September 10, 2025 • 38 mins
Chuck Zodda and Marc Fandetti discuss Christopher Waller emerging as one of three serious contenders for Fed Chair. Tripp Mickle (NYTimes -Tech Reporter) joins the show to share his highlights from the recent Apple Event. Stocks bull market nears 3-year anniversary. Oracle shares surge most since 1992 on Cloud contracts win. Jaguar's rebrand caused an uproar. Its boss has no plans to u-turn. Health insurance costs for businesses to rise by most in 15 years.
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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 Vandetti.
Speaker 2 (01:10):
Chuck, Mark and Tucker with you. And we've got markets
rallying today largely on the back of some earnings that
were fine from Oracle, but the guidance they gave was
just monstrous. And so Oracle stock again we're gonna touch
on this, but it's up forty one percent today, which
(01:32):
in actual dollar terms, just to put this in perspective,
you're talking about a company that added about two hundred
and eighty billion dollars in market cap in a single day,
and that was almost a trillion dollar market cap. It's
it's insane. I mean, this was a company that quite
(01:52):
honestly five six years ago, like, yes, they were around,
they were still, you know, a company, but they were
kind of you know, has been when it came to
the tech sector. You know they exactly they were. They
were fine, they were profitable, they were doing their thing.
And today you've got them, you know, potentially becoming you know,
the next member of the trillion dollar club sometime in
(02:15):
the next couple of days, if not today, depending on
how the rest of the day goes. So with that,
you currently have the Dow off two hundred and fifty
one points because Oracle is not in the Dow. You've
got the S and P five hundred up twenty nine points,
and the Nasdaq Composit up one hundred and two points,
both those about half a percent, And so you say,
why are those up only you know, half a percent.
(02:37):
The answer is, well, the money to bid up Oracle
had to come from somewhere, and basically investors are pulling
from elsewhere in tech right now, Apples down three percent,
Amazon's down two percent, salesforce is down two percent, met
is down one percent, and so you know, other tech
and tech adjacent companies are getting sold in order to
(02:57):
bid up Oracle. Here on the bond side of things,
pretty quiet day, but slightly lower rates on the ten year,
which is now at four point six three percent, down
one point one basis points. When we take a look
at commodity markets, we got oil up sixty six cents
a barrel on West Texas Intermediate to sixty three twenty nine.
(03:19):
Just not a whole lot of noise. They're just kind
of chopping around load to mid sixties as it's been
for a while. And we've got gold up another four
dollars and seventy cents an ounce to thirty six eighty
seven on the nose. No new all time high for
gold today, but hey, every day. You know, there's a
reason why they have twenty four hours in the day,
(03:40):
and it's so that you can see if gold's going
to get to a new all time high. And the
clock hasn't struck midnight yet, so we'll see where we
go today. I want to kick this hour off with
a little bit of a chat about Christopher Waller. Wall
Street Journal has a profile piece out about him and specifically,
(04:02):
you know, kind of talking up the fact that, hey,
he has largely, in my opinion, since being named to
the Federal Reserve Board of Governors back in twenty twenty
by President Trump at the time, I think that Waller
has been the member of the Board of Governors who
(04:22):
has been most pugged in and most accurate when it
comes to forecasting where the economy is wasn't is going.
And in my opinion, this along with his you know,
the fact that he's already on the Board of Governors
and in my mind, should give him a leg up
to be the next ved chair. Whether he is or not,
obviously is not something that we know right now, but
(04:48):
I think that When you look at Waller, he's someone
who again recently, has just seemed to be very pugged
in and locked into where this economy is, and as such,
I think would be a shoe in for the job
if President Trump ended up naming him.
Speaker 3 (05:06):
Well, among the main contenders, he's the only serious monetary
policy researcher his early work somewhat ironically because Trump wants
to control the FED. I'm not judging it, I'm but
it's obvious if Trump could, it would he would be
responsible for printing money. Sure, but he knows he can't
quite get away with that right now, so he's going
for this incremental approach. But Waller's research done mainly in
(05:29):
the early nineties when he was most active in.
Speaker 2 (05:32):
That He's the Saint Louis FED back then, right.
Speaker 3 (05:35):
I don't you know he was ahead of the econ
department in Notre Dame. More recently, he probably made had
multiple FED research stands. A lot of these PhD researchers,
that's a normal career path for them. But the work
of his answers, yes, oh, thanks, thank you both. The
work I'm familiar with is his work on institutional a
(05:57):
design for central banks that ensures the that can operate
credibly and independently. He made significant contributions to the literature
on what type of central banker you want to pick
and how you want to design your central bank. I
bring it up because it's ironic, because he may be
the appointee of someone who effectively views him as a puppet.
(06:18):
Will he be willing to kind of surrender his I
don't want to say conviction. I can't speak for him.
I don't know him, but I assume, given the results
of his research, that he feels like independence is key
to stable inflation and thus stable output, because those two
things are connected.
Speaker 2 (06:35):
And I think it raised the question of look Waller
right now is talking about He's been one of the
very outspoken members of the FED saying we need to
be cutting interest rates, and he's done so in a
way that I think maintains his independence and credibility, and
that he's been talking about this kind of for the
last year, like, hey, guys, the labor market's weaker than
(06:56):
we think, and we need to be doing something on this.
He was one of the leading voices on this last
year as well. This is not you know, an about
face that he made this spring or this summer where
he suddenly said, hey, guys, like now, I think that
you know, we need to be cutting This has been
his position pretty consistently since last year, and I think
(07:22):
with Waller, as with any of these candidates, the question
is it's the it's the Scott Besson conundrum that you have,
which is this time last year, Bessont was writing op
eds talking about, Hey, I can't believe the Treasury is
issuing all this short term debt like they're deliberately doing
(07:42):
it to try to keep long term interest rates low.
Anyone who's serious wouldn't be doing that. I can't believe
they're doing this. And then Besson comes in, takes a
look around, like sees the lay of the land, and
is like, yep, I'm gonna keep doing exactly that because
he realized, like, Okay, when push comes to shove, I
have to pay the bills for the United States, and
this is the best way to do it, you know,
(08:03):
based on you know, what my goals are and everything.
And so with with Waller, and not just Waller, but
the other you know guys who are running for the position. Effectively,
you know, you got the two Kevin's out there worsh
and Hassett that are both in the running as well.
And it's one thing leading up to, you know, a
nomination for a position to say, hey, I think we
(08:25):
should be doing this. When push comes to shove and
you're actually in the big chair, do you look around,
realize the real politique of the situation and say, you
know what, Yeah, we can probably cut this fall. But hey,
if if the economy starts to rebound in Q one
of next year and with it there's a rebound in
inflation and growth and all the stuff that goes along
(08:47):
with that, yeah, you better believe I'm gonna be hiking
because I need to do what's right in this situation.
Otherwise history is not going to remember me very well
as the FED chair that just sat in my hands
while inflation rose.
Speaker 3 (09:00):
Yeah, he's been a little more vocal about cutting rates
given the political backdrop than I would be comfortable with.
I do question whether he's behaving opportunistically.
Speaker 2 (09:08):
Of course he is. I mean, look, I don't think
that's a bad thing quite honestly.
Speaker 3 (09:13):
That he's openly vying for the position.
Speaker 2 (09:15):
You mean, this is what happens with everyone who all
these positions when you are in the running to be
fed chair. Do you think A that you don't have
any ego and B that you haven't learned how to
play the game.
