February 9, 2026 • 38 mins
Chuck Zodda and Mike Armstrong unpack a market rebound led by tech as investors brace for delayed inflation and jobs data amid growing questions about whether January inflation spikes are just seasonal noise. The hour also tackles whether AI can responsibly replace financial planning advice, why the Dow is a flawed—but misunderstood—index, rising concerns over Chinese automakers entering the U.S., and how restaurant price inflation has erased America’s “cheap eats.”
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Speaker 1 (00:00):
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(00:20):
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(00:42):
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(01:06):
and Mike Armstrong.
Speaker 2 (01:09):
Chuck, Mike and Tucker here with you. And as we
kick off another week, we've got stocks, well, they're they're
moving as they they tend to.
Speaker 3 (01:21):
Some of them are up, some of them are down,
some of them are flat. But at the on the whole, the.
Speaker 2 (01:28):
S ANDP is now up about half percent, thirty two points,
the Dow is up forty six points, about a tenth percent,
and the Nasdaq Composite up one hundred and eighty five
points or point eight percent. So you got stocks continuing
the rally that started on Friday tenure US Treasury not
really doing much of anything. It's it I was up
late watching the Super Bowl. I'm gonna sleep in a
(01:50):
little bit. It's up four tenths of a basis point
to four point two one percent, so not much movement there.
The dollar though, saying yeah, I'm on the move today,
down zero point seventy four percent to ninety six seventy eight.
Gold responding in turn, up ninety nine to fifty an
ounce to five thousand, seventy nine and thirty cents, so
back above five thousand, and we'll get those cute, literal
(02:13):
little silver people that are you know, bidden up the
price of silver here gold investors are gold bugs? Are
there silver bugs? Their silver back guerrillas, reptiles.
Speaker 3 (02:26):
I don't know, I don't know.
Speaker 2 (02:27):
In any case, silver's up about seven percent as well
as you got a rebound happening there. Crude oil West
Texts Intermediate up sixty four cents a barrel to sixty
four nineteen triple a national averageur gas prices up five
tenths of ascent overnight to two ninety and two tenths
after briefly dipping back down below that two ninety mark
(02:49):
over the weekend. Peace from the Wall Street Journal, Why
inflation may be about to come in?
Speaker 3 (02:56):
He let the.
Speaker 4 (03:03):
And follow on should we care? Maybe? Yeah.
Speaker 5 (03:07):
So. The reason they are the Wall Street Journal folk,
the fine folks at the Wall Street Journal are warning
you of this is that we've noticed some trends over
the last few years where, especially in the early release
of inflation, January can look a little bit roasty.
Speaker 4 (03:28):
Yeah, a little bit toasty because they try.
Speaker 5 (03:30):
To take out these seasonal adjustment factors and make it
so that, yeah, if XYZ company raises their prices every
January for inflation, that they don't really take that into
account because it's not terribly useful if you're trying to
factor in price adjustments. If you see prices shoot up
every January, they try and take that out. Some economists
(03:50):
have argued that they just can't fully do it properly,
and so we have seen, for instance, in January of
last year inflation and shot up to nearly three percent
in that reading year over year, and in January of
twenty twenty four, actually it declined off the December reading.
Speaker 4 (04:08):
So not the best example there.
Speaker 5 (04:09):
But we've seen a few of these where yeah, in
January you get a hotter than expected reading and then
you know, three months pass and oh, it was just
a January spike that didn't actually signify anything.
Speaker 2 (04:20):
Here's where we stand on inflation right now, just to
update everyone on the lay of the land. The Consumer
Price Index the CPI currently sits a two point seven
one percent year over year. Core CPI is at two
six pc is at two seven seven. We do not
have core PCE for full year because of actually sorry,
(04:42):
both of those we don't have through December yet because
of the shutdown.
Speaker 4 (04:45):
Yep UH.
Speaker 2 (04:47):
PPI is sitting at two nine to eight for the year.
Core PPIs at three three one. So I think right
now you can pretty conclusively say inflation is somewhere between
two and three quarters and three and a quarter. Sure
that it's in that ballpark. I don't like to get
into like, oh, well, is it exactly? It doesn't matter
(05:07):
exactly where it is. There's there's no fundamental difference between
inflation at two eight and two nine. It's not a
useful conversation to have.
Speaker 5 (05:16):
I'd be willing to theorize that it's maybe even as
low as two and a half, but I can't get
there because none of these numbers. I know the median
forecast is two and a half percent year over year
for this.
Speaker 2 (05:26):
Reading, So if it comes in, they're fine, But I
can't get there because we don't have a single year
over year number that's below two six right now. So
I think ultimately what we're interested in is this. At
the end of last year, the range that we were
in for all of these different numbers, two four to
(05:46):
two was the low end for the Producer Price Index.
The high end was two nine for core CPI. So
we've drifted up maybe a third of a percent in
the aggregate. The question for twenty twenty six is do
we continue to see enough disinflation in shelter and and
you know, core services and things like that to bring
(06:09):
this puppy back down into that two and a half range,
or does the tailwind that helped us last year following
energy prices, does that reverse this year and cause more
problems because even though energy prices, you know, the core
numbers exclude them, they seep.
Speaker 4 (06:26):
Into everything they do. I hate predicting energy price.
Speaker 5 (06:30):
Now year's an't is there any catalysts that would make
us believe that that should happen this year.
Speaker 4 (06:34):
I don't think the price would move back up. I
guess iroun action.
Speaker 2 (06:38):
Absent geopolitical whatevers. The potential that you have, in my opinion,
is you've got less drilling that's going on in the
United States right now because shale producers are your marginal
producers of oil in the US, and they're looking at
oil in the high fifties, low sixties and they're like, Nope,
(07:00):
we're not putting the rigs in the ground for that. Yeah,
not worth our time. We're gonna pass. So you've got that,
coupled with the fact that expectations are that the economy
is going to reaccelerate globally, and maybe you get a
reacceleration in the US if the labor market turns up.
And so if you have this reacceleration happening at the
same time that there's less marginal supply coming online and
(07:21):
older US h al wells are continuing to degrade at
a faster clip, then you potentially get oil moving up,
not to like a hundred, but remember all it takes
is for oil to get to you know, seventy, and
you got a ten percent move there, and it's like, oh,
this is you know, something that's going to have a
real impact. So that's the potential path. Does that happen?
I'm not convinced. I think it's a maybe. I do
(07:43):
think there are some structural factors that point to it being,
you know, a legitimate.
Speaker 3 (07:47):
Possibility, But I don't know.
Speaker 2 (07:49):
I mean, no one ever knows what's gonna happen with
energy because most of the price is controlled by you know,
a dozen or so oligarchs who get together every few
months and say, hey, how much oil should we pump
out of our you know fields? And I don't get
in their heads. I got they could be having a
(08:09):
bad day.
Speaker 3 (08:10):
And the like, screw it, We're not gonna pump anything.
Max the prices out, you.
Speaker 2 (08:14):
Know, like really tired from the Super Bowl yesterday. Yeah,
I just gonna take a break. I had a bad parlay.
We need to make this up. Cut the production, Jimmy, like,
you know, it's this is the kind of stuff that
you could see. So ultimately that's one possibility fame as.
Speaker 4 (08:31):
Huge NFL fans.
Speaker 3 (08:33):
Yeah, isn't there.
Speaker 2 (08:35):
There's not gonna be a game in Saudi Arabia next year,
but it was Australia, right.
Speaker 6 (08:39):
Well, there's a flag football thing happening coming up, I.
Speaker 3 (08:43):
Think in Saudi Arabia.
Speaker 6 (08:45):
Yeah, yeah, but yeah, you're right about Australia.
Speaker 2 (08:48):
Yeah, we were covering the Australia game. And why I
think it's the dumbest idea ever. You're gonna fly a
bunch of three hundred pound people like to the other
side of the world, try to deal with that jet lag.
You can have a horrible football game and then when
you're all beating up and Bruce, you're gonna fly right
back and deal with all the swelling that happens on
a twenty hour flight.
Speaker 3 (09:07):
Back at home.
Speaker 2 (09:08):
Really bad idea, Like it's a horrible idea for safety
and the product.
Speaker 3 (09:12):
Yeah, I get that. You want to grow your game globally.
Speaker 5 (09:15):
Yeah, if you want to, and Australia does seem like
a natural market for it, I'll give them that.
Speaker 3 (09:21):
Oh yeah, a lot of big dudes you like to
hit people like, I understand that. Like I'm all for it.
But maybe start in Australian league and call it Ausie
rules football.
