for a moment.
Speaker 2 (02:42):
Surgeon General wants to slap some warnings on alcohol labels, which, yeah,
I guess, I guess we're we're going to get there, unfortunately.
But yeah, the other piece that just slid across my desk.
GM and Ford are reporting their best annual US sales
since twenty nineteen. Ford's new vehicle sales increased four point
two percent last year, representing the automaker's best year.
Speaker 3 (03:04):
Since twenty nineteen.
Speaker 2 (03:06):
Specifically, they're seeing big growth in their hybrid and all
electric models. And then you also saw a report from
where's General Motors in here? I don't see General Motors
in here, so I'll get back to you on that one.
But both of them reporting pretty solid numbers. At the
same time, the Tesla is reporting their slowdown in sales
(03:28):
and y GM competition.
Speaker 4 (03:30):
GM two point seven million vehicles up four point three
percent from a year earlier. For comparison, we're selling two
point nine million in twenty nineteen.
Speaker 2 (03:38):
Yeah, so that speaks to some of that competition that
Elon Musk's going to want to continue to face. I
am just I'm really just waiting for the I think
Dodge is selling it this year in their in their
Ram truck, the all electric truck with a built in
gas power generator to power the battery.
Speaker 3 (04:00):
I know, I'm excited about that.
Speaker 2 (04:03):
I just completed a two thousand mile road trip out
and back to Chicago, and I think a minivan equipped
with that would be just the the sexom. Yeah, yeah,
I think I would be really turning heads with that
bad boy.
Speaker 3 (04:18):
Peace here from Bloomberg.
Speaker 2 (04:20):
America still leads the world in all the ways that matter.
So look, there's been a lot of criticism of the
Biden administration. We had a vote where they pretty resoundingly
elected President Trump. We have a lot of problems, no doubt,
in terms of inflation and a number of people describing
(04:41):
their personal financial situation as challenging. But then you look
across the globe and you take a look at how
Europe's doing, how China's doing turmoil in the Middle East,
and it's really tough to come to any conclusion other
than while we face challenges here domestically, there are few
places in the world where you would, i would say,
(05:05):
arguably like to start a business. For example, point to
one area across the globe where you'd say, yeah, I
would feel more confident starting a business in this country
over the United States. And it's really tough to come
up with one. And some of it I think speaks
to those productivity growth numbers that we've talked about, but
(05:25):
I think some of it also just speaks to the
power of American institutions.
Speaker 3 (05:29):
In all of this.
Speaker 2 (05:30):
Yes, we have, you know, resounding disagreement in Congress and
real problems getting bills passed, but again, you take a
look at other countries. South Korea at the moment, for example.
I don't know if you guys saw the story the
other day where they tried to arrest the sitting president
and their bodyguards effectively blocked a arrest warrant that was
(05:52):
out for like, it was just wild stuff that we
don't still see here in the United States.
Speaker 4 (05:56):
Yeah, what did he he had declared martial law?
Speaker 2 (06:00):
Just yeah, Yeah, so, no, it's a great point.
Speaker 4 (06:05):
It's really important to think about. There is certainly a
lot to work on and a lot to fix, but
our nature is to complain, and it does seem like
we do go around complaining quite a bit. But there
are a lot of positive things to hang our hat on.
When comparing us to our peers in terms of research
and development, business innovation productivity GDP growth, all of those areas,
(06:31):
the US still shines very strong.
Speaker 2 (06:33):
I think the other piece to acknowledge it, I think
a lot of people left the last few years feeling
extremely divided from the political turmoil standpoint right, Like that
part seems to be resounding here in the United States.
But that's another piece that I would say is not
unique to the United States. For the first time in
one hundred years, every single modern democracy in the world
(07:00):
that was in power over the last few years in
the most recent election lost power during this most recent election.
It's the first time that has happened on a coordinated
basis in one hundred years of history that we have
on this and every single ruling party, whether conservative or liberal,
across the globe lost share and in many cases flipped
(07:23):
entirely go look at the UK for example, go look
at New Zealand and other countries where you've seen that happen.
That is incredibly unique this moment in time. And I'm
not saying that it's a good thing. I'm merely saying
that it is seemingly a byproduct of this incredibly volatile
economy that we've had over the last few years.
Speaker 3 (07:43):
Yeah, I mean for good reason.
Speaker 2 (07:45):
When when prices go through the roof, people globally feel
vastly uncomfortable and blame the people that were in charge
when it happened. And so that seems to be what
we saw over the last few years. And I'm not
sure it's something we should be entirely discouraged by. Speaking
of Congress and political turmoil more regarding Musk's Department of
(08:06):
Government efficiency and seemingly every day, I'm not really sure
why there's more and more attention from outsiders saying this
is how Musk and Ramaswami should lead the department, or
that's the way they should lead it. I don't know, Paul,
I tend to be taking a point here of I
(08:26):
think my biggest criticism of DOGE and what they are
trying to create here is that I think it's pretty
disingenuous in terms of what their actual targets are from
what I have seen so far. But trying to grade
this thing after a month and a half of what's
been going on, I just don't really see much of
a purpose at this stage.
Speaker 3 (08:47):
I think the.
Speaker 2 (08:47):
Biggest criticism I have is, don't come out and tell
me that you're going to cut two trillion dollars of
government spending when you very clearly are fundamentally unseerious about
doing so.
Speaker 4 (08:58):
Yeah, I have two new I've tuned off from these
stories so a little bit. I gotta be honest with you, Mike,
just because ultimately it's Congress who needs to act. I
get the role of this committee here. I've looked at
the budget sheet one hundred different times, and I've said
this probably one hundred different times in the show.
Speaker 3 (09:15):
The area is.
Speaker 4 (09:16):
That likely need to be cut to make a meaningful
impact on the budget are areas that cannot be touched
Social Security.
Speaker 3 (09:23):
Without Congress anyway, right, without Congress action.
Speaker 4 (09:26):
And let's be honest, they're just they're really they're not
going to come in and cut them. I just find
it very very unlikely social Security Medicare, military and defense spending,
and so for me to spend my time, you know,
scrutinizing these articles on what they may or may not
do for the budget, let me know when something prints,
let me know when there's actually a cut and what
(09:47):
it is and how substantial. Otherwise, I just think it's
strategically a way to sort of divert the responsibility away
from the president of making any substantial cuts.
Speaker 2 (09:56):
I'm also unconvinced that Americans generally want a government that
is more efficient and spends less money.
Speaker 3 (10:03):
I know, we say that we want that we want
to do away.
Speaker 2 (10:06):
With government waste, we want to drain the swamp, But
when it comes down to brass tax like, hey, should
we repeal the weapon the GPO, Hey should we take
a different look at Social Security or Medicare or the military?
Pull after poll indicates that Americans don't want those programs
to change.
Speaker 4 (10:23):
Hey, do you want your taxes to revert back to
what they were in twenty seventeen?
Speaker 2 (10:27):
Right, So it comes back to me to like these
big overall topics that people seem to have an opinion on,
but then when you get into the.
Speaker 3 (10:34):
Weeds, everybody very much diverts.
Speaker 2 (10:38):
Immediately, Like I think there's general agreement that the government
spends too much money as and is inefficient and wasteful.
We all seem to agree on that, and then when
we get into the brass tax of how you fix that,
there's zero agreement at all. And generally people don't want
the government to spend less money because it means that
they are going to be financially harmed. It reminds me
of the housing affordability conversation, it's going to do it
(11:00):
all the time Nimby, which is, you know, yeah, I
want there to be cheaper homes for sale, but not
if it affects me negatively.
Speaker 4 (11:09):
Right right, not in my back.
Speaker 3 (11:11):
Those two things don't really work together.