Speaker 3 (09:31):
Yeah, I'm not saying I'm not judging it in a
moral sense. I'm saying i's if his objective is to
preserve fed independence, he could distance himself a little bit
more from the regime prevailing political regime the Trump administration,
then he has done. I wouldn't. I was disappointed he
dissented publicly. I know his views are well founded. A
reasonable person can make arguments that the economy is wrea getting,
(09:52):
et cetera. I just thought his vocal advocacy for relaxing
monetary policy and his persistent advocacy of it struck me
as a little bit opportunistic. But like you say, he's
only human. One hopes that if he By the way,
warsh is a light weight, Bascent doesn't know what he's
talking about when it comes to monetary policy. Hassett is
not a light weight. Monetary policy is not his area.
(10:15):
He knows how to read a paper in economics. Waller
of the four I know, percents not in the running anymore,
but I've gripped him in there since he since he
pops off, he sounds off for monetary matters routinely. Of
the four Waller is a heavyweight to begin with. He's
in the mold of Chlorida and Plosser, who recently passed away,
God rest his soul, and a number of other academics
who served on the Federal Reserve Board in the past
(10:36):
twenty five years. Ben Bernanke two, Let's.
Speaker 2 (10:38):
Take a quick break. When we come back, we're joined
by Trip Mikel from The New York Times talking about
Apple's announcement yesterday and what we saw.
Speaker 1 (10:49):
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Speaker 2 (11:26):
All right. As promised, We're now joined by Trip Mikel
from The New York Times here to talk about Apple's
unveiling of new products yesterday. Trip, How are you this morning?
Speaker 1 (11:37):
We're doing great. How are you guys?
Speaker 2 (11:39):
We're doing well. When we look at the Apple announcements
from yesterday, a bunch of different products unveiled, can you
give our listeners a sense of kind of what some
of the big highlights were from the announcements.
Speaker 4 (11:52):
I mean, a most noteworthy thing was the introduction of
really like arguably the first new looking iPhone in years,
probably going back to twenty seventeen. Apple yesterday introduced an
iPhone new iPhone line. It's the iPhone Air. It's about
a third thinner than the than the iPhones we've seen
(12:15):
in recent years. It does it's going to challenge people
a little bit because it does have less battery life. Right,
You're going to give up some functionality if you go thinner.
And Apple noted that in addition to that, they just
updated their existing product line. You know, they're in this
period of their existence where a lot of what they
(12:36):
do is incremental improvements. New new chips, better cameras for iPhones,
bigger screens for watches. You know, AirPods Pro three are
going to have better audio. Those type of changes that
are just kind of improvements around the edges, so to speak, trips.
Speaker 2 (12:56):
Here's my question for you. Who's the person out there
that said, I really want to buy an iPhone right now,
but one with less battery life and one that's thinner,
because the thinness is the thing that matters. Like, Who's
who's demanding that? I guess because I just I feel
like the number one complain of most people is, hey,
(13:18):
my phone dies too much. And Apple went in the
opposite direction here, So help me understand why they did this,
I think.
Speaker 4 (13:25):
But if I had to, like, you know, wager on
the type of person who's going to be buying this phone,
it's probably going to be a lot of people who
are in you know, the Apple upgrade program. They get
a new phone every year, and they'll get you know,
the maximum amount of battery performance out of that device
for a year, and and then they'll swap and they'll
probably start to complain as the battery life gets worse.
(13:48):
You know, we all know that battery life fades over
the life span of a phone, of a device, and
then they'll swap it out a year from now, and
they'll do it because they want to look cool and
that phone will quote unquote look cool because it looks
different than than others out there.
Speaker 1 (14:04):
It is.
Speaker 4 (14:05):
It is kind of a return to form. Excuse the
pun there. It's unintended, but I got to turn to
return to form for Apple in the sense that you know,
there was a period of time where you could have
a new phone, be at a party or put it
on a table at a restaurant and something like, oh wow,
you got the new phone. How do you like it?
Speaker 2 (14:24):
Right?
Speaker 1 (14:25):
Like?
Speaker 4 (14:25):
It will allow people to have that conversation again, and
I bet a lot of people who who like being
seen as like on the on the cutting edge of
the front edge of technology will go out and purchase
it for that reason alone.
Speaker 2 (14:38):
When you look at the rest of the lineup, is
it safe to say incremental improvements but no major steps forward?
Or am I missing something that that was noted yesterday?
Speaker 5 (14:51):
No?
Speaker 4 (14:51):
No, I mean I think that that kind of captures it.
I mean. The one thing that that I would note
from a business perspective for Apple that's it out is
that with their two top line phones, which are bought
by probably their most affluent customers, the iPhone, the iPhone
Pro and the iPhone Promax, they increased the price by
(15:13):
one hundred dollars each on those phones, and most analysts
don't think they needed to increase the price because of
inflation and their components that go into the device. In
other words, they don't think the bill of materials went
up such that they needed to increase price, or that
terrorists pressured them to increase price. They think Apple increased
(15:34):
price because it wants to push up at sales. And
if we look back at Apple's business history, the last
time they did a major price increase in twenty seventeen,
they didn't increase the number of phones they sold the
subsequent year, but they made a lot more money. And
this is a mechanism that they'll turn to from time
to time in order to make sure that their sales
(15:55):
go up and their investors are satisfied.
Speaker 2 (15:58):
One of the other things that I know, you know,
even users who aren't buying new phones will notice in
the coming weeks is the rollout of the new iOS,
which reportedly has a very different look. Is there any
new functionality included there as well? What kind of things
are people going to see?
Speaker 4 (16:15):
Yeah, I mean, we're we're moving towards a new user
interface from Apple here with the new iOS and your
correct It will be out in the coming weeks. It
is bringing in what Apple calls and their great marketing
wisdom liquid glass.
Speaker 1 (16:33):
Yeah.
Speaker 4 (16:34):
Yeah, you know, they love their fancy turns of phrases
to promote things, and in this instance, what that really
means is more transparency around kind of the visual interface.
So when you toggle over something or try to pull
down a a window, you'll you'll be able to kind
of see through the menu that that comes down, and
(16:57):
that displays into what was behind it little bit. You know.
I think early people who tested this over the summer,
when some beta versions of it were released, were a
little bit critical of kind of the way it blurred.
It kind of melded like the background image with the
(17:18):
foreground font in ways that made it hard to kind
of know what you were doing. And so they did
some tinkering around the edges over the course of the summer,
and I'm sure it's ready for primetime now.
Speaker 2 (17:29):
Fantastic, Trip, appreciate you joining us, and thank you for
all the information on yesterday's announcements.
Speaker 4 (17:35):
Great thanks for having me.
Speaker 2 (17:36):
That is Trip, mikel from the New York Times talking
about Apple all right.
Speaker 5 (17:40):
Time for trivia here on the Financial Exchange and today
is Jack Ma's sixty first birthday. In nineteen ninety nine,
Jack Ma founded his internet company that would become the
world's largest retailer in twenty seventeen. So trivia question today,
what is the name of the internet retail company started
(18:00):
by Jack Ma? Once again, what is the name of
the internet retail company started by Jack Ma? Uh be
the sixth person today to text us at six one
seven three six two thirteen eighty five with the correct answer,
and he win a Financial Exchange Show T shirt. Once again,
the sixth correct response to text us to the number
(18:23):
six one seven three six two thirteen eighty five will
win that Financial Exchange Show t shirt. See complete contest
rules at Financial Exchange Show dot com.