Speaker 4 (09:31):
Yeah, so yeah, it's good.
Speaker 6 (09:33):
It's gonna be the Niners playing the Rams in Melbourne, Australia.
Speaker 3 (09:37):
The Niners Rams.
Speaker 6 (09:38):
Yeah, and that's a significant game too.
Speaker 3 (09:41):
Well it is.
Speaker 2 (09:42):
And I guess they're saying, oh, it'll be you know,
less travel because they're both West Coast teams.
Speaker 4 (09:47):
How do we get from oil to hear oil?
Speaker 6 (09:49):
Don't worry about it.
Speaker 5 (09:50):
Saudi Arabia flag football, yep, got it to naturally to
going to play yep, got it?
Speaker 4 (09:57):
Okay, thank you, just make it sure.
Speaker 3 (09:58):
I want to track the steps, all fine.
Speaker 6 (10:00):
It doesn't matter.
Speaker 2 (10:01):
Let's take a audit the trail. It's like watching claudwork.
You just have to see how like all the steps
that takes. Let's take a quick break here. When we
come back, we're gonna do a little bit of trivia,
and then we're going to talk about the uncool stock
index right after this.
Speaker 1 (10:19):
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Speaker 6 (10:51):
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that subscribe button. Time for trivia here on the Financial Exchange.
(11:13):
Today's Joe Peshi's eighty third birthday. Peshi began his career
as a child actor in the late fifties. He rose
to fame in the early eighties with his performance in
Raging Bull. Peshi has been nominated for three Best Supporting
Actor Awards, winning once so our trivia question Today, Joe
(11:33):
Peshi won his only Academy Award for his performance in
which movie. Once again, Joe Peshi won his only Academy
Award for his performance in Which movie. Be the fifth
person today to text us at six one seven three
six two thirteen eighty five with the correct answer along
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Show dot com.
Speaker 2 (12:11):
The Dow Jones Industrial Average crossed fifty thousand in the
past week, and uh, this piece the Wall from the
Wall Street Journal, the Dow the uncool index has its
moment in the sun talks about how people are paying
attention to it because it crossed the fifty thousand mark.
Speaker 5 (12:27):
So is it uncool because it's a garbage index in
terms of how it works, or is it uncool because
it's sucked wind compared to every other one for the
last decade and a half.
Speaker 4 (12:36):
It's both, Yeah, it can be both.
Speaker 3 (12:38):
Well, So here's the thing.
Speaker 2 (12:39):
Let's let's be careful how we talk about the Dow
Jones Industrial Average Okah, okay, why because I'm just gonna
pull some stats for you here, Okay, that they might
surprise you a little bit, and I want you to
be surprised.
Speaker 5 (12:55):
Okay, for don't tell me to be surprised. Why be
surprised then, just go oh yeah, I didn't realize that
that was what we were doing. Now, all right, So
if we look at.
Speaker 2 (13:08):
The Dow over the last five years, total return for
the Dow is about sixty percent. Total return for the
S and P is about seventy seven. If you want
me to pull the Nasdaq, which I haven't done yet,
it's obviously way higher at oh no, sorry, Nasdag's up
sixty six percent. Okay, it was five last five just
because things got so bad in twenty twenty two.
Speaker 3 (13:30):
That makes sense.
Speaker 2 (13:30):
Actually, if we go back another five years, and so
we're looking at the last ten years now, uh, the
NASDAG is up four hundred and forty two percent in
that time, the S and P's up two seventy five,
Dows up to twelve. The Dow like again during these timeframes, Yes,
it has lagged. If we go back as far as
I have data four, which is back to nineteen eighty
(13:56):
four November of eighty four, Dow's up about four thousand
percent during that time, the SMP's up about four thousand
and thirty percent. No, pretty close with it, within sniffing distance. Sure,
the nasdak's up way more just because of you know, well,
what's in it.
Speaker 4 (14:11):
Yep.
Speaker 2 (14:12):
In any case, I don't think anyone looks at the
Nasdaq is like a representation of the broad US economy.
So you can make a case that over really long
periods of time, the Dow actually does get pretty close
to the S and P.
Speaker 3 (14:23):
And that's that's fine.
Speaker 2 (14:25):
What I am going to propose is that now that
the Dow is at fifty thousand, we gotta stop doing
the hats every thousand points, right right? A thousand points
is two percent now like it was one thing when
it went from like Dow ten thousand to Dow eleven.
Speaker 4 (14:40):
Hey, that's a meaningful move. Yeah, forty nine to fifty
is not.
Speaker 2 (14:44):
You can't do Dow fifty one thousand hats. Yeah, I
don't know if it's every twenty five hundred, but that's
not around number. I'm willing to go like five thousand
at a minimum. But ideally i'd like to see we
can't do hats until it gets to sixty thousand.
Speaker 5 (14:58):
I claimed that the is a garbage composition. What I
mean by that is the formula they use is done
to measure the DOO. I find to be stupid and
irrelevant because it is based solely on the price of
your shares, so that's how they weight it, rather than
looking at a more interesting formula, which would be the
(15:21):
price of your share is multiplied by how many shares
exist market cap if you will, yes, And one of
those things is pretty good at measuring the overall scale
and size of your company.
Speaker 4 (15:33):
Another one is not. And the method of the Dow uses.
Speaker 5 (15:37):
Is just not useful in terms of measuring the breadth
of the overall market. And I know that they don't
attempt to right. The folks at the Dow Jones Industrial
Average who select which companies will be in there strategically
move companies in and out based on what they believe
will be a good representation of the overall US economy.
(16:00):
So it is not attempting to do it.
Speaker 4 (16:01):
The S and P. Five hundred does.
Speaker 5 (16:03):
But I don't think enough people recognize that. And so
when you hear us say don't worry about what the
DAW is doing it. It's because of that it measures
thirty companies and it doesn't actually measure their value.
Speaker 2 (16:16):
Yeah, it measures their price, which is not really equal
that the benefits to price waiting and the reason why
early indices were price weighted. It's easy to calculate. It's
a lot easier than doing a market cap weighted index.
The big downsides it's really arbitrary based on you know,
did you do a stock split or a verse split
(16:38):
that can manipulate how much your stock moves the index?
Speaker 5 (16:41):
And you can't include certain companies that would be arguably
pretty representative of the overall US economy because their share
price might be too high.
Speaker 2 (16:51):
Well, and there's only thirty companies, which also restricts it
as well. You know what I think would actually be
really interesting and I'm sure someone does this and I
just have never paid attention to it. If you actually
wanted to measure, in my opinion, the the like the
stock market for the US economy, what would be the companies?
Speaker 3 (17:12):
Uh No, what would be the methodology?
Speaker 2 (17:14):
I'd be interested in revenueated because ultimately you're talking about
how much economic activity you're generating, Like how much activity
you're participating in. And as an example, when we talk
about you know, Uber and uh, who is the one
that I talked to Coca Cola? So Uber does ten
percent more revenue than Coca Cola. Coca Cola is a
(17:38):
three hundred billion dollar company and change Uber is one
hundred and fifty four billion.
Speaker 5 (17:43):
Wouldn't you also then have to say how much domestic revenue?
If you're trying to measure like you'd have to qualify
it even further. I think I want to know Cola
is what half of.
Speaker 2 (17:52):
Their economic activity generated by US companies, you know, like
regardless of where it takes. I mean again, like we
say that the S and P five hundred is a
good measure of the US you know, stock market. Yeah,
even though a lot of that revenue is overseas. Anyways,
I mean, there are there any companies that just have
all their revenue in one country anymore that are in
(18:13):
large cap indices?
Speaker 4 (18:14):
Probably not very few.
Speaker 3 (18:15):
I can't imagine.
Speaker 2 (18:17):
I can't imagine any are Yeah, I mean if I
mean other ways you could do it.
Speaker 5 (18:23):
I suppose you could look at just the largest employers
and their stock prices in the country. Employee waited, I
don't know where that could be fun, yea, But yeah,
there's a lot of different ways to measure I think
really important just context. The stock market does not measure
the success or failure of the economy.
Speaker 4 (18:43):
I think we've mentioned that enough, but it's it's worth.
Speaker 5 (18:46):
Mentioning again that the stock market and the economy are
very different things, and you can have them go in
very different directions for periods of time.
Speaker 2 (18:58):
It can be forward looking as to what it thinks
the economy is going to do, but obviously you know
different things you know at different points in time. Taking
a look at markets as we head towards the bottom
of the hour, looks like we still got a nice
rally happening in the Nasdaq about three quarters of percent
s and p F half percent. But the Dow while
(19:20):
we were talking about it, Michael, it's down twelve points.
