January 24, 2025 • 38 mins
Mike Armstrong and Paul Lane discuss Trump's latest tariff remarks at Davos and how countries are reacting to his threats. Trump says he knows more about interest rates than Fed Chief Powell. Boeing strike and defense charges hammer fourth-quarter results. United and Delta are leading an impressive rally for airline stocks. What is the state of the job market in New England?
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Speaker 1 (00:00):
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(01:06):
and Paul Lane.
Speaker 2 (01:10):
Good morning, Happy Friday, Welcome back to the Financial Exchange.
If it feels like presidential politics news is flying at
you a mile a minute, you're not alone. I don't
think even Paul and I and Chuck are able to
keep up with it as fast as it's coming out.
But we had stock surging yesterday again Asian stocks, global
stocks really moving upwards on comments from Donald Trump. We
(01:32):
have a you know, just a classic Valentine's Day love
story between Trump and Jay Powell coming up to talk about.
So lots to cover here on the Financial Exchange, but
I think we need to start with tariff talk because
that's been the main focus of frankly, this show over
the last week, is the lack of action there. Yesterday,
in an interview with Fox News, Donald Trump saying he
(01:55):
would quote rather not use tariff's against the world's second
largest economy and stocks, at least in Asia kind of
took off on that news of a softening stance towards China.
And I guess my question that I don't think anyone
has an answer to, is is this Donald Trump softening
towards China or is this the same as me saying
(02:16):
to my you know, six year old who's having a
temper tantrum that I would rather not put you in
time out, but you're still acting like a you know what,
and so I'm going to don't. I don't honestly know
the answer. And I think the main takeaway that you
can have at this point when it comes to the
new Trump administration and their attitude towards trade, is could
(02:40):
have been a lot more aggressive, right, That's the only
takeaway I have is they were very aggressive with a
lot of stuff, you know, immediately placing on leave anyone
who is working on DEI projects in the federal government,
immediately changing a ton of stuff when it comes to
the operation of this economy, freezes all sorts of items
(03:02):
that people kind of guessed whether or not they would
be this aggressive on. And they were the only one
that I can point towards and say definitively that people
were pretty certain there would be definitive action on and
didn't get it was trade. And so here's where we stand.
There's a new deadline out there of February first, and
we will see what comes to pass or doesn't come
(03:24):
to pass when that deadline comes and goes.
Speaker 3 (03:26):
I can't wait for that deadline to get pushed back
next week.
Speaker 2 (03:29):
Well, Chuck and I were talking about this yesterday, and
if it does, I think you do have to and
I myself am going to reposition my viewpoint on tariffs
and trade.
Speaker 4 (03:39):
Now.
Speaker 2 (03:40):
Chuck has been a little bit more convinced on this
subject than I have been. Oh, I've been a little
bit skeptical that this is going to go forward. But
if you come and go with this February first deadline,
then I think you do have to take a second
look at this and say, Okay, this is more of
a negotiating tactic. We will see what if anything goes
into place, but maybe we shouldn't bank on higher terrors,
(04:03):
higher import prices, and this is much more of a
negotiating tool than a serious threat.
Speaker 3 (04:07):
I've leaned more in that camp for a longer period
of time. This idea that I'll believe it when I
see it. You know, some of these tariffs that have
been mentioned are so broad based and so extreme in
nature that I always questioned whether or not they were
going to be put in. I could be proven wrong
in a week. That's how quickly things can change with
this current administration. But particularly a point that you and
(04:28):
I talked about earlier this week, Mike, because they've been
tied specific to Mexico and Canada to some of these
kind of social issues of you know, lessening fednyl distribution
across borders, and some of these other items on immigration,
it's lean me to believe further in the camp that
they're negotiating tactics, you know. Similarly here, even the language
as it pertains to China, it's, hey, perhaps we can
(04:51):
make a deal. Trump is you know, mentioning here when
he brings up these subjects, and it's it's a little
bit more skewing to the Negotia side when you kind
of parse through some of the details here.
Speaker 2 (05:02):
Regardless, in terms of market reaction, yesterday, Hong Kong's Hang
Sang Index gained one point eight percent, the Hangshang Tech
Index gains two point eight percent. In trading, the Shanghai
Composite went up point seven percent. Asian currencies got a
lift on the news as well, all gaining ground against
the United States, specifically Chinese yuan, tay bot, Malaysian ring, yet,
Korean wan, and the Aussi dollar all gaining against the
(05:24):
US dollar on that commentary, yesterday, and so again I
don't know where trade is going. I am still taking
the approach of February one is a pretty important deadline
here to see what actually occurs. And I'm not going
to jump on this bandwagon of hey, all is well,
because remember two in the first Trump administration. You have
(05:45):
to go back a while on this, but the early
days of the first Trump administration were very friendly towards China.
He had a state sponsored visit to China, they rolled
out the red carpet. There was a lot of good
news on those relations in the early stage, and then
he didn't get what he wanted and we went forward
with tariffs anyway. And so I don't know what to
(06:06):
make of the stuff on Mexico and Canada. I don't
know where it's fundamentally serious and where it is not.
But as good as the news has been on that
front for major importers and trade between the United States, China, Mexico, Canada,
and Europe so far, I don't want to take it
as eternally good news that nothing is going to happen
on that front, because history told us that that was
(06:29):
simply not the case.
Speaker 4 (06:30):
But February one is the new deadline to keep in mind.
Speaker 2 (06:33):
If they are going to do things at by February one,
it probably will see some hints mid next week.
Speaker 4 (06:39):
It would be my guess.
Speaker 2 (06:40):
Mid next week also a pretty busy period of time
for non politics items that are coming up. We've got
earnings reports coming out next week, continuing a This week
was a light kickoff. You had Netflix with the biggest
reporter this week. Next week you'll have Raytheon reporting on Tuesday,
A SAP also reporting Wednesday.
Speaker 4 (07:03):
Are the heavy hitters.
Speaker 2 (07:04):
You have Microsoft, Meta, and Tesla all reporting after the bell,
all three of those companies trillion plus dollar market value companies. Thursday,
you have Apple, Visa, and MasterCards. So between those six
companies you'll get both a pretty good idea of consumer
spending in the fourth quarter. You'll get a pretty good
idea of advertising what Microsoft is seeing on the AI front.
(07:26):
A pretty wide spectrum of information from publicly traded corporations
starting next week on how they are viewing the last
quarter of twenty twenty.
Speaker 3 (07:35):
Four, something that we should add probably on the Trump
side of things, he had additional commentary on this idea
that he would put further pressure on rates in the
federal reserve and we'll talk about that, you know, in
a later in the show. And also this idea that
he puts some pressure on OPEC to low lower energy
prices out there. Some of these things, you know, in
(07:56):
particular on the OPEK one, it's like, yeah, you can
tell them all you want to lower prices, but good
luck controlling the constituents there well.
Speaker 2 (08:05):
And furthermore, you know, as we've talked about quite a bit,
Ope's just not the powerhouse.
Speaker 4 (08:10):
It once was.
Speaker 2 (08:11):
Right, we are the biggest, they don't really have the
ability to bring down You're the biggest X they did
thirty years ago. And so yeah, to your point, you
can tell them to do ask them to do what
you want. Maybe you'll get a response, maybe you won't.
But the idea that OPEK alone can unilaterally bring down
oil prices like they once did, don't.
Speaker 4 (08:31):
Don't get me wrong.
Speaker 2 (08:31):
They are still a massive hitter, and the Saudis can
influence pricing. But with what Donald Trump wants to do
with drilling, exploration and deregulation of federal lands across the
United States, I don't know that that brings down oil prices,
but it seemingly puts a cap on the potential upside
of prices pretty significantly, because while Exonmobile might not be
(08:54):
interested in drilling new wells at seventy bucks a barrel,
shoot that thing up to ninety and they'll be uh
clambering for the opportunity.
