August 8, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss the BLS not being able to be replaced by the private sector. Las Veags sees drop in tourism, hinting at broader economic woes facing the US. Summer concert season off to a booming start. Paul LaMonica, Barrons, joins the show to chat about Broadcom's fantastic start to the year and why they aren't included in the Magnificent Seven.
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Speaker 1 (00:00):
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(00:20):
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(00:42):
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a donation today. This is the Financial Exchange with Chuck
(01:06):
Zaith and Mike Armstraw, Chuck.
Speaker 2 (01:12):
Mike and Tucker with you here, and we got markets
staging a broad based rally to hopefully close out the week.
Here we got the Dow Jones Industrial Average, or the
Dow in the biz it's up one hundred and sixty
two points, the S and P five hundreds up forty one,
and the Nasdaq is up one hundred and sixty six.
So again, all three major US indices are in the
(01:33):
green today, so that's always fun. Tenure US Treasury selling
off very, very modestly, up three point seven basis points
to four point two eight one. And so you got
interest rates moving just a touch higher, but nothing huge,
nothing crazy. On the oil side of things, West Texas
Intermediate down twenty nine cents a barrel to sixty three
(01:53):
dollars and fifty nine cents. A lot of chatter come
in the last couple of days about US Russia, Ukraine,
maybe some kind of ceasefire potentially coming together. I take
all this with a grain of salt, because you know,
we've kind of seen this before, but maybe maybe this
time is different. But some chatter that that could be
happening as soon as the next week so we'll see
(02:15):
if we get any meaningful progress there. It would obviously
be a great thing if we were able to see that.
And on gold, we've got gold up thirty six dollars
and eighty cents an ounce to thirty four ninety and
fifty cents, kind of getting into the range where gold's
topped out a couple times over the last six months
or so. We'll see if it's able to bust through,
(02:35):
or if it runs out of scheme again and moves
back down. Anything catching your eye, Michael H No, I
think you've very well covered it. I had one other
thing that I saw this morning. This is from a
tweet from someone by the name of Jonathan Mays or Maze,
I don't know. It also could be Jonathan. I don't
(02:58):
know how the pronunciation is. But in any case, uh
US limited service chain same store sales from last quarter,
so think fast food and equivalent, like not fast food
and equivalent, but not sit down. So limited service refers
to counter service only like not you know, sit down service.
(03:18):
McDonald's up two point five percent, Starbucks down two, Taco
Bell up four, Wendy's down three to six, Burger King
up one five Domino's up three four, Chipotle down four,
Pizza Hut down five, KFC down five, Popeyees down point nine,
Jack in the Box down seven point one. Del Taco
down two point two, Papa John's up one. Dutch Brothers,
(03:41):
what do they sell? Dutch Brothers, A lot of demand
for them, up six point one percent, Sweet Green down
seven point one. Coffeelly Dutch Brothers is coffee correct? Okay?
Great pot Belly up three to six. Overall, kind of
a middling quarter. And across the spectrum, you know, there's
(04:01):
not a ton in common with the person who shops
repeatedly at Starbucks with the person who is going to
Pizza Pizza Hut. You know, they're different demos. So a
few bright spots, you know, McDonald's at two point five,
Taco Bell at four. Okay, Like there's a couple good
things there, but by and large, kind of downbeat across
(04:22):
most of that. Just underwhelming. I think It's not horrible horrible,
but underwhelming, I think is the number that I will
say there. And I was looking for you know, this,
this data all in one place, So I'm glad that
and Jonathan put it together just because I was curious
again not horrible, but again, there's a lot of declines
in same store sales, which is not something that you
(04:43):
want to be seeing. The other piece that I found
interesting on this Wendy's on their earnings call, they indicated
that breakfast is the fastest weakening part of their sales
menu right now.
Speaker 3 (04:54):
Yeah, because it sucks.
Speaker 2 (04:56):
It's not just them. McDonald said the same thing. What's that?
So the two takes that I've heard, and I don't
know which one I buy. The two takes that I've
heard are if employment's weakening, people don't go and get
breakfast on the way to work. But I don't really
buy that employment is weakening that much, you know, Like
I'm not really buying that. The other is, hey, if
(05:18):
you're having your you know, your budget eaten into by
higher costs, the easiest thing to cut out is going
out for breakfast.
Speaker 4 (05:27):
I was gonna say, yeah, making breakfast at home is
among the easiest things that you can do.
Speaker 2 (05:30):
So those those are the cases that I've seen there.
But again, I just I found this interesting just because
I hadn't seen the data all in one place, so
that was good to see. There. The BLS can't be
replaced by the private sector. This from Claudia sam who
has the some Rule named after her. She is a
former economist at the Federal Reserve, and basically what she
(05:52):
lays out in this piece is that look, as they
try to, you know, get additional data from private sources,
it's not as easy to do that as it is
from government data for a number of reasons. What was
she outlining.
Speaker 4 (06:10):
Here, So it's taken off a comment from Ray Dalio
who is criticizing the Bureau of Labor Statistics, and and
you know their methodology and you know, antiquated systems and
just their ability to properly gather the data. Her main
point is, I think a sound one.
Speaker 2 (06:28):
Business.
Speaker 4 (06:29):
Private businesses are beholden to their shareholders, and you don't
want them to produce data that we rely on for
setting government policy.
Speaker 2 (06:40):
I think it. I don't think it goes beyond that, right, Like,
you don't.
Speaker 4 (06:43):
Want a private company to be producing the data that
determines what somebody's cost of living adjustment is on Social Security.
You don't want a private company producing the data that
determines the interest rate on Treasury bonds.
Speaker 2 (06:58):
You want that.
Speaker 4 (06:59):
I'm not much of a big government person, but this
is one area where I think you do want the
federal government to be the one measuring this stuff and
actually checking it. That's the entire foundation of the trust
in some of the systems is that it is not
done by a private corporation that has its own self interest.
Speaker 2 (07:19):
So I think you can cut that both ways. Like
there's obviously with some of the changes that were made
to the CPI in the last forty years, you could say, hey,
this is you know, a reason why Social Security benefits
aren't rising as quickly as they would have been otherwise
is because they've changed, you know, methodology in order to
do so. So I think that can cut both ways
to a certain extent.