Speaker 2 (11:12):
And I think if there's one piece that I think
Elon Musk has actually been genuine about it is he's
warned people. He said, look, if we're actually going to
do this, it's going to be painful. He said that,
and that's also why I don't think it's actually going
to happen. Let's take a quick break when we come back,
a little bit of trivia here on the financial exchange
that's next missed one.
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Speaker 5 (12:03):
This segment of the Financial Exchange is brought to you
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dot com and code Vibe twenty twenty five. Time for
trivia here on the Financial Exchange on this day. In
twenty twenty two, Elizabeth Holmes, the founder of Theronos, was
found guilty on four counts of fraud. Furnos was a
blood testing company that collapsed back in twenty eighteen when
it was discovered that the company was falsifying blood tests.
(13:11):
Your requestion today, how many years was Elizabeth Holmes sentence
to in prison? Once again? How many years was Elizabeth
Holmes sentence to in prison? Be the fifth person today
to text us at six one seven three six two
thirteen eighty five with the correct answer, you do win
a Financial Exchange Showed t shirt once again. Be the
fifth correct response to text us at six one seven
(13:34):
three six two thirteen eighty five two Get that Financial
eks Change Show T shirt. See complete contest rules at
financialoks Change Show dot com.
Speaker 3 (13:42):
Paul.
Speaker 2 (13:43):
Back in twenty fourteen, the combination of Costco, Walmart, and Amazon,
those three retailers themselves accounted for about eleven percent of
all retail sales in the country. Based on their most
recent numbers from their last three quarters, those three companies
now make up seventeen percent of retail sales. Roughly fifty
(14:05):
seven percent of the growth over that period came from
those three, and they are in particular just absolutely dominating
most areas of retail, from grocery to just everyday shopping.
These three are accounting for a bigger piece, and I'm
not sure.
Speaker 3 (14:22):
They would have been the three that I would have.
Speaker 2 (14:24):
Banked on back in twenty fourteen, either, right, I mean,
at that point in time, I think Target was playing
a much bigger role in growing and since then they
have very much struggled, but from any number of different areas,
it has become increasingly difficult to compete with them. I've
heard specifically a lot of complaints and lawsuits from small
(14:44):
liquor stores who say, you know, the deals that they
get from distributors, the costcos and the total wines and
others who get from big distributors, we just can't compete
on price with them, and so you know, we're closing
up shop because that's where all.
Speaker 3 (14:58):
The volume's going to.
Speaker 2 (15:00):
Grocers who are saying, you know, Kroger and Albertson's, for example,
saying we cannot continue to compete with Walmart in this
grocery business based on how they just on the pricing
that they get to and on the exposure they get
from other parts of their business, and yet they weren't
allowed to merge. Rarely do we ever have companies that
(15:20):
just dominate forever. And I'm sure the track will change
at some point here, and we have had a bit
of a resurgence of small businesses over the last five years,
but it's tough for me to envision how really any
of the competitors are going to stack up against these three.
Speaker 4 (15:36):
Yeah, these companies have built scale economies where they have
just they're spending forty seven billion in CAPEX in twenty
twenty three to develop a significant amount of warehouses, logistical
advantages and quite honestly, if you look at all three
and Costco a little bit less so here have invested
(15:58):
significantly on the delivery side of the and making things
incredibly easy for the consumer, and Costco has started to
develop that arm of business as well. But it's a
time period where consumers are looking for efficiency, things to
be delivered same day or next day and for strong pricing,
and when you're as large as these three are, you're
(16:20):
able to command that and really deliver those services to
the consumers.
Speaker 1 (16:25):
Zone.
Speaker 2 (16:25):
Yeah, it's not to say any but nobody else will
succeed there. But you look around the around the country too.
I mean, you've had bankruptcies from Big Lots, the Container Store,
party City just actually I believe I have to double
check this, but I believe Party City is going through
full liquidation bankruptcy this time. They had gone through it
several years ago. Private Equity took them private, and this
(16:46):
time it looks like finally liquidating the entire business here,
which is I might have been their only customer.
Speaker 3 (16:53):
So I was there my wife.
Speaker 4 (16:55):
My wife and I took the kids there in and
around when my daughter was having a birthday, just so
that they could walk through the store and go through
the experience of picking out unicorn balloons or whatever. And
I do walk around some of these stores.
Speaker 3 (17:07):
I don't know where I'm gonna get my unicorn balloons.
Speaker 2 (17:09):
Now, by the way, that that was the only place
that I you know, Amazon, I can get everything else there,
but I cannot get a helium filled mylar balloon.
Speaker 3 (17:18):
Anywhere other than parties. Yeah, exactly, but there are some stories.
Speaker 5 (17:22):
We bought a balloon on Amazon. What are you talking about?
Speaker 3 (17:25):
Filled with helium?
Speaker 5 (17:26):
No, we had to buy a helium tank, Michael, which
you can buy an Amazon.
Speaker 3 (17:30):
Really. Yes, Amazon does everything. I don't know.
Speaker 5 (17:35):
We never filled my own balloons. I guess I'm we
do that annually.
Speaker 3 (17:40):
Do you really want a helium tank around? Who wants?
Its not that bad.
Speaker 5 (17:43):
It's like this big Oh it's party. It's meant for parties.
Speaker 1 (17:47):
Yeah.
Speaker 4 (17:47):
Oh, I was thinking of something that was you know, okay, okay,
it looks like it looks literally looks like a propane store,
and that in the garageul be the same size as
the grill for a propane Okay, all right, not as
bad as I thought. But sometimes you walk into some
of these business staples too. I've had to do some
runs in there. I'm like, you know, I just don't
know who where the customer foot traffic comes from.
Speaker 3 (18:09):
Yeah.
Speaker 2 (18:10):
Yeah, it is going to be increasingly challenging. It's not
going to be incredibly difficult for your very small store
with three locations to continue to exist, because I think
there will be still an immense amount of support for
companies like that. But when you talk about your big lots.
But even when I talk about you know, BJ's Wholesale
club for example, you know, other than geographic location, why
(18:33):
choose a BJ's over at cost Co? I think most
people would have a tough time coming up with the
answer to that. And more and more I think people
are answering that question when it comes to Target versus
Walmart or Staples versus Amazon's what's the compelling reason I
need to look elsewhere for this item?
Speaker 3 (18:52):
And the more.
Speaker 2 (18:53):
Businesses they get into, the more challenging it's going to be.
I even think of even a massive competitor in the
liquor space, you know, total wine and more. Well, if
Costco is allowed to sell beer, wine and liquor, I
might not be all that interested in going to some
of these other businesses that do compete in that space. Genuinely, today,
(19:13):
I know that's not certainly Amazon's business or Walmart's business,
but when they are able to offer these multi pronged
UH sales taxics to you, it's tough for many businesses
to compete in the same way. Quick break, we'll have
the trivia winner coming up, and then American's diets have
been changing a lot of the last decade. What it's
meant for some of the businesses that support that.
Speaker 3 (19:34):
Next on the Financial.
Speaker 6 (19:35):
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Speaker 1 (19:52):
Text us six one seven, trink six to two one
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Speaker 5 (20:08):
Trivia questions today was how many years was Elizabeth Holmes
sentenced to in prison? That will be eleven years. Holmes
was charged with fraud in lying to investors to raise
money for the company. She was convicted in twenty twenty
two of three counts of wire fraud in one count
of conspiracy to commit wire fraud. Mike from Stoneham, Mass
(20:29):
is our winner today, taking home a Financial Exchange Show
t shirt. Congrats to Mike. We play trivia every day
here on the Financial Exchange. See complete contest rules at
Financial Exchange Show dot com.
Speaker 2 (20:41):
Paul, do you remember when ozempic and Manjaro and GOVI
We're going to ruin every snacking and bad for you
food brand out there.
Speaker 3 (20:52):
I do remember that that was.