Speaker 3 (09:01):
The other puzzling piece that I found was his commentary
in regards to putting taxes and tariffs and sanctions on
goods sold by Russia to the United States, and I
to gratched my head and said, what the heck do
they even sell? So a quick search indicates that the
Navier they did about fifteen billion of exports to the
United States. Just for context, when we were talking about
(09:22):
the Mexico and Canada stories earlier this week, you're talking
about one point three trillion of you know, exchange and
trade between those two countries. So I'm just pointing out
how small cave are I have to look in terms
of let's see if I can grab some of the
goods here in terms of what they were.
Speaker 4 (09:40):
Well, Paul's going to do that.
Speaker 2 (09:42):
We're going to take a quick break when we come
back a little bit about Donald Trump's virtual visit to Davos,
Switzerland and what was brought up there.
Speaker 4 (09:50):
That's next year on the Financial Exchange.
Speaker 1 (09:53):
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Speaker 4 (11:06):
Well.
Speaker 2 (11:06):
Normally, the the Dovos Switzerland Annual Symposium is a pretty
big subjective conversation here on the financial exchange. This year
there's just been too much going on. But Donald Trump
had a virtual visit there over the last couple of days. Yesterday,
some shots across the bow at some big banks seemingly surprising,
(11:29):
is it Brian moynihan, the CEO of Bank of America,
with some commentary about their business practices. But today it
was really all excuse me. Yesterday was really much more
about trade and once again a very clear verbal warning
to other countries about trade and his intent on terraces.
But again at this stage, I'm just unsure of what
(11:51):
to do with this. But let's let's quote what he said.
Come make your product in America, and we will give
you among the lowest taxes of any nation on earth.
But if you don't make your product in America, which
is your prerogative, then very simply you will have to
pay a tariff. That is pretty clear language, right, Like again,
(12:12):
that is very obvious and clear language that hey, we
want you to manufacture your stuff here in the United
States if you want access to the American consumer. Big
questions as to whether or not that will be followed
through one There are other countries. There are other places
on Earth, by the way, that can demand the same
thing and actually be successful. Right if you're Brazil, sorry,
but nobody's going to listen to you. They'll just say, Okay,
(12:33):
we'll deal with your tariffs and if people want the products,
then go for it. In Brazil is a large nation.
The European Union could probably demand the same thing. They
have a wealthy group of consumers. You want to sell
your product here, you make it. Here are your face tariffs.
India and China could probably do the same to some extent,
and you could have a real competing tariff war should
(12:55):
they go through with all of this. I was just
kind of doing some brainstorming, like, you know what areas
of the world could actually go through with this. Your
opin Union would obviously have a much more difficult time
doing so.
Speaker 3 (13:04):
Yeah, you got to get a lot of people on
the same ada.
Speaker 2 (13:06):
Than India Agina just because of the political situation there.
But nonetheless a very clear message at Davos of we
want to see investment in the United States. And here's
where I will take the pro trade approach to the interpretation.
Here this is Donald Trump once again leaving the door
open to negotiation. One, I don't think you can actually
(13:29):
stand by the fact that you'll have the lowest corporate
tax rates across the globe.
Speaker 4 (13:32):
Because I'm not sure.
Speaker 3 (13:35):
I'm not sure if you can.
Speaker 2 (13:37):
Very clearly he wants to lower the corporate tax rate
and that's going to probably be a priority when he
is negotiating with Congress as to what tax bills get passed.
So I think you can read into that. The second
piece is, look, XYZ country, you go make a big
investment in the United States.
Speaker 4 (13:56):
Like again, it's not that.
Speaker 2 (14:01):
Soft Bank speaks for the South Korean government, but they
just announced a half a billion dollar or was it
half a trillion dollars a trillion dollar five hundred billion
in the United States. Is Korea going to get more
favorable trade treatment because of that deal than others?
Speaker 4 (14:17):
I would bet yes.
Speaker 2 (14:18):
And so again this to me doesn't sound as much
like a threat as it does a negotiating opening of
the door to say want to avoid tariffs, come invest
in the United States. I don't know if it'll pay off.
I don't know if it'll happen, but that seems to
be the shot across the bow here. The other piece
that was, as you alluded to before the break Paul
(14:38):
brought up, was a call to Opek to say, look,
we need to bring oil prices down, and it's the
best strategy we have to end the war in Ukraine.
Don't know what success there's going to be there with
Donald Trump trying to convince Opek to bring down oil prices.
Certainly they still have the power to do so to
(15:00):
some limited extent. But that was the other call that
you saw from Donald Trump and seemingly making energy a
key factor in his plans for twenty twenty five. He's
made a big deal of this. Hey, this is how
we're going to bring down inflation. This is how we're
going to deal with the energy crisis, this is how
we're going to deal with a number of key priorities
(15:22):
in the United States. Is cheaper energy, And I wonder
what you make of it.
Speaker 3 (15:27):
My I have a theory here that it seems like
since Trump has been president his first term and now
his second term. It feels as if he's always been
very conscious of what the market, how the market perceives
his actions then tried to be very favorable to the market.
Speaker 4 (15:42):
Is that a.
Speaker 3 (15:43):
Reasonable I think?
Speaker 4 (15:44):
Okay?
Speaker 3 (15:45):
And similarly here, if you're looking at the inflationary picture,
which basically, amongst other things, got him into office for
the second term, it would have to be the number
one on the list if you were trying to rank out.
Is the reason why he unseated Biden is because of the.
Speaker 4 (15:59):
Inflation economy and what the economy was was inflation exactly.
Speaker 3 (16:02):
Inflation really just was extremely challenging for a lot of
American consumers out there. We've talked about this a lot
on the show. What psychologically has the most significant impact
on US consumers in terms of their feelings towards inflation. Oftentimes,
though it's not the biggest ticket from your monthly budget
at your household, it is oil and gas prices and
(16:24):
what you see on the street corner at Exonmobile or
wherever you're picking up your gas. It has a very
significant impact. And it seems like from all the messaging here,
I do feel as if this is a huge part
of his agenda and it ties into his real focus
on trying to improve economic sentiment. Is at any cost necessary,
try to get oil and gas prices down. Now, we
(16:46):
talk about a lot on the show that inflation is
not just oil and gas. In fact, quite honestly, the
Federal Reserve strips out the impact of energy and food
costs when it's studying inflation. So there's a lot of
other things that's being overly simple just to say, drive
down oil and gas prices. But it does have a
lot of favor in economic sentiments. So it does seem
(17:07):
like that is a huge focus here with all this commentary.
Speaker 2 (17:10):
Speaking of interest rates, Donald Trump says he knows interest
rates better than Fed Chief Powell. I don't think Powell's
been great at it, but I would challenge that presupposition quote.
I think I know interest rates much better than they do,
and I think I know certainly much better than the
ones who's primarily in charge of making that decision. If
I disagree, I will let it be known. So we
(17:33):
have another battle brewing here. I drew a big heart
around Donald Trump and J. Powell just to indicate how
much they seem to like each other. Over the last
course of the few years, but we have a battle
brewing here, and quite frankly, there's only really one way
that it can go, which is Donald Trump is going
to express his dissatisfaction with the way things are being managed,
(17:59):
and J. Powell and the Fed are going to need
to completely ignore it. Is really the only way that
it can go. Now they, I do think, genuinely will
ignore it. And what I mean by that is, let's
say Donald Trump is right that lower energy prices do
bring down inflation, which far be it from me to debate.
(18:21):
I don't know where energy prices are going to go.
But if you get headline inflation, which most recently read
two point nine percent a year over year, down to
two percent by the end of twenty twenty five, and
even if you know core inflation is still running like
two and a half percent, it very well would be
justifiable for the Federal Reserve to bring down interest rates,
(18:43):
and I think they probably would in those circumstances, because
this Federal Reserve really clearly wants lower interest rates to happen.
They are still worried about the recession, they're worried about
the labor market, and they want that to happen. The
problem you have is we're not seeing much evidence of
that yet, and the most recent trend on inflation has
been towards the upside. CPI has been showing some not
(19:06):
worrisome prints, but some heavier prints on inflation. And as
you pointed out, oil prices alone are not going to
change the Fed's mind, nor should they, because they are
not going to be the greatest indication of where overall
prices are going, where housing prices and other actors either
items that really drive inflation go quick break. Wall Street
(19:27):
Watch is up next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch a complete look and what's moving market so
far today right here on the Financial Exchange Radio Network.
