September 8, 2025 • 38 mins
Chuck Zodda and Marc Fandetti discuss America's 'buy now, pay later' economy is nothing new. Ted Rossman (Bankrate) joins the show to chat about holiday shopping concerns. Tesla's US market share drops to the lowest level since 2017 as competition heats up. Apple's plan B for AI is actually pretty great. Lego is about to test the Force of nostalgia.
Mark as Played
Transcript
Episode Transcript
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Speaker 1 (00:00):
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(00:43):
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donation today. This is the Financial Exchange with Chuck Zada,
(01:06):
and Mark Fandetti, Chuck.
Speaker 2 (01:12):
Mark and Tucker with you here.
Speaker 3 (01:14):
And as we kick off the second week of September,
we've got stocks broadly in positive territory. The Dow Jones
is up seventy six points about point one seven percent,
the S and P five hundred up four tenths of
a percent, or about twenty five points back above sixty
five hundred, the Nasdaq Composite up one hundred and seventy
points about three quarters of a percent, and so all
(01:36):
your major US indices are chugging right along this despite
the SMP having eighty five more issues down today than up.
So you do have kind of megacap tech driving the
ship again, which quite honestly, that's been the position of
stability over the last couple of years. Anytime that you've
tried to get small caps leading or the rest of
(01:56):
the index leading, the whole thing's kind of fallen on
its face. So I know that we normally talk about, hey,
you want you know, kind of broad rallies that lead
the market forward. Broad rallies have not been supportive of
this market for the last two and a half years,
and so until proven otherwise, the safer position for the
market has actually been big Tech leading the way.
Speaker 2 (02:18):
Tenure.
Speaker 3 (02:19):
US Treasury is down two point seven basis points to
four point h five nine percent. When we take a
look at commodities, oil up forty five cents a barrel
on West Texas Intermediate sixty two to thirty two a barrel,
and we've got gold of another twenty six fifteen ounce
to thirty six seventy nine and eighty cents, another all
(02:39):
time high for gold as it continues to surge ahead.
We could talk a little bit about what that means
in conjunction with bond yields falling. Hint, it's not really
great on the inflation side of things, is my read.
But it is what it is, and it's kind of
what you're seeing here at the moment. I want to
talk a little bit about this Wall Street Journal piece.
(03:02):
It's titled Americas by Now Pay Later Economy. The subheader
is Signs of an emerging debt crisis are everywhere, from
credit cards and mortgages to government budgets and oh boy,
like Americans have too much debt? How are we ever
gonna pay for all the debt? I mean, look, I
(03:26):
know that at some point it all matters but I'm
sorry I from kind of pooping this a little bit.
Speaker 2 (03:30):
But two things.
Speaker 3 (03:32):
A since the day I was born, Americans have been
saying there's there's too much debt that we have and
this is gonna cause problems literally true, you know, like
you can go find the Time magazine articles from nineteen
thirty seven about all Americans you know, growing debt problem,
and you know this and that, and it hasn't been
an issue whether you know, it's not to say that
(03:53):
we haven't had blow ups like we have, like the
generally most you know, most of the recent recessions are
caused by some kind of excess leverage somewhere in the system.
But somehow that gets interpreted as like it's always a problem,
and it's just not. Most of the time, it's it's
fine as long as you can cover that debt, there's
(04:14):
no problem with having it taken out. And so I
think that I can pooh pooh some of this while
also saying, hey, what does this say about where America
is today in terms of where the debt is building
up and why it's potentially problematic.
Speaker 2 (04:31):
And what I get.
Speaker 3 (04:33):
To is an extension of what we've been seeing for
the last fifteen or twenty years, which is, if you're
in the top fifteen to twenty percent of wage journers
in the country, you're in a good spot. You might
not like things aren't perfect for it. I'm not saying
that they are. Like you still have to make choices.
Not all of us are Jeff Bezos, but you've been
(04:56):
able to figure out how to make things work generally
for the remaining people, in particular the bottom fifty to
sixty percent of wage earners. Even figuring out how to
pay for groceries now is increasingly a bigger problem, to
the point where you are ending up with people having
to put groceries you know, Hey, I'm paying for groceries,
(05:20):
you know, using a firm so that I can buy
now and pay later.
Speaker 2 (05:23):
I'm you know, putting a.
Speaker 3 (05:26):
Chipotle you know, burrito on a payment plan, and it's
just real stuff. Like I know, we laugh about it,
but people don't do that stuff voluntarily. People don't sit
there and say, oh, like, gee, this is fun. It's
happening because someone just wants to have a burrito, just
to have like some kind of good in their life,
and the only way they can afford it is to
(05:47):
break it into you know, four payments of five dollars,
and that sucks for us, Like, I'm sorry, it's it's
just awful, But this is true. Now the piece on housing,
sixty nine percent of borrowers who took out a mortgage
ensured by the FAHA last years these are FAHA mortgages
had debt to income ratios that are considered risky, compared
(06:09):
with twenty eight percent in twenty twelve. So there are
more risky mortgages that are being made right now. We're
not going to know for probably five to seven years
whether that risk turns into any actual problem. Remember, not
called risk ends up paying off badly like some of it.
The nature of risk is sometimes the risk is worth taking,
(06:31):
and so I think in looking at this, it's something
that bears watching there. But ultimately, the reason that those
loans are considered risky is because those debt to income
ratios are higher. And I'm guessing it's not because people
suddenly decided, hey, let's go buy that luxury home on
an FAHA mortgage. That's not usually what happens with FAHA mortgages.
(06:52):
It's much more. Hey, home prices are still really high
and incomes have not kept with them, especially with mortgage
rates where they are and so bar wars. Have you
gotten into riskier loans in order to deal with this
that that could be a problem, but aren't necessarily going
to be one.
Speaker 4 (07:11):
Yeah, it becomes a problem, as you suggested, and as
the article points out, if the economy slows, or if
inflation slows by a lot. Inflation is good if you
have that the real value, assuming your wages keep up
totally right, the real value of your payments goes down
alternatively or conversely, or the other side of that coin,
and whatever how you want to look at it, is
that dissinflation or deflation like we had in nineteen twenty
(07:34):
nine and nineteen thirty three. I know I'm going back
aways here, but we haven't then. We haven't had meaningful
I could tell you it was a tough It was
a tough period. We haven't had meaningful disinflation or deflation
in about one hundred years. I don't think I'm leaving
any uncomfortable disin now.
Speaker 3 (07:49):
Nothing since you had a brief period in the financial
after the financial crisis.
Speaker 4 (07:52):
Yeah, that was like one quarter of year over year,
very very fleeting, but still it was bad. When you'd
rather have inflation and let it eat away the real
value of your debt, So that can become a noxious
situation of vicious cycle if you like. This does become
a problem if we ever session, particularly a disinflationary recession,
(08:13):
so people losing their jobs and the real value of
their debt is, you know, not shrinking at the very
least looking chuck at as I'm sure you and Mike
Armstrong have done at. Household debt service payments is a
percentage of disposable personal income which the FED calculates every quarter,
which consists of mortgage debt and consumer debt. These ratios
(08:39):
don't look at all elevated relative to historical experience. That's
very big picture.
Speaker 3 (08:44):
But and I think this is the thing, Like the
big picture doesn't look bad. But I think you can
make a case that it doesn't look bad because the
top twenty percent of Americans by income do so much
of the borrowing on things like houses and things like that,
and their incomes in their asset levels have grown to
the point where it's not really a huge issue for them. Generally,
(09:09):
if you make twenty five thousand dollars a year, you're
not buying a house in today's world in America and
most of it, and so okay, when you look at
you know, the thing that that person struggles with, it's
trying to make their rent payment and trying to even
just buy groceries, and are they having to go into
(09:30):
debt to buy groceries? And like, this is the problem.
Is in the aggregate things look okay, but you talk
to half of Americans right now and they're not okay financially.
Speaker 4 (09:41):
And I think this is one of the things Bess
was getting at. Maybe I'm sorry to go back to
the last hour, but and he didn't make this point,
but it does follow that FED rate cuts won't help
the people who need help the most. The FED cuts,
the FED acts on the economy by stimulating demand. Some
of that demand goes into prices, hopefully some of it
goes into real GDP, like we talked about in the
(10:01):
last hour. But we don't appear to have a demand
problem right now. And if indeed the composition of borrowers
is as you posited that it is, and that seems
very plausible to me, FED rate cuts ain't gonna do
a thing for those at the in the lower tiers.