Speaker 2 (20:53):
Going to be the end of all ice cream brands
and snack foods out there.
Speaker 3 (20:58):
It turns out the rumor of their.
Speaker 2 (21:01):
Demise has been pretty exaggerated here, and in fact, Americans
seem to be snacking more often than ever, which I
don't I'm not sure I get any of this. Like,
I don't know about your personal behaviors, but I buy
a bunch of snacks for my kids to go in
their lunchboxes because I'm lazy and I don't want to
hand make snacks. So I'll be the first to admit that,
(21:24):
But it really doesn't carry over to any of my
own habits and behaviors.
Speaker 4 (21:29):
On the weekends and when I'm at home, then obviously
there's more stuff around, so you're more likely snack boat.
Speaker 2 (21:34):
All it is is maybe people are just at home
more because we haven't socialized since COVID.
Speaker 5 (21:40):
There are definitely moments on like a lazy Sunday where
you're stuck inside or something where you're just bored, like
let me go taste of stack?
Speaker 3 (21:47):
But is that any different from your pre COVID life?
Speaker 2 (21:50):
Like this seems to be making an argument that Americans
have made some tremendous transformation where we just sit around
and eat all day, and I don't know, it's not
like we're signific In fact, we got less fat over
the last two years. So I just don't really understand it.
But clearly, if you look at I always say, follow
(22:10):
the money, and you had some big transactions here in
these brands. So a few years ago, the company, the
Kellogg spread off, sorry, split off their cereal brands from
their snack brands. So they wanted to focus their snack
brands on Pringles and Cheese It's and rice Krispy's treats,
and so they spun off this brand called Kelenova, and
(22:32):
in August Mars said that they're going to acquire the
company for thirty six billion dollars. So clearly worked. Likewise,
Hostess was gobbled up by JM. Smucker based on again
their snacking brands, and I just my only conclusion is that, yeah,
if if I worked from home all day every day,
(22:55):
I would definitely snack a lot more than I do
because we're sitting here and chairs in a studio and
I generally think it would be rude to talk to
you while my mouth is full of pringles. But if
I were doing it from home, might I might partake
in that, and that doesn't to me seem like it's
going to be a successful, permanent shift, especially if there
(23:15):
is this strong desire from a lot of people to
get onto these weight loss drugs.
Speaker 4 (23:19):
Yeah, I could certainly see the pandemic and post pandemic
a tremendous surge and snacking, and perhaps that those sales
numbers led to these future acquisitions that we're seeing here,
But a lot of food habits in terms of the
trends of what people eating, our cyclical and our trend based.
They do a good job of highlighting that there's been
(23:40):
an uptick in sales on sort of the charcoutery boards
sort of things, you know, meats and cheeses as well
as just standalone cottage cheese. But they made the parallel
to Greek yogurt, which just became really prevalent for toast alvocatta.
Toast is another one where it just seems more like
the gym and like different, you know, whether it's Peloton
(24:03):
or P ninety x or trends that come around, but
it's just are more short lived in nature.
Speaker 2 (24:07):
Wasn't there a Super Bowl a few years ago where
they convinced us all that they're going to run out
of avocados. Am I making that up the avocado shortage
of like twenty seventeen.
Speaker 4 (24:16):
Or there definitely has been an avocado stories in one
of the years.
Speaker 2 (24:19):
In either case, I see a lot of this stuff
as temporary, because all the trends that we seem to
see in both exercise as well as food habits seem
to be very temporary in nature.
Speaker 3 (24:31):
Intend to flip flop all the time.
Speaker 5 (24:33):
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Speaker 1 (25:32):
The proceeding was paid for and the views expressed are
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Speaker 2 (25:43):
The legal ramifications of the Chevron doctrine continue to spill
over here, this time on net neutrality. So to paint
the history on this one, for a couple decades, the
FCC had enforced a policy of net neutrality, which pretty
simply meant that if you you are a broadband internet provider,
you can't intentionally slow down or speed up any Internet
(26:05):
traffic or prioritize one or the other. So as you
can imagine, if your Verizon delivering broadband internet to somebody's home,
and also you have a TV package for sale, you
might be interested, for example, in slowing down traffic Internet
traffic on YouTube or on Fubo, or on Hulu or
Netflix because you want more subscribers to your wired cable package.
(26:30):
Net neutrality prevented them from doing those types of slow
downs intentionally or otherwise. That was not a congressional law, though.
That was a policy passed decades ago that was overridden
by the Trump administration, put back in place by the
FCC under the Biden administration, and then that administration got sued.
(26:50):
And now with this overturning of the Chevron doctrine, which
is effectively, hey, if you want to pass laws, pass laws,
but we're not just going to defer to regulations posed
by government entities. This has again been overturned. And I'm,
by no means the foremost expert on this. I don't
really know how it will change the way the Internet
(27:13):
is delivered today and in the future. But you know,
one of the big concerns that has been spelled out
and why Google opposed this so much, is that, Yeah,
what if Comcast and AT and T and Verizon decide
to start slowing down traffic that comes from Google, like
YouTube or Netflix or these others. And my answer would be, well,
if they do, then they're acting as a monopoly. And
(27:36):
so we already have laws that would break you apart
for these reasons, and so go do so, right, Like,
I really I don't know that it's all that complicated.
Because where you live, Paul, how many choices of internet
service providers do you have?
Speaker 1 (27:51):
Two?
Speaker 5 (27:52):
Two?
Speaker 3 (27:53):
Me as well? Do both of them also deliver cable? Yes?
Speaker 2 (27:56):
Yes, So if either of them go say, hey, we're
going to intentionally slow down your Netflix subscription because we
are losing a ton of money to people cutting the cord, well,
then you're acting as a monopoly because I have nowhere
else to go in those scenarios. And so I'm sure
there are other ramifications here. I am sure the Internet
(28:19):
is going to change in some meaningful way, but I'm
not sure how. And what I ultimately come back to
is maybe we do need net neutrality, but Congress should
go pass a law if that's going to be the case.
Speaker 4 (28:32):
Yeah, I'm with you on that. I struggle to to
know the full incasies of the SEC, FCC and how
Verizon and Comcast deliver you know, internet today, sure, how
the speed's translated out.
Speaker 2 (28:48):
I just I do want to blowback if Verizon just started,
you know, making it so Netflix buffers all the time.
Speaker 3 (28:54):
Right, I just don't see it happening.
Speaker 4 (28:57):
I do wonder if that would. There's just you hope
that there's always competitors out there that to shift to,
whether it's from Verizon to Comcasts or you know, this
is probably further down the road, but SpaceX has Starlink. Yeah, Starlink.
Does that just become if they went down their road? Okay?
Do they just drop their prices down to a point
(29:18):
where they make it a lucrative and attractive for everyone
to switch over.
Speaker 3 (29:22):
Let's take a quick break.
Speaker 2 (29:23):
When we come back, Paulumonica from Baron's join us to
talk about the super Bowl that's next here on the
Financial Exchange.
Speaker 1 (29:30):
Find daily interviews and full shows of the Financial Exchange
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(29:51):
You're listening to the Financial Exchange Radio Network. Ladies and gentlemen.
Speaker 3 (29:57):
The weekend.
Speaker 4 (30:05):
As promised, we are joined by Paul la Monica from
Barons for a little bit of Friday chatter on a
company by the name of Caesar's. Did the real Caesar
actually live in this palace? Paul, thanks so much for joining.
Speaker 7 (30:20):
Us, Thank you very much. Yeah, I don't think he
actually lived in Vegas, although that would have been interesting quoting.
Speaker 4 (30:29):
The hangover there just for the listeners out there, of course.
Speaker 7 (30:32):
Yeah.