Speaker 5 (20:00):
After notching its first record close of the year, markets
today are slightly dipping into negative territory as Wall Street
continues to monitor fourth quarter earning season and developments on
possible tariffs from President Trump. At the moment, Dow is
off by a quarter percent, or one hundred and fifteen points,
SMP five hundred is down only two points, and the
(20:23):
Nasdaq down merely five points. Russell two thousand is off
by three points, so it's pretty quiet out there. Ten
year treasurevealed is flat at four point six two percent,
and crude oil off about a quarter percent, trading at
seventy four dollars and forty four cents a barrel. Boeing
shares actually up by a quarter percent now after the
aircraft maker revealed it racked up about four billion dollars
(20:46):
in losses and generated less revenue in the fourth quarter
than expected. Meanwhile, Noberg nor Disk said its experimental weight
loss shot help patients lose over one fifth of their
body weight in a trial that stock up by over
six percent. Elsewhere, a cloud communications software maker Twilio issued
an optimistic forecast for the next few years at its
(21:08):
investor event yesterday, sending that stock up by twenty percent
so far today. Railroad company CSX saw its revenue fall
last quarter, hit by lower fuel, sewercharge and cole revenue
that stock down by two percent. Texas Instrument shares down
by five percent after the chip makers outlook for this
(21:28):
quarter missed expectations. American Express posted a surgeon quarterly revenue,
boosted in part by holiday spending. MX shares down by
three percent. In Verizon shares up by about one percent
after the telecom giant said it expects wireless service revenue
to continue rising this year. I'm Tucker Silvan, that's Wall Street.
Speaker 2 (21:49):
Watch the great news out at Boeing just continuing this week.
Boeing will actually be reporting their earnings Tuesday morning, ahead
of the bell. But they were so bad, I guess
the executives felt the need to get the bad news
out early.
Speaker 4 (22:05):
Here.
Speaker 2 (22:05):
Boeing had another quarter of fresh charges and losses, highlighting
the real problems the new CEO, Kelly Ortberg has as
he tries to stabilize this company. Boeing said sales were
fifteen point two billion dollars, which was less than the
sixteen point seven to six billion expected by Wall Street.
Loss per share came in at five dollars and forty
(22:26):
six cents loss per share. Again according to generally account
generally accepted accounting principles, the problems are also not relegated
to the things that we think of the problems with Boeing.
You know, obviously the commercial aviation portion of their business
has been the concern dumpster fire, but remember they had
(22:49):
a big strike that they had to deal with. In
the last quarter, they had the failed what was the
name of the capsule that they sent to the space station.
I don't remember, but you know, we have two astronauts
sitting in space right now that can't come home because
of a failed Boeing capsule. And I shouldn't say fail.
It didn't crash and burn, but there were some concerns
(23:09):
about it concerning enough to not bring astronauts home. And
then the figures also revealed the precarious state of their
defense business. They suffered at one point seven billion dollars
in charges tied to programs, including the refueling tanker that
they're doing, the long delayed Air Force one. So I
don't see any real story of turnarounds now, you know,
(23:32):
maybe we'll hear on the earnings report next week that
this was one of those throw it all in one
quarter and you know, get the dumpster fire out of
the way quarters here. And the stock admittedly has been
on a bit of an uptick since November when they
reached a if that was an all time low or
just a a low for the year, but it has
(23:53):
been a rough path for Boeing and no indication in
this release at least that they are are moving beyond.
Speaker 3 (24:01):
No, the worst is not behind them. You made the
key points. We all know the issues that they're dealing
with on the silvil aviation side of things. Those have
been well documented on the news, but it was surprising
to see just how dismal their defense contract business is
doing on that end of things. That loss in that
area is concerning. It's really hard to make the argument
other than you really believing that Kelly Orper can come
(24:24):
in and turn around this company. There's just a lot
of negatives out here when you look at this business,
and it's gonna take more than a quarter to turn
this around. I mean, this is supply chains that need
to be reconstructed. There is a financial discipline that needs
to occur. And to that point, Kelly Oorper has stashed
away twenty four billion in cash they now sit That
(24:45):
was at the most recent quarter, but they now sit
with a little over twenty six billion cash, basically recognizing
that they're going to need a lot of cash to
burn to try and turn this thing around. Because to
your point where you led this, the sales aren't backing,
you know what they're anticipating, so they really need to
bunker down and try and turn this thing around. The
stock had lost thirty three percent last year and to
(25:06):
your point, had reached one of its historic lows back
in November.
Speaker 2 (25:10):
There hasn't been much in the way of activist investor
activity and to this point, and my read on that
is just I don't think anybody knows how to fix
this company yet, and so you have not had activists
coming in and saying do this, do that. But it
does bring up a big question to me, which is
does this company eventually take the GE approach, you know, like, hey,
(25:30):
we've just been a disaster for so long.
Speaker 4 (25:31):
We've gotten into too many areas and what GE.
Speaker 2 (25:34):
Has done over the last decade has been sell off
massive businesses and split up. It is not the same
company that it was pre Great Financial Crisis, and it's
a real question as to whether or not Boeing will
ever be the same company it was pre twenty twenty
and the disaster, sorry, pre twenty eighteen. When was the
no that was twenty twenty twenty, nineteen, twenty twenty, I
(25:55):
don't know when the first planes that went down, But
real question as to whether they will ever be that
company again or if you potentially have a you know,
Boeing Commercial Aviation and a Boeing defense. I'm not sure.
Speaker 3 (26:08):
There's definitely an argument to be made that they need
to narrow their focus.
Speaker 2 (26:12):
Speaking of the airline industry, as much trouble as Boeing
seems to be struggling, with United, Delta and other major
global airlines having a heck of a moment right now.
United Airlines for the year bumped up one hundred and
fifty four percent in twenty twenty four. Delta not quite
(26:34):
as much, but rose seventy seven percent over the same
period of time. According to the Wall Street Journal those
reliability rankings that they put out there every year. In
terms of US airlines, Delta once again took the number
one spot, followed by Southwest, which again surprising given some
of the troubles they've had, Alaska Airlines, Allegiance, United Jet,
Blue American taking that seventh spot, and then Spirit in
(26:56):
Frontier rounding out the last two places there in terms
of reliability at least, but in spite of United, kind
of middle of the pack in terms of reliability.
Speaker 4 (27:07):
Huge profit year for them.
Speaker 3 (27:08):
I love this piece, Mike. I thought it did a
really great job. One of the theories that Buffett has
trumpeted for many years is this idea that investing in
airlines is just a bottomless pit, that you just can't
make any money doing it. And what they did here
in the Wall Street Journal is they said, back in
nineteen seventy eight, the Airline Deregulation Act was passed, and
since then, over the forty six years, if you had
(27:30):
put one thousand bucks into some of the major airline carriers,
you would have three thousand, three hundred and forty two
dollars a day, but only seven hundred eleven dollars after
you account for the impacts of inflation. You put that
same one thousand bucks into the S and P five hundred,
you'd have one hundred and ninety thousand bucks over that
forty six year period.
Speaker 2 (27:48):
That was just been a detrimental area to invest in. Yeah,
And which is, you know, on the surface, surprising because
more people fly today, it's become a much bigger piece
of every day life compared to the nineteen sixties and seventies.
And yet there does not seem to be that benefit
from scale that you would expect from a business that
(28:09):
has dramatically grown over the course of five decades.
Speaker 3 (28:12):
No, And it's because to the point, and people may
argue with this because some fares do seem expensive today,
but if you look back to nineteen seventy eight, they're
fifty percent cheaper if you account for inflation the fares
that we pay today. And some of that's obvious, right.
You just innovate more. There is more scale, there's more
planes out there, but it's it's an area where from
an investing standpoint, has always been fascinating to fall because
(28:35):
it's just it's very cyclical in nature. It's so capital intensive,
and there's been some some stars out there. Southwest Airlines
is one that has really done well over its history,
but all of these have run into Chapter eleven bankruptcies
over you know, the last decade plus.
Speaker 4 (28:50):
Have either of you ever flown a Legiant No.