Speaker 4 (07:39):
Agreed, But I don't think somebody changed the methodology at
the Bureau of Labor Statistics with the express intent of lowering.
Speaker 2 (07:48):
Oh no, they did. They specifically moved to a different
CPI index in order to do that to cut the inflation, Yes,
so that the inflation adjustments would be smaller. Now it's
not you know, one percent smaller. You talk talking about
you know, tens of a percent that might add up
over time. But it was absolutely the intent of of
why they did this. The the big thing that I
(08:10):
look at on this is I'll use China as an example.
Can we all agree that China has not real government
economic statistics, and when they are real and the data
moves the way they don't want, they get rid of them. Yes,
we've seen this. The one with a few years ago
(08:31):
is when youth unemployment hit like twenty one or twenty
two percent, they discontinue the data series, and then magically,
six months it came back at two thirds the rate
at like fourteen percent, And clearly all those people just
must have gotten jobs over the summer like they had
to obviously. So if we look at China just as
an example, China's government run statistics are terrible, so we
(08:53):
can't really get any direct data from China on what's
going on in their economy. And so this is how
you into this stuff about like, hey, how high are
smog levels around shaying Hi? Is a you know, a
predictive for activity? What's electricity demand in uh Beijing? You know,
like these.
Speaker 4 (09:11):
Basically rely on foreign companies doing business in China right
to give you hints about the actual state of the
economy there.
Speaker 2 (09:19):
Which is not really a great way to fly. You're
kind of flying blind. And the two places where this
becomes problematic is number one, like you do have an
awful lot of government programs that do rely on these statistics.
If anyone listening is on Social Security, you get a
cost of living increase that is based on a CPI
index calculated by the Bureau of Labor Statistics. It might
(09:40):
be right, it might be wrong, but you know how
it's calculated, You see what goes into it, and you
can plan accordingly.
Speaker 4 (09:46):
And I'd be willing to say that I would not
were Io Security beneficiary. I would not, for instance, want
Tesla calculating making that calculation.
Speaker 2 (09:56):
You don't want any private company that's in charge of
that calcul like it's it's something where it fundamentally a
is not going to be something that they can do
in the same way to begin with. But the other piece,
just if you're looking at this one risk that you have,
what if that company goes out of business and you
(10:18):
lose all the data you know, like what if they
no longer exist? The US government for better or for worse,
it can't go out of business. It might be good,
it might be bad. They don't go out of business,
they're there, So I think in looking at this. I'm
a big believer at any point in time, you want
to look at a whole bunch of different indices, some private,
(10:40):
some public, in order to make determinations on what's going on.
But it's it's so that you can make better economic
decisions in the aggregate, and so that you can know
and understand what's going on with the economy before you do.
So you don't go talk to anyone who runs a business.
You don't simply go win and say, hey, this looks
(11:01):
like a good place to build a restaurant without doing
a whole bunch of research. And some of that research
is private sector data you might get, you know, credit card,
you know, transaction data from a provider or something like that.
But some of it also might be, hey, I need
to go to you know, the local government, the city
or state and figure out what's the population in this area.
(11:24):
I might need to go to the city or state
to find you know, average incomes in this area. And
granted that's a state government but not federal. But ultimately
you're still relying on a combination of public and private
sources in order to make decisions. And if the public
ones either go down in quality significantly or cease to exist.
It becomes harder for businesses and individuals to make those decisions.
Speaker 4 (11:45):
Then, yeah, I get that it's nuanced because I think
both of us have expressed, you know, interest in some
things being privatized that the government currently does. I just
don't think the independent statistics that you use to measure
the economy is one of those in my list.
Speaker 2 (12:00):
Let's take a quick break here. When we come back,
we've got what do we have? Oh, here we go,
We've got trivia and then we're talking Vegas baby.
Speaker 1 (12:09):
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Speaker 3 (12:53):
All right, let's do a little bit of trivia here
on the Financial Exchange and today is Dustin hoffman eighty
eighth birthday, Believe it or not. When beginning his career
as an actor in the early sixties, Hoffman shared an
apartment with two actors who would become legends in their
own rights. So trivia question today, Name one of the
(13:18):
two actors Dustin Hoffman shared in apartment with in the
early sixties. Once again, name one of the two actors
Dustin Hoffman shared an apartment with back in the early sixties.
Be the third person today to text us at six
one seven three six two thirteen eighty five with the
correct answer, and you win a Financial Exchange Show T shirt.
(13:41):
Once again, the third correct response to text us to
the number six one seven three six two thirteen eighty
five will win that T shirt. See complete contest rules
at Financial Exchange Show dot com.
Speaker 2 (13:54):
Las Vegas the city in Nevada uh they experienced an
eleven point three percent drop in visitors during the month
of June and what works out to four hundred thousand
fewer visitors than they saw during June of last year,
and it is the sixth consecutive month this year. Now
(14:15):
that Vegas is seeing a decline here now, A lot
of people like to point out that Vegas. I have
a couple buddies who are you know, big travelers out
that way. They go there on a pretty regular basis,
and you know, they like to point out, hey, Vegas
is kind of a bell weather for the US economy.
When everyone feels flushed there, you know, traveling there and
it's jammed. When it's you know a little slower in
(14:37):
the economy, things slow down there pretty quickly because you know,
disposable income that gets used there. You know, no one's
forced to go to Vegas. You know, we don't make
you go there. And so ultimately the thinking is, hey,
if Vegas is slowing, is it problematic for the US economy?
I just wonder if things are different this year, and
(14:59):
so is this more just reflecting the broader travel slow
down but to a greater extent, and ultimately the US
economy is still chugging along, more slowly, but still chugging.
Speaker 4 (15:10):
Nonetheless, Yeah, I don't have an answer for your check.
I mean, I wrote down a few things, right, I mean,
we talked yesterday about the prevalence of online gambling, and
so with the spread of gambling generally. I mean five
years ago, there were no casinos in Massachusetts, right within
five years ago.
Speaker 2 (15:27):
How when it was seven hour I think it was
like twenty eighteen or nineteen. Now it's a decade ago
there were no casinos.