Speaker 4 (30:33):
So caesar stock, as you allude to in this piece,
was down thirty percent last year, but perhaps some optimism
heading into this year. And I just asked, first, Paul,
give us a breakdown on kind of how they generate
the revenue. Obviously we know that they have the mobile
sports book, but also of course they have the physical
location in Vegas and Nevada and New Orleans. But how
(30:56):
did they earn their money in general? Like from a breakdown, Yeah, I.
Speaker 7 (31:01):
Mean, by and large, you know, Caesar's is still a
company that generates most of its money from the gambling
and hospitality side of the business, owning these casinos and
you know, lodging properties, you know, primarily in Vegas, but
you know they have other markets as well. In New Orleans.
(31:21):
Is an interesting story coming because of the Super Bowl.
You know, of course, we had the horrific events that happened,
you know, New Year's Eve night, in New Year's Day
mourning in Las Vegas. I doubt that that's going to
de tour tour, you know, tourists football fans from heading
to the Big Easy next month for the Super Bowl.
(31:43):
And because Caesars has the recently renovated Harrah's property in
New Orleans, they could get a big boost there and
obviously a lot of brand name exposure as well from
having the super Bowl being played at the Caesars super Dome.
But yeah, this is a company that obviously has many
of its more high profile properties in Las Vegas, which
(32:07):
is still a market that is you know, doing quite well.
You've got the you know, the namesake Caesars on the strip,
you know, and other companies like Flamengo, Harrah's Planet, Hollywood, Paris.
So you know, there's hopes that these companies could also
maybe benefit from some of the turmoil that's happened in
Vegas lately, the Mirage shutting its doors, Tropicana doing so
(32:30):
as well, So you know, maybe you get a boost
to those Vegas properties from the losses that you know
have taken place on the strip with you know, some
casinos closing.
Speaker 4 (32:40):
You mentioned they're you know, they're in the online sports
betting business as well. I know that there is some
optimism that they had revenue search forty percent in the
third quarter of twenty twenty four. However, isn't that market
share mainly dominated by Fan Duel and DraftKings. How does
that break out in terms of where they rank compared
to those competitors.
Speaker 7 (33:00):
Yeah, without question, what you have in the online sports
mobile sports business, it is as close to being a
duopoly as you can get between DraftKings and Fandual and
by Flotter Entertainment. But I think there are some opportunities
for the legacy casino companies, particularly Caesars and MGM, to
(33:25):
eat into some of that market share as well. And
since this is a relatively new market, only been a
couple of years since the Supreme Court, you know, legalized
it in various states, it is a growth opportunity for
Caesars that really didn't exist all that long ago. So
any kind of new revenue is kind of proverbial gravy.
(33:47):
But yeah, make no mistake, I don't get a sense that,
barring a major marketing push, I don't think that Caesars
is going to supplant either DraftKings or fan Duel as
a leader in market share anytime soon. But you know,
there are you know, there's a lot of revenue to
go around.
Speaker 4 (34:07):
Certainly, How have their peers fared over the course the
last year? MGM and win. Hey, you know you mentioned
Caesar's down thirty percent last year. How has the casino
sector in general fared?
Speaker 7 (34:18):
Yeah, the casino you know sector was a bit of
a lagger last year. You didn't really see much in
the way of growth for any of these stocks, but
Caesar's was among the you know, worst performers. And what's
interesting is that, you know, Carl Icon, who was a
big agitator in the stock a couple of years ago
(34:40):
before Caesar's merged with El Dorado, uh and now wound
up having its new management team in place. Is the
kind of legacy uh, you know, CEO from El Dorado,
Icon has a small stake in Caesar's. Again, there's no
indication that this is another to his stake. It might
(35:00):
be a little bit more passive, but the fact that
he still sees some upside with this company a confidence
in you know, in management. I think, you know, that
is kind of towel.
Speaker 4 (35:12):
Paul A Monica from Baron's talking to us about Caesar Entertainment. Paul,
thanks so much for the time, and have a great weekend.
Speaker 7 (35:18):
Thanks a lot, you, two guys.
Speaker 2 (35:20):
Tucker mentioned earlier how Jet Blue has been slapped with
a two million dollar fine over there seeming inability to
get their planes where they're supposed to be on time.
Taking a look at global rankings of the world's air carriers,
it's pretty embarrassing for the United States. So they put
together these rankings regularly, and they're looking at the most
(35:44):
on time airlines across the globe. Only two US airlines
even made the top ten, United sitting at the ten
spot and Delta sitting at the number three spot. Other
than that, you had Ara, Mexico, Saudi Airlines, Latam, Qatar,
Azula or Avianza, I don't know, Iberia and Scandinavian airlines
rounding out the top ten. But here in the United States,
(36:07):
if you just look at the US and Canadian airlines
that do business here in North America, again, that Jet
Blue space is almost second to none in terms of reliability.
So Delta, as I mentioned, takes the number one spot,
eighty three and a half percent of their flights being online, which,
by the way, that's our definition of success is like
a B minus United at eighty percent. Rounding out the
(36:32):
bottom four here or the bottom five here, you have
Spirit Airlines only seventy six percent on time, Jet Blue
at seventy five, Frontier sitting at seventy two percent. Air
Canada is apparently terrible at seventy one, and then West
Jet at seventy one percent as well. So just taking
the look here at I don't know what makes American
(36:53):
airports and airlines so much worse than our global competitors
at getting places on time, but apparently there's something to that.
Speaker 4 (37:00):
Have you seen some of the workers there, Yes, but
I've also ossed either it's true.
Speaker 2 (37:08):
Yeah, I don't know what there is to it other
than to say I still love flying on Delta over
almost any airline that I can find. Yeah.
Speaker 4 (37:17):
You wonder the impact of the Jet Blue and Spirit
not merging, you know, how that impacts their business and
some of these numbers going forward, you know, do they
get their their act together or do they sort of.
Speaker 3 (37:28):
Get a little older?
Speaker 4 (37:29):
Yeah?
Speaker 3 (37:30):
Yeah, exactly what do you have for us? Stack Roulette
Paul Apple.
Speaker 4 (37:34):
Agrees to pay a ninety five million dollar lawsuit over
recordings tied to Siri. I just want to briefly take
this moment to rail on Syria. I think it's so
useless and it has just been. It's just not a
very good tool at all. It never picks up voice
that well, and I.
Speaker 2 (37:49):
Hate it as it goes off and apparently also records
your voice and allows Apple to monitor you for years
and years without.
Speaker 4 (37:56):
Your never had it on, baby, Always turn.
Speaker 2 (37:59):
That thing off all the time that we have for
today's and this week's financial exchange, we'll be right back
at it on Monday. Markets remain in positive territory and
accelerating now with the NASDAC up over one point four percent.
We'll have a full recap for you next week's folks.
Have a great weekend and happy twenty twenty five.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
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the hosts. Do not reflect the opinions of Armstrong Advisory
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(00:20):
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(00:43):
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heroes by visiting dav I Cave Don Boston and making
a donation today. This is the Financial Exchange with Mike
(01:06):
Armstrong and Paul Lane.
Speaker 2 (01:09):
Welcome back to the Financial Exchange. If you didn't like yesterday,
you're gonna love what you see today. Dow up two
hundred twenty seven points half a percent, SMP up.
Speaker 3 (01:17):
Forty six points or three quarters.
Speaker 2 (01:19):
Of percent, and Nasdaq up one hundred and ninety six
points or one full percentage points. Russell two thousand, up
about nine tenths of a point. The ten year yield
on the US Treasury down to four point five seven
to three percent. We've got oil coming in at seventy
three dollars eighty two cents per barrel. That brings us
(01:40):
to the national average for gas prices, which, if you'll
give me just about six seconds, we're sitting at a
national average of three dollars and seven cents per gallon,
with most of New England actually below that average other
than Vermont. Let's see, I got a fine Rhode Island here,
(02:01):
and Rhode Island is also also below the national average.