Speaker 2 (10:17):
Let's take a quick break.
Speaker 3 (10:18):
When we come back, we're gonna be joined by Ted
Rossman from bank Rate and he's going to talk to
us about their survey on prospective holidays spending. What are
people going to be buying for gifts under the tree
this year. We'll fill you in when we return.
Speaker 1 (10:33):
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Speaker 5 (11:09):
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Speaker 2 (11:44):
As promised.
Speaker 3 (11:45):
We're now joined by Ted Rossman from Bankrate here to
discuss bank rates. Twenty twenty five Early Holidays Shopping survey ted.
Speaker 2 (11:54):
How you doing today?
Speaker 6 (11:56):
I'm doing well. Thanks for having me.
Speaker 3 (11:57):
Tech can talk a little bit about what this survey
come and some of the interesting results that you found here.
Speaker 6 (12:03):
We found that forty percent of holiday shoppers are concerned
that holiday gifts are going to be more expensive this year.
We could read potential tariff impacts into that, as well
as just the general trend of rising prices the past
few years. Many people are starting their holiday shopping early.
This is a trend that's really taken off ever since
(12:24):
the pandemic started as more of a supply chain concern,
it's morphed into more of a way to spread out
your cash flow. We see about half of holiday shoppers
are going to start making purchases before the end of October.
A lot of the best deals are going to start
in early October with things like Amazon Prime Day and
Target Circle Week and all the copycat sales that go on.
Speaker 3 (12:47):
When you look at what we are seeing as far
as impulse shopping, you know a lot of people saying, Hey,
I want to plan and start taking advantage of these
things earlier. Do you see a lot of people that's
like I saw this on TV, I got to do
it now, or hey, I'm going.
Speaker 2 (13:03):
To do this late? Like what do we see there?
Speaker 6 (13:06):
There is some of that, and that's actually part of
why retailers offer the early sales, because it's kind of
a buy something for a friend or family member and
maybe buy something for yourself. There's kind of a treat
yourself angle to something like Amazon Prime Day, which on
the face of it is kind of an early shopping kickoff.
The July version is kind of the back to school kickoff,
(13:27):
but I'm sure they're happy if you buy things for
yourself as well. Social media marketing fits into all this.
There is a little bit of a risk that if
you start early, you're just going to keep buying. I do, though,
think the early start can be used to your advantage
in a few ways. It does help you spread out
your cash flow. If nothing else, Even if you think
this is all crazy. We just celebrated Labor Day. We
(13:49):
haven't really put summer to rest. If all this holiday
shopping talk sounds early to you, if nothing else, at
least start sketching out your budget and gift list and
start setting money aside from every paycheck. You might have
seven or eight paychecks between now and the end of
the year. A really smart strategy is to set money
aside ahead of time, rather than leaving it all till
(14:09):
the end. That's when you're at more risk of running
up at credit card balance. The average rate is twenty percent.
You want to plan in advance.
Speaker 3 (14:17):
What are we seeing when it gets at you know,
cash flow and stuff like that. What percentage of Americans
are going to have to end up going into debt
in order to make their holiday purchases.
Speaker 6 (14:28):
About a quarter of holiday shoppers admit that they're likely
to take on debt. Frankly, I fear the actual cause.
The actual result will be higher because about half of
credit card holders already have debt from month to month,
and by now pay later has been growing rapidly. That's
been growing double digits every holiday season, and that's debt too.
It may feel different, it may feel more responsible if
(14:50):
you're financing something let's say four interest free payments over
six weeks. But there are a lot of financial pressures
out there. It continues to be interesting how sent is low,
but actual spending has been higher, and you just want
to make sure that you're spending smartly, so you're setting
money aside ahead of time, You're not taking on debt.
You don't want to be paying off this Christmas a
(15:12):
year from now, and try to stack discounts when possible.
So that's going to involve taking advantage of a store promo,
combining that with the rewards credit card that you hopefully
pay off right away. Maybe you use an online shopping
portal like Racqueton, or you take advantage of MX offers
and Chase offers and those other digital coupons that could
be three or four ways to save on the same purchase.
Speaker 3 (15:34):
Ted, appreciate you joining us today. Thank you so much
for the time in for conducting the survey.
Speaker 2 (15:40):
Anytime.
Speaker 6 (15:41):
Thank you.
Speaker 3 (15:41):
It's Ted Rossman with bank Rate talking about their twenty
twenty five Early Holiday Shopping survey.
Speaker 5 (15:49):
All right, time for trivia here in the Financial Exchange
and on this day in nineteen eighty six, the Oprah
Winfree Show was first broadcast nationally. Oprah's wild least successful
show ran from nineteen eighty six to twenty eleven. So
our trivia question today, which host had the longest running
daytime talk show?
Speaker 2 (16:10):
Once again?
Speaker 5 (16:10):
Which host had the longest running daytime talk show? Be
the fifth person today to text us at six one
seven three six two thirteen eighty five with the correct answer,
and you'll win a Financial Exchange Show T shirt once again.
The fifth correct response to text us to the number
six one seven three six two thirteen eighty five will
(16:32):
win that T shirt. See complete contest rules at Financial
Exchange Show dot com.
Speaker 3 (16:37):
Two questions for you guys. Eight Have you ever watched
a full episode of Oprah?
Speaker 5 (16:44):
My mom always had it on, uh when I was younger. Uh,
So I guess the answer is yes, but you never.
I never liked sat down.
Speaker 2 (16:53):
It sounds like it was background noise.
Speaker 5 (16:55):
Yeah, it was like a fish bowl.
Speaker 2 (16:56):
Yeah, Mark, what about you?
Speaker 3 (16:58):
Not to my knowledge, I would think I have either,
but I just I'm not really around during the day.
Speaker 2 (17:04):
It was on to like three.
Speaker 3 (17:05):
I remember what are the big daytime talk shows now
like they still exist?
Speaker 2 (17:11):
Right? Does the format still exist?
Speaker 5 (17:14):
I don't think so?
Speaker 2 (17:16):
What what what's on in that place?
Speaker 1 (17:18):
Now?
Speaker 4 (17:18):
You've got like five TVs in here?
Speaker 2 (17:20):
Is is it just? AI? If anyone has an answer
to this texts?
Speaker 4 (17:27):
What's the bigger question? It sounds like you're working up
to something. No, you're just wondering.
Speaker 3 (17:30):
Who watch I don't know what happened to daytime talk
I don't know if it's still there on TV, if
it's gone Texas at six one seven three six, two
thirteen eighty five, and let us know if there are
still TV daytime talk shows.
Speaker 5 (17:43):
A like Clarkson, Ben says, is one of them?
Speaker 2 (17:46):
She's got one?
Speaker 5 (17:47):
Yeah, doesn't true? Barrymore have another one?
Speaker 2 (17:49):
No idea? Yeah, no idea.
Speaker 3 (17:52):
But I'm I'm I'm kind of clueless in this area,
and I'll admit it. So like this is why I'm
asking for help. You know they always say like, hey,
if you're in trouble, ask for help. I'm in trouble.
I don't know any daytime talk show hosts on TV,
and so I'm asking for help at six one seven
three six, two thirteen eighty five. I want to know
what happened to the format.
Speaker 5 (18:11):
Kelly and Mark?
Speaker 2 (18:13):
Who's Mark?
Speaker 6 (18:14):
I don't know.
Speaker 5 (18:15):
I'm just reading Ben's text, like Kelly Rippa that was
so not Kelly Clarkson. Kelly Clarkson has one, so there's
a lot of Kelly's.
Speaker 2 (18:24):
I don't know who the.
Speaker 5 (18:25):
Hell Mark is not? Mark Fandetti? Mark Fandetti is he's
here with us right now?
Speaker 4 (18:28):
That's right.
Speaker 2 (18:30):
I've always wondered what happens to you at nude?
Speaker 3 (18:35):
Interesting in any case, As we take a look at
markets as we head towards the bottom of the hour,
the Dow Jones Industrial Average still up eighty one points,
the smp is up twenty three, Nasdaq up one hundred
and sixty five. So continued upward drifting markets again like
last week. Early last week on Tuesday, looked like markets
were getting a little bit shaky again, and they've just
(18:57):
you know, picked themselves up, dusted themselves off, and continued
their upward march here. And this has been the big
theme pretty much since mid April, where I think the
largest dip that we've seen has been maybe three and
a half percent. It's been an incredibly calm last five
(19:20):
months now, dating back to you know kind of April fifteenth,
twentieth that range.