Speaker 3 (19:24):
Oh what are we gonna do? Do we have to
give our hats? Hats? Give back the hats? Quick Break
Trivia Answers.
Speaker 1 (19:33):
Next, 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
(19:54):
look at what's moving markets so far today. Right here
on the Financial Exchange Radio network.
Speaker 6 (20:01):
Well markets are mixed at the moment, the Nasdaq seeing
a nice little rally as traders ready for another busy
week highlighted by a delayed job support and a CPI
reading for the latest gauge on inflation. Right now, the
Dow is off by only ten points. SMP five hundred
is up half a percent, NASDAC up nearly one percent higher,
(20:23):
two hundred and seventeen points, RUSTED two thousand is up
about eight tenths of a percent ten. Your treasurrealed flat
at the moment at four point two point two percent,
and Crewe Oil up one on a third percent higher,
trading at sixty four dollars in thirty eight cents a barrel.
Novo nord his shares jumping over three percent after Hins
and Hers pulled its we Go VI copycat weight loss
(20:46):
pill off the market after Novo threatened legal action against
the telehealth firm Hymns and herstock tumbling about twenty five
percent on that news. Meanwhile, Bloomberg reported this morning that
Alphabet is looking to raise about fifteen billion dollars from
a US high grade dollar bond sale. Alphabet shares are
up about one percent. Elsewhere, Oracle rising about nine percent
(21:09):
after the tech company received an upgrade to buy from
neutral from DA Davidson. Grocery giant Kroger named former Walmart
executive Greg Forran as its next CEO. Kroger's stock is
up about six percent, while Walmart shares a down one percent.
And tomorrow morning, ahead of the opening bell, ask Forzenca,
(21:29):
Coca Cola, BP, CBS Health, Marriott, and Spotify among those
who will post their quarterly results. I'm Tucker Silva, and
that is Wall Street.
Speaker 4 (21:39):
Watch Mike.
Speaker 2 (21:40):
There's a piece in the New York Times feeling amateur
at retirement planning, they asked AI for help. More people
were turning to chatbots for advice, inquiring about high stakes
decisions such as saving for retirement, even if they eventually
turn to a human, what.
Speaker 4 (21:58):
Do you think better or worse than TikTok?
Speaker 2 (21:59):
Financial advice depends what you put into it, quite honestly.
Speaker 3 (22:04):
And as I was reading.
Speaker 2 (22:07):
This, I pulled up an AI prompt and said, Okay,
here's what I gave, And I said, pretend I'm a
sixty five year old looking to retire. I have four
hundred thousand investible assets and a four hundred thousand dollars home.
I spend forty thousand dollars a year. Walk me through
a detailed analysis of building a financial plan and the
(22:27):
questions I need to answer in order to not run
out of money in retirement. And it did a pretty
good job of like summarizing a lot of the questions
that I need to ask.
Speaker 3 (22:37):
I didn't ask it to actually solve.
Speaker 2 (22:39):
Any of them for me, because I'd have to put
in a whole lot more information. And this, I think
is the place where a lot of people would run
into trouble is unless you actually know what information you
need to have in order to be able to put
this in, you're not going to get the result that
(22:59):
you want of it, and it's not going to be accurate.
Speaker 5 (23:03):
Here's where I think that AI could be helpful, and
it can also be wrong. By the way, right, we've
talked at length about this, AI is frequently wrong.
Speaker 4 (23:12):
I had one just from.
Speaker 2 (23:14):
Like very simple financial thing that I asked it last
week just to like see if it knew.
Speaker 3 (23:18):
I was like, what is the.
Speaker 2 (23:19):
Maximum gift allowance in twenty twenty six without having to,
you know, file anything for taxes, it's just wrong.
Speaker 3 (23:28):
It told me eighteen thousand instead of nineteen thousand.
Speaker 4 (23:30):
Yeah.
Speaker 5 (23:31):
Math is oftentimes also not great at and so if
you're trying to use it for a calculator of some sort,
it can it can pose problems.
Speaker 4 (23:40):
There.
Speaker 5 (23:40):
Where I think it might be useful is if you
have a highly specific financial question.
Speaker 3 (23:45):
Yes, like.
Speaker 5 (23:48):
When I saw the other day, I am saving money
for my kids college and we are thinking about this,
that or the other, and how it will affect our
financial aid application process. Can you walk me through how
this aspect of my income is put on the financial
(24:09):
aid applications? And you know, it can probably do a
pretty good job of telling you about the differences on
the FAFT set versus the CSS profile, both of which
are used for filing for financial aid. I think if
you generally put it in there and ask a question
like you did Chuck, where you say I'm sixty five
and have this much money and want to save for retirements,
(24:30):
you know, can you build me a financial plan? I'd
be very concerned about it. The software, the AI itself
doing all the calculations correctly, and you having enough information
to input in there and then contextualize what it's spitting
back out right, like, would you know to ask, Okay,
(24:52):
what is the average return that you are using for
the investment portfolio? Would it have any context to say,
am I in the right investment mix for what I'm
trying to accomplish right now? Yeah, both of which are
brought up in this New York Times piece, and I'm
just unclear that those would be all that good. The
case here was a thirty two year old who happened
(25:15):
to have her entire retirement plan in a what's referred
to as a target date fund that was built for
somebody who retires in twenty fifteen, which is not Again,
if you're thirty two, that's not exactly lining up probably
with your objectives. And so you can see a big
problem there, And that might be AI might be good at, like, hey,
(25:36):
I'm in this. Is it designed for somebody my age? Like, yeah,
AI can probably answer that, But a big broader building
of a model for something as important as your financial
future unless you have the expertise to put the right
things in there in the first place, like we've talked
about right, Like, I don't think AI is going to
allow you to file your own taxes or build your
(25:56):
own financial plan unless you have the pre existing contact
of how to build software and how to build a
financial plan.
Speaker 3 (26:05):
If you have, as you said, if you have a
very simple question that.
Speaker 2 (26:08):
You wanted to answer, I think it can usually answer
that pretty correctly. If you are very tech savvy and
want to use CAD code to go and build out,
you know, a personalized piece of financial planning software, you
can use it to do that. If you're in that
(26:28):
ninety five percent in the middle where you don't have
the advanced skills but no more than the basic questions,
it can get complicated to make sure you're getting the
most out of it that you need.
Speaker 5 (26:39):
I'll be the first to say I do think that
AI is going to reshape just about every industry out
there as we've talked about it, and financial planning is
no exception.
Speaker 3 (26:48):
It totally will. There will be large groups of people
that will be able to say I can use this
to do my financial planning.
Speaker 5 (26:57):
One hundred percent and so that is not in irrelevant
development here, and I think it will change. It'll probably
change the software that I as a financial planner use,
like no doubt all of those things are going to shift.
But when it comes to things as important as say
your taxes or your retirement plan. What you have to
(27:18):
ask yourself before using one of these tools is will
I feel confident enough to go and execute a financial
strategy based on its recommendations?
Speaker 3 (27:27):
Right?
Speaker 5 (27:27):
And unless you feel some of those categories like we
talked about, I find it unlikely that the average person will.
If you're going down that road and want to check
in on the work that you're already doing, Armstrong would
love to help there. We work with folks with all
different backgrounds to try and structure their financial future. Some
of whom have already done a lot of the legwork
(27:48):
and that's great and we can pick it up and
bring it across the finish line. Others need a full
build out of what their financial future may come to
look like. If you fall in any of those categories,
we'd love to chat with you too. The numbers eight
hundred three nine three for zero zero one. You can
go check out our website where you can book a
time for us to call you back at Armstrong Advisory
dot com or again that number eight hundred three nine
(28:11):
three for zero zero one.
Speaker 1 (28:13):
The proceeding was paid for by Armstrong Advisory Group. A
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
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Speaker 2 (28:30):
Let's see, Oh, Chinese cars, Yes, let's talk about Chinese cars, Mike.
Speaker 5 (28:34):
Ah, Yes, so peace from Bloomberg. Chinese cars are coming
to the US, like it or not. I think this
mainly is a commentary on the statement that the President
made the other day, sorry, last month, when he was
in Detroit. President Trump said that if Chinese automakers wanted
to build plants in the US, he would quote love that.
(28:55):
And so then this piece jumps along that, hey, we
are going to allow these into the United States. Now,
a few things about Chinese owned and manufactured cars. One,
we tear if the living heck out of them right now.