So only Vermont sitting up there above the national average
here in New England? Anything else catching your eye this morning?
After yesterday's scary Apple and Tesla sell off.
Speaker 4 (02:18):
The US Surgeon General issued an advisory warning Friday about
the link between alcohol consumption and increased cancerousk Can't I
just came across my desk.
Speaker 2 (02:26):
Can't I just brew some moonshine in my backyard without
the government being all up in my business.
Speaker 3 (02:36):
Yeah, I don't know.
Speaker 4 (02:36):
It's gonna sol me down tonight going off to dinner.
But does he make me pause for a moment.
Speaker 2 (02:42):
Surgeon General wants to slap some warnings on alcohol labels, which, yeah,
I guess, I guess we're we're going to get there, unfortunately.
But yeah, the other piece that just slid across my desk.
GM and Ford are reporting their best annual US sales
since twenty nineteen. Ford's new vehicle sales increased four point
two percent last year, representing the automaker's best year.
Speaker 3 (03:04):
Since twenty nineteen.
Speaker 2 (03:06):
Specifically, they're seeing big growth in their hybrid and all
electric models. And then you also saw a report from
where's General Motors in here? I don't see General Motors
in here, so I'll get back to you on that one.
But both of them reporting pretty solid numbers. At the
same time, the Tesla is reporting their slowdown in sales
(03:28):
and y GM competition.
Speaker 4 (03:30):
GM two point seven million vehicles up four point three
percent from a year earlier. For comparison, we're selling two
point nine million in twenty nineteen.
Speaker 2 (03:38):
Yeah, so that speaks to some of that competition that
Elon Musk's going to want to continue to face. I
am just I'm really just waiting for the I think
Dodge is selling it this year in their in their
Ram truck, the all electric truck with a built in
gas power generator to power the battery.
Speaker 3 (04:00):
I know, I'm excited about that.
Speaker 2 (04:03):
I just completed a two thousand mile road trip out
and back to Chicago, and I think a minivan equipped
with that would be just the the sexom. Yeah, yeah,
I think I would be really turning heads with that
bad boy.
Speaker 3 (04:18):
Peace here from Bloomberg.
Speaker 2 (04:20):
America still leads the world in all the ways that matter.
So look, there's been a lot of criticism of the
Biden administration. We had a vote where they pretty resoundingly
elected President Trump. We have a lot of problems, no doubt,
in terms of inflation and a number of people describing
(04:41):
their personal financial situation as challenging. But then you look
across the globe and you take a look at how
Europe's doing, how China's doing turmoil in the Middle East,
and it's really tough to come to any conclusion other
than while we face challenges here domestically, there are few
places in the world where you would, i would say,
(05:05):
arguably like to start a business. For example, point to
one area across the globe where you'd say, yeah, I
would feel more confident starting a business in this country
over the United States. And it's really tough to come
up with one. And some of it I think speaks
to those productivity growth numbers that we've talked about, but
(05:25):
I think some of it also just speaks to the
power of American institutions.
Speaker 3 (05:29):
In all of this.
Speaker 2 (05:30):
Yes, we have, you know, resounding disagreement in Congress and
real problems getting bills passed, but again, you take a
look at other countries. South Korea at the moment, for example.
I don't know if you guys saw the story the
other day where they tried to arrest the sitting president
and their bodyguards effectively blocked a arrest warrant that was
(05:52):
out for like, it was just wild stuff that we
don't still see here in the United States.
Speaker 4 (05:56):
Yeah, what did he he had declared martial law?
Speaker 2 (06:00):
Just yeah, Yeah, so, no, it's a great point.
Speaker 4 (06:05):
It's really important to think about. There is certainly a
lot to work on and a lot to fix, but
our nature is to complain, and it does seem like
we do go around complaining quite a bit. But there
are a lot of positive things to hang our hat on.
When comparing us to our peers in terms of research
and development, business innovation productivity GDP growth, all of those areas,
(06:31):
the US still shines very strong.
Speaker 2 (06:33):
I think the other piece to acknowledge it, I think
a lot of people left the last few years feeling
extremely divided from the political turmoil standpoint right, Like that
part seems to be resounding here in the United States.
But that's another piece that I would say is not
unique to the United States. For the first time in
one hundred years, every single modern democracy in the world
(07:00):
that was in power over the last few years in
the most recent election lost power during this most recent election.
It's the first time that has happened on a coordinated
basis in one hundred years of history that we have
on this and every single ruling party, whether conservative or liberal,
across the globe lost share and in many cases flipped
(07:23):
entirely go look at the UK for example, go look
at New Zealand and other countries where you've seen that happen.
That is incredibly unique this moment in time. And I'm
not saying that it's a good thing. I'm merely saying
that it is seemingly a byproduct of this incredibly volatile
economy that we've had over the last few years.
Speaker 3 (07:43):
Yeah, I mean for good reason.
Speaker 2 (07:45):
When when prices go through the roof, people globally feel
vastly uncomfortable and blame the people that were in charge
when it happened. And so that seems to be what
we saw over the last few years. And I'm not
sure it's something we should be entirely discouraged by. Speaking
of Congress and political turmoil more regarding Musk's Department of
(08:06):
Government efficiency and seemingly every day, I'm not really sure
why there's more and more attention from outsiders saying this
is how Musk and Ramaswami should lead the department, or
that's the way they should lead it. I don't know, Paul,
I tend to be taking a point here of I
(08:26):
think my biggest criticism of DOGE and what they are
trying to create here is that I think it's pretty
disingenuous in terms of what their actual targets are from
what I have seen so far. But trying to grade
this thing after a month and a half of what's
been going on, I just don't really see much of
a purpose at this stage.
Speaker 3 (08:47):
I think the.
Speaker 2 (08:47):
Biggest criticism I have is, don't come out and tell
me that you're going to cut two trillion dollars of
government spending when you very clearly are fundamentally unseerious about
doing so.
Speaker 4 (08:58):
Yeah, I have two new I've tuned off from these
stories so a little bit. I gotta be honest with you, Mike,
just because ultimately it's Congress who needs to act. I
get the role of this committee here. I've looked at
the budget sheet one hundred different times, and I've said
this probably one hundred different times in the show.
Speaker 3 (09:15):
The area is.
Speaker 4 (09:16):
That likely need to be cut to make a meaningful
impact on the budget are areas that cannot be touched
Social Security.
Speaker 3 (09:23):
Without Congress anyway, right, without Congress action.
Speaker 4 (09:26):
And let's be honest, they're just they're really they're not
going to come in and cut them. I just find
it very very unlikely social Security Medicare, military and defense spending,
and so for me to spend my time, you know,
scrutinizing these articles on what they may or may not
do for the budget, let me know when something prints,
let me know when there's actually a cut and what
(09:47):
it is and how substantial. Otherwise, I just think it's
strategically a way to sort of divert the responsibility away
from the president of making any substantial cuts.
Speaker 2 (09:56):
I'm also unconvinced that Americans generally want a government that
is more efficient and spends less money.
Speaker 3 (10:03):
I know, we say that we want that we want
to do away.
Speaker 2 (10:06):
With government waste, we want to drain the swamp, But
when it comes down to brass tax like, hey, should
we repeal the weapon the GPO, Hey should we take
a different look at Social Security or Medicare or the military?
Pull after poll indicates that Americans don't want those programs
to change.
Speaker 4 (10:23):
Hey, do you want your taxes to revert back to
what they were in twenty seventeen?
Speaker 2 (10:27):
Right, So it comes back to me to like these
big overall topics that people seem to have an opinion on,
but then when you get into the.
Speaker 3 (10:34):
Weeds, everybody very much diverts.