Speaker 4 (15:32):
But you know, I have to say, all of the
excuses that I could think of to me don't really
make up for an eleven percent dropping visitors. I mean,
if that's persistent, then I'm not sure I'm willing to
blame it on anything other than a weak economy. Granted,
you know, you have one June where it just drops,
and that could be a blip on the radar. But
(15:53):
let's say you get measurements for July, August, and September
and they're all more than ten percent.
Speaker 2 (15:57):
Off year over year.
Speaker 4 (15:58):
Yeah, that's probably more than just oh, you know, you
can gamble on your phone. That seems like a bigger
problem to me for Vegas if that's the case.
Speaker 2 (16:06):
Tucker, you get any thoughts on this?
Speaker 4 (16:10):
Well, I thought so that I can probably get a
deal on going to Vegas, But that's literally apparently you can't.
Speaker 2 (16:14):
Actually apparently Vegas is ridiculously expensive.
Speaker 3 (16:18):
Now, well, no, I was literally just looking that up, Mike,
because I was thinking of my brother in law's bachelor party.
I want to say it was eight years ago, somewhere
in that range. And I paid, And this was in
the month of August, mind you, I paid.
Speaker 2 (16:32):
Beautiful time to be in the desk.
Speaker 4 (16:34):
Oh.
Speaker 3 (16:34):
I've done Vegas in July and it's not great. Oh yeah,
it was hell not great. But nonetheless, a flight to
Vegas was six hundred and fifty bucks round trip from Boston.
I'm looking at it now for that same week, and
I believe it was the week of like August twenty
fifth or something, one hundred ninety six bucks.
Speaker 2 (16:54):
I've heard that it's just like the hotels and the
food has gotten way more expensive. Though. Yeah, it used
to be, Hey, you can get there, you know, relatively cheaply.
You can stay there cheaply because they just want you
to come in and gamble, exactly. And I've heard that
anecdotally prices have moved up a lot on the strip
these days. But I don't know. I haven't been to
(17:15):
Vegas in.
Speaker 3 (17:18):
Yeah, I haven't been like six years, somewhere in that range.
Speaker 2 (17:20):
It might be like eight for me. I think like
twenty seventeen maybe.
Speaker 3 (17:24):
Yeah, I've always wanted to go back there and have
like a foodie experience because when I went out there
was for two bachelor parties and we would just like
survive on a slice of pizza and bud lights and
as one does.
Speaker 2 (17:37):
So I want to go back there. Yesterday's bacon, let
me eat that.
Speaker 4 (17:41):
I don't know, man, I'm seeing some cheap hotel rooms
right now.
Speaker 2 (17:45):
What a Jym's hotel?
Speaker 4 (17:47):
They're always Luxor hotel and casino sixty bucks a night, Okay,
the funt to blue is only two seventy seven on
the weekend or weekday.
Speaker 2 (17:56):
I'm looking at Labor day weekend, Wow, no one works?
Then it's labor day. Yeah, you know, to try to
get a drink? Then what are you gonna do? You know? So,
I don't know entirely what to make of this. I think.
I also think the other piece that's mentioned in here
is you get a lot of international travel that goes
to Vegas, and maybe some of that's pulled back and
(18:17):
it's not reflective of the broader US economy, right yep, Yes,
so it is a good like Vegas is such a
unique place. I just don't know in this particular set
of economic circumstances. Can you tell anything from it?
Speaker 3 (18:31):
Do you think a small factor is kind of piggybacking
off of our conversation yesterday in terms of gambling just
being on your phone, like do people have to go
to people really don't have to go to Vegas.
Speaker 4 (18:42):
I'm willing to accept that, Tucker, but I'm not willing
to accept that it represents an eleven percent drop in Vegas.
Speaker 3 (18:47):
Demanda, Yeah, fair, I'm just saying it's a small factor, right.
Speaker 2 (18:50):
Yeah, But let's talk about the three groups that go
to Vegas. Bachelor parties and bachelorette parties. Just people are
their twenties, okay, business travelers for conventions, and a bunch
of older people going to see with money shows, right
yeph The group in the twenties is the one that
I look at and I say, they don't need to
(19:11):
go anymore. They can either gamble on sports or they
could buy zero data expiration options in their brokerage account
and have fun doing that. I guess, like that's the
other one. Sure, your convention still happened. There's only one place.
I don't even know who plays Vegas anymore, But whoever's
playing Vegas there's only one place that you can see.
Then there's only one sphere. I don't know. Quick break,
(19:33):
We got the trivia answer in Wall Street Watch.
Speaker 5 (19:35):
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
look at what's moving markets so far today. Right here
(19:56):
on the Financial Exchange Radio Network.
Speaker 3 (19:58):
Markets are closing out the week in rally mode. Gold
is seeing much attention after The Financial Times reported that
the US imposed levies on one kilo bars, which would
mark a blow to Switzerland, a major refining hub. Right now,
the Dow is up by two tenths of one percent,
or about one hundred points, higher S and P five
hundreds up over half a percent or thirty four points,
(20:21):
Nasdaq is up seven tenths of one percent or one
hundred and fifty four points, and the Russell two thousand
is up by two tenths of one percent. Ten year
treasure reeled up four basis points at four point two
eighty seven percent, and crude oil flat at the moment,
trading at sixty three dollars in eighty cents a barrel.
Rocket Maker firefly Aerospace had a successful IPO yesterday as
(20:44):
it made its debut trading on the Nasdaq, surging thirty
four percent. However, that stock is giving back thirteen percent today. Meanwhile,
Sweet Green share is dropping more than twenty five percent
after the salad chain cut its twenty twenty five outlook
for the second quarter in a row. The company said
it saw issues with its loyalty program, weak consumer sentiment,
(21:06):
tariff headwinds in store challenges. Sticking with the restaurant space
where Wendy stock is up two percent despite a lower
full year profit forecast after its second quarter profit topped
analyst expectations despite headwinds in its US business. The company
cited a dynamic consumer environment and more challenging competition elsewhere.