Speaker 2 (18:35):
Piece here from Barons Stocks bullmarket nears three year anniversary.
It likely has more room to run. Well, yes, that
tends to be the case with stocks. They do tend
to move up in the long run and absent any
kind of crisis. Again kind of the secular bull markets
have been the feature, not the bug, in the United
(18:56):
States for the last eighty years. And oh yeah, if
you're a betting person generally betting on stocks to go
up historically has been a better proposition than betting on
them to go down.
Speaker 3 (19:09):
Yeah, the argument of this piece seems to be and
this is not necessarily wrong. Before the fact, we'll find
out if things continue to go as they've gone, stocks
will continue to go up. And I'm not really oversimplifying.
Speaker 2 (19:21):
No, AI, go ahead, Chuck, No, No, we just got
to go to break the one time you're not looking
at the clock, but I read you though. Quick break
here when we come back. We got the trivia answer
in Wall Street Watch.
Speaker 1 (19:40):
Bringing the latest financial news straight to your radio. Every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
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):
Markeets in mixed territory. After the Producer Price Index this
morning revealed wholesale prices actually fell zero point one percent
last month, better than expectations of a zero point three
percent increase. We'll get another look at inflation tomorrow morning
at a thirty when the Consumer Price Index is released.
Right now, the Dow is down by six tenths of
(20:21):
one percent, or two hundred and ninety points lower. SMP
five hundred is down three tenths of one percent or
twenty one or two is up three tenths of one
percent or twenty one points higher in the Nasdaq, also
up by about three tenths of one percent. Russell two
thousand is flat at the moment. Tenyure Treasure Reealed is
down two basis points at four point zero five three percent,
(20:44):
and crude oil up over one and a half percent higher,
trading at sixty three dollars in sixty six cents a barrel.
Oracle surging by forty two percent now after the software
company forecasted huge gains in cloud infrastructure revenue. The cloud
Giant is on pace for its best day since nineteen
ninety two. It is now approaching the one trillion dollar
(21:06):
market cap benchmark. More on Oracle with Chuck and Mark
here in a matter of moments. Meanwhile, Memestock in video
game retailer game Stop is climbing over five percent higher
after it reported a jump in quarterly profit and said
the value of its bitcoin holdings topped half a billion
dollars in the previous quarter. Elsewhere, we Go Vi and
(21:28):
Ozembic maker Novo Nordisk said it plans to cut nine
thousand jobs. The company also cut its guidance for the
second time in six weeks. That stock is up nearly
one percent, Chiwi sinking sixteen percent after the online pet
products retailer posted a decline in quarterly profit. In online brokerage,
(21:48):
Robinhood announced it will launch its own social media network
that will allow users to post their trades. Robinhood stock
is up by two percent. I'm Tucker Silva and that
Wallstree watch and in the previous segment, we asked you
the trivia question, what is the name of the internet
retail company started by Jack Ma That would of course
(22:09):
be Ali Baba. Andrew from Hyannis, mass is our winner
today taking on my Financial Exchange Show t shirt. Congrats
to Andrew and we played trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (22:24):
As Tucker noted, Oracle reported earnings after the bell yesterday
and coming into the week, I'll be one hundred percent
honestly said, look, you know, in terms of earnings reports,
there's nothing that is huge this week. I think like
my words were somewhere along the lines of sure, you've
got Oracle, but you know, they're not what Microsoft and
(22:44):
in Video and you know, YadA YadA are And today
I kind of have to, you know, crumple up all
those words on a piece of paper, eat them, and
you know say oops, like gosh, didn't really see that coming.
And the good news is I wasn't the only one
who didn't see this coming, because if other people did,
the stock wouldn't be up forty two percent today because
(23:06):
it would have already been, you know, priced in. So
here's what happened. Oracle reported earnings, and the earnings for
the current quarter actually missed on both earnings per share
and revenue. They missed, but they came out and they said, hey,
we now have four hundred and fifty billion dollars worth
(23:31):
of basically what they call it is contracted revenue that
has not yet been recognized, so contracts to provide cloud services.
And that's up three hundred and fifty nine percent from
a year ago. And everyone kind of went, excuse me,
you have you have what? And how did this just happen.
(23:53):
What they're saying is that their cloud business, which did
ten billion dollars in revenue last year, is going to
do around eighteen billion this year, and then in fiscal
twenty seven it'll go to thirty two billion. In fiscal
twenty eight, it'll go to seventy three billion, in fiscal
twenty nine to one hundred and fourteen billion, and in
(24:13):
fiscal twenty thirty to one hundred and forty four billion dollars.
So their cloud revenue, they're saying, is going to go
up fourteen x in the next five years, which is insane.
It's crazy. I'm not saying it's not going to happen.
I'm just saying it's it's crazy growth. It's basically what
in video went through in the last couple of years.
(24:35):
And so you try to piece this all together and say, Okay,
how is this happening because further sales of in vidio
processors are no longer moving in that fashion. But Oracle,
if you look at like what they what they do,
they're saying, no, we're going to have you know, people
are going to use our cloud in order to basically
(24:58):
provide AI services. Could be Microsoft subcontracting out some of
the you know, cloud demand that they have, it could
be whatever, but Oracle pretty much saying, yeah, this is
where we're going to make our bread and butter. The
question becomes, Okay, is this actually like new revenue somewhere else?
Is this something that isn't you know that no one
else is pricing in. If so, where's it coming from?
(25:22):
And so, you know, people are just trying to figure out, like,
where's this spend going to come from? Given what's already
been announced by other companies and what's allocated out there.
And I think that's the remaining question. But it's driving
up everything today related to semis. You will get you know,
other big semi names and videos up four and a
half percent today, AMD up three and a half, broad
(25:45):
Coom up another ten, Core Weave up eighteen. It's basically
that entire AI ecosystem is just through the roof today,
and this because people are like, oh gee, there's like,
is there a whole nother leg on all of this?
There might be. I mean it's it's certainly as possible.
But where is the spending going to come from? Is
(26:06):
always the question that's out there, and I still don't
have a good read on that. But it doesn't really
matter if I have a good read on it, because
the stocks are absolutely rocketing today after quite honestly, Semi's
and AI had kind of weakened again in the last
month or so. I think we had the piece Tucker
when was it was like sometime in the last week
(26:28):
or two, the piece about like, oh, like does this
mean anything about like that the AI boom is over?
We cover that piece about like how AI stocks had
been you know, struggling recently, and we said at the time, like, no,
it just means that they haven't done well for a
few weeks. And look, this is kind of the case
in point. There's you know, you never know what the
market doesn't know out there, and in this case, it
(26:50):
missed a ton of information, and so you've got Oracle
stock up almost three hundred billion dollars on the day.
It's insane. I've never seen anything like this for a
company of this.
Speaker 3 (27:00):
No, given the number of analysts covering it. I'm looking
at our innovation for example of famous AI and other.
Speaker 2 (27:09):
Kathy Woods, ut did they even hold it? They don't
own it.
Speaker 3 (27:14):
And I'm looking at competitors. I picked on ARC for
only because they're conspicuous and vote for but I'm looking
at competitors. They don't own it. So my question is,
how do you, how do you miss? They have contracts
with open Ai, XAI, Meta and videos so AI and
AI adjacent companies, and they're one of the few people
that can make the storage for the data that these
(27:36):
AI models train and perform other functions, so all the paraphernalia.