Speaker 2 (28:53):
I was surprised by them taking the number four spot
in terms of the Wall Street Journal's reliability ranking. They
are a discount air line. I've flown them twice, I
think mainly because they were one of the few carriers
doing NonStop Boston to Indiana. We did take off on time,
but it is a spirit type experience and if you're
flying out there. My word of advice would be, do
(29:14):
not check luggage with them, not because they lost anything,
but I remember showing up to the airport with plenty
of time and then experiencing the single longest bag check
experience that I've ever dealt with in my life. Yeah,
and just it was one of those funny experiences where
they're constantly like, all right, if you're on the Boston flight,
cut the line, get to the front.
Speaker 4 (29:33):
We need to get you on that. We need to
get you on that plane.
Speaker 2 (29:35):
Immediately, give us your bags, and you would just deal
with this over and over and over again, where you
were getting towards the front of the line, and then
oh no, we got to get all these bags on
the plane because otherwise you're going to miss your plane.
Quick break. But when we come back, I want to
talk about the job market in New England. What are
we really facing here? Can you still describe it as
one of the hottest job markets in the country as
(29:57):
you have been, you know, during previous times of economic
down term?
Speaker 4 (30:02):
Quick break? That's next on the Financial Exchange.
Speaker 1 (30:05):
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Speaker 2 (30:45):
Paul, we talk a lot about the state and national
employment market, but not as much focus on the regional
and so I want to quote some data here. We
get the week the monthly jobs report, but the state
by state data comes out a little bit later. So
the latest that I have is November of twenty twenty
four in front of me, and it paints a pretty
(31:05):
good picture of most of.
Speaker 4 (31:06):
New England and Vermont.
Speaker 2 (31:08):
The unemployment rate is the second lowest in the country,
sitting at two point four percent, closely followed by New
Hampshire at two point five. When you take a look
at other larger states Connecticut sitting at three percent unemployment Massachusetts,
you gotta come down quite a bit further. Here they
take the thirty first rank, but still below the national
(31:28):
average at four percent. Rhode Island was the only one
that I could look at definitively here and say, okay,
that's a little bit worse than average four point six
percent forty first rank in terms of state by state
here in terms of the unemployment rate. Obviously, the unemployment
rate isn't the only factor to consider when looking at
the state of the labor market, and I am hearing
(31:48):
pretty consistently, especially from new college graduates, that it is
a tremendously competitive market right now. Well not for new labor,
but for jobs. They are having a tougher time finding them.
Those who are unemployed are staying on unemployment longer, and
it's not exactly the job market that they were kind
(32:08):
of led to believe from maybe people that were graduating
in just a few years ago, in twenty twenty one
and twenty twenty two.
Speaker 3 (32:15):
It's interesting, it does seem like New England is a
bit of a microcosm of what's going on nationally in
terms of the job market, where unemployment rates are still
very low historically, and as you alluded to, a lot
of the New England states look very well positioned from
an unemployment rate perspective. But to your point, this idea
of job openings and new jobs being posted. Those have
(32:36):
declined wherever you look around. New England, Massachusetts saw a
drop of thirty three thousand openings, Main twelve thousand, New
Hampshire seven thousand, and Rhode Island five and Vermont three.
All of them have less jobs available than they did
a year ago. Now, part of this is the fact
that twenty twenty two sorry extremely robust. Twenty one and
(32:56):
twenty two were extremely robust labor market that was hard
to replicate. But if you do look forward, it does
seem like many employers Mike are really focused on retaining
the talent that they have, but not really adding on
more employees, sort of standing pat from an employment perspective.
Speaker 2 (33:12):
In terms of financial planning work that you do, Paul,
and that I do here, I feel like there's a
real lack of resources and education on workplace benefits in particular.
There's a few reasons for that, but the big one
is that for financial advisors, a lot of the incentive
for making money is aligned with managing assets, and if
(33:33):
you're a younger worker in the workplace, it's kind of
tough to do that, and so there's a ton of
advice out there for things like social security and retirement planning,
not a ton out there for what I do about
things like stock options or what's better a traditional or
WROTH for one K? How much life insurance do I
need at earlier stages of life and planning? And so
(33:56):
I want to put that out there is Hey, I
know that there's a lack of resources on this. Certainly,
if you want to go digging and search on the internet,
you can find it. But when you go out there
to try and find professional advice on these subjects, I
recognize that it can be few and far between. If
you're facing questions such as, hey, my company's offering stock
options and I just don't understand exactly how they might
(34:18):
benefit me for the future, or you know, should I
be contributing to traditional versus ROTH for one K? And
how much should be going in? How much life insurance
do I need at the stage of my life? When
or should I be considering long term care insurance? These
are complicated questions that are truly unique to each individual,
and also don't have a ton of education resources on
(34:43):
how to find the answer to them. If you're facing
these types of questions, maybe you've got a kid or
a niece or nephew that's in the labor market trying
to sort these things out and is trying to learn
more and just get educated on the subject. We'd love
to talk to you here at the Armstrong Advisory Group.
We offer free consultation through out in New England, have
a lot of great resources on our website as well.
But to talk to one of our people here at
(35:05):
Armstrong about your financial future, give us a ring at
eight hundred three nine three for zero zero one. That's
again the number four the Armstrong Advisory Group Live Human
Beings standing by at eight hundred three nine three for
zero zero one.
Speaker 1 (35:18):
The proceeding was paid for by Armstrong Advisory Group, a
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Armstrong guide a specific financial, legal or tax advice. Consult
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Speaker 2 (35:35):
Did you know that you could get a used iPhone
Paul for the rock bottom price of three thousand dollars?
Why are people paying three thousand dollars for iPhones with
cracked screens and gross clogged speakers.
Speaker 4 (35:52):
Do you know why.
Speaker 3 (35:53):
I don't understand why anyone would go out and do
it unless perhaps it has TikTok in it, because phones
with TikTok are now being listed for extremely absurd prices
in hopes that there's some way for people to get
their crack app TikTok through a means of an older phone.
Speaker 2 (36:18):
So, Tucker, can you confirm have you looked every day
that the TikTok app is still back to the Apple apps?
Speaker 4 (36:23):
Right?
Speaker 2 (36:23):
I know you did this on like Tuesday, So let's
refresh our memory here in terms of whether or not
Apple has reallowed this. But to recap, the Trump administration
has put into place a seventy five day delay, effectively
informing their justice departments that they don't want it to
go after any companies, TikTok especially.
Speaker 4 (36:44):
However, that has.
Speaker 2 (36:47):
Not been enough for Apple and Google to say we're
still willing to let people download the app new in
the App Store. So what does that leave. It leaves
an app that's still perfectly functional. TikTok's still supporting it
as far as I can tell. They might not be
able to push updates through it. But if you have
TikTok on your phone. You can still access it, you
can still go, you know, get that endorphin rush that
(37:07):
you get from setting up a camera and doing a
silly dance on a public street.
Speaker 4 (37:12):
For some reason, I don't get it this algorithm.
Speaker 3 (37:15):
I'm telling you, it's got people.
Speaker 5 (37:17):
But.
Speaker 2 (37:19):
For you know, the latest craze and you know, hey,
this is the economics.
Speaker 4 (37:24):
It works applying to mand baby.
Speaker 2 (37:25):
But a brand new phone might get you, you know,
might cost you a thousand bucks before taxes from the
Apple Store, but you want one with TikTok loaded up
on it, and you're going to be paying out the
nose for it because you cannot anymore download that app.
I don't know how this works, because generally speaking, I
would want to wipe a phone clean before transferring it.
So I'm a little bit confused about that piece of it.
(37:48):
But nonetheless, these things are selling like hotcakes. We're going
to take a quick break here on the financial exchange.
Markets are very lightly negative as we kick off trading here.
Speaker 4 (37:59):
We're about an hour halfy in.
Speaker 2 (38:00):
The Dow's off one hundred and seven points a quarter
of a percent, the S and P's off four less
than a tenth of a percent. And the nazac's off
twenty one or one tenth of a percent. We'll be
right back with a whole lot more here on the
Financial Exchange. Stay tuned, folks,
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(01:06):
and Paul Lane.