(21:29):
Trade Desk dropping thirty nine percent after Bank of America
and Moffat Nathanson downgraded the stock, even after the tech
company had strong earnings. However, its CEO warned the during
the company's earnings call that some of the world's largest
brands are absolutely facing pressure from tariffs and inflation, and
Pinterest shares falling eight percent after the social media company
(21:52):
posted better than expected quarterly revenue, but its adjusted earnings
per share disappointed. I'm Tucker Silva and that is Wall
Street Watch. And in the previous segment, we asked you
the tribute question name one of the two actors Dustin
Hoffman shared an apartment with back in the early sixties. Well,
the two actors were Gene Hackman and Robert Duval. Jim
(22:15):
and Maine is our winner today taking on a Financial
Exchange Show t shirt. Congrats to Jim and we played
trivia every day here in the Financial Exchange. See complete
contest rules at Financial Exchange Show dot com.
Speaker 2 (22:26):
Mike, you want to talk a little bit about uh
ALS alternative investments in four one case if you want to, Nam,
I'm good. We discussed this. Well, now we have to Well, no, Tucker,
you put him in the stack. I said, yeah, I
said do what you want here. That's fine. I know
(22:47):
you said do what you want, but this is here,
so like I don't know, it's here, go for it. Then, Well, the.
Speaker 4 (22:53):
President basically signed an executive order asking ARISA to clarify
some stuff on this. It doesn't mean you're gonna have
alternative investments in your fourro one case tomorrow.
Speaker 2 (23:03):
I want to talk about it like that, Like we already.
I want to talk about like is this good or bad? Okay? Oh,
that's what one of these pieces is. It's like is
this good or bad? All right? If you want the
bad argument.
Speaker 4 (23:15):
Deal making in private equity has been under cline for
like four years in a row, and now they're turning
to four oh one k's as a possible source of
new funds.
Speaker 2 (23:22):
Always get worried that you're gonna be holding the bag
when someone talks about democratizing access. Yeah, why do they
want to give you access now? You know, like what
they've kept it away from you for so long? Why
now are they wanting to give you access? So that
makes you wonder a little bit. Yeah, other things, Uh,
there are only so many good alternative managers. It's just
(23:43):
like any other business. You look at real estate, and
there are some people that are really good at managing it.
There's some people that are really bad at it. And
so given that, how do you know that the good
ones are gonna make it down to the people that
are putting in twenty five dollars you know, every couple
of weeks, as opposed to hey, here's one hundred million
dollars for you to go invest in It's a lot
(24:03):
easier to get one hundred million dollars once than build
it through these little twenty five dollars deposits. So how
do you know that you're actually gonna have decent options
in your plan?
Speaker 4 (24:13):
So, to be fair to remember's going to play the
opposite side of this for a moment. While I am
certain there are private equity funds, good ones that do
not want to attract small investors, part of the reason
they have not gone for smaller investors is because the
regulators have prevented them from doing so. There's been all
sorts of rules for years now when it comes to
alternative investments in private equity in particular, why.
Speaker 2 (24:36):
Are they pushing to change it now exactly?
Speaker 4 (24:38):
Well, yeah, I mean, fair question, but you know, arguably
they've been pushing to change it for a while, and
they faced a regulator and an administration that has been
unwilling to budge on it. And this one is so
I think you could take that argument that, yeah, this
just wasn't going to happen under the Biden administration, even
though the funds wanted it back then and wanted it
(24:58):
back during Obama, and it just couldn't get pushed over
the finish line at that point. But I'd be I
guess my point would be I would be highly suspicious,
like you.
Speaker 2 (25:08):
Are, good potential things. You could potentially get access to
asset classes with a little bit less correlation to other markets,
so they could prevent you know, you from seeing as
big as swings in any particular year. Potentially the downside
to that, hey, if markets are absolutely ripping a lot
of times, private investments tend to lag a little bit
on that side. And so do you sit there and wonder, gee,
(25:28):
why am I doing this in a market you know
that might be up thirty percent for the year. It
minds you know, hey, why is this holding only up ten? Like?
What gives? So those are things that you can consider
on this. Ultimately, the devil's going to be in the
details on this, and not just in the broader you know,
regulation and not legislation. But how do custodians and how
(25:49):
do plan managers decide what they're going to allow inside?
Do they have caps on how much of your retirement
assets can be in alternatives or will they allow you
to put one hundred percent in them if possible? What
kind of liquidity do you get because normally liquidity is
pretty bad in alts. Is it something that is monthly, quarterly?
(26:11):
Is it annually? How does that all work? Yeah, I
need to take my RMD and all of it's in
a private refund. Right, These are things we don't have
great answers to now, and so on those items, I'm
not going to be overly critical because we don't know.
It's just we're gonna have to see how it plays out.
Speaker 4 (26:25):
I want to talk to you folks about the brand
new guide for the month of August from the Armstrong
Advisory Group. It is titled Leaving a Lasting Legacy, and
the guide we go through a bunch of different estate
planning tools that our clients use to tailor their financial strategy.
Some of them obviously involve trusts and complex planning, but others,
(26:49):
you know, we spend a lot of time just talking about, Hey,
what are the cheap or free things that you can
do to develop a legacy and put together a coherent
and cohesive estate plan without having to spend thousands of
dollars with an attorney. Because there are things that can
be done on that front, everything from titling of assets.
(27:10):
In Massachusetts, for example, there's transfer on death deeds, all
sorts of things that you can look into and understand,
but especially with all the regulatory changes over the last
few years when it comes to iras the tax treatment
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Speaker 4 (28:03):
Mike.
Speaker 2 (28:04):
In the last segment, we talked a little bit about Vegas.
Here's the counterpoint to it. Live Nation reporting their earnings
and indicating that their revenue is up sixteen percent from
the period the same period in last year and concert
revenue specifically up nineteen percent, and so this could be
part of the answer, which is, yeah, people aren't traveling
(28:25):
as much. Maybe they are doing more things locally as
their entertainment spend.
Speaker 4 (28:30):
Yeah, it's tough to make sense that, right. Like you
would think if we are in a tough economy, then
you would see both of these trends getting worse. Concerts
and Vegas travel and one's doing just fine. The other
one is suck and wins. So I have a pretty
tough time differentiating between those two.