Speaker 2 (19:26):
Let's take a quick break. When we return, we've got
the trivia answer.
Speaker 7 (19:30):
Then we're talking Tesla, bringing the latest financial news straight
to your radio.
Speaker 1 (19:43):
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street. Watch a complete
look at what's moving market so far today right here
on the Financial Exchange Radio Network.
Speaker 5 (20:00):
It's to see in a nice little gain at this
point as investors wait more inflation and jobs data do
out this week ahead of the FEDS meeting next week. However,
the size of the likely raycut is the biggest question
that remains right now. The Dow is up by two
tenths of one percent, or eighty eight points higher. SMP
five hundred is up four tenths of one percent, NASDAC
(20:22):
up eight tenths of one percent, or one hundred and
seventy two points higher. Russell two thousand is edging higher.
Tenure treasure real down three basis points and is now
at four point zero four nine percent. In crude oil
is up over one percent higher today, trading at sixty
two dollars in sixty cents a barrel. Robinhood and appleven
(20:42):
set to join the S and P five hundred on
September twenty second. That news came on Friday, robinhood surging
by fourteen percent, while Apple eleven shares are up by
eleven percent. Meanwhile, Wall Street Journal reported that PNC Financial
agreed to buy privately held First Bank and a four
point one billion dollar DEALP and C shares are back
(21:05):
or retreating almost one percent. Elsewhere, Some AT Therapeutic stock
is sinking twenty five percent after the biopharmaceutical companies results
from a Phase three trial for its lung cancer drug
showed fewer improvements in patients. SpaceX agreed to pay seventeen
billion dollars for the rights to some of Echo Star's
(21:25):
wireless spectrum. EchoStar shares are jumping fifteen percent on that news,
while competitors AT and T, Verizon and T Mobile are
down about two percent. And according to a new filing
this morning, ticket selling platform stub hub is aiming to
raise as much as eight hundred and fifty million dollars
for its IPO, giving it evaluation of up to nine
(21:45):
point two billion dollars. The company plans to sell more
than thirty four million shares price between twenty two and
twenty five dollars per share. I'm Tucker Silva and that
is Wall Street Watch. And in the segment, we asked
you the tribute question, which host had the longest running
daytime talk show. Well, that would be Maury Povich. He
(22:08):
hosted Maury for thirty one years, beginning in nineteen ninety one.
Tom from Spencer Mass is our winner today taking on
the Financial Exchange Show Teacher. Congrats to Tom, and we
played trivia every day here in the Financial Exchange. See
complete contest rules at Financial Exchange Show dot com.
Speaker 3 (22:26):
Tesla market share drops to the lowest since twenty seventeen
as competition heats up. To this a report from Reuters,
and what we are seeing is that Tesla, which at
one point had about eighty percent of the US EV market,
now was down to thirty eight percent of total EV
sales in August. It's the first time it's fallen below
(22:47):
forty percent in a month since October of twenty of
twenty seventeen. And so I think this is a continued
question for Tesla, especially given the expiration of tax credits
for evs at the end of this month. What do
their sales look like as we head into twenty twenty six,
and what does that do to the overall profitability of
(23:08):
the company as Elon Musk tries to turn them from
a car maker into a robot maker.
Speaker 4 (23:14):
So slowing demand overall for evs is was inevitable even
without removal of incentives, et cetera. Correct slowing growth in
or negative growth in Tesla's market share. This is a
very bad combination if this is your core business, is it, though,
or do they consider themselves to be evolving into something else?
Speaker 3 (23:35):
The whole thing now is they want to be a
robot maker. I think because they realize that. Look, being
a car maker's tough, and it's hard, and the margins
are bad and it's tough business.
Speaker 4 (23:45):
Why would margins be better on a robot maker? Is
it just more about the software there and the cleverness of.
Speaker 3 (23:51):
The well, we don't know, because there haven't been any
robot makers before, so it's we could all speculate, but
who knows who's.
Speaker 4 (23:58):
Actually primultiple on a a car maker currently that wants
to become a robot maker. Why don't we do that?
Speaker 2 (24:07):
I mean, yeah, no, silly, I get what you're saying.
Speaker 3 (24:10):
Yeah, and so the question is, like, what are examples
of you know, heavy machinery companies, because that's effectively what
a robot is.
Speaker 2 (24:19):
Maybe it's media machinery, white machinery.
Speaker 3 (24:21):
That is the key ques depends on the size of
the robot, I guess right. Ultimately, the question that you're
going to be asking is how many of these can
we sell? And what are the margins going to be
on them? And even like when we talk about like
big heavy machinery companies like Deer just as an example,
(24:43):
they do forty billion dollars in revenue a year. I mean,
it's it's not the pooh pooh Deer, but it kind
of is because that's just not huge in terms of
what we see for you know, big software companies and
Apple and Nvidio and Amazon and those kinds of companies.
Forty four billion dollars is it's it's a drop in
(25:04):
the bucket. It's I like Deer myself, I you know,
I'm a big believer in their products.
Speaker 2 (25:11):
But ultimately, okay, like who buys them. It's a small
subset of the population.
Speaker 3 (25:17):
You know, it's industrial sized farms, people with large lawns,
and occasionally, you know, municipalities that need, you know, something
that can work around the town and stuff like that.
Speaker 2 (25:29):
Like that's that's kind of what it is.
Speaker 3 (25:32):
So I think that when we're talking about robots, everyone
like the thing that everyone loves to say is, well,
you know, we can sell billions of them because there
will be one in every home to you know, do
the laundry and do the dishes and this and that,
to which I say, Okay, how much are they going
(25:54):
to cost? Because most families don't just have a bunch
of money sitting around for a robot. You know, if
you're listening to this show, do you sit there and say, yeah,
my robot budget this month is one thousand dollars a
month or do you say, hey, it's kind of hard
to pay the bills.
Speaker 2 (26:10):
I don't think I can afford that right now.
Speaker 1 (26:13):
Probably the latter.
Speaker 3 (26:14):
So if the price gets to the point where it's
really affordable, what's gonna happen to the margins?
Speaker 2 (26:20):
They're probably not great?
Speaker 4 (26:22):
You know, you where the big barriers to entry even
if Tesla was an early innovator leader like they were
with evs as they're discovering now with evs.
Speaker 3 (26:33):
And are there and the thing that typically protects a
business's margins are you know, things like network effects and
things like that that can make it hard to pick
someone else or a pat I guess, yeah, is there
anything there in robotics?
Speaker 2 (26:48):
I don't know. We're at the early point of it, right,
I don't know.
Speaker 4 (26:53):
It's amazing that it still commands such a premium in
multiple terms relative to comps.
Speaker 3 (27:01):
But it's premium. It is an Elon premium. It's not
related to products. It's not related to It is an
Elon premium. You cannot have a big enough key man,
you know, insurance policy on Elon for that company.
Speaker 4 (27:14):
But how do serious people argue, Like a couple of
years ago, very serious people are arguing that the premium
is attributable to their dominance and increased likely dominance of evs.
That thesis is out the window. Yeah, am I misspeaking? Exaggerated?
Now it's robots? Are you serious? I'm not saying I
don't love. I don't know what Tesla's done.
Speaker 2 (27:35):
I do.
Speaker 4 (27:35):
It's a question of how much do you want to
pay for it? Right?
Speaker 3 (27:38):
Always, always is Folks, Are you wondering where the economy
is heading? GDP is growing, but Tariff's inflation and jobs numbers.
Speaker 2 (27:45):
They're making headlines.
Speaker 3 (27:46):
Interest rates, housing costs and policy changes are impacting all
of us, and even AI is obviously changing how markets move.
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Armstrong may contact you to offer investment advisory services.
Speaker 3 (29:16):
Apple's plan B for AI is actually pretty great. This
is from Bloomberg and it talks about how, look, they're
not spending billions of dollars, you know, building out their
own data centers and AI facilities. They are content right
now to let other people try to do that on
their own and work on their own Apple intelligence stuff,
which is largely on device based, and you know that.