Much like the Internet boom Oracle made a lot of
the paraphernalia, there are shades of that here. To think
that they've been the beneficiary of both booms is pretty remarkable.
There was an interim period when they lost you know,
ninety percent of their market cap.
Speaker 2 (27:55):
But yeah, it is.
Speaker 3 (27:56):
It is kind of wild. And how did active managers
who we pay not we as Armstrong Advisory Group where
we do our day work, but we as investors generally
pay a lot of money to to outperform, how do
they miss this story?
Speaker 2 (28:08):
Folks? If you are wondering where the economy is heading,
you are not alone. GDP. We've talked about it's growing,
but Tariff's inflation and jobs numbers are making headlines, all
kinds of questions about interest rates, housing cost policy changes,
even AI. Look, it's changing our markets. Move you see
this Today the Armstrong Advisory Group is hosting two financial
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Speaker 2 (29:42):
I want to talk a little bit about the auto
industry here, and specifically about Jaguar as they are known.
And basically, they've tried to go through a rebrand this year,
and you know, in including getting rid of the Jaguar
logo and just moving to a weird font Jaguar type.
(30:10):
And Jaguar says that they expect only fifteen percent of
their current customers to buy their cars once the rebrand
is complete. So they're saying, we know we're alien eating
eighty five percent of our current customers and we're cool
with it, which is generally like not a great business model,
because it's typically cheaper to maintain your current customers than
(30:31):
to try to find new ones. Now, the case that
Jaguar is trying to make is that their current models
had fallen behind the times and the stereotypical Jaguar owner
had become, you know, a sixty five year old that
might only buy one more Jaguar from them, and so
they wanted to get back into the youth market. And
(30:54):
I gotta tell you a couple things first. Whenever people
try to like target a market that they're not really
known in. They generally do it really badly. I have
two good examples of this. One in the auto industry.
The first one I'm gonna give though, is the NFL,
and the NFL a few years back decided that they
(31:16):
wanted to try to make inroads with women. They wanted
more women watching football, and instead of being like, hey,
women who like football, how do we get more women
to watch football? They just threw out a bunch of
pink branded stuff and said this will be what makes
it work. And obviously it didn't work because that's not
how any of this works, and so it was just
(31:37):
this huge flop because they didn't actually understand what they
were doing in their target audience. Another one in the
auto industry about twenty years ago, Toyota, who generally has
really good decision making on a lot of this stuff,
they decided they wanted to target young people too, and
they came out with a car brand called Scion Scion
(31:58):
and it lasted maybe five or six years. They had
like a couple like cheap, boxy looking models, and they,
you know, came out with all these commercials that were
just like all these young people being like, oh, like
cyon Yahoo Cool Laws, and it flopped because it turns
out young people don't want to buy cars that are
geared at young people. They want to feel you know,
(32:19):
older and mature driving a car. And so if you
try to sell a car that's you know, targeted at
in you know, a twenty year old, you're not going
to sell because they don't want something that's targeted them.
They want to feel older. So to bring this full
circle to Jaguar, the Jaguar is basically doing what a
combination of Toyota and the NFL did in that they're
(32:43):
trying to sell a car to young people by being like, oh, look,
we're hip because our new logo has some capital letters
where there shouldn't be and some lowercase letters where there
shouldn't be, And buy Jaguar because you're young and we're
young too. And that's just not how this works.
Speaker 3 (33:02):
Yeah, it's hard for a luxury brand that has a
nostalgia appeal like Cadillac or jag to evolve. I bring
up Cadillac because I think they've done a good job
of keeping personal opinion. You know, a Caddy when you
see one, you still my whole life. They've had a
distinctive grill, distinctive kalelights, and other little features that are
(33:23):
indicative of something being a caddy. Same is true in
my mind of Buick and Lincoln, and I name American
brands because that's what I grew up admiring. Jag such
a rat. BMW's an example of a When you see
a BMW coming head on made in any era, you
know it's a beamer.
Speaker 2 (33:41):
Can we talk about BMW just for a second, I'd
love to. I don't know who their current stylist is.
They're making some weird decisions. I got to say, you
can still recognize them. But unfortunately it's just like these
two giant buck teeth driving right at you now. With
the new vehicles they're rolling out, I.
Speaker 3 (33:57):
Haven't seen that yet they and I'll be careful with that.
Speaker 2 (34:01):
I've been a big believer in like they've normally had
like really classly, really good looking vehicles and Gollie g Wilkers.
I'm not really sure that that's the case anymore with
some of the new stuff I'm seeing coming off the line.
Speaker 3 (34:13):
Yeah, you have to be faithful to some characteristics that
people associated.
Speaker 2 (34:18):
It just looks like a giant beaver coming at you. Now,
it's like the grill. The problem is what they're doing now,
so that the grill always used to stop just below
kind of like the kneeline of the car, is how
I describe it, Like that lower bumper, right, the grill
was that top part. Now that they've taken it, they've
narrowed it and made it go all the way down,
like to the foot of the car, and so it's
(34:39):
just this narrow, little bucktooth thing that's coming right at you.
Speaker 3 (34:43):
Oh so it's more vertical.
Speaker 2 (34:45):
Yeah, it's like the proportions are all wrong.
Speaker 3 (34:49):
Yeah. Ford tried that, I forget with which I think
the original edsel or something had a vertical grill, and
people hated it. They quickly went back went back to
the traditional horizon. I don't know why that comes to mind.
You just have to be careful when you're messing with
something that is distinctively associated with your lineup.
Speaker 2 (35:05):
Let me see if I can. I'll see if I
can find a picture for you in the break. But
let's go to break right now, and when we come back,
we'll do some stack roulette.
Speaker 1 (35:12):
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(35:33):
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Speaker 2 (36:18):
Mark what do you got for me? For sack roulette?
Speaker 3 (36:20):
Wall Street Journal reporting that health insurance costs for businesses
are expected to rise by the most in fifteen years
next year. A on a big consultancy that works with
employers on providing benefits packages Willis Towers Watson better known
as WTW. In fact, I don't think they go by
Willis Towers Watson anymore, but anyway, are both saying that
(36:43):
they expect coverage for health insurance to increase by nine
to ten percent on average next year. They service mainly
big employers, but the same forces driving that will of
course affect smaller, smaller groups and the individuals who buy
through exchanges. This is obviously not good for inflation.
Speaker 2 (37:05):
All else equal, no, And obviously what you hear then
from employers is okay. They go to their benefits manager
and they say, how can I reduce this cost? And
you generally have two options. You can raise deductibles or
you can push a bigger chunk of this onto your
employees to handle, where you might say, okay, we used
(37:25):
to cover ninety percent of the cost, now we're going
to cover eighty percent of the cost, you know, just
as an example there so companies rarely, you know, eat
cost increases of this magnitude on their size, and so
the concern for I think a lot of workers would be, Hey,
am I either going to be seeing higher deductibles in
my plan in the coming year or is my employer
(37:49):
going to cover less of the premium than they used to?
Speaker 1 (37:53):
Right?
Speaker 2 (37:53):
You know, those are two things to watch out for
as you get into the new rates that are rolled
out in the next month or two. We're gonna take
a quick break for the entire rest of the day.