Speaker 2 (28:49):
Let's take a quick break here. When we return, we
are going to be joined by Paul Lamonica from Barons,
and Paul is going to be talking to us about
right after this.
Speaker 1 (29:02):
Here the Financial Exchange every day from eleven to noon,
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Speaker 3 (29:38):
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Speaker 2 (30:08):
As promised, We're not joined by Paul Amonica from Barons
here to talk a little bit about Broadcom. Paul, how
is it that Broadcom somehow gets left out of the
conversation for the Magnificent Seven, despite you know, being the
sixth biggest company by market cap in the S and
P five hundred.
Speaker 6 (30:27):
Yeah, no, that's a great question. It's worth more than
Tesla right now. And broadcomstock has done better than all
of the Magnificent seven stocks except in Vidia. You know,
Microsoft and Meta have had great years, but in Vidia,
excuse me, Broadcom is up more than thirty percent, So
I've feel quipped that maybe we should you know, rename
(30:47):
rename it the Grade eight or the Exceptional eight. But
you know, putting all of that aside, I mean, obviously
Wall Street loves to have certain monikers. I mean we
used to have the fang stocks and now at the
mag seven. Broadcom make no mistake, is a legitimate you know,
chip powerhouse, you know, benefiting from strong demand for artificial intelligence.
(31:11):
You know, one person that I quoted in the story
joke that they're kind of the poor man's in video,
you know, because they don't have as dominant a market
shares and video does. But you know, you look at
the stock, it's definitely not poor in terms of its valuation.
It's trading at a premium doing video.
Speaker 2 (31:29):
Right now, What's like the specific niche that they fill
in that AI ecosystem? Why are they important to it? Like,
what do they do that's so special?
Speaker 6 (31:38):
Yeah, they have AI chips that are used and bought
by a lot of the hyperscalers. So companies like alphabet
and Meta platforms are big customers. You know, I believe
they have relationship you know, with Apple on some chips
as well, So you know, they are just part of
(31:59):
this water tech ecosystem, particularly with regards to all of
those hyperscalers that is spending so much money on artificial
intelligence technology right now. So they are, along with Nvidio,
one of the big beneficiaries in a way that Intel
is not. That's why Intel's a stock that's been struggling
(32:21):
as of late, you know, and we've now seen some
of the political pressure with some of the comments from
the President about their CEO as well.
Speaker 2 (32:29):
So how come even with the performance that Broadcom has
put together over the last four or five years, how
come they get no love? Why can't they get into
the Max seven? Why can't we make it the Elite eight?
What's going on here?
Speaker 6 (32:41):
No, I mean it's a great question. I mean, to
be fair, I mean it is all about just a
silly Wall Street moniker that might be a little dated.
I wouldn't go so far to say they get no love.
Speaker 2 (32:54):
The stock's up.
Speaker 6 (32:55):
More than thirty percent this year, trading at a pe
of around you know, forty five or so times forward
earnings estimates, So they are clearly beloved by investors. And
you know, many analysts have you know, price targets on
the stock that are you know, pretty bullish. As well.
(33:17):
So this is not a company that is unloved.
Speaker 2 (33:21):
You know, forty four out.
Speaker 6 (33:22):
Of forty nine analysts have a buy on it. But
as actually, as I pointed out in the story last week,
the price target hasn't come up yet, so I think
you might see analysts need to rush to raise their
price targets, particularly when the company reports earnings again in September.
Last check, the price target was below three hundred as
the consensus. Even though analysts have a buy rating on
(33:44):
the stock, stock's already over three hundred. So there's a
bit of a disconnect there. If you love the stock
right now, I think it's a buy, should go higher,
but the price target's below where it's currently trading.
Speaker 2 (33:57):
Very good, Paul. We appreciate you joining us today. Thank
you so much for the time, and I hope you
have a great weekend. Sand you guys.
Speaker 6 (34:05):
Thanks a lot.
Speaker 2 (34:05):
That is Paul Lamonica talking about broad coom here, Mike,
what do you think about that we're gonna rebrand, do
a little elitat or is that too march madness?
Speaker 4 (34:15):
I mean we've gone from what were all the acronyms
that we've had.
Speaker 2 (34:19):
For we went through fang fang. Yeah.
Speaker 4 (34:22):
Yeah, it'll probably shift at some point because it doesn't
look like Tesla's doing much recently.
Speaker 2 (34:27):
Maybe do we just can you? Can you be kicked
out of the mag seven?
Speaker 1 (34:31):
No?
Speaker 2 (34:31):
I think you have to rebrand it. You have to rebrand? Well,
what if we just want a different seven? No? No,
Super seven can't do it? No, okay, gotta do it.
Speaker 4 (34:42):
Did you guys already cover McDonald's and the adult Happy Meal?
Speaker 2 (34:48):
No, no idea what I'm talking about.
Speaker 4 (34:49):
Okay, So on August twelfth, McDonald's is reviving a bunch
of different brands and putting out adult happy meals with
mystery Shakes and all sorts of characters that you haven't
heard from in a while, characters like who Michael, I forget,
I've got a picture Hamburglar? Yeah, you got the Hamburglar
(35:10):
in here? Grimace, Grimace is in here. They're going to
be making cards. I think of these characters and Mystery Shake.
While I do think that McDonald's is going to struggle
to actually execute on this because the ice cream machine
is gonna be down and all sorts of problems.
Speaker 2 (35:28):
This is going to drive traffic. People are going to
be all over.
Speaker 4 (35:31):
This, you know, between Disney adults and everything else playing
in nostalgia right now?
Speaker 2 (35:35):
Yeah, look out, well happy Gilmore too did. That was
an objectively terrible but that's all you had to do,
was all you had to do was sit there, and
you were already subscribed to Netflix.
Speaker 4 (35:44):
I think that people are going to head to McDonald's
after August twelfth to grab one of these things.
Speaker 2 (35:47):
How long are they going to be out there for.
Speaker 4 (35:49):
I don't have a date on it begins August twelfth.
Speaker 3 (35:52):
I don't know how waiting in mine. Yeah, it's a
limited time. Yeah, sounds stupid me.