(29:40):
Here's the interesting thing about this, So Apple's kind of
gotten punished in the last couple of years for not
doing enough on AI. The comparison that I'll make to Apple,
what if they're like Toyota, who four or five years ago,
everyone in their grandmother was pouring money into EV development,
and Toyota said, no, we're not gonna do that. We're
(30:00):
gonna stick with what we know, which is turtal combustion engines, hybrids,
and and that's gonna be our stuff, and four years
ago everyone called them crazy. They're like, how could you
not be developing evs? Everyone's gonna drive one? And sure enough,
everyone's not driving one today. What if Apple is Toyota
(30:21):
for ai, where yeah, some people are gonna choose to
use use it and it's gonna be a thing. You know,
I'm not saying it won't be. But what if there's
too much money being spent trying to build out all
these data centers, just like trying to build out all
these EV plants, and we're gonna have overcapacity and the
margins go bad and the thing isn't profitable even though
there's increased demand.
Speaker 2 (30:41):
And Apple sitting there saying yeah, like we were in
the cat bird seat the whole time. I could see
that as a plausible path.
Speaker 7 (30:47):
Well.
Speaker 4 (30:47):
I think of companies that have spent a lot and
continue to like Microsoft and their Office Suite their flagship,
also call it their flagship software Excel, PowerPoint word Functionally,
they're no different than they were, at least for me
thirty years ago. Powerpoints still does not know that I'm
trying to center a chart and when I do the
same thing on the next slot, I want it to
(31:08):
look like I did it on the last slide. Why
is mister Clippy not detecting that I want to do
the same thing I just did the last thirty operations?
It takes me as much time to do Now. There
may be innovative features that I'm just not aware of.
I don't think so because I constantly google how do
you do this in Excel to make sure I'm not
missing any new shortcuts or PowerPoint or word less. So
(31:30):
it's a word process or you don't expect as much
from it. Formatting is a chore getting it to recognize
the repetitive that you want to replicate a simple operation
that you've just done five times in a row, and
not offering to do it for you is frustrating. Where
are the fruits of spending to this point? For those
of us that actually work? And I'm picking on Microsoft here,
(31:51):
I'm sure there are other good candidates for possible sort
of misguided investing quick.
Speaker 2 (31:57):
Break here when we come back stack.
Speaker 1 (31:59):
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(32:22):
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Speaker 3 (32:43):
All right, Mark, I'm gonna kick off stack role here.
Lego on October fourth is going to be releasing their
most expensive Lego set ever, So one thousand dollars you
heard that right, one thousand dollars Lego death Star from
Star Wars. It's two and a half feet tall, two
(33:07):
and a half feet wide, and almost a foot deep,
and it is nine thousand pieces.
Speaker 2 (33:16):
I don't know how long that takes you to put together.
Speaker 4 (33:19):
That be round?
Speaker 2 (33:20):
Yeah anyway, No, it's it's not round.
Speaker 3 (33:21):
It's like a cutout of the Death Star so you
can play in some of the rooms and stuff inside it.
Speaker 4 (33:27):
Okay, okay, So oh yeah, that makes a lot more
sense than what I was thinking.
Speaker 3 (33:34):
Look, when you combine Lego fans and Star Wars fans,
someone's gonna pay up for this. I'm sure they don't
have to sell very many of them for this to
end up making money. The interesting thing came just as
I was going through the most highly priced Lego sets
out there. The next closest is the Millennium Falcon, which
is eight hundred and fifty dollars right now. And then
you get to the third place one, which is the
(33:58):
leab Air leab Hair Crawler Crane. It's it's basically like
a construction crane that is seven hundred dollars. I don't
know if there's like a huge crane Officionado market for them.
And then finally you get to the fourth most expensive
Lego set, which is the Titanic nine thousand pieces, also
(34:21):
six hundred and seventy nine dollars. But here's the thing
about the Lego Titanic set.
Speaker 2 (34:28):
It doesn't sink. It's unsinkable.
Speaker 3 (34:32):
It doesn't like allow you to you know how like
the Titanic broken half leg along the mid line and set.
Speaker 2 (34:38):
It doesn't do that. How do you build a Titanic.
Speaker 4 (34:41):
That would be very poor taste if it did.
Speaker 2 (34:43):
How would it be poor taste?
Speaker 4 (34:45):
Like it's it's designed a snap in the middle and sink.
Speaker 3 (34:48):
That that's what the Titanic did. If you're making a
lego of a disaster. Don't you have to be able
to recreate the disaster? Maybe the poor taste is making
it Titanic one to begin with, not the fact that,
hey it doesn't bet.
Speaker 5 (35:04):
I was gonna ask if it came intact or if
it was the disaster Titanic, Like, I don't know what
set it was.
Speaker 4 (35:10):
What kid would want to put together the sunken titan
I don't think these are kids morbid.
Speaker 3 (35:15):
Okay, well here's the thing, Mark, So I'm a big
believer in like, disaster tourism shouldn't be a thing to
begin with, right like all of.
Speaker 2 (35:23):
The people, Yes, it really does.
Speaker 3 (35:26):
Like it's you're basically like spending money to relive someone's
family's worst day of their life. I guess the point
I'm making is maybe the Titanic lego shouldn't exist, but
if it does, it should actually, you know, be what
the Titanic was, which was the ship that people thought
couldn't sink that did.
Speaker 4 (35:46):
It wouldn't be hard to modify it.
Speaker 2 (35:49):
I don't know what might be.
Speaker 5 (35:50):
By the way, I'm seeing according to AI that the
nine thousand piece lego set can take anywhere between fifteen
and thirty hours.
Speaker 3 (35:58):
So it's a it's a solid week of work. It's
either a part time or full time job for a week.
I'm pretty sure that would take me a month. I'm
not even exactly.
Speaker 2 (36:05):
It could be a while.
Speaker 3 (36:07):
They have an Eiffel Tower one that's ten thousand and
one pieces. How much do you think they struggled to
get it to ten thousand and one? So it's you know,
it's a little more than ten thousand. But yeah, honestly,
the Titanic one, it does kind of rub me the
wrong way because you probably shouldn't be selling it to
begin with, and be if you do sell it, well
(36:27):
you have to actually have it do what the Titanic did.
Speaker 2 (36:31):
I don't know.
Speaker 3 (36:33):
Yeah, I'm uncomfortable with it, but right like, I'm not
a fan of disaster tourism in general. It's just kinda
it doesn't feel good to me.
Speaker 4 (36:42):
Now, do they have a Hindenburg too? Is it part
of the line up.
Speaker 3 (36:44):
There or do they have I did not see one
of those. I don't know how you make lego blimps
A Lego's that one? You know, They've got a bunch
of Star Wars, one bunch of Lord of the Rings
ones that.
Speaker 4 (36:54):
That star blew up, but you know that was fictional
did twice twice?
Speaker 2 (36:59):
Yeah, it wasn't the same Death Star, But you know
the other ones.
Speaker 3 (37:03):
It's like okay, like, yeah, there's a river steamboat and
you know, a floating restaurant.
Speaker 2 (37:06):
I'm just looking at other their boats. You know.
Speaker 3 (37:08):
The Titanic's the one that they made the biggest just
because everyone knows it.
Speaker 2 (37:12):
But it does kind of feel like disaster tourism, right.
Speaker 4 (37:15):
You're profiting off of a trail because nobody wants to
build like what was the the what was the sister
ship the Britannic or something? No, why not sell that?
Or like what happy.
Speaker 3 (37:25):
The QI two the biggest ship in the world for
a while, That sounds right right it was when I
was a kid. I don't even I've never been on
a cruise my life, so in any case, I just
I don't know, but uh, it just caught my eye that, like,
I don't know, the Titanic. It just feels wrong for
two reasons, Like what I'm not a disaster tourism believer,
(37:45):
but if you're gonna build the Titanic, I don't know
how you build a lego set where you can't have
it like recreate what happened, because that's the only reason
people know about the Titanic today. Maybe one other large
cruise ship from the nineteen tens aside from the.
Speaker 4 (38:02):
Britannic ustorship, the Carpathian, which rescues or I.
Speaker 2 (38:05):
Guess you could say, or you could say like the Lusitania.
Speaker 3 (38:08):
But why do we know that again, disaster tourism, like
no one knows, just normal cruise ships from back then.