Tomorrow is Thursday, and that means that we're gonna be
doing a show. We're gonna talk about the consumer price Index,
we're gonna talk about continuing jobless claims, and a whole
(38:15):
lot more. So you should tune in and listen to us,
because it's gonna be great.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
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(00:20):
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Exchange with Chuck Zada and Mark Fandaddy, your exclusive look
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(01:06):
and Mark Vandetti.
Speaker 2 (01:10):
Chuck, Mark and Tucker with you. And we've got markets
rallying today largely on the back of some earnings that
were fine from Oracle, but the guidance they gave was
just monstrous. And so Oracle stock again we're gonna touch
on this, but it's up forty one percent today, which
(01:32):
in actual dollar terms, just to put this in perspective,
you're talking about a company that added about two hundred
and eighty billion dollars in market cap in a single day,
and that was almost a trillion dollar market cap. It's
it's insane. I mean, this was a company that quite
(01:52):
honestly five six years ago, like, yes, they were around,
they were still, you know, a company, but they were
kind of you know, has been when it came to
the tech sector. You know they exactly they were. They
were fine, they were profitable, they were doing their thing.
And today you've got them, you know, potentially becoming you know,
the next member of the trillion dollar club sometime in
(02:15):
the next couple of days, if not today, depending on
how the rest of the day goes. So with that,
you currently have the Dow off two hundred and fifty
one points because Oracle is not in the Dow. You've
got the S and P five hundred up twenty nine points,
and the Nasdaq Composit up one hundred and two points,
both those about half a percent, And so you say,
why are those up only you know, half a percent.
(02:37):
The answer is, well, the money to bid up Oracle
had to come from somewhere, and basically investors are pulling
from elsewhere in tech right now, Apples down three percent,
Amazon's down two percent, salesforce is down two percent, met
is down one percent, and so you know, other tech
and tech adjacent companies are getting sold in order to
(02:57):
bid up Oracle. Here on the bond side of things,
pretty quiet day, but slightly lower rates on the ten year,
which is now at four point six three percent, down
one point one basis points. When we take a look
at commodity markets, we got oil up sixty six cents
a barrel on West Texas Intermediate to sixty three twenty nine.
(03:19):
Just not a whole lot of noise. They're just kind
of chopping around load to mid sixties as it's been
for a while. And we've got gold up another four
dollars and seventy cents an ounce to thirty six eighty
seven on the nose. No new all time high for
gold today, but hey, every day. You know, there's a
reason why they have twenty four hours in the day,
(03:40):
and it's so that you can see if gold's going
to get to a new all time high. And the
clock hasn't struck midnight yet, so we'll see where we
go today. I want to kick this hour off with
a little bit of a chat about Christopher Waller. Wall
Street Journal has a profile piece out about him and specifically,
(04:02):
you know, kind of talking up the fact that, hey,
he has largely, in my opinion, since being named to
the Federal Reserve Board of Governors back in twenty twenty
by President Trump at the time, I think that Waller
has been the member of the Board of Governors who
(04:22):
has been most pugged in and most accurate when it
comes to forecasting where the economy is wasn't is going.
And in my opinion, this along with his you know,
the fact that he's already on the Board of Governors
and in my mind, should give him a leg up
to be the next ved chair. Whether he is or not,
obviously is not something that we know right now, but
(04:48):
I think that When you look at Waller, he's someone
who again recently, has just seemed to be very pugged
in and locked into where this economy is, and as such,
I think would be a shoe in for the job
if President Trump ended up naming him.
Speaker 3 (05:06):
Well, among the main contenders, he's the only serious monetary
policy researcher his early work somewhat ironically because Trump wants
to control the FED. I'm not judging it, I'm but
it's obvious if Trump could, it would he would be
responsible for printing money. Sure, but he knows he can't
quite get away with that right now, so he's going
for this incremental approach. But Waller's research done mainly in
(05:29):
the early nineties when he was most active in.
Speaker 2 (05:32):
That He's the Saint Louis FED back then, right.
Speaker 3 (05:35):
I don't you know he was ahead of the econ
department in Notre Dame. More recently, he probably made had
multiple FED research stands. A lot of these PhD researchers,
that's a normal career path for them. But the work
of his answers, yes, oh, thanks, thank you both. The
work I'm familiar with is his work on institutional a
(05:57):
design for central banks that ensures the that can operate
credibly and independently. He made significant contributions to the literature
on what type of central banker you want to pick
and how you want to design your central bank. I
bring it up because it's ironic, because he may be
the appointee of someone who effectively views him as a puppet.
(06:18):
Will he be willing to kind of surrender his I
don't want to say conviction. I can't speak for him.
I don't know him, but I assume, given the results
of his research, that he feels like independence is key
to stable inflation and thus stable output, because those two
things are connected.
Speaker 2 (06:35):
And I think it raised the question of look Waller
right now is talking about He's been one of the
very outspoken members of the FED saying we need to
be cutting interest rates, and he's done so in a
way that I think maintains his independence and credibility, and
that he's been talking about this kind of for the
last year, like, hey, guys, the labor market's weaker than
(06:56):
we think, and we need to be doing something on this.
He was one of the leading voices on this last
year as well. This is not you know, an about
face that he made this spring or this summer where
he suddenly said, hey, guys, like now, I think that
you know, we need to be cutting This has been
his position pretty consistently since last year, and I think
(07:22):
with Waller, as with any of these candidates, the question
is it's the it's the Scott Besson conundrum that you have,
which is this time last year, Bessont was writing op
eds talking about, Hey, I can't believe the Treasury is
issuing all this short term debt like they're deliberately doing
(07:42):
it to try to keep long term interest rates low.
Anyone who's serious wouldn't be doing that. I can't believe
they're doing this. And then Besson comes in, takes a
look around, like sees the lay of the land, and
is like, yep, I'm gonna keep doing exactly that because
he realized, like, Okay, when push comes to shove, I
have to pay the bills for the United States, and
this is the best way to do it, you know,
(08:03):
based on you know, what my goals are and everything.
And so with with Waller, and not just Waller, but
the other you know guys who are running for the position. Effectively,
you know, you got the two Kevin's out there worsh
and Hassett that are both in the running as well.
And it's one thing leading up to, you know, a
nomination for a position to say, hey, I think we
(08:25):
should be doing this. When push comes to shove and
you're actually in the big chair, do you look around,
realize the real politique of the situation and say, you
know what, Yeah, we can probably cut this fall. But hey,
if if the economy starts to rebound in Q one
of next year and with it there's a rebound in
inflation and growth and all the stuff that goes along
(08:47):
with that, yeah, you better believe I'm gonna be hiking
because I need to do what's right in this situation.
Otherwise history is not going to remember me very well
as the FED chair that just sat in my hands
while inflation rose.
Speaker 3 (09:00):
Yeah, he's been a little more vocal about cutting rates
given the political backdrop than I would be comfortable with.
I do question whether he's behaving opportunistically.
Speaker 2 (09:08):
Of course he is. I mean, look, I don't think
that's a bad thing quite honestly.
Speaker 3 (09:13):
That he's openly vying for the position.
Speaker 2 (09:15):
You mean, this is what happens with everyone who all
these positions when you are in the running to be
fed chair. Do you think A that you don't have
any ego and B that you haven't learned how to
play the game.