Speaker 2 (36:00):
Honestly, I wouldn't want it either. But I think that
people are gonna be all over this adult happy meal.
Feels tough to me.
Speaker 7 (36:08):
We'll say it feels at rush it. It feels a
little too close to dressing yourself up as a baby. Okay,
never heard of that one, But all right, exactly there's
a reason why I don't know, just U doesn't doesn't
quite quick for me. Speaking of which, this Wall Street
(36:29):
Journal piece the homeowners who decided that having just one
pool wasn't enough.
Speaker 2 (36:34):
I hate these people. The people are the reporters.
Speaker 4 (36:38):
So I'm trying people who cares about the millionaires that
have two pools in their house? Like, no, I don't
care about that. Why Wall Street Journal are you printing
a story on it? Who cares to get people upset?
To get people obsesssions accomplished?
Speaker 2 (36:54):
I guess. The other question is who lacks the self aware?
I guess if you have two pools, do you generally
lack the self awareness to not be interviewed about it? Yeah?
Like you know, now.
Speaker 4 (37:07):
Super yachts with pools in them, like welcome to pool.
People and their inordinate wealth make all sorts of stupid
decisions and uh yeah, who cares?
Speaker 2 (37:19):
This is a dumb piece, like especially like reading some
of the captions on the photos. Matthias Johnson's indoor pool
has decorative dolphins.
Speaker 3 (37:28):
Oh good, Matthias is stupid dolphins in your pool?
Speaker 2 (37:32):
Beam?
Speaker 4 (37:32):
So here's what Wall Street Journal is playing into, though,
is the immense interest that everybody has and seeing other
people's homes. This is why Zillow is now like the
if you track its visits and volumes to like a
social media app, it's like the seventh in the world
or something like that. So, yeah, people are fascinated with
this stuff, and so I'm sure it's getting the clicks,
(37:53):
but just give me a break.
Speaker 2 (37:56):
Yeah, honestly, would rather read about someone's private jets if
they have a lot of money. Yeah, do you like this? Yeah,
if you got two jets, triples are safe. Now now
we're talking. What was it Jeff Immelt that had the
backup jet when he was at GE in case the
primary broke down. Boy, that's a blast from the past.
We're done for the day, done for the week. Markets
(38:16):
remain broadly positive. Have a great weekend. We'll see you Monday.
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heroes by visiting dav five K Doug Boston and making
a donation today. This is the Financial Exchange with Chuck
(01:06):
Zaith and Mike Armstraw, Chuck.
Speaker 2 (01:12):
Mike and Tucker with you here, and we got markets
staging a broad based rally to hopefully close out the week.
Here we got the Dow Jones Industrial Average, or the
Dow in the biz it's up one hundred and sixty
two points, the S and P five hundreds up forty one,
and the Nasdaq is up one hundred and sixty six.
So again, all three major US indices are in the
(01:33):
green today, so that's always fun. Tenure US Treasury selling
off very, very modestly, up three point seven basis points
to four point two eight one. And so you got
interest rates moving just a touch higher, but nothing huge,
nothing crazy. On the oil side of things, West Texas
Intermediate down twenty nine cents a barrel to sixty three
(01:53):
dollars and fifty nine cents. A lot of chatter come
in the last couple of days about US Russia, Ukraine,
maybe some kind of ceasefire potentially coming together. I take
all this with a grain of salt, because you know,
we've kind of seen this before, but maybe maybe this
time is different. But some chatter that that could be
happening as soon as the next week so we'll see
(02:15):
if we get any meaningful progress there. It would obviously
be a great thing if we were able to see that.
And on gold, we've got gold up thirty six dollars
and eighty cents an ounce to thirty four ninety and
fifty cents, kind of getting into the range where gold's
topped out a couple times over the last six months
or so. We'll see if it's able to bust through,
(02:35):
or if it runs out of scheme again and moves
back down. Anything catching your eye, Michael H No, I
think you've very well covered it. I had one other
thing that I saw this morning. This is from a
tweet from someone by the name of Jonathan Mays or Maze,
I don't know. It also could be Jonathan. I don't
(02:58):
know how the pronunciation is. But in any case, uh
US limited service chain same store sales from last quarter,
so think fast food and equivalent, like not fast food
and equivalent, but not sit down. So limited service refers
to counter service only like not you know, sit down service.
(03:18):
McDonald's up two point five percent, Starbucks down two, Taco
Bell up four, Wendy's down three to six, Burger King
up one five Domino's up three four, Chipotle down four,
Pizza Hut down five, KFC down five, Popeyees down point nine,
Jack in the Box down seven point one. Del Taco
down two point two, Papa John's up one. Dutch Brothers,
(03:41):
what do they sell? Dutch Brothers, A lot of demand
for them, up six point one percent, Sweet Green down
seven point one. Coffeelly Dutch Brothers is coffee correct? Okay?
Great pot Belly up three to six. Overall, kind of
a middling quarter. And across the spectrum, you know, there's
(04:01):
not a ton in common with the person who shops
repeatedly at Starbucks with the person who is going to
Pizza Pizza Hut. You know, they're different demos. So a
few bright spots, you know, McDonald's at two point five,
Taco Bell at four. Okay, Like there's a couple good
things there, but by and large, kind of downbeat across
(04:22):
most of that. Just underwhelming. I think It's not horrible horrible,
but underwhelming, I think is the number that I will
say there. And I was looking for you know, this,
this data all in one place, So I'm glad that
and Jonathan put it together just because I was curious
again not horrible, but again, there's a lot of declines
in same store sales, which is not something that you
(04:43):
want to be seeing. The other piece that I found
interesting on this Wendy's on their earnings call, they indicated
that breakfast is the fastest weakening part of their sales
menu right now.
Speaker 3 (04:54):
Yeah, because it sucks.
Speaker 2 (04:56):
It's not just them. McDonald said the same thing. What's that?
So the two takes that I've heard, and I don't
know which one I buy. The two takes that I've
heard are if employment's weakening, people don't go and get
breakfast on the way to work. But I don't really
buy that employment is weakening that much, you know, Like
I'm not really buying that. The other is, hey, if
(05:18):
you're having your you know, your budget eaten into by
higher costs, the easiest thing to cut out is going
out for breakfast.