And I don't think that they would even allowed to
be allowed to be registered if you decide to import
your own Chinese made vehicle from overseas and pay the
(29:17):
import tax on them. Volvo though, just you know, so
we're all aware, is a subsidiary of a Chinese company.
They do manufacture cars in the US, They're looked at
very differently than say, what's what's some of the big
ones over there. Shoomi is one of the car manud
China byd I guess the question what I personally very
(29:41):
much hope that we don't allow Chinese automobiles to be
sold in the United States, even if they are manufactured
and assembled here in the United States. I purely am
basing that off of national security concerns. But I think
the way that people are going to position it is,
is this any bigger of a security threat than the
(30:02):
pre existing threats from TikTok televisions, all sorts of networking
devices that go into equipment all across the country. I
would argue yes, but I think plenty of people would argue.
Speaker 2 (30:12):
Now, I think the big thing that would prevent me
from ever buying a Chinese vehicle is the fact that look, ultimately,
if there are Chinese components, which there are in every
single electronics thing that you own, it is sitting at
your house, the vehicle poses all kinds of different risks
(30:35):
from a locationtive perspective, privacy perspective, like there's a whole
different element there, and this is before you even get
into having you know, your mobility tied into potentially being
restricted by the Chinese government if they decided to, you know,
shut it down, shut it down for whatever reason, which
(30:57):
I would imagine that they can. I know that might
be speculative, but.
Speaker 5 (31:03):
The cars are increasingly of electronic devices that are controlled
by a server, and so you can do this. It's
entirely possible, and I firmly believe it would never happen
outside of a all out conflict between the US and China.
Speaker 4 (31:18):
You know.
Speaker 2 (31:19):
So it's uh again, it's a concern on my end.
Speaker 3 (31:23):
Let's take a quick break. When we come back, let's
do a little bit of stack roulette.
Speaker 1 (31:26):
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Speaker 6 (32:07):
This segment of The Financial Exchange is brought to you
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a couple segments ago, we asked you the trivia question.
Joe Peshi won his only Academy Award for his performance
in which movie That would be Good Fellas. Darren from
(32:52):
Lowell Mass is our winner today, taking home a Financial
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Speaker 2 (33:04):
Mike, I want to talk about this piece from the
Wall Street Journal. It's titled Where Did all the Cheap
Restaurants Go? And it's talking about the pricing compression that
you're seeing between casual, fast casual, and sit down restaurants.
Speaker 5 (33:18):
And so let's define one that fits into each category.
Speaker 2 (33:22):
Casual is McDonald's, Fast casual is let's even stick with
just burger places. Fast casual is five guys.
Speaker 4 (33:31):
You that distinction I would okay.
Speaker 3 (33:34):
And sit down would be Applebe's or Chili's. I'll have burgers.
Speaker 2 (33:40):
If you took me back to my college days, you
could go into McDonald's and you can get a meal
for four to five dollars. You could go into five
Guys and you would get a burger for nine to
ten dollars. You would go to Applebee's and you'd get
a burger for thirteen to fifteen dollars.
Speaker 4 (33:58):
So different price components, different price part Clearly.
Speaker 2 (34:01):
Today you go to McDonald's and you're probably paying somewhere
in the ten to eleven range for you know, a
full you know, a burger and fries. You go to
a five guys you're paying fifteen sixteen. You go to Applebee's,
you're paying fifteen to eighteen. And so the only one
(34:22):
that has impress that's happened there.
Speaker 5 (34:24):
Yeah, I was gonna say, the one that seemingly has
developed value. I don't think, you know, I think the
one that has really shown value a casual.
Speaker 3 (34:33):
Has been like chain.
Speaker 5 (34:35):
No, the one that's developed sorry, like chain, sit down,
sit down, chain, sit down, Applebe's, Chili's. That's the value
that group, that's that the one is the one that
has shown its value.
Speaker 2 (34:44):
Which is the opposite of how we used to think
of them. It used to be if I need something cheap,
I'm going to McDonald's. Now it's well, they're all kind
of in the same ballparking. It used to be the
McDonald's burger was a third of the cost of the
Applebe's one, and now it's like there may be like
is a sixty it's sixty percent of the apple piece one.
(35:05):
And so it's just this compression that's happened. And I
think what you end up getting then is for people
that aren't choosing to go to McDonald's purely for economic reasons,
like hey, I can't afford to go to Applebee's. It's okay,
that middle piece is being squeezed, which is why we
see Chipotle with you know, sales down year over year,
(35:25):
which five guys is in public, But I'm guessing they're
seeing something similar. That's why we see Sweet Green getting
eaten a line. Yeah, what about Shakeshack right, same boat?
If Panera was still publicly traded, I'm sure they'd be
showing the same stuff as well.
Speaker 5 (35:39):
Whereas I think that if you're truly looking for bottom
of the barrel pricing, you still might associate Burger King,
Wendy's at McDonald's with Hey, I just need a really
cheap meal fast, even though the difference between the two
is narrow.
Speaker 3 (35:52):
The savings isn't as much.
Speaker 4 (35:53):
Yeah. Yeah.
Speaker 5 (35:56):
By the way, if I want the cheapest meal available
to these days, I think the cheapest place can go
for a meal as pizza.
Speaker 3 (36:02):
Yeah, Pizza's got an expensive man.
Speaker 5 (36:04):
Yeah, but plenty of places still offer you a slice
and a soda for a very like you can get
a slice in a soda for the price that you
get that fast food meal.
Speaker 3 (36:12):
Use is a slice of meal?
Speaker 4 (36:14):
Yeah, depends on the slice.
Speaker 3 (36:16):
I'm a two slice guy.
Speaker 5 (36:17):
Yeah, Yeah, well, even then, I bet you can go
to plenty of local pizza joints get two slices in
a soda for under seven bucks.
Speaker 3 (36:24):
Maybe I don't do that often.
Speaker 4 (36:25):
Yeah, me either, but I think there are plenty of
places that would offer that.
Speaker 2 (36:29):
But I do know if I'm getting a pie on
a Friday night, it's twenty, it's twenty.
Speaker 5 (36:34):
You know, it's not twelve or thirteen. But imagine ordering
McDonald's for your whole family. Would you make me do
that again? Just think about that, right, Like, think about
the price differential on getting each of the kids a
happy meal and you and your wife a McDonald's meal
if you're looking at thirty to forty bucks there, whereas
you're looking at twenty for the pizza.
Speaker 4 (36:52):
Pizza. Pizza is the cheap what you don't want a
happy meal.
Speaker 5 (36:58):
My happiness level is Mike's unhappy not it's not high
enough media that can make me happy.
Speaker 3 (37:07):
Happy.
Speaker 2 (37:07):
I have a melancholy meal every day.
Speaker 3 (37:11):
Dismal.
Speaker 4 (37:13):
Uh. Best Super Bowl ad? You guys have a favorite?
Quite on best and worst.
Speaker 3 (37:17):
I really didn't watch many.
Speaker 2 (37:20):
Yeah, I was at a bunch of people at the
house for the game and was mostly trying to clean
up during the commercials.
Speaker 4 (37:26):
I haven't judged which ones are the best.
Speaker 5 (37:28):
I think the ones that clearly got my attention most
were Ben Stiller's ad for AI. Yeah, probably it was Instacard,
and then the other one was the duncan Ad. Got
my attention because bright colors and a ton of famous people,
and honestly, that's kind of the goal, right, get my
(37:50):
attention for thirty seconds.
Speaker 6 (37:51):
The one that stood out was the Backstreet Boys karaoke
one coin based yeah.
Speaker 4 (37:55):
Commercial like no terble whatsoever.
Speaker 2 (37:58):
But again, yeah, there were a lot of audible groans
in my house when that happened.
Speaker 3 (38:04):
Really killed the vibe.
Speaker 5 (38:06):
Also, I told you that potato chips are going to
try and convince us that they're healthy.
Speaker 2 (38:10):
Yeah, they were talking potato chips.
Speaker 4 (38:14):
Actually, yes they were.
Speaker 2 (38:15):
Oh good. Let's take a quick break for the rest
of the day. Uh, we'll be back tomorrow with some
retail sales data.
Speaker 3 (38:22):
We'll see you then,
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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heroes by visiting dav five K Boston and making a
donation today. This is the Financial Exchange with Chuck Zada,
(01:06):
and Mike Armstrong.
Speaker 2 (01:09):
Chuck, Mike and Tucker here with you. And as we
kick off another week, we've got stocks, well, they're they're
moving as they they tend to.
Speaker 3 (01:21):
Some of them are up, some of them are down,
some of them are flat. But at the on the whole, the.