Speaker 2 (01:10):
Good morning, Happy Friday, Welcome back to the Financial Exchange.
If it feels like presidential politics news is flying at
you a mile a minute, you're not alone. I don't
think even Paul and I and Chuck are able to
keep up with it as fast as it's coming out.
But we had stock surging yesterday again Asian stocks, global
stocks really moving upwards on comments from Donald Trump. We
(01:32):
have a you know, just a classic Valentine's Day love
story between Trump and Jay Powell coming up to talk about.
So lots to cover here on the Financial Exchange, but
I think we need to start with tariff talk because
that's been the main focus of frankly, this show over
the last week, is the lack of action there. Yesterday,
in an interview with Fox News, Donald Trump saying he
(01:55):
would quote rather not use tariff's against the world's second
largest economy and stocks, at least in Asia kind of
took off on that news of a softening stance towards China.
And I guess my question that I don't think anyone
has an answer to, is is this Donald Trump softening
towards China or is this the same as me saying
(02:16):
to my you know, six year old who's having a
temper tantrum that I would rather not put you in
time out, but you're still acting like a you know what,
and so I'm going to don't. I don't honestly know
the answer. And I think the main takeaway that you
can have at this point when it comes to the
new Trump administration and their attitude towards trade, is could
(02:40):
have been a lot more aggressive, right, That's the only
takeaway I have is they were very aggressive with a
lot of stuff, you know, immediately placing on leave anyone
who is working on DEI projects in the federal government,
immediately changing a ton of stuff when it comes to
the operation of this economy, freezes all sorts of items
(03:02):
that people kind of guessed whether or not they would
be this aggressive on. And they were the only one
that I can point towards and say definitively that people
were pretty certain there would be definitive action on and
didn't get it was trade. And so here's where we stand.
There's a new deadline out there of February first, and
we will see what comes to pass or doesn't come
(03:24):
to pass when that deadline comes and goes.
Speaker 3 (03:26):
I can't wait for that deadline to get pushed back
next week.
Speaker 2 (03:29):
Well, Chuck and I were talking about this yesterday, and
if it does, I think you do have to and
I myself am going to reposition my viewpoint on tariffs
and trade.
Speaker 4 (03:39):
Now.
Speaker 2 (03:40):
Chuck has been a little bit more convinced on this
subject than I have been. Oh, I've been a little
bit skeptical that this is going to go forward. But
if you come and go with this February first deadline,
then I think you do have to take a second
look at this and say, Okay, this is more of
a negotiating tactic. We will see what if anything goes
into place, but maybe we shouldn't bank on higher terrors,
(04:03):
higher import prices, and this is much more of a
negotiating tool than a serious threat.
Speaker 3 (04:07):
I've leaned more in that camp for a longer period
of time. This idea that I'll believe it when I
see it. You know, some of these tariffs that have
been mentioned are so broad based and so extreme in
nature that I always questioned whether or not they were
going to be put in. I could be proven wrong
in a week. That's how quickly things can change with
this current administration. But particularly a point that you and
(04:28):
I talked about earlier this week, Mike, because they've been
tied specific to Mexico and Canada to some of these
kind of social issues of you know, lessening fednyl distribution
across borders, and some of these other items on immigration,
it's lean me to believe further in the camp that
they're negotiating tactics, you know. Similarly here, even the language
as it pertains to China, it's, hey, perhaps we can
(04:51):
make a deal. Trump is you know, mentioning here when
he brings up these subjects, and it's it's a little
bit more skewing to the Negotia side when you kind
of parse through some of the details here.
Speaker 2 (05:02):
Regardless, in terms of market reaction, yesterday, Hong Kong's Hang
Sang Index gained one point eight percent, the Hangshang Tech
Index gains two point eight percent. In trading, the Shanghai
Composite went up point seven percent. Asian currencies got a
lift on the news as well, all gaining ground against
the United States, specifically Chinese yuan, tay bot, Malaysian ring, yet,
Korean wan, and the Aussi dollar all gaining against the
(05:24):
US dollar on that commentary, yesterday, and so again I
don't know where trade is going. I am still taking
the approach of February one is a pretty important deadline
here to see what actually occurs. And I'm not going
to jump on this bandwagon of hey, all is well,
because remember two in the first Trump administration. You have
(05:45):
to go back a while on this, but the early
days of the first Trump administration were very friendly towards China.
He had a state sponsored visit to China, they rolled
out the red carpet. There was a lot of good
news on those relations in the early stage, and then
he didn't get what he wanted and we went forward
with tariffs anyway. And so I don't know what to
(06:06):
make of the stuff on Mexico and Canada. I don't
know where it's fundamentally serious and where it is not.
But as good as the news has been on that
front for major importers and trade between the United States, China, Mexico, Canada,
and Europe so far, I don't want to take it
as eternally good news that nothing is going to happen
on that front, because history told us that that was
(06:29):
simply not the case.
Speaker 4 (06:30):
But February one is the new deadline to keep in mind.
Speaker 2 (06:33):
If they are going to do things at by February one,
it probably will see some hints mid next week.
Speaker 4 (06:39):
It would be my guess.
Speaker 2 (06:40):
Mid next week also a pretty busy period of time
for non politics items that are coming up. We've got
earnings reports coming out next week, continuing a This week
was a light kickoff. You had Netflix with the biggest
reporter this week. Next week you'll have Raytheon reporting on Tuesday,
A SAP also reporting Wednesday.
Speaker 4 (07:03):
Are the heavy hitters.
Speaker 2 (07:04):
You have Microsoft, Meta, and Tesla all reporting after the bell,
all three of those companies trillion plus dollar market value companies. Thursday,
you have Apple, Visa, and MasterCards. So between those six
companies you'll get both a pretty good idea of consumer
spending in the fourth quarter. You'll get a pretty good
idea of advertising what Microsoft is seeing on the AI front.
(07:26):
A pretty wide spectrum of information from publicly traded corporations
starting next week on how they are viewing the last
quarter of twenty twenty.
Speaker 3 (07:35):
Four, something that we should add probably on the Trump
side of things, he had additional commentary on this idea
that he would put further pressure on rates in the
federal reserve and we'll talk about that, you know, in
a later in the show. And also this idea that
he puts some pressure on OPEC to low lower energy
prices out there. Some of these things, you know, in
(07:56):
particular on the OPEK one, it's like, yeah, you can
tell them all you want to lower prices, but good
luck controlling the constituents there well.
Speaker 2 (08:05):
And furthermore, you know, as we've talked about quite a bit,
Ope's just not the powerhouse.
Speaker 4 (08:10):
It once was.
Speaker 2 (08:11):
Right, we are the biggest, they don't really have the
ability to bring down You're the biggest X they did
thirty years ago. And so yeah, to your point, you
can tell them to do ask them to do what
you want. Maybe you'll get a response, maybe you won't.
But the idea that OPEK alone can unilaterally bring down
oil prices like they once did, don't.
Speaker 4 (08:31):
Don't get me wrong.
Speaker 2 (08:31):
They are still a massive hitter, and the Saudis can
influence pricing. But with what Donald Trump wants to do
with drilling, exploration and deregulation of federal lands across the
United States, I don't know that that brings down oil prices,
but it seemingly puts a cap on the potential upside
of prices pretty significantly, because while Exonmobile might not be
(08:54):
interested in drilling new wells at seventy bucks a barrel,
shoot that thing up to ninety and they'll be uh
clambering for the opportunity.
Speaker 3 (09:01):
The other puzzling piece that I found was his commentary
in regards to putting taxes and tariffs and sanctions on
goods sold by Russia to the United States, and I
to gratched my head and said, what the heck do
they even sell? So a quick search indicates that the
Navier they did about fifteen billion of exports to the
United States. Just for context, when we were talking about
(09:22):
the Mexico and Canada stories earlier this week, you're talking
about one point three trillion of you know, exchange and
trade between those two countries. So I'm just pointing out
how small cave are I have to look in terms
of let's see if I can grab some of the
goods here in terms of what they were.
Speaker 4 (09:40):
Well, Paul's going to do that.