We're gonna take a quick break for the entire rest
of the day. We'll see you tomorrow on the Financial
Exchange
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(01:06):
and Mark Fandetti, Chuck.
Speaker 2 (01:12):
Mark and Tucker with you here.
Speaker 3 (01:14):
And as we kick off the second week of September,
we've got stocks broadly in positive territory. The Dow Jones
is up seventy six points about point one seven percent,
the S and P five hundred up four tenths of
a percent, or about twenty five points back above sixty
five hundred, the Nasdaq Composite up one hundred and seventy
points about three quarters of a percent, and so all
(01:36):
your major US indices are chugging right along this despite
the SMP having eighty five more issues down today than up.
So you do have kind of megacap tech driving the
ship again, which quite honestly, that's been the position of
stability over the last couple of years. Anytime that you've
tried to get small caps leading or the rest of
(01:56):
the index leading, the whole thing's kind of fallen on
its face. So I know that we normally talk about, hey,
you want you know, kind of broad rallies that lead
the market forward. Broad rallies have not been supportive of
this market for the last two and a half years,
and so until proven otherwise, the safer position for the
market has actually been big Tech leading the way.
Speaker 2 (02:18):
Tenure.
Speaker 3 (02:19):
US Treasury is down two point seven basis points to
four point h five nine percent. When we take a
look at commodities, oil up forty five cents a barrel
on West Texas Intermediate sixty two to thirty two a barrel,
and we've got gold of another twenty six fifteen ounce
to thirty six seventy nine and eighty cents, another all
(02:39):
time high for gold as it continues to surge ahead.
We could talk a little bit about what that means
in conjunction with bond yields falling. Hint, it's not really
great on the inflation side of things, is my read.
But it is what it is, and it's kind of
what you're seeing here at the moment. I want to
talk a little bit about this Wall Street Journal piece.
(03:02):
It's titled Americas by Now Pay Later Economy. The subheader
is Signs of an emerging debt crisis are everywhere, from
credit cards and mortgages to government budgets and oh boy,
like Americans have too much debt? How are we ever
gonna pay for all the debt? I mean, look, I
(03:26):
know that at some point it all matters but I'm
sorry I from kind of pooping this a little bit.
Speaker 2 (03:30):
But two things.
Speaker 3 (03:32):
A since the day I was born, Americans have been
saying there's there's too much debt that we have and
this is gonna cause problems literally true, you know, like
you can go find the Time magazine articles from nineteen
thirty seven about all Americans you know, growing debt problem,
and you know this and that, and it hasn't been
an issue whether you know, it's not to say that
(03:53):
we haven't had blow ups like we have, like the
generally most you know, most of the recent recessions are
caused by some kind of excess leverage somewhere in the system.
But somehow that gets interpreted as like it's always a problem,
and it's just not. Most of the time, it's it's
fine as long as you can cover that debt, there's
(04:14):
no problem with having it taken out. And so I
think that I can pooh pooh some of this while
also saying, hey, what does this say about where America
is today in terms of where the debt is building
up and why it's potentially problematic.
Speaker 2 (04:31):
And what I get.
Speaker 3 (04:33):
To is an extension of what we've been seeing for
the last fifteen or twenty years, which is, if you're
in the top fifteen to twenty percent of wage journers
in the country, you're in a good spot. You might
not like things aren't perfect for it. I'm not saying
that they are. Like you still have to make choices.
Not all of us are Jeff Bezos, but you've been
(04:56):
able to figure out how to make things work generally
for the remaining people, in particular the bottom fifty to
sixty percent of wage earners. Even figuring out how to
pay for groceries now is increasingly a bigger problem, to
the point where you are ending up with people having
to put groceries you know, Hey, I'm paying for groceries,
(05:20):
you know, using a firm so that I can buy
now and pay later.
Speaker 2 (05:23):
I'm you know, putting a.
Speaker 3 (05:26):
Chipotle you know, burrito on a payment plan, and it's
just real stuff. Like I know, we laugh about it,
but people don't do that stuff voluntarily. People don't sit
there and say, oh, like, gee, this is fun. It's
happening because someone just wants to have a burrito, just
to have like some kind of good in their life,
and the only way they can afford it is to
(05:47):
break it into you know, four payments of five dollars,
and that sucks for us, Like, I'm sorry, it's it's
just awful, But this is true. Now the piece on housing,
sixty nine percent of borrowers who took out a mortgage
ensured by the FAHA last years these are FAHA mortgages
had debt to income ratios that are considered risky, compared
(06:09):
with twenty eight percent in twenty twelve. So there are
more risky mortgages that are being made right now. We're
not going to know for probably five to seven years
whether that risk turns into any actual problem. Remember, not
called risk ends up paying off badly like some of it.
The nature of risk is sometimes the risk is worth taking,
(06:31):
and so I think in looking at this, it's something
that bears watching there. But ultimately, the reason that those
loans are considered risky is because those debt to income
ratios are higher. And I'm guessing it's not because people
suddenly decided, hey, let's go buy that luxury home on
an FAHA mortgage. That's not usually what happens with FAHA mortgages.
(06:52):
It's much more. Hey, home prices are still really high
and incomes have not kept with them, especially with mortgage
rates where they are and so bar wars. Have you
gotten into riskier loans in order to deal with this
that that could be a problem, but aren't necessarily going
to be one.
Speaker 4 (07:11):
Yeah, it becomes a problem, as you suggested, and as
the article points out, if the economy slows, or if
inflation slows by a lot. Inflation is good if you
have that the real value, assuming your wages keep up
totally right, the real value of your payments goes down
alternatively or conversely, or the other side of that coin,
and whatever how you want to look at it, is
that dissinflation or deflation like we had in nineteen twenty
(07:34):
nine and nineteen thirty three. I know I'm going back
aways here, but we haven't then. We haven't had meaningful
I could tell you it was a tough It was
a tough period. We haven't had meaningful disinflation or deflation
in about one hundred years. I don't think I'm leaving
any uncomfortable disin now.
Speaker 3 (07:49):
Nothing since you had a brief period in the financial
after the financial crisis.
Speaker 4 (07:52):
Yeah, that was like one quarter of year over year,
very very fleeting, but still it was bad. When you'd
rather have inflation and let it eat away the real
value of your debt, So that can become a noxious
situation of vicious cycle if you like. This does become
a problem if we ever session, particularly a disinflationary recession,
(08:13):
so people losing their jobs and the real value of
their debt is, you know, not shrinking at the very
least looking chuck at as I'm sure you and Mike
Armstrong have done at. Household debt service payments is a
percentage of disposable personal income which the FED calculates every quarter,
which consists of mortgage debt and consumer debt. These ratios
(08:39):
don't look at all elevated relative to historical experience. That's
very big picture.
Speaker 3 (08:44):
But and I think this is the thing, Like the
big picture doesn't look bad. But I think you can
make a case that it doesn't look bad because the
top twenty percent of Americans by income do so much
of the borrowing on things like houses and things like that,
and their incomes in their asset levels have grown to
the point where it's not really a huge issue for them. Generally,
(09:09):
if you make twenty five thousand dollars a year, you're
not buying a house in today's world in America and
most of it, and so okay, when you look at
you know, the thing that that person struggles with, it's
trying to make their rent payment and trying to even
just buy groceries, and are they having to go into
(09:30):
debt to buy groceries? And like, this is the problem.
Is in the aggregate things look okay, but you talk
to half of Americans right now and they're not okay financially.
Speaker 4 (09:41):
And I think this is one of the things Bess
was getting at. Maybe I'm sorry to go back to
the last hour, but and he didn't make this point,
but it does follow that FED rate cuts won't help
the people who need help the most. The FED cuts,
the FED acts on the economy by stimulating demand. Some
of that demand goes into prices, hopefully some of it
goes into real GDP, like we talked about in the
(10:01):
last hour. But we don't appear to have a demand
problem right now. And if indeed the composition of borrowers
is as you posited that it is, and that seems
very plausible to me, FED rate cuts ain't gonna do
a thing for those at the in the lower tiers.
Speaker 2 (10:17):
Let's take a quick break.
Speaker 3 (10:18):
When we come back, we're gonna be joined by Ted
Rossman from bank Rate and he's going to talk to
us about their survey on prospective holidays spending. What are
people going to be buying for gifts under the tree
this year. We'll fill you in when we return.