Speaker 2 (01:28):
S ANDP is now up about half percent, thirty two points,
the Dow is up forty six points, about a tenth percent,
and the Nasdaq Composite up one hundred and eighty five
points or point eight percent. So you got stocks continuing
the rally that started on Friday tenure US Treasury not
really doing much of anything. It's it I was up
late watching the Super Bowl. I'm gonna sleep in a
(01:50):
little bit. It's up four tenths of a basis point
to four point two one percent, so not much movement there.
The dollar though, saying yeah, I'm on the move today,
down zero point seventy four percent to ninety six seventy eight.
Gold responding in turn, up ninety nine to fifty an
ounce to five thousand, seventy nine and thirty cents, so
back above five thousand, and we'll get those cute, literal
(02:13):
little silver people that are you know, bidden up the
price of silver here gold investors are gold bugs? Are
there silver bugs? Their silver back guerrillas, reptiles.
Speaker 3 (02:26):
I don't know, I don't know.
Speaker 2 (02:27):
In any case, silver's up about seven percent as well
as you got a rebound happening there. Crude oil West
Texts Intermediate up sixty four cents a barrel to sixty
four nineteen triple a national averageur gas prices up five
tenths of ascent overnight to two ninety and two tenths
after briefly dipping back down below that two ninety mark
(02:49):
over the weekend. Peace from the Wall Street Journal, Why
inflation may be about to come in?
Speaker 3 (02:56):
He let the.
Speaker 4 (03:03):
And follow on should we care? Maybe? Yeah.
Speaker 5 (03:07):
So. The reason they are the Wall Street Journal folk,
the fine folks at the Wall Street Journal are warning
you of this is that we've noticed some trends over
the last few years where, especially in the early release
of inflation, January can look a little bit roasty.
Speaker 4 (03:28):
Yeah, a little bit toasty because they try.
Speaker 5 (03:30):
To take out these seasonal adjustment factors and make it
so that, yeah, if XYZ company raises their prices every
January for inflation, that they don't really take that into
account because it's not terribly useful if you're trying to
factor in price adjustments. If you see prices shoot up
every January, they try and take that out. Some economists
(03:50):
have argued that they just can't fully do it properly,
and so we have seen, for instance, in January of
last year inflation and shot up to nearly three percent
in that reading year over year, and in January of
twenty twenty four, actually it declined off the December reading.
Speaker 4 (04:08):
So not the best example there.
Speaker 5 (04:09):
But we've seen a few of these where yeah, in
January you get a hotter than expected reading and then
you know, three months pass and oh, it was just
a January spike that didn't actually signify anything.
Speaker 2 (04:20):
Here's where we stand on inflation right now, just to
update everyone on the lay of the land. The Consumer
Price Index the CPI currently sits a two point seven
one percent year over year. Core CPI is at two
six pc is at two seven seven. We do not
have core PCE for full year because of actually sorry,
(04:42):
both of those we don't have through December yet because
of the shutdown.
Speaker 4 (04:45):
Yep UH.
Speaker 2 (04:47):
PPI is sitting at two nine to eight for the year.
Core PPIs at three three one. So I think right
now you can pretty conclusively say inflation is somewhere between
two and three quarters and three and a quarter. Sure
that it's in that ballpark. I don't like to get
into like, oh, well, is it exactly? It doesn't matter
(05:07):
exactly where it is. There's there's no fundamental difference between
inflation at two eight and two nine. It's not a
useful conversation to have.
Speaker 5 (05:16):
I'd be willing to theorize that it's maybe even as
low as two and a half, but I can't get
there because none of these numbers. I know the median
forecast is two and a half percent year over year
for this.
Speaker 2 (05:26):
Reading, So if it comes in, they're fine, But I
can't get there because we don't have a single year
over year number that's below two six right now. So
I think ultimately what we're interested in is this. At
the end of last year, the range that we were
in for all of these different numbers, two four to
(05:46):
two was the low end for the Producer Price Index.
The high end was two nine for core CPI. So
we've drifted up maybe a third of a percent in
the aggregate. The question for twenty twenty six is do
we continue to see enough disinflation in shelter and and
you know, core services and things like that to bring
(06:09):
this puppy back down into that two and a half range,
or does the tailwind that helped us last year following
energy prices, does that reverse this year and cause more
problems because even though energy prices, you know, the core
numbers exclude them, they seep.
Speaker 4 (06:26):
Into everything they do. I hate predicting energy price.
Speaker 5 (06:30):
Now year's an't is there any catalysts that would make
us believe that that should happen this year.
Speaker 4 (06:34):
I don't think the price would move back up. I
guess iroun action.
Speaker 2 (06:38):
Absent geopolitical whatevers. The potential that you have, in my opinion,
is you've got less drilling that's going on in the
United States right now because shale producers are your marginal
producers of oil in the US, and they're looking at
oil in the high fifties, low sixties and they're like, Nope,
(07:00):
we're not putting the rigs in the ground for that. Yeah,
not worth our time. We're gonna pass. So you've got that,
coupled with the fact that expectations are that the economy
is going to reaccelerate globally, and maybe you get a
reacceleration in the US if the labor market turns up.
And so if you have this reacceleration happening at the
same time that there's less marginal supply coming online and
(07:21):
older US h al wells are continuing to degrade at
a faster clip, then you potentially get oil moving up,
not to like a hundred, but remember all it takes
is for oil to get to you know, seventy, and
you got a ten percent move there, and it's like, oh,
this is you know, something that's going to have a
real impact. So that's the potential path. Does that happen?
I'm not convinced. I think it's a maybe. I do
(07:43):
think there are some structural factors that point to it being,
you know, a legitimate.
Speaker 3 (07:47):
Possibility, But I don't know.
Speaker 2 (07:49):
I mean, no one ever knows what's gonna happen with
energy because most of the price is controlled by you know,
a dozen or so oligarchs who get together every few
months and say, hey, how much oil should we pump
out of our you know fields? And I don't get
in their heads. I got they could be having a
(08:09):
bad day.
Speaker 3 (08:10):
And the like, screw it, We're not gonna pump anything.
Max the prices out, you.
Speaker 2 (08:14):
Know, like really tired from the Super Bowl yesterday. Yeah,
I just gonna take a break. I had a bad parlay.
We need to make this up. Cut the production, Jimmy, like,
you know, it's this is the kind of stuff that
you could see. So ultimately that's one possibility fame as.
Speaker 4 (08:31):
Huge NFL fans.
Speaker 3 (08:33):
Yeah, isn't there.
Speaker 2 (08:35):
There's not gonna be a game in Saudi Arabia next year,
but it was Australia, right.
Speaker 6 (08:39):
Well, there's a flag football thing happening coming up, I.
Speaker 3 (08:43):
Think in Saudi Arabia.
Speaker 6 (08:45):
Yeah, yeah, but yeah, you're right about Australia.
Speaker 2 (08:48):
Yeah, we were covering the Australia game. And why I
think it's the dumbest idea ever. You're gonna fly a
bunch of three hundred pound people like to the other
side of the world, try to deal with that jet lag.
You can have a horrible football game and then when
you're all beating up and Bruce, you're gonna fly right
back and deal with all the swelling that happens on
a twenty hour flight.
Speaker 3 (09:07):
Back at home.
Speaker 2 (09:08):
Really bad idea, Like it's a horrible idea for safety
and the product.
Speaker 3 (09:12):
Yeah, I get that. You want to grow your game globally.
Speaker 5 (09:15):
Yeah, if you want to, and Australia does seem like
a natural market for it, I'll give them that.
Speaker 3 (09:21):
Oh yeah, a lot of big dudes you like to
hit people like, I understand that. Like I'm all for it.
But maybe start in Australian league and call it Ausie
rules football.
Speaker 4 (09:31):
Yeah, so yeah, it's good.
Speaker 6 (09:33):
It's gonna be the Niners playing the Rams in Melbourne, Australia.
Speaker 3 (09:37):
The Niners Rams.
Speaker 6 (09:38):
Yeah, and that's a significant game too.
Speaker 3 (09:41):
Well it is.
Speaker 2 (09:42):
And I guess they're saying, oh, it'll be you know,
less travel because they're both West Coast teams.
Speaker 4 (09:47):
How do we get from oil to hear oil?
Speaker 6 (09:49):
Don't worry about it.
Speaker 5 (09:50):
Saudi Arabia flag football, yep, got it to naturally to
going to play yep, got it?
Speaker 4 (09:57):
Okay, thank you, just make it sure.
Speaker 3 (09:58):
I want to track the steps, all fine.
Speaker 6 (10:00):
It doesn't matter.