Speaker 2 (09:42):
We're going to take a quick break when we come
back a little bit about Donald Trump's virtual visit to Davos,
Switzerland and what was brought up there.
Speaker 4 (09:50):
That's next year on the Financial Exchange.
Speaker 1 (09:53):
Breaking business and financial news first throughout the day only
here on the Financial Exchange Radio Network. Miss any of
the show, you can catch up at your convenience by
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Speaker 4 (11:06):
Well.
Speaker 2 (11:06):
Normally, the the Dovos Switzerland Annual Symposium is a pretty
big subjective conversation here on the financial exchange. This year
there's just been too much going on. But Donald Trump
had a virtual visit there over the last couple of days. Yesterday,
some shots across the bow at some big banks seemingly surprising,
(11:29):
is it Brian moynihan, the CEO of Bank of America,
with some commentary about their business practices. But today it
was really all excuse me. Yesterday was really much more
about trade and once again a very clear verbal warning
to other countries about trade and his intent on terraces.
But again at this stage, I'm just unsure of what
(11:51):
to do with this. But let's let's quote what he said.
Come make your product in America, and we will give
you among the lowest taxes of any nation on earth.
But if you don't make your product in America, which
is your prerogative, then very simply you will have to
pay a tariff. That is pretty clear language, right, Like again,
(12:12):
that is very obvious and clear language that hey, we
want you to manufacture your stuff here in the United
States if you want access to the American consumer. Big
questions as to whether or not that will be followed
through one There are other countries. There are other places
on Earth, by the way, that can demand the same
thing and actually be successful. Right if you're Brazil, sorry,
but nobody's going to listen to you. They'll just say, Okay,
(12:33):
we'll deal with your tariffs and if people want the products,
then go for it. In Brazil is a large nation.
The European Union could probably demand the same thing. They
have a wealthy group of consumers. You want to sell
your product here, you make it. Here are your face tariffs.
India and China could probably do the same to some extent,
and you could have a real competing tariff war should
(12:55):
they go through with all of this. I was just
kind of doing some brainstorming, like, you know what areas
of the world could actually go through with this. Your
opin Union would obviously have a much more difficult time
doing so.
Speaker 3 (13:04):
Yeah, you got to get a lot of people on
the same ada.
Speaker 2 (13:06):
Than India Agina just because of the political situation there.
But nonetheless a very clear message at Davos of we
want to see investment in the United States. And here's
where I will take the pro trade approach to the interpretation.
Here this is Donald Trump once again leaving the door
open to negotiation. One, I don't think you can actually
(13:29):
stand by the fact that you'll have the lowest corporate
tax rates across the globe.
Speaker 4 (13:32):
Because I'm not sure.
Speaker 3 (13:35):
I'm not sure if you can.
Speaker 2 (13:37):
Very clearly he wants to lower the corporate tax rate
and that's going to probably be a priority when he
is negotiating with Congress as to what tax bills get passed.
So I think you can read into that. The second
piece is, look, XYZ country, you go make a big
investment in the United States.
Speaker 4 (13:56):
Like again, it's not that.
Speaker 2 (14:01):
Soft Bank speaks for the South Korean government, but they
just announced a half a billion dollar or was it
half a trillion dollars a trillion dollar five hundred billion
in the United States. Is Korea going to get more
favorable trade treatment because of that deal than others?
Speaker 4 (14:17):
I would bet yes.
Speaker 2 (14:18):
And so again this to me doesn't sound as much
like a threat as it does a negotiating opening of
the door to say want to avoid tariffs, come invest
in the United States. I don't know if it'll pay off.
I don't know if it'll happen, but that seems to
be the shot across the bow here. The other piece
that was, as you alluded to before the break Paul
(14:38):
brought up, was a call to Opek to say, look,
we need to bring oil prices down, and it's the
best strategy we have to end the war in Ukraine.
Don't know what success there's going to be there with
Donald Trump trying to convince Opek to bring down oil prices.
Certainly they still have the power to do so to
(15:00):
some limited extent. But that was the other call that
you saw from Donald Trump and seemingly making energy a
key factor in his plans for twenty twenty five. He's
made a big deal of this. Hey, this is how
we're going to bring down inflation. This is how we're
going to deal with the energy crisis, this is how
we're going to deal with a number of key priorities
(15:22):
in the United States. Is cheaper energy, And I wonder
what you make of it.
Speaker 3 (15:27):
My I have a theory here that it seems like
since Trump has been president his first term and now
his second term. It feels as if he's always been
very conscious of what the market, how the market perceives
his actions then tried to be very favorable to the market.
Speaker 4 (15:42):
Is that a.
Speaker 3 (15:43):
Reasonable I think?
Speaker 4 (15:44):
Okay?
Speaker 3 (15:45):
And similarly here, if you're looking at the inflationary picture,
which basically, amongst other things, got him into office for
the second term, it would have to be the number
one on the list if you were trying to rank out.
Is the reason why he unseated Biden is because of the.
Speaker 4 (15:59):
Inflation economy and what the economy was was inflation exactly.
Speaker 3 (16:02):
Inflation really just was extremely challenging for a lot of
American consumers out there. We've talked about this a lot
on the show. What psychologically has the most significant impact
on US consumers in terms of their feelings towards inflation. Oftentimes,
though it's not the biggest ticket from your monthly budget
at your household, it is oil and gas prices and
(16:24):
what you see on the street corner at Exonmobile or
wherever you're picking up your gas. It has a very
significant impact. And it seems like from all the messaging here,
I do feel as if this is a huge part
of his agenda and it ties into his real focus
on trying to improve economic sentiment. Is at any cost necessary,
try to get oil and gas prices down. Now, we
(16:46):
talk about a lot on the show that inflation is
not just oil and gas. In fact, quite honestly, the
Federal Reserve strips out the impact of energy and food
costs when it's studying inflation. So there's a lot of
other things that's being overly simple just to say, drive
down oil and gas prices. But it does have a
lot of favor in economic sentiments. So it does seem
(17:07):
like that is a huge focus here with all this commentary.
Speaker 2 (17:10):
Speaking of interest rates, Donald Trump says he knows interest
rates better than Fed Chief Powell. I don't think Powell's
been great at it, but I would challenge that presupposition quote.
I think I know interest rates much better than they do,
and I think I know certainly much better than the
ones who's primarily in charge of making that decision. If
I disagree, I will let it be known. So we
(17:33):
have another battle brewing here. I drew a big heart
around Donald Trump and J. Powell just to indicate how
much they seem to like each other. Over the last
course of the few years, but we have a battle
brewing here, and quite frankly, there's only really one way
that it can go, which is Donald Trump is going
to express his dissatisfaction with the way things are being managed,
(17:59):
and J. Powell and the Fed are going to need
to completely ignore it. Is really the only way that
it can go. Now they, I do think, genuinely will
ignore it. And what I mean by that is, let's
say Donald Trump is right that lower energy prices do
bring down inflation, which far be it from me to debate.
(18:21):
I don't know where energy prices are going to go.
But if you get headline inflation, which most recently read
two point nine percent a year over year, down to
two percent by the end of twenty twenty five, and
even if you know core inflation is still running like
two and a half percent, it very well would be
justifiable for the Federal Reserve to bring down interest rates,
(18:43):
and I think they probably would in those circumstances, because
this Federal Reserve really clearly wants lower interest rates to happen.
They are still worried about the recession, they're worried about
the labor market, and they want that to happen. The
problem you have is we're not seeing much evidence of
that yet, and the most recent trend on inflation has
been towards the upside. CPI has been showing some not
(19:06):
worrisome prints, but some heavier prints on inflation. And as
you pointed out, oil prices alone are not going to
change the Fed's mind, nor should they, because they are
not going to be the greatest indication of where overall
prices are going, where housing prices and other actors either
items that really drive inflation go quick break. Wall Street
(19:27):
Watch is up next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch a complete look and what's moving market so
far today right here on the Financial Exchange Radio Network.