Speaker 2 (10:38):
Immediately, Like I think there's general agreement that the government
spends too much money as and is inefficient and wasteful.
We all seem to agree on that, and then when
we get into the brass tax of how you fix that,
there's zero agreement at all. And generally people don't want
the government to spend less money because it means that
they are going to be financially harmed. It reminds me
of the housing affordability conversation, it's going to do it
(11:00):
all the time Nimby, which is, you know, yeah, I
want there to be cheaper homes for sale, but not
if it affects me negatively.
Speaker 4 (11:09):
Right right, not in my back.
Speaker 3 (11:11):
Those two things don't really work together.
Speaker 2 (11:12):
And I think if there's one piece that I think
Elon Musk has actually been genuine about it is he's
warned people. He said, look, if we're actually going to
do this, it's going to be painful. He said that,
and that's also why I don't think it's actually going
to happen. Let's take a quick break when we come back,
a little bit of trivia here on the financial exchange
that's next missed one.
Speaker 1 (11:33):
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Speaker 5 (12:03):
This segment of the Financial Exchange is brought to you
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dot com and code Vibe twenty twenty five. Time for
trivia here on the Financial Exchange on this day. In
twenty twenty two, Elizabeth Holmes, the founder of Theronos, was
found guilty on four counts of fraud. Furnos was a
blood testing company that collapsed back in twenty eighteen when
it was discovered that the company was falsifying blood tests.
(13:11):
Your requestion today, how many years was Elizabeth Holmes sentence
to in prison? Once again? How many years was Elizabeth
Holmes sentence to in prison? Be the fifth person today
to text us at six one seven three six two
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eks Change Show T shirt. See complete contest rules at
financialoks Change Show dot com.
Speaker 3 (13:42):
Paul.
Speaker 2 (13:43):
Back in twenty fourteen, the combination of Costco, Walmart, and Amazon,
those three retailers themselves accounted for about eleven percent of
all retail sales in the country. Based on their most
recent numbers from their last three quarters, those three companies
now make up seventeen percent of retail sales. Roughly fifty
(14:05):
seven percent of the growth over that period came from
those three, and they are in particular just absolutely dominating
most areas of retail, from grocery to just everyday shopping.
These three are accounting for a bigger piece, and I'm
not sure.
Speaker 3 (14:22):
They would have been the three that I would have.
Speaker 2 (14:24):
Banked on back in twenty fourteen, either, right, I mean,
at that point in time, I think Target was playing
a much bigger role in growing and since then they
have very much struggled, but from any number of different areas,
it has become increasingly difficult to compete with them. I've
heard specifically a lot of complaints and lawsuits from small
(14:44):
liquor stores who say, you know, the deals that they
get from distributors, the costcos and the total wines and
others who get from big distributors, we just can't compete
on price with them, and so you know, we're closing
up shop because that's where all.
Speaker 3 (14:58):
The volume's going to.
Speaker 2 (15:00):
Grocers who are saying, you know, Kroger and Albertson's, for example,
saying we cannot continue to compete with Walmart in this
grocery business based on how they just on the pricing
that they get to and on the exposure they get
from other parts of their business, and yet they weren't
allowed to merge. Rarely do we ever have companies that
(15:20):
just dominate forever. And I'm sure the track will change
at some point here, and we have had a bit
of a resurgence of small businesses over the last five years,
but it's tough for me to envision how really any
of the competitors are going to stack up against these three.
Speaker 4 (15:36):
Yeah, these companies have built scale economies where they have
just they're spending forty seven billion in CAPEX in twenty
twenty three to develop a significant amount of warehouses, logistical
advantages and quite honestly, if you look at all three
and Costco a little bit less so here have invested
(15:58):
significantly on the delivery side of the and making things
incredibly easy for the consumer, and Costco has started to
develop that arm of business as well. But it's a
time period where consumers are looking for efficiency, things to
be delivered same day or next day and for strong pricing,
and when you're as large as these three are, you're
(16:20):
able to command that and really deliver those services to
the consumers.
Speaker 1 (16:25):
Zone.
Speaker 2 (16:25):
Yeah, it's not to say any but nobody else will
succeed there. But you look around the around the country too.
I mean, you've had bankruptcies from Big Lots, the Container Store,
party City just actually I believe I have to double
check this, but I believe Party City is going through
full liquidation bankruptcy this time. They had gone through it
several years ago. Private Equity took them private, and this
(16:46):
time it looks like finally liquidating the entire business here,
which is I might have been their only customer.
Speaker 3 (16:53):
So I was there my wife.
Speaker 4 (16:55):
My wife and I took the kids there in and
around when my daughter was having a birthday, just so
that they could walk through the store and go through
the experience of picking out unicorn balloons or whatever. And
I do walk around some of these stores.
Speaker 3 (17:07):
I don't know where I'm gonna get my unicorn balloons.
Speaker 2 (17:09):
Now, by the way, that that was the only place
that I you know, Amazon, I can get everything else there,
but I cannot get a helium filled mylar balloon.
Speaker 3 (17:18):
Anywhere other than parties. Yeah, exactly, but there are some stories.
Speaker 5 (17:22):
We bought a balloon on Amazon. What are you talking about?
Speaker 3 (17:25):
Filled with helium?
Speaker 5 (17:26):
No, we had to buy a helium tank, Michael, which
you can buy an Amazon.
Speaker 3 (17:30):
Really. Yes, Amazon does everything. I don't know.
Speaker 5 (17:35):
We never filled my own balloons. I guess I'm we
do that annually.
Speaker 3 (17:40):
Do you really want a helium tank around? Who wants?
Its not that bad.
Speaker 5 (17:43):
It's like this big Oh it's party. It's meant for parties.
Speaker 1 (17:47):
Yeah.
Speaker 4 (17:47):
Oh, I was thinking of something that was you know, okay, okay,
it looks like it looks literally looks like a propane store,
and that in the garageul be the same size as
the grill for a propane Okay, all right, not as
bad as I thought. But sometimes you walk into some
of these business staples too. I've had to do some
runs in there. I'm like, you know, I just don't
know who where the customer foot traffic comes from.
Speaker 3 (18:09):
Yeah.
Speaker 2 (18:10):
Yeah, it is going to be increasingly challenging. It's not
going to be incredibly difficult for your very small store
with three locations to continue to exist, because I think
there will be still an immense amount of support for
companies like that. But when you talk about your big lots.
But even when I talk about you know, BJ's Wholesale
club for example, you know, other than geographic location, why
(18:33):
choose a BJ's over at cost Co? I think most
people would have a tough time coming up with the
answer to that. And more and more I think people
are answering that question when it comes to Target versus
Walmart or Staples versus Amazon's what's the compelling reason I
need to look elsewhere for this item?
Speaker 3 (18:52):
And the more.
Speaker 2 (18:53):
Businesses they get into, the more challenging it's going to be.
I even think of even a massive competitor in the
liquor space, you know, total wine and more. Well, if
Costco is allowed to sell beer, wine and liquor, I
might not be all that interested in going to some
of these other businesses that do compete in that space. Genuinely, today,
(19:13):
I know that's not certainly Amazon's business or Walmart's business,
but when they are able to offer these multi pronged
UH sales taxics to you, it's tough for many businesses
to compete in the same way. Quick break, we'll have
the trivia winner coming up, and then American's diets have
been changing a lot of the last decade. What it's
meant for some of the businesses that support that.
Speaker 3 (19:34):
Next on the Financial.
Speaker 6 (19:35):
Exchange, bringing the latest financial news straight to your radio
every day. It's the Financial Exchange on the Financial Exchange
Radio Network.
Speaker 1 (19:52):
Text us six one seven, trink six to two one
three eight five with your comments and questions about today's show.
This is the financi Think She'll Exchange Radio Network.