Speaker 2 (10:01):
Let's take a audit the trail. It's like watching claudwork.
You just have to see how like all the steps
that takes. Let's take a quick break here. When we
come back, we're gonna do a little bit of trivia,
and then we're going to talk about the uncool stock
index right after this.
Speaker 1 (10:19):
If you missed any of today's show, catch up whenever
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(10:41):
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Speaker 6 (10:51):
The Financial Exchange streams live every day on YouTube. Subscribe
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only here in the Financial Exchange Radio Network. Just search
the Financial Exchange on YouTube and be sure to hit
that subscribe button. Time for trivia here on the Financial Exchange.
(11:13):
Today's Joe Peshi's eighty third birthday. Peshi began his career
as a child actor in the late fifties. He rose
to fame in the early eighties with his performance in
Raging Bull. Peshi has been nominated for three Best Supporting
Actor Awards, winning once so our trivia question Today, Joe
(11:33):
Peshi won his only Academy Award for his performance in
which movie. Once again, Joe Peshi won his only Academy
Award for his performance in Which movie. Be the fifth
person today to text us at six one seven three
six two thirteen eighty five with the correct answer along
with keyword trivia, and you win a Financial Exchange Show
(11:55):
T shirt once again. The fifth correct response to textas
to the number six seven three six thirteen eighty five
with correct answer along with the keyword trivia, We'll win
that T shirt. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (12:11):
The Dow Jones Industrial Average crossed fifty thousand in the
past week, and uh, this piece the Wall from the
Wall Street Journal, the Dow the uncool index has its
moment in the sun talks about how people are paying
attention to it because it crossed the fifty thousand mark.
Speaker 5 (12:27):
So is it uncool because it's a garbage index in
terms of how it works, or is it uncool because
it's sucked wind compared to every other one for the
last decade and a half.
Speaker 4 (12:36):
It's both, Yeah, it can be both.
Speaker 3 (12:38):
Well, So here's the thing.
Speaker 2 (12:39):
Let's let's be careful how we talk about the Dow
Jones Industrial Average Okah, okay, why because I'm just gonna
pull some stats for you here, Okay, that they might
surprise you a little bit, and I want you to
be surprised.
Speaker 5 (12:55):
Okay, for don't tell me to be surprised. Why be
surprised then, just go oh yeah, I didn't realize that
that was what we were doing. Now, all right, So
if we look at.
Speaker 2 (13:08):
The Dow over the last five years, total return for
the Dow is about sixty percent. Total return for the
S and P is about seventy seven. If you want
me to pull the Nasdaq, which I haven't done yet,
it's obviously way higher at oh no, sorry, Nasdag's up
sixty six percent. Okay, it was five last five just
because things got so bad in twenty twenty two.
Speaker 3 (13:30):
That makes sense.
Speaker 2 (13:30):
Actually, if we go back another five years, and so
we're looking at the last ten years now, uh, the
NASDAG is up four hundred and forty two percent in
that time, the S and P's up two seventy five,
Dows up to twelve. The Dow like again during these timeframes, Yes,
it has lagged. If we go back as far as
I have data four, which is back to nineteen eighty
(13:56):
four November of eighty four, Dow's up about four thousand
percent during that time, the SMP's up about four thousand
and thirty percent. No, pretty close with it, within sniffing distance. Sure,
the nasdak's up way more just because of you know, well,
what's in it.
Speaker 4 (14:11):
Yep.
Speaker 2 (14:12):
In any case, I don't think anyone looks at the
Nasdaq is like a representation of the broad US economy.
So you can make a case that over really long
periods of time, the Dow actually does get pretty close
to the S and P.
Speaker 3 (14:23):
And that's that's fine.
Speaker 2 (14:25):
What I am going to propose is that now that
the Dow is at fifty thousand, we gotta stop doing
the hats every thousand points, right right? A thousand points
is two percent now like it was one thing when
it went from like Dow ten thousand to Dow eleven.
Speaker 4 (14:40):
Hey, that's a meaningful move. Yeah, forty nine to fifty
is not.
Speaker 2 (14:44):
You can't do Dow fifty one thousand hats. Yeah, I
don't know if it's every twenty five hundred, but that's
not around number. I'm willing to go like five thousand
at a minimum. But ideally i'd like to see we
can't do hats until it gets to sixty thousand.
Speaker 5 (14:58):
I claimed that the is a garbage composition. What I
mean by that is the formula they use is done
to measure the DOO. I find to be stupid and
irrelevant because it is based solely on the price of
your shares, so that's how they weight it, rather than
looking at a more interesting formula, which would be the
(15:21):
price of your share is multiplied by how many shares
exist market cap if you will, yes, And one of
those things is pretty good at measuring the overall scale
and size of your company.
Speaker 4 (15:33):
Another one is not. And the method of the Dow uses.
Speaker 5 (15:37):
Is just not useful in terms of measuring the breadth
of the overall market. And I know that they don't
attempt to right. The folks at the Dow Jones Industrial
Average who select which companies will be in there strategically
move companies in and out based on what they believe
will be a good representation of the overall US economy.
(16:00):
So it is not attempting to do it.
Speaker 4 (16:01):
The S and P. Five hundred does.
Speaker 5 (16:03):
But I don't think enough people recognize that. And so
when you hear us say don't worry about what the
DAW is doing it. It's because of that it measures
thirty companies and it doesn't actually measure their value.
Speaker 2 (16:16):
Yeah, it measures their price, which is not really equal
that the benefits to price waiting and the reason why
early indices were price weighted. It's easy to calculate. It's
a lot easier than doing a market cap weighted index.
The big downsides it's really arbitrary based on you know,
did you do a stock split or a verse split
(16:38):
that can manipulate how much your stock moves the index?
Speaker 5 (16:41):
And you can't include certain companies that would be arguably
pretty representative of the overall US economy because their share
price might be too high.
Speaker 2 (16:51):
Well, and there's only thirty companies, which also restricts it
as well. You know what I think would actually be
really interesting and I'm sure someone does this and I
just have never paid attention to it. If you actually
wanted to measure, in my opinion, the the like the
stock market for the US economy, what would be the companies?
Speaker 3 (17:12):
Uh No, what would be the methodology?
Speaker 2 (17:14):
I'd be interested in revenueated because ultimately you're talking about
how much economic activity you're generating, Like how much activity
you're participating in. And as an example, when we talk
about you know, Uber and uh, who is the one
that I talked to Coca Cola? So Uber does ten
percent more revenue than Coca Cola. Coca Cola is a
(17:38):
three hundred billion dollar company and change Uber is one
hundred and fifty four billion.
Speaker 5 (17:43):
Wouldn't you also then have to say how much domestic revenue?
If you're trying to measure like you'd have to qualify
it even further. I think I want to know Cola
is what half of.
Speaker 2 (17:52):
Their economic activity generated by US companies, you know, like
regardless of where it takes. I mean again, like we
say that the S and P five hundred is a
good measure of the US you know, stock market. Yeah,
even though a lot of that revenue is overseas. Anyways,
I mean, there are there any companies that just have
all their revenue in one country anymore that are in
(18:13):
large cap indices?
Speaker 4 (18:14):
Probably not very few.
Speaker 3 (18:15):
I can't imagine.
Speaker 2 (18:17):
I can't imagine any are Yeah, I mean if I
mean other ways you could do it.
Speaker 5 (18:23):
I suppose you could look at just the largest employers
and their stock prices in the country. Employee waited, I
don't know where that could be fun, yea, But yeah,
there's a lot of different ways to measure I think
really important just context. The stock market does not measure
the success or failure of the economy.
Speaker 4 (18:43):
I think we've mentioned that enough, but it's it's worth.
Speaker 5 (18:46):
Mentioning again that the stock market and the economy are
very different things, and you can have them go in
very different directions for periods of time.
Speaker 2 (18:58):
It can be forward looking as to what it thinks
the economy is going to do, but obviously you know
different things you know at different points in time. Taking
a look at markets as we head towards the bottom
of the hour, looks like we still got a nice
rally happening in the Nasdaq about three quarters of percent
s and p F half percent. But the Dow while
(19:20):
we were talking about it, Michael, it's down twelve points.
Speaker 3 (19:24):
Oh what are we gonna do? Do we have to
give our hats? Hats? Give back the hats? Quick Break
Trivia Answers.
Speaker 1 (19:33):
Next, 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
(19:54):
look at what's moving markets so far today. Right here
on the Financial Exchange Radio network.