Speaker 1 (10:33):
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(10:55):
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Speaker 5 (11:09):
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Speaker 2 (11:44):
As promised.
Speaker 3 (11:45):
We're now joined by Ted Rossman from Bankrate here to
discuss bank rates. Twenty twenty five Early Holidays Shopping survey ted.
Speaker 2 (11:54):
How you doing today?
Speaker 6 (11:56):
I'm doing well. Thanks for having me.
Speaker 3 (11:57):
Tech can talk a little bit about what this survey
come and some of the interesting results that you found here.
Speaker 6 (12:03):
We found that forty percent of holiday shoppers are concerned
that holiday gifts are going to be more expensive this year.
We could read potential tariff impacts into that, as well
as just the general trend of rising prices the past
few years. Many people are starting their holiday shopping early.
This is a trend that's really taken off ever since
(12:24):
the pandemic started as more of a supply chain concern,
it's morphed into more of a way to spread out
your cash flow. We see about half of holiday shoppers
are going to start making purchases before the end of October.
A lot of the best deals are going to start
in early October with things like Amazon Prime Day and
Target Circle Week and all the copycat sales that go on.
Speaker 3 (12:47):
When you look at what we are seeing as far
as impulse shopping, you know a lot of people saying, Hey,
I want to plan and start taking advantage of these
things earlier. Do you see a lot of people that's
like I saw this on TV, I got to do
it now, or hey, I'm going.
Speaker 2 (13:03):
To do this late? Like what do we see there?
Speaker 6 (13:06):
There is some of that, and that's actually part of
why retailers offer the early sales, because it's kind of
a buy something for a friend or family member and
maybe buy something for yourself. There's kind of a treat
yourself angle to something like Amazon Prime Day, which on
the face of it is kind of an early shopping kickoff.
The July version is kind of the back to school kickoff,
(13:27):
but I'm sure they're happy if you buy things for
yourself as well. Social media marketing fits into all this.
There is a little bit of a risk that if
you start early, you're just going to keep buying. I do, though,
think the early start can be used to your advantage
in a few ways. It does help you spread out
your cash flow. If nothing else, Even if you think
this is all crazy. We just celebrated Labor Day. We
(13:49):
haven't really put summer to rest. If all this holiday
shopping talk sounds early to you, if nothing else, at
least start sketching out your budget and gift list and
start setting money aside from every paycheck. You might have
seven or eight paychecks between now and the end of
the year. A really smart strategy is to set money
aside ahead of time, rather than leaving it all till
(14:09):
the end. That's when you're at more risk of running
up at credit card balance. The average rate is twenty percent.
You want to plan in advance.
Speaker 3 (14:17):
What are we seeing when it gets at you know,
cash flow and stuff like that. What percentage of Americans
are going to have to end up going into debt
in order to make their holiday purchases.
Speaker 6 (14:28):
About a quarter of holiday shoppers admit that they're likely
to take on debt. Frankly, I fear the actual cause.
The actual result will be higher because about half of
credit card holders already have debt from month to month,
and by now pay later has been growing rapidly. That's
been growing double digits every holiday season, and that's debt too.
It may feel different, it may feel more responsible if
(14:50):
you're financing something let's say four interest free payments over
six weeks. But there are a lot of financial pressures
out there. It continues to be interesting how sent is low,
but actual spending has been higher, and you just want
to make sure that you're spending smartly, so you're setting
money aside ahead of time, You're not taking on debt.
You don't want to be paying off this Christmas a
(15:12):
year from now, and try to stack discounts when possible.
So that's going to involve taking advantage of a store promo,
combining that with the rewards credit card that you hopefully
pay off right away. Maybe you use an online shopping
portal like Racqueton, or you take advantage of MX offers
and Chase offers and those other digital coupons that could
be three or four ways to save on the same purchase.
Speaker 3 (15:34):
Ted, appreciate you joining us today. Thank you so much
for the time in for conducting the survey.
Speaker 2 (15:40):
Anytime.
Speaker 6 (15:41):
Thank you.
Speaker 3 (15:41):
It's Ted Rossman with bank Rate talking about their twenty
twenty five Early Holiday Shopping survey.
Speaker 5 (15:49):
All right, time for trivia here in the Financial Exchange
and on this day in nineteen eighty six, the Oprah
Winfree Show was first broadcast nationally. Oprah's wild least successful
show ran from nineteen eighty six to twenty eleven. So
our trivia question today, which host had the longest running
daytime talk show?
Speaker 2 (16:10):
Once again?
Speaker 5 (16:10):
Which host had the longest running daytime talk show? Be
the fifth person today to text us at six one
seven three six two thirteen eighty five with the correct answer,
and you'll win a Financial Exchange Show T shirt once again.
The fifth correct response to text us to the number
six one seven three six two thirteen eighty five will
(16:32):
win that T shirt. See complete contest rules at Financial
Exchange Show dot com.
Speaker 3 (16:37):
Two questions for you guys. Eight Have you ever watched
a full episode of Oprah?
Speaker 5 (16:44):
My mom always had it on, uh when I was younger. Uh,
So I guess the answer is yes, but you never.
I never liked sat down.
Speaker 2 (16:53):
It sounds like it was background noise.
Speaker 5 (16:55):
Yeah, it was like a fish bowl.
Speaker 2 (16:56):
Yeah, Mark, what about you?
Speaker 3 (16:58):
Not to my knowledge, I would think I have either,
but I just I'm not really around during the day.
Speaker 2 (17:04):
It was on to like three.
Speaker 3 (17:05):
I remember what are the big daytime talk shows now
like they still exist?
Speaker 2 (17:11):
Right? Does the format still exist?
Speaker 5 (17:14):
I don't think so?
Speaker 2 (17:16):
What what what's on in that place?
Speaker 1 (17:18):
Now?
Speaker 4 (17:18):
You've got like five TVs in here?
Speaker 2 (17:20):
Is is it just? AI? If anyone has an answer
to this texts?
Speaker 4 (17:27):
What's the bigger question? It sounds like you're working up
to something. No, you're just wondering.
Speaker 3 (17:30):
Who watch I don't know what happened to daytime talk
I don't know if it's still there on TV, if
it's gone Texas at six one seven three six, two
thirteen eighty five, and let us know if there are
still TV daytime talk shows.
Speaker 5 (17:43):
A like Clarkson, Ben says, is one of them?
Speaker 2 (17:46):
She's got one?
Speaker 5 (17:47):
Yeah, doesn't true? Barrymore have another one?
Speaker 2 (17:49):
No idea? Yeah, no idea.
Speaker 3 (17:52):
But I'm I'm I'm kind of clueless in this area,
and I'll admit it. So like this is why I'm
asking for help. You know they always say like, hey,
if you're in trouble, ask for help. I'm in trouble.
I don't know any daytime talk show hosts on TV,
and so I'm asking for help at six one seven
three six, two thirteen eighty five. I want to know
what happened to the format.
Speaker 5 (18:11):
Kelly and Mark?
Speaker 2 (18:13):
Who's Mark?
Speaker 6 (18:14):
I don't know.
Speaker 5 (18:15):
I'm just reading Ben's text, like Kelly Rippa that was
so not Kelly Clarkson. Kelly Clarkson has one, so there's
a lot of Kelly's.
Speaker 2 (18:24):
I don't know who the.
Speaker 5 (18:25):
Hell Mark is not? Mark Fandetti? Mark Fandetti is he's
here with us right now?
Speaker 4 (18:28):
That's right.
Speaker 2 (18:30):
I've always wondered what happens to you at nude?
Speaker 3 (18:35):
Interesting in any case, As we take a look at
markets as we head towards the bottom of the hour,
the Dow Jones Industrial Average still up eighty one points,
the smp is up twenty three, Nasdaq up one hundred
and sixty five. So continued upward drifting markets again like
last week. Early last week on Tuesday, looked like markets
were getting a little bit shaky again, and they've just
(18:57):
you know, picked themselves up, dusted themselves off, and continued
their upward march here. And this has been the big
theme pretty much since mid April, where I think the
largest dip that we've seen has been maybe three and
a half percent. It's been an incredibly calm last five
(19:20):
months now, dating back to you know kind of April fifteenth,
twentieth that range.
Speaker 2 (19:26):
Let's take a quick break. When we return, we've got
the trivia answer.
Speaker 7 (19:30):
Then we're talking Tesla, bringing the latest financial news straight
to your radio.