Speaker 3 (09:31):
Yeah, I'm not saying I'm not judging it in a
moral sense. I'm saying i's if his objective is to
preserve fed independence, he could distance himself a little bit
more from the regime prevailing political regime the Trump administration,
then he has done. I wouldn't. I was disappointed he
dissented publicly. I know his views are well founded. A
reasonable person can make arguments that the economy is wrea getting,
(09:52):
et cetera. I just thought his vocal advocacy for relaxing
monetary policy and his persistent advocacy of it struck me
as a little bit opportunistic. But like you say, he's
only human. One hopes that if he By the way,
warsh is a light weight, Bascent doesn't know what he's
talking about when it comes to monetary policy. Hassett is
not a light weight. Monetary policy is not his area.
(10:15):
He knows how to read a paper in economics. Waller
of the four I know, percents not in the running anymore,
but I've gripped him in there since he since he
pops off, he sounds off for monetary matters routinely. Of
the four Waller is a heavyweight to begin with. He's
in the mold of Chlorida and Plosser, who recently passed away,
God rest his soul, and a number of other academics
who served on the Federal Reserve Board in the past
(10:36):
twenty five years. Ben Bernanke two, Let's.
Speaker 2 (10:38):
Take a quick break. When we come back, we're joined
by Trip Mikel from The New York Times talking about
Apple's announcement yesterday and what we saw.
Speaker 1 (10:49):
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(11:09):
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Speaker 2 (11:26):
All right. As promised, We're now joined by Trip Mikel
from The New York Times here to talk about Apple's
unveiling of new products yesterday. Trip, How are you this morning?
Speaker 1 (11:37):
We're doing great. How are you guys?
Speaker 2 (11:39):
We're doing well. When we look at the Apple announcements
from yesterday, a bunch of different products unveiled, can you
give our listeners a sense of kind of what some
of the big highlights were from the announcements.
Speaker 4 (11:52):
I mean, a most noteworthy thing was the introduction of
really like arguably the first new looking iPhone in years,
probably going back to twenty seventeen. Apple yesterday introduced an
iPhone new iPhone line. It's the iPhone Air. It's about
a third thinner than the than the iPhones we've seen
(12:15):
in recent years. It does it's going to challenge people
a little bit because it does have less battery life. Right,
You're going to give up some functionality if you go thinner.
And Apple noted that in addition to that, they just
updated their existing product line. You know, they're in this
period of their existence where a lot of what they
(12:36):
do is incremental improvements. New new chips, better cameras for iPhones,
bigger screens for watches. You know, AirPods Pro three are
going to have better audio. Those type of changes that
are just kind of improvements around the edges, so to speak, trips.
Speaker 2 (12:56):
Here's my question for you. Who's the person out there
that said, I really want to buy an iPhone right now,
but one with less battery life and one that's thinner,
because the thinness is the thing that matters. Like, Who's
who's demanding that? I guess because I just I feel
like the number one complain of most people is, hey,
(13:18):
my phone dies too much. And Apple went in the
opposite direction here, So help me understand why they did this,
I think.
Speaker 4 (13:25):
But if I had to, like, you know, wager on
the type of person who's going to be buying this phone,
it's probably going to be a lot of people who
are in you know, the Apple upgrade program. They get
a new phone every year, and they'll get you know,
the maximum amount of battery performance out of that device
for a year, and and then they'll swap and they'll
probably start to complain as the battery life gets worse.
(13:48):
You know, we all know that battery life fades over
the life span of a phone, of a device, and
then they'll swap it out a year from now, and
they'll do it because they want to look cool and
that phone will quote unquote look cool because it looks
different than than others out there.
Speaker 1 (14:04):
It is.
Speaker 4 (14:05):
It is kind of a return to form. Excuse the
pun there. It's unintended, but I got to turn to
return to form for Apple in the sense that you know,
there was a period of time where you could have
a new phone, be at a party or put it
on a table at a restaurant and something like, oh wow,
you got the new phone. How do you like it?
Speaker 2 (14:24):
Right?
Speaker 1 (14:25):
Like?
Speaker 4 (14:25):
It will allow people to have that conversation again, and
I bet a lot of people who who like being
seen as like on the on the cutting edge of
the front edge of technology will go out and purchase
it for that reason alone.
Speaker 2 (14:38):
When you look at the rest of the lineup, is
it safe to say incremental improvements but no major steps forward?
Or am I missing something that that was noted yesterday?
Speaker 5 (14:51):
No?
Speaker 4 (14:51):
No, I mean I think that that kind of captures it.
I mean. The one thing that that I would note
from a business perspective for Apple that's it out is
that with their two top line phones, which are bought
by probably their most affluent customers, the iPhone, the iPhone
Pro and the iPhone Promax, they increased the price by
(15:13):
one hundred dollars each on those phones, and most analysts
don't think they needed to increase the price because of
inflation and their components that go into the device. In
other words, they don't think the bill of materials went
up such that they needed to increase price, or that
terrorists pressured them to increase price. They think Apple increased
(15:34):
price because it wants to push up at sales. And
if we look back at Apple's business history, the last
time they did a major price increase in twenty seventeen,
they didn't increase the number of phones they sold the
subsequent year, but they made a lot more money. And
this is a mechanism that they'll turn to from time
to time in order to make sure that their sales
(15:55):
go up and their investors are satisfied.
Speaker 2 (15:58):
One of the other things that I know, you know,
even users who aren't buying new phones will notice in
the coming weeks is the rollout of the new iOS,
which reportedly has a very different look. Is there any
new functionality included there as well? What kind of things
are people going to see?
Speaker 4 (16:15):
Yeah, I mean, we're we're moving towards a new user
interface from Apple here with the new iOS and your
correct It will be out in the coming weeks. It
is bringing in what Apple calls and their great marketing
wisdom liquid glass.
Speaker 1 (16:33):
Yeah.
Speaker 4 (16:34):
Yeah, you know, they love their fancy turns of phrases
to promote things, and in this instance, what that really
means is more transparency around kind of the visual interface.
So when you toggle over something or try to pull
down a a window, you'll you'll be able to kind
of see through the menu that that comes down, and
(16:57):
that displays into what was behind it little bit. You know.
I think early people who tested this over the summer,
when some beta versions of it were released, were a
little bit critical of kind of the way it blurred.
It kind of melded like the background image with the
(17:18):
foreground font in ways that made it hard to kind
of know what you were doing. And so they did
some tinkering around the edges over the course of the summer,
and I'm sure it's ready for primetime now.
Speaker 2 (17:29):
Fantastic, Trip, appreciate you joining us, and thank you for
all the information on yesterday's announcements.
Speaker 4 (17:35):
Great thanks for having me.
Speaker 2 (17:36):
That is Trip, mikel from the New York Times talking
about Apple all right.
Speaker 5 (17:40):
Time for trivia here on the Financial Exchange and today
is Jack Ma's sixty first birthday. In nineteen ninety nine,
Jack Ma founded his internet company that would become the
world's largest retailer in twenty seventeen. So trivia question today,
what is the name of the internet retail company started
(18:00):
by Jack Ma? Once again, what is the name of
the internet retail company started by Jack Ma? Uh be
the sixth person today to text us at six one
seven three six two thirteen eighty five with the correct answer,
and he win a Financial Exchange Show T shirt. Once again,
the sixth correct response to text us to the number
(18:23):
six one seven three six two thirteen eighty five will
win that Financial Exchange Show t shirt. See complete contest
rules at Financial Exchange Show dot com.
Speaker 2 (18:35):
Piece here from Barons Stocks bullmarket nears three year anniversary.