Speaker 5 (20:00):
After notching its first record close of the year, markets
today are slightly dipping into negative territory as Wall Street
continues to monitor fourth quarter earning season and developments on
possible tariffs from President Trump. At the moment, Dow is
off by a quarter percent, or one hundred and fifteen points,
SMP five hundred is down only two points, and the
(20:23):
Nasdaq down merely five points. Russell two thousand is off
by three points, so it's pretty quiet out there. Ten
year treasurevealed is flat at four point six two percent,
and crude oil off about a quarter percent, trading at
seventy four dollars and forty four cents a barrel. Boeing
shares actually up by a quarter percent now after the
aircraft maker revealed it racked up about four billion dollars
(20:46):
in losses and generated less revenue in the fourth quarter
than expected. Meanwhile, Noberg nor Disk said its experimental weight
loss shot help patients lose over one fifth of their
body weight in a trial that stock up by over
six percent. Elsewhere, a cloud communications software maker Twilio issued
an optimistic forecast for the next few years at its
(21:08):
investor event yesterday, sending that stock up by twenty percent
so far today. Railroad company CSX saw its revenue fall
last quarter, hit by lower fuel, sewercharge and cole revenue
that stock down by two percent. Texas Instrument shares down
by five percent after the chip makers outlook for this
(21:28):
quarter missed expectations. American Express posted a surgeon quarterly revenue,
boosted in part by holiday spending. MX shares down by
three percent. In Verizon shares up by about one percent
after the telecom giant said it expects wireless service revenue
to continue rising this year. I'm Tucker Silvan, that's Wall Street.
Speaker 2 (21:49):
Watch the great news out at Boeing just continuing this week.
Boeing will actually be reporting their earnings Tuesday morning, ahead
of the bell. But they were so bad, I guess
the executives felt the need to get the bad news
out early.
Speaker 4 (22:05):
Here.
Speaker 2 (22:05):
Boeing had another quarter of fresh charges and losses, highlighting
the real problems the new CEO, Kelly Ortberg has as
he tries to stabilize this company. Boeing said sales were
fifteen point two billion dollars, which was less than the
sixteen point seven to six billion expected by Wall Street.
Loss per share came in at five dollars and forty
(22:26):
six cents loss per share. Again according to generally account
generally accepted accounting principles, the problems are also not relegated
to the things that we think of the problems with Boeing.
You know, obviously the commercial aviation portion of their business
has been the concern dumpster fire, but remember they had
(22:49):
a big strike that they had to deal with. In
the last quarter, they had the failed what was the
name of the capsule that they sent to the space station.
I don't remember, but you know, we have two astronauts
sitting in space right now that can't come home because
of a failed Boeing capsule. And I shouldn't say fail.
It didn't crash and burn, but there were some concerns
(23:09):
about it concerning enough to not bring astronauts home. And
then the figures also revealed the precarious state of their
defense business. They suffered at one point seven billion dollars
in charges tied to programs, including the refueling tanker that
they're doing, the long delayed Air Force one. So I
don't see any real story of turnarounds now, you know,
(23:32):
maybe we'll hear on the earnings report next week that
this was one of those throw it all in one
quarter and you know, get the dumpster fire out of
the way quarters here. And the stock admittedly has been
on a bit of an uptick since November when they
reached a if that was an all time low or
just a a low for the year, but it has
(23:53):
been a rough path for Boeing and no indication in
this release at least that they are are moving beyond.
Speaker 3 (24:01):
No, the worst is not behind them. You made the
key points. We all know the issues that they're dealing
with on the silvil aviation side of things. Those have
been well documented on the news, but it was surprising
to see just how dismal their defense contract business is
doing on that end of things. That loss in that
area is concerning. It's really hard to make the argument
other than you really believing that Kelly Orper can come
(24:24):
in and turn around this company. There's just a lot
of negatives out here when you look at this business,
and it's gonna take more than a quarter to turn
this around. I mean, this is supply chains that need
to be reconstructed. There is a financial discipline that needs
to occur. And to that point, Kelly Oorper has stashed
away twenty four billion in cash they now sit That
(24:45):
was at the most recent quarter, but they now sit
with a little over twenty six billion cash, basically recognizing
that they're going to need a lot of cash to
burn to try and turn this thing around. Because to
your point where you led this, the sales aren't backing,
you know what they're anticipating, so they really need to
bunker down and try and turn this thing around. The
stock had lost thirty three percent last year and to
(25:06):
your point, had reached one of its historic lows back
in November.
Speaker 2 (25:10):
There hasn't been much in the way of activist investor
activity and to this point, and my read on that
is just I don't think anybody knows how to fix
this company yet, and so you have not had activists
coming in and saying do this, do that. But it
does bring up a big question to me, which is
does this company eventually take the GE approach, you know, like, hey,
(25:30):
we've just been a disaster for so long.
Speaker 4 (25:31):
We've gotten into too many areas and what GE.
Speaker 2 (25:34):
Has done over the last decade has been sell off
massive businesses and split up. It is not the same
company that it was pre Great Financial Crisis, and it's
a real question as to whether or not Boeing will
ever be the same company it was pre twenty twenty
and the disaster, sorry, pre twenty eighteen. When was the
no that was twenty twenty twenty, nineteen, twenty twenty, I
(25:55):
don't know when the first planes that went down, But
real question as to whether they will ever be that
company again or if you potentially have a you know,
Boeing Commercial Aviation and a Boeing defense. I'm not sure.
Speaker 3 (26:08):
There's definitely an argument to be made that they need
to narrow their focus.
Speaker 2 (26:12):
Speaking of the airline industry, as much trouble as Boeing
seems to be struggling, with United, Delta and other major
global airlines having a heck of a moment right now.
United Airlines for the year bumped up one hundred and
fifty four percent in twenty twenty four. Delta not quite
(26:34):
as much, but rose seventy seven percent over the same
period of time. According to the Wall Street Journal those
reliability rankings that they put out there every year. In
terms of US airlines, Delta once again took the number
one spot, followed by Southwest, which again surprising given some
of the troubles they've had, Alaska Airlines, Allegiance, United Jet,
Blue American taking that seventh spot, and then Spirit in
(26:56):
Frontier rounding out the last two places there in terms
of reliability at least, but in spite of United, kind
of middle of the pack in terms of reliability.
Speaker 4 (27:07):
Huge profit year for them.
Speaker 3 (27:08):
I love this piece, Mike. I thought it did a
really great job. One of the theories that Buffett has
trumpeted for many years is this idea that investing in
airlines is just a bottomless pit, that you just can't
make any money doing it. And what they did here
in the Wall Street Journal is they said, back in
nineteen seventy eight, the Airline Deregulation Act was passed, and
since then, over the forty six years, if you had
(27:30):
put one thousand bucks into some of the major airline carriers,
you would have three thousand, three hundred and forty two
dollars a day, but only seven hundred eleven dollars after
you account for the impacts of inflation. You put that
same one thousand bucks into the S and P five hundred,
you'd have one hundred and ninety thousand bucks over that
forty six year period.
Speaker 2 (27:48):
That was just been a detrimental area to invest in. Yeah,
And which is, you know, on the surface, surprising because
more people fly today, it's become a much bigger piece
of every day life compared to the nineteen sixties and seventies.
And yet there does not seem to be that benefit
from scale that you would expect from a business that
(28:09):
has dramatically grown over the course of five decades.
Speaker 3 (28:12):
No, And it's because to the point, and people may
argue with this because some fares do seem expensive today,
but if you look back to nineteen seventy eight, they're
fifty percent cheaper if you account for inflation the fares
that we pay today. And some of that's obvious, right.
You just innovate more. There is more scale, there's more
planes out there, but it's it's an area where from
an investing standpoint, has always been fascinating to fall because
(28:35):
it's just it's very cyclical in nature. It's so capital intensive,
and there's been some some stars out there. Southwest Airlines
is one that has really done well over its history,
but all of these have run into Chapter eleven bankruptcies
over you know, the last decade plus.
Speaker 4 (28:50):
Have either of you ever flown a Legiant No.