Speaker 4 (05:27):
I was gonna say, yeah, making breakfast at home is
among the easiest things that you can do.
Speaker 2 (05:30):
So those those are the cases that I've seen there.
But again, I just I found this interesting just because
I hadn't seen the data all in one place, so
that was good to see. There. The BLS can't be
replaced by the private sector. This from Claudia sam who
has the some Rule named after her. She is a
former economist at the Federal Reserve, and basically what she
(05:52):
lays out in this piece is that look, as they
try to, you know, get additional data from private sources,
it's not as easy to do that as it is
from government data for a number of reasons. What was
she outlining.
Speaker 4 (06:10):
Here, So it's taken off a comment from Ray Dalio
who is criticizing the Bureau of Labor Statistics, and and
you know their methodology and you know, antiquated systems and
just their ability to properly gather the data. Her main
point is, I think a sound one.
Speaker 2 (06:28):
Business.
Speaker 4 (06:29):
Private businesses are beholden to their shareholders, and you don't
want them to produce data that we rely on for
setting government policy.
Speaker 2 (06:40):
I think it. I don't think it goes beyond that, right, Like,
you don't.
Speaker 4 (06:43):
Want a private company to be producing the data that
determines what somebody's cost of living adjustment is on Social Security.
You don't want a private company producing the data that
determines the interest rate on Treasury bonds.
Speaker 2 (06:58):
You want that.
Speaker 4 (06:59):
I'm not much of a big government person, but this
is one area where I think you do want the
federal government to be the one measuring this stuff and
actually checking it. That's the entire foundation of the trust
in some of the systems is that it is not
done by a private corporation that has its own self interest.
Speaker 2 (07:19):
So I think you can cut that both ways. Like
there's obviously with some of the changes that were made
to the CPI in the last forty years, you could say, hey,
this is you know, a reason why Social Security benefits
aren't rising as quickly as they would have been otherwise
is because they've changed, you know, methodology in order to
do so. So I think that can cut both ways
to a certain extent.
Speaker 4 (07:39):
Agreed, But I don't think somebody changed the methodology at
the Bureau of Labor Statistics with the express intent of lowering.
Speaker 2 (07:48):
Oh no, they did. They specifically moved to a different
CPI index in order to do that to cut the inflation, Yes,
so that the inflation adjustments would be smaller. Now it's
not you know, one percent smaller. You talk talking about
you know, tens of a percent that might add up
over time. But it was absolutely the intent of of
why they did this. The the big thing that I
(08:10):
look at on this is I'll use China as an example.
Can we all agree that China has not real government
economic statistics, and when they are real and the data
moves the way they don't want, they get rid of them. Yes,
we've seen this. The one with a few years ago
(08:31):
is when youth unemployment hit like twenty one or twenty
two percent, they discontinue the data series, and then magically,
six months it came back at two thirds the rate
at like fourteen percent, And clearly all those people just
must have gotten jobs over the summer like they had
to obviously. So if we look at China just as
an example, China's government run statistics are terrible, so we
(08:53):
can't really get any direct data from China on what's
going on in their economy. And so this is how
you into this stuff about like, hey, how high are
smog levels around shaying Hi? Is a you know, a
predictive for activity? What's electricity demand in uh Beijing? You know,
like these.
Speaker 4 (09:11):
Basically rely on foreign companies doing business in China right
to give you hints about the actual state of the
economy there.
Speaker 2 (09:19):
Which is not really a great way to fly. You're
kind of flying blind. And the two places where this
becomes problematic is number one, like you do have an
awful lot of government programs that do rely on these statistics.
If anyone listening is on Social Security, you get a
cost of living increase that is based on a CPI
index calculated by the Bureau of Labor Statistics. It might
(09:40):
be right, it might be wrong, but you know how
it's calculated, You see what goes into it, and you
can plan accordingly.
Speaker 4 (09:46):
And I'd be willing to say that I would not
were Io Security beneficiary. I would not, for instance, want
Tesla calculating making that calculation.
Speaker 2 (09:56):
You don't want any private company that's in charge of
that calcul like it's it's something where it fundamentally a
is not going to be something that they can do
in the same way to begin with. But the other piece,
just if you're looking at this one risk that you have,
what if that company goes out of business and you
(10:18):
lose all the data you know, like what if they
no longer exist? The US government for better or for worse,
it can't go out of business. It might be good,
it might be bad. They don't go out of business,
they're there, So I think in looking at this. I'm
a big believer at any point in time, you want
to look at a whole bunch of different indices, some private,
(10:40):
some public, in order to make determinations on what's going on.
But it's it's so that you can make better economic
decisions in the aggregate, and so that you can know
and understand what's going on with the economy before you do.
So you don't go talk to anyone who runs a business.
You don't simply go win and say, hey, this looks
(11:01):
like a good place to build a restaurant without doing
a whole bunch of research. And some of that research
is private sector data you might get, you know, credit card,
you know, transaction data from a provider or something like that.
But some of it also might be, hey, I need
to go to you know, the local government, the city
or state and figure out what's the population in this area.
(11:24):
I might need to go to the city or state
to find you know, average incomes in this area. And
granted that's a state government but not federal. But ultimately
you're still relying on a combination of public and private
sources in order to make decisions. And if the public
ones either go down in quality significantly or cease to exist.
It becomes harder for businesses and individuals to make those decisions.
Speaker 4 (11:45):
Then, yeah, I get that it's nuanced because I think
both of us have expressed, you know, interest in some
things being privatized that the government currently does. I just
don't think the independent statistics that you use to measure
the economy is one of those in my list.
Speaker 2 (12:00):
Let's take a quick break here. When we come back,
we've got what do we have? Oh, here we go,
We've got trivia and then we're talking Vegas baby.
Speaker 1 (12:09):
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Speaker 3 (12:53):
All right, let's do a little bit of trivia here
on the Financial Exchange and today is Dustin hoffman eighty
eighth birthday, Believe it or not. When beginning his career
as an actor in the early sixties, Hoffman shared an
apartment with two actors who would become legends in their
own rights. So trivia question today, Name one of the
(13:18):
two actors Dustin Hoffman shared in apartment with in the
early sixties. Once again, name one of the two actors
Dustin Hoffman shared an apartment with back in the early sixties.