It likely has more room to run. Well, yes, that
tends to be the case with stocks. They do tend
to move up in the long run and absent any
kind of crisis. Again kind of the secular bull markets
have been the feature, not the bug, in the United
(18:56):
States for the last eighty years. And oh yeah, if
you're a betting person generally betting on stocks to go
up historically has been a better proposition than betting on
them to go down.
Speaker 3 (19:09):
Yeah, the argument of this piece seems to be and
this is not necessarily wrong. Before the fact, we'll find
out if things continue to go as they've gone, stocks
will continue to go up. And I'm not really oversimplifying.
Speaker 2 (19:21):
No, AI, go ahead, Chuck, No, No, we just got
to go to break the one time you're not looking
at the clock, but I read you though. Quick break
here when we come back. We got the trivia answer
in Wall Street Watch.
Speaker 1 (19:40):
Bringing the latest financial news straight to your radio. Every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
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):
Markeets in mixed territory. After the Producer Price Index this
morning revealed wholesale prices actually fell zero point one percent
last month, better than expectations of a zero point three
percent increase. We'll get another look at inflation tomorrow morning
at a thirty when the Consumer Price Index is released.
Right now, the Dow is down by six tenths of
(20:21):
one percent, or two hundred and ninety points lower. SMP
five hundred is down three tenths of one percent or
twenty one or two is up three tenths of one
percent or twenty one points higher in the Nasdaq, also
up by about three tenths of one percent. Russell two
thousand is flat at the moment. Tenyure Treasure Reealed is
down two basis points at four point zero five three percent,
(20:44):
and crude oil up over one and a half percent higher,
trading at sixty three dollars in sixty six cents a barrel.
Oracle surging by forty two percent now after the software
company forecasted huge gains in cloud infrastructure revenue. The cloud
Giant is on pace for its best day since nineteen
ninety two. It is now approaching the one trillion dollar
(21:06):
market cap benchmark. More on Oracle with Chuck and Mark
here in a matter of moments. Meanwhile, Memestock in video
game retailer game Stop is climbing over five percent higher
after it reported a jump in quarterly profit and said
the value of its bitcoin holdings topped half a billion
dollars in the previous quarter. Elsewhere, we Go Vi and
(21:28):
Ozembic maker Novo Nordisk said it plans to cut nine
thousand jobs. The company also cut its guidance for the
second time in six weeks. That stock is up nearly
one percent, Chiwi sinking sixteen percent after the online pet
products retailer posted a decline in quarterly profit. In online brokerage,
(21:48):
Robinhood announced it will launch its own social media network
that will allow users to post their trades. Robinhood stock
is up by two percent. I'm Tucker Silva and that
Wallstree watch and in the previous segment, we asked you
the trivia question, what is the name of the internet
retail company started by Jack Ma That would of course
(22:09):
be Ali Baba. Andrew from Hyannis, mass is our winner
today taking on my Financial Exchange Show t shirt. Congrats
to Andrew and we played trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (22:24):
As Tucker noted, Oracle reported earnings after the bell yesterday
and coming into the week, I'll be one hundred percent
honestly said, look, you know, in terms of earnings reports,
there's nothing that is huge this week. I think like
my words were somewhere along the lines of sure, you've
got Oracle, but you know, they're not what Microsoft and
(22:44):
in Video and you know, YadA YadA are And today
I kind of have to, you know, crumple up all
those words on a piece of paper, eat them, and
you know say oops, like gosh, didn't really see that coming.
And the good news is I wasn't the only one
who didn't see this coming, because if other people did,
the stock wouldn't be up forty two percent today because
(23:06):
it would have already been, you know, priced in. So
here's what happened. Oracle reported earnings, and the earnings for
the current quarter actually missed on both earnings per share
and revenue. They missed, but they came out and they said, hey,
we now have four hundred and fifty billion dollars worth
(23:31):
of basically what they call it is contracted revenue that
has not yet been recognized, so contracts to provide cloud services.
And that's up three hundred and fifty nine percent from
a year ago. And everyone kind of went, excuse me,
you have you have what? And how did this just happen.
(23:53):
What they're saying is that their cloud business, which did
ten billion dollars in revenue last year, is going to
do around eighteen billion this year, and then in fiscal
twenty seven it'll go to thirty two billion. In fiscal
twenty eight, it'll go to seventy three billion, in fiscal
twenty nine to one hundred and fourteen billion, and in
(24:13):
fiscal twenty thirty to one hundred and forty four billion dollars.
So their cloud revenue, they're saying, is going to go
up fourteen x in the next five years, which is insane.
It's crazy. I'm not saying it's not going to happen.
I'm just saying it's it's crazy growth. It's basically what
in video went through in the last couple of years.
(24:35):
And so you try to piece this all together and say, Okay,
how is this happening because further sales of in vidio
processors are no longer moving in that fashion. But Oracle,
if you look at like what they what they do,
they're saying, no, we're going to have you know, people
are going to use our cloud in order to basically
(24:58):
provide AI services. Could be Microsoft subcontracting out some of
the you know, cloud demand that they have, it could
be whatever, but Oracle pretty much saying, yeah, this is
where we're going to make our bread and butter. The
question becomes, Okay, is this actually like new revenue somewhere else?
Is this something that isn't you know that no one
else is pricing in. If so, where's it coming from?
(25:22):
And so, you know, people are just trying to figure out, like,
where's this spend going to come from? Given what's already
been announced by other companies and what's allocated out there.
And I think that's the remaining question. But it's driving
up everything today related to semis. You will get you know,
other big semi names and videos up four and a
half percent today, AMD up three and a half, broad
(25:45):
Coom up another ten, Core Weave up eighteen. It's basically
that entire AI ecosystem is just through the roof today,
and this because people are like, oh gee, there's like,
is there a whole nother leg on all of this?
There might be. I mean it's it's certainly as possible.
But where is the spending going to come from? Is
(26:06):
always the question that's out there, and I still don't
have a good read on that. But it doesn't really
matter if I have a good read on it, because
the stocks are absolutely rocketing today after quite honestly, Semi's
and AI had kind of weakened again in the last
month or so. I think we had the piece Tucker
when was it was like sometime in the last week
(26:28):
or two, the piece about like, oh, like does this
mean anything about like that the AI boom is over?
We cover that piece about like how AI stocks had
been you know, struggling recently, and we said at the time, like, no,
it just means that they haven't done well for a
few weeks. And look, this is kind of the case
in point. There's you know, you never know what the
market doesn't know out there, and in this case, it
(26:50):
missed a ton of information, and so you've got Oracle
stock up almost three hundred billion dollars on the day.
It's insane. I've never seen anything like this for a
company of this.
Speaker 3 (27:00):
No, given the number of analysts covering it. I'm looking
at our innovation for example of famous AI and other.
Speaker 2 (27:09):
Kathy Woods, ut did they even hold it? They don't
own it.
Speaker 3 (27:14):
And I'm looking at competitors. I picked on ARC for
only because they're conspicuous and vote for but I'm looking
at competitors. They don't own it. So my question is,
how do you, how do you miss? They have contracts
with open Ai, XAI, Meta and videos so AI and
AI adjacent companies, and they're one of the few people
that can make the storage for the data that these
(27:36):
AI models train and perform other functions, so all the paraphernalia.
Much like the Internet boom Oracle made a lot of
the paraphernalia, there are shades of that here. To think
that they've been the beneficiary of both booms is pretty remarkable.