Speaker 1 (19:43):
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street. Watch a complete
look at what's moving market so far today right here
on the Financial Exchange Radio Network.
Speaker 5 (20:00):
It's to see in a nice little gain at this
point as investors wait more inflation and jobs data do
out this week ahead of the FEDS meeting next week. However,
the size of the likely raycut is the biggest question
that remains right now. The Dow is up by two
tenths of one percent, or eighty eight points higher. SMP
five hundred is up four tenths of one percent, NASDAC
(20:22):
up eight tenths of one percent, or one hundred and
seventy two points higher. Russell two thousand is edging higher.
Tenure treasure real down three basis points and is now
at four point zero four nine percent. In crude oil
is up over one percent higher today, trading at sixty
two dollars in sixty cents a barrel. Robinhood and appleven
(20:42):
set to join the S and P five hundred on
September twenty second. That news came on Friday, robinhood surging
by fourteen percent, while Apple eleven shares are up by
eleven percent. Meanwhile, Wall Street Journal reported that PNC Financial
agreed to buy privately held First Bank and a four
point one billion dollar DEALP and C shares are back
(21:05):
or retreating almost one percent. Elsewhere, Some AT Therapeutic stock
is sinking twenty five percent after the biopharmaceutical companies results
from a Phase three trial for its lung cancer drug
showed fewer improvements in patients. SpaceX agreed to pay seventeen
billion dollars for the rights to some of Echo Star's
(21:25):
wireless spectrum. EchoStar shares are jumping fifteen percent on that news,
while competitors AT and T, Verizon and T Mobile are
down about two percent. And according to a new filing
this morning, ticket selling platform stub hub is aiming to
raise as much as eight hundred and fifty million dollars
for its IPO, giving it evaluation of up to nine
(21:45):
point two billion dollars. The company plans to sell more
than thirty four million shares price between twenty two and
twenty five dollars per share. I'm Tucker Silva and that
is Wall Street Watch. And in the segment, we asked
you the tribute question, which host had the longest running
daytime talk show. Well, that would be Maury Povich. He
(22:08):
hosted Maury for thirty one years, beginning in nineteen ninety one.
Tom from Spencer Mass is our winner today taking on
the Financial Exchange Show Teacher. Congrats to Tom, and we
played trivia every day here in the Financial Exchange. See
complete contest rules at Financial Exchange Show dot com.
Speaker 3 (22:26):
Tesla market share drops to the lowest since twenty seventeen
as competition heats up. To this a report from Reuters,
and what we are seeing is that Tesla, which at
one point had about eighty percent of the US EV market,
now was down to thirty eight percent of total EV
sales in August. It's the first time it's fallen below
(22:47):
forty percent in a month since October of twenty of
twenty seventeen. And so I think this is a continued
question for Tesla, especially given the expiration of tax credits
for evs at the end of this month. What do
their sales look like as we head into twenty twenty six,
and what does that do to the overall profitability of
(23:08):
the company as Elon Musk tries to turn them from
a car maker into a robot maker.
Speaker 4 (23:14):
So slowing demand overall for evs is was inevitable even
without removal of incentives, et cetera. Correct slowing growth in
or negative growth in Tesla's market share. This is a
very bad combination if this is your core business, is it, though,
or do they consider themselves to be evolving into something else?
Speaker 3 (23:35):
The whole thing now is they want to be a
robot maker. I think because they realize that. Look, being
a car maker's tough, and it's hard, and the margins
are bad and it's tough business.
Speaker 4 (23:45):
Why would margins be better on a robot maker? Is
it just more about the software there and the cleverness of.
Speaker 3 (23:51):
The well, we don't know, because there haven't been any
robot makers before, so it's we could all speculate, but
who knows who's.
Speaker 4 (23:58):
Actually primultiple on a a car maker currently that wants
to become a robot maker. Why don't we do that?
Speaker 2 (24:07):
I mean, yeah, no, silly, I get what you're saying.
Speaker 3 (24:10):
Yeah, and so the question is, like, what are examples
of you know, heavy machinery companies, because that's effectively what
a robot is.
Speaker 2 (24:19):
Maybe it's media machinery, white machinery.
Speaker 3 (24:21):
That is the key ques depends on the size of
the robot, I guess right. Ultimately, the question that you're
going to be asking is how many of these can
we sell? And what are the margins going to be
on them? And even like when we talk about like
big heavy machinery companies like Deer just as an example,
(24:43):
they do forty billion dollars in revenue a year. I mean,
it's it's not the pooh pooh Deer, but it kind
of is because that's just not huge in terms of
what we see for you know, big software companies and
Apple and Nvidio and Amazon and those kinds of companies.
Forty four billion dollars is it's it's a drop in
(25:04):
the bucket. It's I like Deer myself, I you know,
I'm a big believer in their products.
Speaker 2 (25:11):
But ultimately, okay, like who buys them. It's a small
subset of the population.
Speaker 3 (25:17):
You know, it's industrial sized farms, people with large lawns,
and occasionally, you know, municipalities that need, you know, something
that can work around the town and stuff like that.
Speaker 2 (25:29):
Like that's that's kind of what it is.
Speaker 3 (25:32):
So I think that when we're talking about robots, everyone
like the thing that everyone loves to say is, well,
you know, we can sell billions of them because there
will be one in every home to you know, do
the laundry and do the dishes and this and that,
to which I say, Okay, how much are they going
(25:54):
to cost? Because most families don't just have a bunch
of money sitting around for a robot. You know, if
you're listening to this show, do you sit there and say, yeah,
my robot budget this month is one thousand dollars a
month or do you say, hey, it's kind of hard
to pay the bills.
Speaker 2 (26:10):
I don't think I can afford that right now.
Speaker 1 (26:13):
Probably the latter.
Speaker 3 (26:14):
So if the price gets to the point where it's
really affordable, what's gonna happen to the margins?
Speaker 2 (26:20):
They're probably not great?
Speaker 4 (26:22):
You know, you where the big barriers to entry even
if Tesla was an early innovator leader like they were
with evs as they're discovering now with evs.
Speaker 3 (26:33):
And are there and the thing that typically protects a
business's margins are you know, things like network effects and
things like that that can make it hard to pick
someone else or a pat I guess, yeah, is there
anything there in robotics?
Speaker 2 (26:48):
I don't know. We're at the early point of it, right,
I don't know.
Speaker 4 (26:53):
It's amazing that it still commands such a premium in
multiple terms relative to comps.
Speaker 3 (27:01):
But it's premium. It is an Elon premium. It's not
related to products. It's not related to It is an
Elon premium. You cannot have a big enough key man,
you know, insurance policy on Elon for that company.
Speaker 4 (27:14):
But how do serious people argue, Like a couple of
years ago, very serious people are arguing that the premium
is attributable to their dominance and increased likely dominance of evs.
That thesis is out the window. Yeah, am I misspeaking? Exaggerated?
Now it's robots? Are you serious? I'm not saying I
don't love. I don't know what Tesla's done.
Speaker 2 (27:35):
I do.
Speaker 4 (27:35):
It's a question of how much do you want to
pay for it? Right?
Speaker 3 (27:38):
Always, always is Folks, Are you wondering where the economy
is heading? GDP is growing, but Tariff's inflation and jobs numbers.
Speaker 2 (27:45):
They're making headlines.
Speaker 3 (27:46):
Interest rates, housing costs and policy changes are impacting all
of us, and even AI is obviously changing how markets move.
The Armstrong Advisory Group is hosting two financial seminars this
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Speaker 3 (29:16):
Apple's plan B for AI is actually pretty great. This
is from Bloomberg and it talks about how, look, they're
not spending billions of dollars, you know, building out their
own data centers and AI facilities. They are content right
now to let other people try to do that on
their own and work on their own Apple intelligence stuff,
which is largely on device based, and you know that.
(29:40):
Here's the interesting thing about this, So Apple's kind of
gotten punished in the last couple of years for not
doing enough on AI. The comparison that I'll make to Apple,
what if they're like Toyota, who four or five years ago,
everyone in their grandmother was pouring money into EV development,
and Toyota said, no, we're not gonna do that. We're
(30:00):
gonna stick with what we know, which is turtal combustion engines, hybrids,
and and that's gonna be our stuff, and four years
ago everyone called them crazy. They're like, how could you
not be developing evs? Everyone's gonna drive one? And sure enough,
everyone's not driving one today. What if Apple is Toyota
(30:21):
for ai, where yeah, some people are gonna choose to
use use it and it's gonna be a thing. You know,
I'm not saying it won't be. But what if there's
too much money being spent trying to build out all
these data centers, just like trying to build out all
these EV plants, and we're gonna have overcapacity and the
margins go bad and the thing isn't profitable even though
there's increased demand.