Speaker 6 (20:01):
Well markets are mixed at the moment, the Nasdaq seeing
a nice little rally as traders ready for another busy
week highlighted by a delayed job support and a CPI
reading for the latest gauge on inflation. Right now, the
Dow is off by only ten points. SMP five hundred
is up half a percent, NASDAC up nearly one percent higher,
(20:23):
two hundred and seventeen points, RUSTED two thousand is up
about eight tenths of a percent ten. Your treasurrealed flat
at the moment at four point two point two percent,
and Crewe Oil up one on a third percent higher,
trading at sixty four dollars in thirty eight cents a barrel.
Novo nord his shares jumping over three percent after Hins
and Hers pulled its we Go VI copycat weight loss
(20:46):
pill off the market after Novo threatened legal action against
the telehealth firm Hymns and herstock tumbling about twenty five
percent on that news. Meanwhile, Bloomberg reported this morning that
Alphabet is looking to raise about fifteen billion dollars from
a US high grade dollar bond sale. Alphabet shares are
up about one percent. Elsewhere, Oracle rising about nine percent
(21:09):
after the tech company received an upgrade to buy from
neutral from DA Davidson. Grocery giant Kroger named former Walmart
executive Greg Forran as its next CEO. Kroger's stock is
up about six percent, while Walmart shares a down one percent.
And tomorrow morning, ahead of the opening bell, ask Forzenca,
(21:29):
Coca Cola, BP, CBS Health, Marriott, and Spotify among those
who will post their quarterly results. I'm Tucker Silva, and
that is Wall Street.
Speaker 4 (21:39):
Watch Mike.
Speaker 2 (21:40):
There's a piece in the New York Times feeling amateur
at retirement planning, they asked AI for help. More people
were turning to chatbots for advice, inquiring about high stakes
decisions such as saving for retirement, even if they eventually
turn to a human, what.
Speaker 4 (21:58):
Do you think better or worse than TikTok?
Speaker 2 (21:59):
Financial advice depends what you put into it, quite honestly.
Speaker 3 (22:04):
And as I was reading.
Speaker 2 (22:07):
This, I pulled up an AI prompt and said, Okay,
here's what I gave, And I said, pretend I'm a
sixty five year old looking to retire. I have four
hundred thousand investible assets and a four hundred thousand dollars home.
I spend forty thousand dollars a year. Walk me through
a detailed analysis of building a financial plan and the
(22:27):
questions I need to answer in order to not run
out of money in retirement. And it did a pretty
good job of like summarizing a lot of the questions
that I need to ask.
Speaker 3 (22:37):
I didn't ask it to actually solve.
Speaker 2 (22:39):
Any of them for me, because I'd have to put
in a whole lot more information. And this, I think
is the place where a lot of people would run
into trouble is unless you actually know what information you
need to have in order to be able to put
this in, you're not going to get the result that
(22:59):
you want of it, and it's not going to be accurate.
Speaker 5 (23:03):
Here's where I think that AI could be helpful, and
it can also be wrong. By the way, right, we've
talked at length about this, AI is frequently wrong.
Speaker 4 (23:12):
I had one just from.
Speaker 2 (23:14):
Like very simple financial thing that I asked it last
week just to like see if it knew.
Speaker 3 (23:18):
I was like, what is the.
Speaker 2 (23:19):
Maximum gift allowance in twenty twenty six without having to,
you know, file anything for taxes, it's just wrong.
Speaker 3 (23:28):
It told me eighteen thousand instead of nineteen thousand.
Speaker 4 (23:30):
Yeah.
Speaker 5 (23:31):
Math is oftentimes also not great at and so if
you're trying to use it for a calculator of some sort,
it can it can pose problems.
Speaker 4 (23:40):
There.
Speaker 5 (23:40):
Where I think it might be useful is if you
have a highly specific financial question.
Speaker 3 (23:45):
Yes, like.
Speaker 5 (23:48):
When I saw the other day, I am saving money
for my kids college and we are thinking about this,
that or the other, and how it will affect our
financial aid application process. Can you walk me through how
this aspect of my income is put on the financial
(24:09):
aid applications? And you know, it can probably do a
pretty good job of telling you about the differences on
the FAFT set versus the CSS profile, both of which
are used for filing for financial aid. I think if
you generally put it in there and ask a question
like you did Chuck, where you say I'm sixty five
and have this much money and want to save for retirements,
(24:30):
you know, can you build me a financial plan? I'd
be very concerned about it. The software, the AI itself
doing all the calculations correctly, and you having enough information
to input in there and then contextualize what it's spitting
back out right, like, would you know to ask, Okay,
(24:52):
what is the average return that you are using for
the investment portfolio? Would it have any context to say,
am I in the right investment mix for what I'm
trying to accomplish right now? Yeah, both of which are
brought up in this New York Times piece, and I'm
just unclear that those would be all that good. The
case here was a thirty two year old who happened
(25:15):
to have her entire retirement plan in a what's referred
to as a target date fund that was built for
somebody who retires in twenty fifteen, which is not Again,
if you're thirty two, that's not exactly lining up probably
with your objectives. And so you can see a big
problem there, And that might be AI might be good at, like, hey,
(25:36):
I'm in this. Is it designed for somebody my age? Like, yeah,
AI can probably answer that, But a big broader building
of a model for something as important as your financial
future unless you have the expertise to put the right
things in there in the first place, like we've talked
about right, Like, I don't think AI is going to
allow you to file your own taxes or build your
(25:56):
own financial plan unless you have the pre existing contact
of how to build software and how to build a
financial plan.
Speaker 3 (26:05):
If you have, as you said, if you have a
very simple question that.
Speaker 2 (26:08):
You wanted to answer, I think it can usually answer
that pretty correctly. If you are very tech savvy and
want to use CAD code to go and build out,
you know, a personalized piece of financial planning software, you
can use it to do that. If you're in that
(26:28):
ninety five percent in the middle where you don't have
the advanced skills but no more than the basic questions,
it can get complicated to make sure you're getting the
most out of it that you need.
Speaker 5 (26:39):
I'll be the first to say I do think that
AI is going to reshape just about every industry out
there as we've talked about it, and financial planning is
no exception.
Speaker 3 (26:48):
It totally will. There will be large groups of people
that will be able to say I can use this
to do my financial planning.
Speaker 5 (26:57):
One hundred percent and so that is not in irrelevant
development here, and I think it will change. It'll probably
change the software that I as a financial planner use,
like no doubt all of those things are going to shift.
But when it comes to things as important as say
your taxes or your retirement plan. What you have to
(27:18):
ask yourself before using one of these tools is will
I feel confident enough to go and execute a financial
strategy based on its recommendations?
Speaker 3 (27:27):
Right?
Speaker 5 (27:27):
And unless you feel some of those categories like we
talked about, I find it unlikely that the average person will.
If you're going down that road and want to check
in on the work that you're already doing, Armstrong would
love to help there. We work with folks with all
different backgrounds to try and structure their financial future. Some
of whom have already done a lot of the legwork
(27:48):
and that's great and we can pick it up and
bring it across the finish line. Others need a full
build out of what their financial future may come to
look like. If you fall in any of those categories,
we'd love to chat with you too. The numbers eight
hundred three nine three for zero zero one. You can
go check out our website where you can book a
time for us to call you back at Armstrong Advisory
dot com or again that number eight hundred three nine
(28:11):
three for zero zero one.
Speaker 1 (28:13):
The proceeding was paid for by Armstrong Advisory Group. A
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (28:30):
Let's see, Oh, Chinese cars, Yes, let's talk about Chinese cars, Mike.
Speaker 5 (28:34):
Ah, Yes, so peace from Bloomberg. Chinese cars are coming
to the US, like it or not. I think this
mainly is a commentary on the statement that the President
made the other day, sorry, last month, when he was
in Detroit. President Trump said that if Chinese automakers wanted
to build plants in the US, he would quote love that.
(28:55):
And so then this piece jumps along that, hey, we
are going to allow these into the United States. Now,
a few things about Chinese owned and manufactured cars. One,
we tear if the living heck out of them right now.
And I don't think that they would even allowed to
be allowed to be registered if you decide to import
your own Chinese made vehicle from overseas and pay the
(29:17):
import tax on them. Volvo though, just you know, so
we're all aware, is a subsidiary of a Chinese company.
They do manufacture cars in the US, They're looked at
very differently than say, what's what's some of the big
ones over there. Shoomi is one of the car manud
China byd I guess the question what I personally very
(29:41):
much hope that we don't allow Chinese automobiles to be
sold in the United States, even if they are manufactured
and assembled here in the United States. I purely am
basing that off of national security concerns. But I think
the way that people are going to position it is,
is this any bigger of a security threat than the
(30:02):
pre existing threats from TikTok televisions, all sorts of networking
devices that go into equipment all across the country. I
would argue yes, but I think plenty of people would argue.