There was an interim period when they lost you know,
ninety percent of their market cap.
Speaker 2 (27:55):
But yeah, it is.
Speaker 3 (27:56):
It is kind of wild. And how did active managers
who we pay not we as Armstrong Advisory Group where
we do our day work, but we as investors generally
pay a lot of money to to outperform, how do
they miss this story?
Speaker 2 (28:08):
Folks? If you are wondering where the economy is heading,
you are not alone. GDP. We've talked about it's growing,
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(29:14):
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Speaker 1 (29:27):
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Speaker 2 (29:42):
I want to talk a little bit about the auto
industry here, and specifically about Jaguar as they are known.
And basically, they've tried to go through a rebrand this year,
and you know, in including getting rid of the Jaguar
logo and just moving to a weird font Jaguar type.
(30:10):
And Jaguar says that they expect only fifteen percent of
their current customers to buy their cars once the rebrand
is complete. So they're saying, we know we're alien eating
eighty five percent of our current customers and we're cool
with it, which is generally like not a great business model,
because it's typically cheaper to maintain your current customers than
(30:31):
to try to find new ones. Now, the case that
Jaguar is trying to make is that their current models
had fallen behind the times and the stereotypical Jaguar owner
had become, you know, a sixty five year old that
might only buy one more Jaguar from them, and so
they wanted to get back into the youth market. And
(30:54):
I gotta tell you a couple things first. Whenever people
try to like target a market that they're not really
known in. They generally do it really badly. I have
two good examples of this. One in the auto industry.
The first one I'm gonna give though, is the NFL,
and the NFL a few years back decided that they
(31:16):
wanted to try to make inroads with women. They wanted
more women watching football, and instead of being like, hey,
women who like football, how do we get more women
to watch football? They just threw out a bunch of
pink branded stuff and said this will be what makes
it work. And obviously it didn't work because that's not
how any of this works, and so it was just
(31:37):
this huge flop because they didn't actually understand what they
were doing in their target audience. Another one in the
auto industry about twenty years ago, Toyota, who generally has
really good decision making on a lot of this stuff,
they decided they wanted to target young people too, and
they came out with a car brand called Scion Scion
(31:58):
and it lasted maybe five or six years. They had
like a couple like cheap, boxy looking models, and they,
you know, came out with all these commercials that were
just like all these young people being like, oh, like
cyon Yahoo Cool Laws, and it flopped because it turns
out young people don't want to buy cars that are
geared at young people. They want to feel you know,
(32:19):
older and mature driving a car. And so if you
try to sell a car that's you know, targeted at
in you know, a twenty year old, you're not going
to sell because they don't want something that's targeted them.
They want to feel older. So to bring this full
circle to Jaguar, the Jaguar is basically doing what a
combination of Toyota and the NFL did in that they're
(32:43):
trying to sell a car to young people by being like, oh, look,
we're hip because our new logo has some capital letters
where there shouldn't be and some lowercase letters where there
shouldn't be, And buy Jaguar because you're young and we're
young too. And that's just not how this works.
Speaker 3 (33:02):
Yeah, it's hard for a luxury brand that has a
nostalgia appeal like Cadillac or jag to evolve. I bring
up Cadillac because I think they've done a good job
of keeping personal opinion. You know, a Caddy when you
see one, you still my whole life. They've had a
distinctive grill, distinctive kalelights, and other little features that are
(33:23):
indicative of something being a caddy. Same is true in
my mind of Buick and Lincoln, and I name American
brands because that's what I grew up admiring. Jag such
a rat. BMW's an example of a When you see
a BMW coming head on made in any era, you
know it's a beamer.
Speaker 2 (33:41):
Can we talk about BMW just for a second, I'd
love to. I don't know who their current stylist is.
They're making some weird decisions. I got to say, you
can still recognize them. But unfortunately it's just like these
two giant buck teeth driving right at you now. With
the new vehicles they're rolling out, I.
Speaker 3 (33:57):
Haven't seen that yet they and I'll be careful with that.
Speaker 2 (34:01):
I've been a big believer in like they've normally had
like really classly, really good looking vehicles and Gollie g Wilkers.
I'm not really sure that that's the case anymore with
some of the new stuff I'm seeing coming off the line.
Speaker 3 (34:13):
Yeah, you have to be faithful to some characteristics that
people associated.
Speaker 2 (34:18):
It just looks like a giant beaver coming at you. Now,
it's like the grill. The problem is what they're doing now,
so that the grill always used to stop just below
kind of like the kneeline of the car, is how
I describe it, Like that lower bumper, right, the grill
was that top part. Now that they've taken it, they've
narrowed it and made it go all the way down,
like to the foot of the car, and so it's
(34:39):
just this narrow, little bucktooth thing that's coming right at you.
Speaker 3 (34:43):
Oh so it's more vertical.
Speaker 2 (34:45):
Yeah, it's like the proportions are all wrong.
Speaker 3 (34:49):
Yeah. Ford tried that, I forget with which I think
the original edsel or something had a vertical grill, and
people hated it. They quickly went back went back to
the traditional horizon. I don't know why that comes to mind.
You just have to be careful when you're messing with
something that is distinctively associated with your lineup.
Speaker 2 (35:05):
Let me see if I can. I'll see if I
can find a picture for you in the break. But
let's go to break right now, and when we come back,
we'll do some stack roulette.
Speaker 1 (35:12):
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the Financial Exchange Radio Network. The Financial Exchange is now
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Business Radio Channel one thirty two. Stay informed about the
(35:33):
latest from Wall Street, fiscal policy, and breaking business news.
Every day. The Financial Exchange is life on Serious XM's
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Speaker 5 (35:47):
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Speaker 2 (36:18):
Mark what do you got for me? For sack roulette?
Speaker 3 (36:20):
Wall Street Journal reporting that health insurance costs for businesses
are expected to rise by the most in fifteen years
next year. A on a big consultancy that works with
employers on providing benefits packages Willis Towers Watson better known
as WTW. In fact, I don't think they go by
Willis Towers Watson anymore, but anyway, are both saying that
(36:43):
they expect coverage for health insurance to increase by nine
to ten percent on average next year. They service mainly
big employers, but the same forces driving that will of
course affect smaller, smaller groups and the individuals who buy
through exchanges. This is obviously not good for inflation.
Speaker 2 (37:05):
All else equal, no, And obviously what you hear then
from employers is okay. They go to their benefits manager
and they say, how can I reduce this cost? And
you generally have two options. You can raise deductibles or
you can push a bigger chunk of this onto your
employees to handle, where you might say, okay, we used
(37:25):
to cover ninety percent of the cost, now we're going
to cover eighty percent of the cost, you know, just
as an example there so companies rarely, you know, eat
cost increases of this magnitude on their size, and so
the concern for I think a lot of workers would be, Hey,
am I either going to be seeing higher deductibles in
my plan in the coming year or is my employer
(37:49):
going to cover less of the premium than they used to?
Speaker 1 (37:53):
Right?
Speaker 2 (37:53):
You know, those are two things to watch out for
as you get into the new rates that are rolled
out in the next month or two. We're gonna take
a quick break for the entire rest of the day.
Tomorrow is Thursday, and that means that we're gonna be
doing a show. We're gonna talk about the consumer price Index,
we're gonna talk about continuing jobless claims, and a whole
(38:15):
lot more. So you should tune in and listen to us,
because it's gonna be great.
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