Speaker 5 (20:08):
Trivia questions today was how many years was Elizabeth Holmes
sentenced to in prison? That will be eleven years. Holmes
was charged with fraud in lying to investors to raise
money for the company. She was convicted in twenty twenty
two of three counts of wire fraud in one count
of conspiracy to commit wire fraud. Mike from Stoneham, Mass
(20:29):
is our winner today, taking home a Financial Exchange Show
t shirt. Congrats to Mike. We play trivia every day
here on the Financial Exchange. See complete contest rules at
Financial Exchange Show dot com.
Speaker 2 (20:41):
Paul, do you remember when ozempic and Manjaro and GOVI
We're going to ruin every snacking and bad for you
food brand out there.
Speaker 3 (20:52):
I do remember that that was.
Speaker 2 (20:53):
Going to be the end of all ice cream brands
and snack foods out there.
Speaker 3 (20:58):
It turns out the rumor of their.
Speaker 2 (21:01):
Demise has been pretty exaggerated here, and in fact, Americans
seem to be snacking more often than ever, which I
don't I'm not sure I get any of this. Like,
I don't know about your personal behaviors, but I buy
a bunch of snacks for my kids to go in
their lunchboxes because I'm lazy and I don't want to
hand make snacks. So I'll be the first to admit that,
(21:24):
But it really doesn't carry over to any of my
own habits and behaviors.
Speaker 4 (21:29):
On the weekends and when I'm at home, then obviously
there's more stuff around, so you're more likely snack boat.
Speaker 2 (21:34):
All it is is maybe people are just at home
more because we haven't socialized since COVID.
Speaker 5 (21:40):
There are definitely moments on like a lazy Sunday where
you're stuck inside or something where you're just bored, like
let me go taste of stack?
Speaker 3 (21:47):
But is that any different from your pre COVID life?
Speaker 2 (21:50):
Like this seems to be making an argument that Americans
have made some tremendous transformation where we just sit around
and eat all day, and I don't know, it's not
like we're signific In fact, we got less fat over
the last two years. So I just don't really understand it.
But clearly, if you look at I always say, follow
(22:10):
the money, and you had some big transactions here in
these brands. So a few years ago, the company, the
Kellogg spread off, sorry, split off their cereal brands from
their snack brands. So they wanted to focus their snack
brands on Pringles and Cheese It's and rice Krispy's treats,
and so they spun off this brand called Kelenova, and
(22:32):
in August Mars said that they're going to acquire the
company for thirty six billion dollars. So clearly worked. Likewise,
Hostess was gobbled up by JM. Smucker based on again
their snacking brands, and I just my only conclusion is that, yeah,
if if I worked from home all day every day,
(22:55):
I would definitely snack a lot more than I do
because we're sitting here and chairs in a studio and
I generally think it would be rude to talk to
you while my mouth is full of pringles. But if
I were doing it from home, might I might partake
in that, and that doesn't to me seem like it's
going to be a successful, permanent shift, especially if there
(23:15):
is this strong desire from a lot of people to
get onto these weight loss drugs.
Speaker 4 (23:19):
Yeah, I could certainly see the pandemic and post pandemic
a tremendous surge and snacking, and perhaps that those sales
numbers led to these future acquisitions that we're seeing here,
But a lot of food habits in terms of the
trends of what people eating, our cyclical and our trend based.
They do a good job of highlighting that there's been
(23:40):
an uptick in sales on sort of the charcoutery boards
sort of things, you know, meats and cheeses as well
as just standalone cottage cheese. But they made the parallel
to Greek yogurt, which just became really prevalent for toast alvocatta.
Toast is another one where it just seems more like
the gym and like different, you know, whether it's Peloton
(24:03):
or P ninety x or trends that come around, but
it's just are more short lived in nature.
Speaker 2 (24:07):
Wasn't there a Super Bowl a few years ago where
they convinced us all that they're going to run out
of avocados. Am I making that up the avocado shortage
of like twenty seventeen.
Speaker 4 (24:16):
Or there definitely has been an avocado stories in one
of the years.
Speaker 2 (24:19):
In either case, I see a lot of this stuff
as temporary, because all the trends that we seem to
see in both exercise as well as food habits seem
to be very temporary in nature.
Speaker 3 (24:31):
Intend to flip flop all the time.
Speaker 5 (24:33):
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So if you're not prepared to handle the increased costs
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(24:54):
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(25:17):
you might really need to do tomorrow once again the
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That's eight sixty six eight four eight five six nine nine,
or you can request the guide from their website Legal
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Speaker 1 (25:32):
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Armstrong do not endorse each other and are
not affiliated.
Speaker 2 (25:43):
The legal ramifications of the Chevron doctrine continue to spill
over here, this time on net neutrality. So to paint
the history on this one, for a couple decades, the
FCC had enforced a policy of net neutrality, which pretty
simply meant that if you you are a broadband internet provider,
you can't intentionally slow down or speed up any Internet
(26:05):
traffic or prioritize one or the other. So as you
can imagine, if your Verizon delivering broadband internet to somebody's home,
and also you have a TV package for sale, you
might be interested, for example, in slowing down traffic Internet
traffic on YouTube or on Fubo, or on Hulu or
Netflix because you want more subscribers to your wired cable package.
(26:30):
Net neutrality prevented them from doing those types of slow
downs intentionally or otherwise. That was not a congressional law, though.
That was a policy passed decades ago that was overridden
by the Trump administration, put back in place by the
FCC under the Biden administration, and then that administration got sued.
(26:50):
And now with this overturning of the Chevron doctrine, which
is effectively, hey, if you want to pass laws, pass laws,
but we're not just going to defer to regulations posed
by government entities. This has again been overturned. And I'm,
by no means the foremost expert on this. I don't
really know how it will change the way the Internet
(27:13):
is delivered today and in the future. But you know,
one of the big concerns that has been spelled out
and why Google opposed this so much, is that, Yeah,
what if Comcast and AT and T and Verizon decide
to start slowing down traffic that comes from Google, like
YouTube or Netflix or these others. And my answer would be, well,
if they do, then they're acting as a monopoly. And
(27:36):
so we already have laws that would break you apart
for these reasons, and so go do so, right, Like,
I really I don't know that it's all that complicated.
Because where you live, Paul, how many choices of internet
service providers do you have?
Speaker 1 (27:51):
Two?
Speaker 5 (27:52):
Two?
Speaker 3 (27:53):
Me as well? Do both of them also deliver cable? Yes?
Speaker 2 (27:56):
Yes, So if either of them go say, hey, we're
going to intentionally slow down your Netflix subscription because we
are losing a ton of money to people cutting the cord, well,
then you're acting as a monopoly because I have nowhere
else to go in those scenarios. And so I'm sure
there are other ramifications here. I am sure the Internet
(28:19):
is going to change in some meaningful way, but I'm
not sure how. And what I ultimately come back to
is maybe we do need net neutrality, but Congress should
go pass a law if that's going to be the case.
Speaker 4 (28:32):
Yeah, I'm with you on that. I struggle to to
know the full incasies of the SEC, FCC and how
Verizon and Comcast deliver you know, internet today, sure, how
the speed's translated out.
Speaker 2 (28:48):
I just I do want to blowback if Verizon just started,
you know, making it so Netflix buffers all the time.
Speaker 3 (28:54):
Right, I just don't see it happening.
Speaker 4 (28:57):
I do wonder if that would. There's just you hope
that there's always competitors out there that to shift to,
whether it's from Verizon to Comcasts or you know, this
is probably further down the road, but SpaceX has Starlink. Yeah, Starlink.
Does that just become if they went down their road? Okay?
Do they just drop their prices down to a point
(29:18):
where they make it a lucrative and attractive for everyone
to switch over.
Speaker 3 (29:22):
Let's take a quick break.