Speaker 2 (30:12):
Now, I think the big thing that would prevent me
from ever buying a Chinese vehicle is the fact that look, ultimately,
if there are Chinese components, which there are in every
single electronics thing that you own, it is sitting at
your house, the vehicle poses all kinds of different risks
(30:35):
from a locationtive perspective, privacy perspective, like there's a whole
different element there, and this is before you even get
into having you know, your mobility tied into potentially being
restricted by the Chinese government if they decided to, you know,
shut it down, shut it down for whatever reason, which
(30:57):
I would imagine that they can. I know that might
be speculative, but.
Speaker 5 (31:03):
The cars are increasingly of electronic devices that are controlled
by a server, and so you can do this. It's
entirely possible, and I firmly believe it would never happen
outside of a all out conflict between the US and China.
Speaker 4 (31:18):
You know.
Speaker 2 (31:19):
So it's uh again, it's a concern on my end.
Speaker 3 (31:23):
Let's take a quick break. When we come back, let's
do a little bit of stack roulette.
Speaker 1 (31:26):
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Like us on YouTube and get
caught up on anything and everything you might have missed.
This is the Financial Exchange Radio Network. The Financial Exchange
is life on Series XM's business radio channel one thirty
two weekdays from eleven to noon. Get the latest business
(31:47):
and financial news from across the country and around the world,
and keep up to date on how it might affect
your wallet. That's the Financial Exchange weekdays from eleven to
noon on series XM's business radio Channel one thirty two
face He's the Financial Exchange Radio Network.
Speaker 6 (32:07):
This segment of The Financial Exchange is brought to you
by the US Virgin Islands Department of Tourism. Experience America's
Caribbean and fall naturally and rhythm with the heartbeat of
the Islands while enjoying incredible beaches, world class cuisine, and
unforgettable sunsets. The weather is perfect all year round, so
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(32:29):
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Now visit USVII dot com. That's visit USVII dot com. Well,
a couple segments ago, we asked you the trivia question.
Joe Peshi won his only Academy Award for his performance
in which movie That would be Good Fellas. Darren from
(32:52):
Lowell Mass is our winner today, taking home a Financial
Exchange Show T shirt. Congrats to Darren, and we play
trivia every day here in the Financial Looks Change see
complete contest rules at Financial Exchange Show dot com.
Speaker 2 (33:04):
Mike, I want to talk about this piece from the
Wall Street Journal. It's titled Where Did all the Cheap
Restaurants Go? And it's talking about the pricing compression that
you're seeing between casual, fast casual, and sit down restaurants.
Speaker 5 (33:18):
And so let's define one that fits into each category.
Speaker 2 (33:22):
Casual is McDonald's, Fast casual is let's even stick with
just burger places. Fast casual is five guys.
Speaker 4 (33:31):
You that distinction I would okay.
Speaker 3 (33:34):
And sit down would be Applebe's or Chili's. I'll have burgers.
Speaker 2 (33:40):
If you took me back to my college days, you
could go into McDonald's and you can get a meal
for four to five dollars. You could go into five
Guys and you would get a burger for nine to
ten dollars. You would go to Applebee's and you'd get
a burger for thirteen to fifteen dollars.
Speaker 4 (33:58):
So different price components, different price part Clearly.
Speaker 2 (34:01):
Today you go to McDonald's and you're probably paying somewhere
in the ten to eleven range for you know, a
full you know, a burger and fries. You go to
a five guys you're paying fifteen sixteen. You go to Applebee's,
you're paying fifteen to eighteen. And so the only one
(34:22):
that has impress that's happened there.
Speaker 5 (34:24):
Yeah, I was gonna say, the one that seemingly has
developed value. I don't think, you know, I think the
one that has really shown value a casual.
Speaker 3 (34:33):
Has been like chain.
Speaker 5 (34:35):
No, the one that's developed sorry, like chain, sit down,
sit down, chain, sit down, Applebe's, Chili's. That's the value
that group, that's that the one is the one that
has shown its value.
Speaker 2 (34:44):
Which is the opposite of how we used to think
of them. It used to be if I need something cheap,
I'm going to McDonald's. Now it's well, they're all kind
of in the same ballparking. It used to be the
McDonald's burger was a third of the cost of the
Applebe's one, and now it's like there may be like
is a sixty it's sixty percent of the apple piece one.
(35:05):
And so it's just this compression that's happened. And I
think what you end up getting then is for people
that aren't choosing to go to McDonald's purely for economic reasons,
like hey, I can't afford to go to Applebee's. It's okay,
that middle piece is being squeezed, which is why we
see Chipotle with you know, sales down year over year,
(35:25):
which five guys is in public, But I'm guessing they're
seeing something similar. That's why we see Sweet Green getting
eaten a line. Yeah, what about Shakeshack right, same boat?
If Panera was still publicly traded, I'm sure they'd be
showing the same stuff as well.
Speaker 5 (35:39):
Whereas I think that if you're truly looking for bottom
of the barrel pricing, you still might associate Burger King,
Wendy's at McDonald's with Hey, I just need a really
cheap meal fast, even though the difference between the two
is narrow.
Speaker 3 (35:52):
The savings isn't as much.
Speaker 4 (35:53):
Yeah. Yeah.
Speaker 5 (35:56):
By the way, if I want the cheapest meal available
to these days, I think the cheapest place can go
for a meal as pizza.
Speaker 3 (36:02):
Yeah, Pizza's got an expensive man.
Speaker 5 (36:04):
Yeah, but plenty of places still offer you a slice
and a soda for a very like you can get
a slice in a soda for the price that you
get that fast food meal.
Speaker 3 (36:12):
Use is a slice of meal?
Speaker 4 (36:14):
Yeah, depends on the slice.
Speaker 3 (36:16):
I'm a two slice guy.
Speaker 5 (36:17):
Yeah, Yeah, well, even then, I bet you can go
to plenty of local pizza joints get two slices in
a soda for under seven bucks.
Speaker 3 (36:24):
Maybe I don't do that often.
Speaker 4 (36:25):
Yeah, me either, but I think there are plenty of
places that would offer that.
Speaker 2 (36:29):
But I do know if I'm getting a pie on
a Friday night, it's twenty, it's twenty.
Speaker 5 (36:34):
You know, it's not twelve or thirteen. But imagine ordering
McDonald's for your whole family. Would you make me do
that again? Just think about that, right, Like, think about
the price differential on getting each of the kids a
happy meal and you and your wife a McDonald's meal
if you're looking at thirty to forty bucks there, whereas
you're looking at twenty for the pizza.
Speaker 4 (36:52):
Pizza. Pizza is the cheap what you don't want a
happy meal.
Speaker 5 (36:58):
My happiness level is Mike's unhappy not it's not high
enough media that can make me happy.
Speaker 3 (37:07):
Happy.
Speaker 2 (37:07):
I have a melancholy meal every day.
Speaker 3 (37:11):
Dismal.
Speaker 4 (37:13):
Uh. Best Super Bowl ad? You guys have a favorite?
Quite on best and worst.
Speaker 3 (37:17):
I really didn't watch many.
Speaker 2 (37:20):
Yeah, I was at a bunch of people at the
house for the game and was mostly trying to clean
up during the commercials.
Speaker 4 (37:26):
I haven't judged which ones are the best.
Speaker 5 (37:28):
I think the ones that clearly got my attention most
were Ben Stiller's ad for AI. Yeah, probably it was Instacard,
and then the other one was the duncan Ad. Got
my attention because bright colors and a ton of famous people,
and honestly, that's kind of the goal, right, get my
(37:50):
attention for thirty seconds.
Speaker 6 (37:51):
The one that stood out was the Backstreet Boys karaoke
one coin based yeah.
Speaker 4 (37:55):
Commercial like no terble whatsoever.
Speaker 2 (37:58):
But again, yeah, there were a lot of audible groans
in my house when that happened.
Speaker 3 (38:04):
Really killed the vibe.
Speaker 5 (38:06):
Also, I told you that potato chips are going to
try and convince us that they're healthy.
Speaker 2 (38:10):
Yeah, they were talking potato chips.
Speaker 4 (38:14):
Actually, yes they were.
Speaker 2 (38:15):
Oh good. Let's take a quick break for the rest
of the day. Uh, we'll be back tomorrow with some
retail sales data.
Speaker 3 (38:22):
We'll see you then,
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