Speaker 2 (30:41):
And Apple sitting there saying yeah, like we were in
the cat bird seat the whole time. I could see
that as a plausible path.
Speaker 7 (30:47):
Well.
Speaker 4 (30:47):
I think of companies that have spent a lot and
continue to like Microsoft and their Office Suite their flagship,
also call it their flagship software Excel, PowerPoint word Functionally,
they're no different than they were, at least for me
thirty years ago. Powerpoints still does not know that I'm
trying to center a chart and when I do the
same thing on the next slot, I want it to
(31:08):
look like I did it on the last slide. Why
is mister Clippy not detecting that I want to do
the same thing I just did the last thirty operations?
It takes me as much time to do Now. There
may be innovative features that I'm just not aware of.
I don't think so because I constantly google how do
you do this in Excel to make sure I'm not
missing any new shortcuts or PowerPoint or word less. So
(31:30):
it's a word process or you don't expect as much
from it. Formatting is a chore getting it to recognize
the repetitive that you want to replicate a simple operation
that you've just done five times in a row, and
not offering to do it for you is frustrating. Where
are the fruits of spending to this point? For those
of us that actually work? And I'm picking on Microsoft here,
(31:51):
I'm sure there are other good candidates for possible sort
of misguided investing quick.
Speaker 2 (31:57):
Break here when we come back stack.
Speaker 1 (31:59):
Rule miss any of the show. The Financial Exchange Show
podcast is available on Apple, Spotify, and iHeartRadio. Hit the
subscribe button and leave us a five star review. This
is the Financial Exchange Radio network. The Financial Exchange is
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(32:22):
the latest from Wall Street, fiscal policy, and breaking business news.
Every day. The Financial Exchange is live on Serious XM's
Business radio channel one thirty two. This is the Financial
Exchange Radio Network.
Speaker 3 (32:43):
All right, Mark, I'm gonna kick off stack role here.
Lego on October fourth is going to be releasing their
most expensive Lego set ever, So one thousand dollars you
heard that right, one thousand dollars Lego death Star from
Star Wars. It's two and a half feet tall, two
(33:07):
and a half feet wide, and almost a foot deep,
and it is nine thousand pieces.
Speaker 2 (33:16):
I don't know how long that takes you to put together.
Speaker 4 (33:19):
That be round?
Speaker 2 (33:20):
Yeah anyway, No, it's it's not round.
Speaker 3 (33:21):
It's like a cutout of the Death Star so you
can play in some of the rooms and stuff inside it.
Speaker 4 (33:27):
Okay, okay, So oh yeah, that makes a lot more
sense than what I was thinking.
Speaker 3 (33:34):
Look, when you combine Lego fans and Star Wars fans,
someone's gonna pay up for this. I'm sure they don't
have to sell very many of them for this to
end up making money. The interesting thing came just as
I was going through the most highly priced Lego sets
out there. The next closest is the Millennium Falcon, which
is eight hundred and fifty dollars right now. And then
you get to the third place one, which is the
(33:58):
leab Air leab Hair Crawler Crane. It's it's basically like
a construction crane that is seven hundred dollars. I don't
know if there's like a huge crane Officionado market for them.
And then finally you get to the fourth most expensive
Lego set, which is the Titanic nine thousand pieces, also
(34:21):
six hundred and seventy nine dollars. But here's the thing
about the Lego Titanic set.
Speaker 2 (34:28):
It doesn't sink. It's unsinkable.
Speaker 3 (34:32):
It doesn't like allow you to you know how like
the Titanic broken half leg along the mid line and set.
Speaker 2 (34:38):
It doesn't do that. How do you build a Titanic.
Speaker 4 (34:41):
That would be very poor taste if it did.
Speaker 2 (34:43):
How would it be poor taste?
Speaker 4 (34:45):
Like it's it's designed a snap in the middle and sink.
Speaker 3 (34:48):
That that's what the Titanic did. If you're making a
lego of a disaster. Don't you have to be able
to recreate the disaster? Maybe the poor taste is making
it Titanic one to begin with, not the fact that,
hey it doesn't bet.
Speaker 5 (35:04):
I was gonna ask if it came intact or if
it was the disaster Titanic, Like, I don't know what
set it was.
Speaker 4 (35:10):
What kid would want to put together the sunken titan
I don't think these are kids morbid.
Speaker 3 (35:15):
Okay, well here's the thing, Mark, So I'm a big
believer in like, disaster tourism shouldn't be a thing to
begin with, right like all of.
Speaker 2 (35:23):
The people, Yes, it really does.
Speaker 3 (35:26):
Like it's you're basically like spending money to relive someone's
family's worst day of their life. I guess the point
I'm making is maybe the Titanic lego shouldn't exist, but
if it does, it should actually, you know, be what
the Titanic was, which was the ship that people thought
couldn't sink that did.
Speaker 4 (35:46):
It wouldn't be hard to modify it.
Speaker 2 (35:49):
I don't know what might be.
Speaker 5 (35:50):
By the way, I'm seeing according to AI that the
nine thousand piece lego set can take anywhere between fifteen
and thirty hours.
Speaker 3 (35:58):
So it's a it's a solid week of work. It's
either a part time or full time job for a week.
I'm pretty sure that would take me a month. I'm
not even exactly.
Speaker 2 (36:05):
It could be a while.
Speaker 3 (36:07):
They have an Eiffel Tower one that's ten thousand and
one pieces. How much do you think they struggled to
get it to ten thousand and one? So it's you know,
it's a little more than ten thousand. But yeah, honestly,
the Titanic one, it does kind of rub me the
wrong way because you probably shouldn't be selling it to
begin with, and be if you do sell it, well
(36:27):
you have to actually have it do what the Titanic did.
Speaker 2 (36:31):
I don't know.
Speaker 3 (36:33):
Yeah, I'm uncomfortable with it, but right like, I'm not
a fan of disaster tourism in general. It's just kinda
it doesn't feel good to me.
Speaker 4 (36:42):
Now, do they have a Hindenburg too? Is it part
of the line up.
Speaker 3 (36:44):
There or do they have I did not see one
of those. I don't know how you make lego blimps
A Lego's that one? You know, They've got a bunch
of Star Wars, one bunch of Lord of the Rings
ones that.
Speaker 4 (36:54):
That star blew up, but you know that was fictional
did twice twice?
Speaker 2 (36:59):
Yeah, it wasn't the same Death Star, But you know
the other ones.
Speaker 3 (37:03):
It's like okay, like, yeah, there's a river steamboat and
you know, a floating restaurant.
Speaker 2 (37:06):
I'm just looking at other their boats. You know.
Speaker 3 (37:08):
The Titanic's the one that they made the biggest just
because everyone knows it.
Speaker 2 (37:12):
But it does kind of feel like disaster tourism, right.
Speaker 4 (37:15):
You're profiting off of a trail because nobody wants to
build like what was the the what was the sister
ship the Britannic or something? No, why not sell that?
Or like what happy.
Speaker 3 (37:25):
The QI two the biggest ship in the world for
a while, That sounds right right it was when I
was a kid. I don't even I've never been on
a cruise my life, so in any case, I just
I don't know, but uh, it just caught my eye that, like,
I don't know, the Titanic. It just feels wrong for
two reasons, Like what I'm not a disaster tourism believer,
(37:45):
but if you're gonna build the Titanic, I don't know
how you build a lego set where you can't have
it like recreate what happened, because that's the only reason
people know about the Titanic today. Maybe one other large
cruise ship from the nineteen tens aside from the.
Speaker 4 (38:02):
Britannic ustorship, the Carpathian, which rescues or I.
Speaker 2 (38:05):
Guess you could say, or you could say like the Lusitania.
Speaker 3 (38:08):
But why do we know that again, disaster tourism, like
no one knows, just normal cruise ships from back then.
We're gonna take a quick break for the entire rest
of the day. We'll see you tomorrow on the Financial
Exchange
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