Speaker 2 (29:23):
When we come back, Paulumonica from Baron's join us to
talk about the super Bowl that's next here on the
Financial Exchange.
Speaker 1 (29:30):
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Like us on YouTube and get
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This is the Financial Exchange Radio Network. The Financial Exchange
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Hit that subscribe button then leave us a five star review.
(29:51):
You're listening to the Financial Exchange Radio Network. Ladies and gentlemen.
Speaker 3 (29:57):
The weekend.
Speaker 4 (30:05):
As promised, we are joined by Paul la Monica from
Barons for a little bit of Friday chatter on a
company by the name of Caesar's. Did the real Caesar
actually live in this palace? Paul, thanks so much for joining.
Speaker 7 (30:20):
Us, Thank you very much. Yeah, I don't think he
actually lived in Vegas, although that would have been interesting quoting.
Speaker 4 (30:29):
The hangover there just for the listeners out there, of course.
Speaker 7 (30:32):
Yeah.
Speaker 4 (30:33):
So caesar stock, as you allude to in this piece,
was down thirty percent last year, but perhaps some optimism
heading into this year. And I just asked, first, Paul,
give us a breakdown on kind of how they generate
the revenue. Obviously we know that they have the mobile
sports book, but also of course they have the physical
location in Vegas and Nevada and New Orleans. But how
(30:56):
did they earn their money in general? Like from a breakdown, Yeah, I.
Speaker 7 (31:01):
Mean, by and large, you know, Caesar's is still a
company that generates most of its money from the gambling
and hospitality side of the business, owning these casinos and
you know, lodging properties, you know, primarily in Vegas, but
you know they have other markets as well. In New Orleans.
(31:21):
Is an interesting story coming because of the Super Bowl.
You know, of course, we had the horrific events that happened,
you know, New Year's Eve night, in New Year's Day
mourning in Las Vegas. I doubt that that's going to
de tour tour, you know, tourists football fans from heading
to the Big Easy next month for the Super Bowl.
(31:43):
And because Caesars has the recently renovated Harrah's property in
New Orleans, they could get a big boost there and
obviously a lot of brand name exposure as well from
having the super Bowl being played at the Caesars super Dome.
But yeah, this is a company that obviously has many
of its more high profile properties in Las Vegas, which
(32:07):
is still a market that is you know, doing quite well.
You've got the you know, the namesake Caesars on the strip,
you know, and other companies like Flamengo, Harrah's Planet, Hollywood, Paris.
So you know, there's hopes that these companies could also
maybe benefit from some of the turmoil that's happened in
Vegas lately, the Mirage shutting its doors, Tropicana doing so
(32:30):
as well, So you know, maybe you get a boost
to those Vegas properties from the losses that you know
have taken place on the strip with you know, some
casinos closing.
Speaker 4 (32:40):
You mentioned they're you know, they're in the online sports
betting business as well. I know that there is some
optimism that they had revenue search forty percent in the
third quarter of twenty twenty four. However, isn't that market
share mainly dominated by Fan Duel and DraftKings. How does
that break out in terms of where they rank compared
to those competitors.
Speaker 7 (33:00):
Yeah, without question, what you have in the online sports
mobile sports business, it is as close to being a
duopoly as you can get between DraftKings and Fandual and
by Flotter Entertainment. But I think there are some opportunities
for the legacy casino companies, particularly Caesars and MGM, to
(33:25):
eat into some of that market share as well. And
since this is a relatively new market, only been a
couple of years since the Supreme Court, you know, legalized
it in various states, it is a growth opportunity for
Caesars that really didn't exist all that long ago. So
any kind of new revenue is kind of proverbial gravy.
(33:47):
But yeah, make no mistake, I don't get a sense that,
barring a major marketing push, I don't think that Caesars
is going to supplant either DraftKings or fan Duel as
a leader in market share anytime soon. But you know,
there are you know, there's a lot of revenue to
go around.
Speaker 4 (34:07):
Certainly, How have their peers fared over the course the
last year? MGM and win. Hey, you know you mentioned
Caesar's down thirty percent last year. How has the casino
sector in general fared?
Speaker 7 (34:18):
Yeah, the casino you know sector was a bit of
a lagger last year. You didn't really see much in
the way of growth for any of these stocks, but
Caesar's was among the you know, worst performers. And what's
interesting is that, you know, Carl Icon, who was a
big agitator in the stock a couple of years ago
(34:40):
before Caesar's merged with El Dorado, uh and now wound
up having its new management team in place. Is the
kind of legacy uh, you know, CEO from El Dorado,
Icon has a small stake in Caesar's. Again, there's no
indication that this is another to his stake. It might
(35:00):
be a little bit more passive, but the fact that
he still sees some upside with this company a confidence
in you know, in management. I think, you know, that
is kind of towel.
Speaker 4 (35:12):
Paul A Monica from Baron's talking to us about Caesar Entertainment. Paul,
thanks so much for the time, and have a great weekend.
Speaker 7 (35:18):
Thanks a lot, you, two guys.
Speaker 2 (35:20):
Tucker mentioned earlier how Jet Blue has been slapped with
a two million dollar fine over there seeming inability to
get their planes where they're supposed to be on time.
Taking a look at global rankings of the world's air carriers,
it's pretty embarrassing for the United States. So they put
together these rankings regularly, and they're looking at the most
(35:44):
on time airlines across the globe. Only two US airlines
even made the top ten, United sitting at the ten
spot and Delta sitting at the number three spot. Other
than that, you had Ara, Mexico, Saudi Airlines, Latam, Qatar,
Azula or Avianza, I don't know, Iberia and Scandinavian airlines
rounding out the top ten. But here in the United States,
(36:07):
if you just look at the US and Canadian airlines
that do business here in North America, again, that Jet
Blue space is almost second to none in terms of reliability.
So Delta, as I mentioned, takes the number one spot,
eighty three and a half percent of their flights being online, which,
by the way, that's our definition of success is like
a B minus United at eighty percent. Rounding out the
(36:32):
bottom four here or the bottom five here, you have
Spirit Airlines only seventy six percent on time, Jet Blue
at seventy five, Frontier sitting at seventy two percent. Air
Canada is apparently terrible at seventy one, and then West
Jet at seventy one percent as well. So just taking
the look here at I don't know what makes American
(36:53):
airports and airlines so much worse than our global competitors
at getting places on time, but apparently there's something to that.
Speaker 4 (37:00):
Have you seen some of the workers there, Yes, but
I've also ossed either it's true.
Speaker 2 (37:08):
Yeah, I don't know what there is to it other
than to say I still love flying on Delta over
almost any airline that I can find. Yeah.
Speaker 4 (37:17):
You wonder the impact of the Jet Blue and Spirit
not merging, you know, how that impacts their business and
some of these numbers going forward, you know, do they
get their their act together or do they sort of.
Speaker 3 (37:28):
Get a little older?
Speaker 4 (37:29):
Yeah?
Speaker 3 (37:30):
Yeah, exactly what do you have for us? Stack Roulette
Paul Apple.
Speaker 4 (37:34):
Agrees to pay a ninety five million dollar lawsuit over
recordings tied to Siri. I just want to briefly take
this moment to rail on Syria. I think it's so
useless and it has just been. It's just not a
very good tool at all. It never picks up voice
that well, and I.
Speaker 2 (37:49):
Hate it as it goes off and apparently also records
your voice and allows Apple to monitor you for years
and years without.
Speaker 4 (37:56):
Your never had it on, baby, Always turn.
Speaker 2 (37:59):
That thing off all the time that we have for
today's and this week's financial exchange, we'll be right back
at it on Monday. Markets remain in positive territory and
accelerating now with the NASDAC up over one point four percent.
We'll have a full recap for you next week's folks.
Have a great weekend and happy twenty twenty five.
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