Speaker 2 (28:53):
I was surprised by them taking the number four spot
in terms of the Wall Street Journal's reliability ranking. They
are a discount air line. I've flown them twice, I
think mainly because they were one of the few carriers
doing NonStop Boston to Indiana. We did take off on time,
but it is a spirit type experience and if you're
flying out there. My word of advice would be, do
(29:14):
not check luggage with them, not because they lost anything,
but I remember showing up to the airport with plenty
of time and then experiencing the single longest bag check
experience that I've ever dealt with in my life. Yeah,
and just it was one of those funny experiences where
they're constantly like, all right, if you're on the Boston flight,
cut the line, get to the front.
Speaker 4 (29:33):
We need to get you on that. We need to
get you on that plane.
Speaker 2 (29:35):
Immediately, give us your bags, and you would just deal
with this over and over and over again, where you
were getting towards the front of the line, and then
oh no, we got to get all these bags on
the plane because otherwise you're going to miss your plane.
Quick break. But when we come back, I want to
talk about the job market in New England. What are
we really facing here? Can you still describe it as
one of the hottest job markets in the country as
(29:57):
you have been, you know, during previous times of economic
down term?
Speaker 4 (30:02):
Quick break? That's next on the Financial Exchange.
Speaker 1 (30:05):
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Like us on YouTube and get
caught up on anything and everything you might have missed.
This is the Financial Exchange Radio Network. Miss any of
the show, catch up at your convenience by visiting Financial
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(30:27):
This is your home for the latest business and financial
news in New England and around the country. This is
the Financial Exchange Radio Network.
Speaker 2 (30:45):
Paul, we talk a lot about the state and national
employment market, but not as much focus on the regional
and so I want to quote some data here. We
get the week the monthly jobs report, but the state
by state data comes out a little bit later. So
the latest that I have is November of twenty twenty
four in front of me, and it paints a pretty
(31:05):
good picture of most of.
Speaker 4 (31:06):
New England and Vermont.
Speaker 2 (31:08):
The unemployment rate is the second lowest in the country,
sitting at two point four percent, closely followed by New
Hampshire at two point five. When you take a look
at other larger states Connecticut sitting at three percent unemployment Massachusetts,
you gotta come down quite a bit further. Here they
take the thirty first rank, but still below the national
(31:28):
average at four percent. Rhode Island was the only one
that I could look at definitively here and say, okay,
that's a little bit worse than average four point six
percent forty first rank in terms of state by state
here in terms of the unemployment rate. Obviously, the unemployment
rate isn't the only factor to consider when looking at
the state of the labor market, and I am hearing
(31:48):
pretty consistently, especially from new college graduates, that it is
a tremendously competitive market right now. Well not for new labor,
but for jobs. They are having a tougher time finding them.
Those who are unemployed are staying on unemployment longer, and
it's not exactly the job market that they were kind
(32:08):
of led to believe from maybe people that were graduating
in just a few years ago, in twenty twenty one
and twenty twenty two.
Speaker 3 (32:15):
It's interesting, it does seem like New England is a
bit of a microcosm of what's going on nationally in
terms of the job market, where unemployment rates are still
very low historically, and as you alluded to, a lot
of the New England states look very well positioned from
an unemployment rate perspective. But to your point, this idea
of job openings and new jobs being posted. Those have
(32:36):
declined wherever you look around. New England, Massachusetts saw a
drop of thirty three thousand openings, Main twelve thousand, New
Hampshire seven thousand, and Rhode Island five and Vermont three.
All of them have less jobs available than they did
a year ago. Now, part of this is the fact
that twenty twenty two sorry extremely robust. Twenty one and
(32:56):
twenty two were extremely robust labor market that was hard
to replicate. But if you do look forward, it does
seem like many employers Mike are really focused on retaining
the talent that they have, but not really adding on
more employees, sort of standing pat from an employment perspective.
Speaker 2 (33:12):
In terms of financial planning work that you do, Paul,
and that I do here, I feel like there's a
real lack of resources and education on workplace benefits in particular.
There's a few reasons for that, but the big one
is that for financial advisors, a lot of the incentive
for making money is aligned with managing assets, and if
(33:33):
you're a younger worker in the workplace, it's kind of
tough to do that, and so there's a ton of
advice out there for things like social security and retirement planning,
not a ton out there for what I do about
things like stock options or what's better a traditional or
WROTH for one K? How much life insurance do I
need at earlier stages of life and planning? And so
(33:56):
I want to put that out there is Hey, I
know that there's a lack of resources on this. Certainly,
if you want to go digging and search on the internet,
you can find it. But when you go out there
to try and find professional advice on these subjects, I
recognize that it can be few and far between. If
you're facing questions such as, hey, my company's offering stock
options and I just don't understand exactly how they might
(34:18):
benefit me for the future, or you know, should I
be contributing to traditional versus ROTH for one K? And
how much should be going in? How much life insurance
do I need at the stage of my life? When
or should I be considering long term care insurance? These
are complicated questions that are truly unique to each individual,
and also don't have a ton of education resources on
(34:43):
how to find the answer to them. If you're facing
these types of questions, maybe you've got a kid or
a niece or nephew that's in the labor market trying
to sort these things out and is trying to learn
more and just get educated on the subject. We'd love
to talk to you here at the Armstrong Advisory Group.
We offer free consultation through out in New England, have
a lot of great resources on our website as well.
But to talk to one of our people here at
(35:05):
Armstrong about your financial future, give us a ring at
eight hundred three nine three for zero zero one. That's
again the number four the Armstrong Advisory Group Live Human
Beings standing by at eight hundred three nine three for
zero zero one.
Speaker 1 (35:18):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial, tax and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services. Uh.
Speaker 2 (35:35):
Did you know that you could get a used iPhone
Paul for the rock bottom price of three thousand dollars?
Why are people paying three thousand dollars for iPhones with
cracked screens and gross clogged speakers.
Speaker 4 (35:52):
Do you know why.
Speaker 3 (35:53):
I don't understand why anyone would go out and do
it unless perhaps it has TikTok in it, because phones
with TikTok are now being listed for extremely absurd prices
in hopes that there's some way for people to get
their crack app TikTok through a means of an older phone.
Speaker 2 (36:18):
So, Tucker, can you confirm have you looked every day
that the TikTok app is still back to the Apple apps?
Speaker 4 (36:23):
Right?
Speaker 2 (36:23):
I know you did this on like Tuesday, So let's
refresh our memory here in terms of whether or not
Apple has reallowed this. But to recap, the Trump administration
has put into place a seventy five day delay, effectively
informing their justice departments that they don't want it to
go after any companies, TikTok especially.
Speaker 4 (36:44):
However, that has.
Speaker 2 (36:47):
Not been enough for Apple and Google to say we're
still willing to let people download the app new in
the App Store. So what does that leave. It leaves
an app that's still perfectly functional. TikTok's still supporting it
as far as I can tell. They might not be
able to push updates through it. But if you have
TikTok on your phone. You can still access it, you
can still go, you know, get that endorphin rush that
(37:07):
you get from setting up a camera and doing a
silly dance on a public street.
Speaker 4 (37:12):
For some reason, I don't get it this algorithm.
Speaker 3 (37:15):
I'm telling you, it's got people.
Speaker 5 (37:17):
But.
Speaker 2 (37:19):
For you know, the latest craze and you know, hey,
this is the economics.
Speaker 4 (37:24):
It works applying to mand baby.
Speaker 2 (37:25):
But a brand new phone might get you, you know,
might cost you a thousand bucks before taxes from the
Apple Store, but you want one with TikTok loaded up
on it, and you're going to be paying out the
nose for it because you cannot anymore download that app.
I don't know how this works, because generally speaking, I
would want to wipe a phone clean before transferring it.
So I'm a little bit confused about that piece of it.
(37:48):
But nonetheless, these things are selling like hotcakes. We're going
to take a quick break here on the financial exchange.
Markets are very lightly negative as we kick off trading here.
Speaker 4 (37:59):
We're about an hour halfy in.
Speaker 2 (38:00):
The Dow's off one hundred and seven points a quarter
of a percent, the S and P's off four less
than a tenth of a percent. And the nazac's off
twenty one or one tenth of a percent. We'll be
right back with a whole lot more here on the
Financial Exchange. Stay tuned, folks,
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