Be the third person today to text us at six
one seven three six two thirteen eighty five with the
correct answer, and you win a Financial Exchange Show T shirt.
(13:41):
Once again, the third correct response to text us to
the number six one seven three six two thirteen eighty
five will win that T shirt. See complete contest rules
at Financial Exchange Show dot com.
Speaker 2 (13:54):
Las Vegas the city in Nevada uh they experienced an
eleven point three percent drop in visitors during the month
of June and what works out to four hundred thousand
fewer visitors than they saw during June of last year,
and it is the sixth consecutive month this year. Now
(14:15):
that Vegas is seeing a decline here now, A lot
of people like to point out that Vegas. I have
a couple buddies who are you know, big travelers out
that way. They go there on a pretty regular basis,
and you know, they like to point out, hey, Vegas
is kind of a bell weather for the US economy.
When everyone feels flushed there, you know, traveling there and
it's jammed. When it's you know a little slower in
(14:37):
the economy, things slow down there pretty quickly because you know,
disposable income that gets used there. You know, no one's
forced to go to Vegas. You know, we don't make
you go there. And so ultimately the thinking is, hey,
if Vegas is slowing, is it problematic for the US economy?
I just wonder if things are different this year, and
(14:59):
so is this more just reflecting the broader travel slow
down but to a greater extent, and ultimately the US
economy is still chugging along, more slowly, but still chugging.
Speaker 4 (15:10):
Nonetheless, Yeah, I don't have an answer for your check.
I mean, I wrote down a few things, right, I mean,
we talked yesterday about the prevalence of online gambling, and
so with the spread of gambling generally. I mean five
years ago, there were no casinos in Massachusetts, right within
five years ago.
Speaker 2 (15:27):
How when it was seven hour I think it was
like twenty eighteen or nineteen. Now it's a decade ago
there were no casinos.
Speaker 4 (15:32):
But you know, I have to say, all of the
excuses that I could think of to me don't really
make up for an eleven percent dropping visitors. I mean,
if that's persistent, then I'm not sure I'm willing to
blame it on anything other than a weak economy. Granted,
you know, you have one June where it just drops,
and that could be a blip on the radar. But
(15:53):
let's say you get measurements for July, August, and September
and they're all more than ten percent.
Speaker 2 (15:57):
Off year over year.
Speaker 4 (15:58):
Yeah, that's probably more than just oh, you know, you
can gamble on your phone. That seems like a bigger
problem to me for Vegas if that's the case.
Speaker 2 (16:06):
Tucker, you get any thoughts on this?
Speaker 4 (16:10):
Well, I thought so that I can probably get a
deal on going to Vegas, But that's literally apparently you can't.
Speaker 2 (16:14):
Actually apparently Vegas is ridiculously expensive.
Speaker 3 (16:18):
Now, well, no, I was literally just looking that up, Mike,
because I was thinking of my brother in law's bachelor party.
I want to say it was eight years ago, somewhere
in that range. And I paid, And this was in
the month of August, mind you, I paid.
Speaker 2 (16:32):
Beautiful time to be in the desk.
Speaker 4 (16:34):
Oh.
Speaker 3 (16:34):
I've done Vegas in July and it's not great. Oh yeah,
it was hell not great. But nonetheless, a flight to
Vegas was six hundred and fifty bucks round trip from Boston.
I'm looking at it now for that same week, and
I believe it was the week of like August twenty
fifth or something, one hundred ninety six bucks.
Speaker 2 (16:54):
I've heard that it's just like the hotels and the
food has gotten way more expensive. Though. Yeah, it used
to be, Hey, you can get there, you know, relatively cheaply.
You can stay there cheaply because they just want you
to come in and gamble, exactly. And I've heard that
anecdotally prices have moved up a lot on the strip
these days. But I don't know. I haven't been to
(17:15):
Vegas in.
Speaker 3 (17:18):
Yeah, I haven't been like six years, somewhere in that range.
Speaker 2 (17:20):
It might be like eight for me. I think like
twenty seventeen maybe.
Speaker 3 (17:24):
Yeah, I've always wanted to go back there and have
like a foodie experience because when I went out there
was for two bachelor parties and we would just like
survive on a slice of pizza and bud lights and
as one does.
Speaker 2 (17:37):
So I want to go back there. Yesterday's bacon, let
me eat that.
Speaker 4 (17:41):
I don't know, man, I'm seeing some cheap hotel rooms
right now.
Speaker 2 (17:45):
What a Jym's hotel?
Speaker 4 (17:47):
They're always Luxor hotel and casino sixty bucks a night, Okay,
the funt to blue is only two seventy seven on
the weekend or weekday.
Speaker 2 (17:56):
I'm looking at Labor day weekend, Wow, no one works?
Then it's labor day. Yeah, you know, to try to
get a drink? Then what are you gonna do? You know? So,
I don't know entirely what to make of this. I think.
I also think the other piece that's mentioned in here
is you get a lot of international travel that goes
to Vegas, and maybe some of that's pulled back and
(18:17):
it's not reflective of the broader US economy, right yep, Yes,
so it is a good like Vegas is such a
unique place. I just don't know in this particular set
of economic circumstances. Can you tell anything from it?
Speaker 3 (18:31):
Do you think a small factor is kind of piggybacking
off of our conversation yesterday in terms of gambling just
being on your phone, like do people have to go
to people really don't have to go to Vegas.
Speaker 4 (18:42):
I'm willing to accept that, Tucker, but I'm not willing
to accept that it represents an eleven percent drop in Vegas.
Speaker 3 (18:47):
Demanda, Yeah, fair, I'm just saying it's a small factor, right.
Speaker 2 (18:50):
Yeah, But let's talk about the three groups that go
to Vegas. Bachelor parties and bachelorette parties. Just people are
their twenties, okay, business travelers for conventions, and a bunch
of older people going to see with money shows, right
yeph The group in the twenties is the one that
I look at and I say, they don't need to
(19:11):
go anymore. They can either gamble on sports or they
could buy zero data expiration options in their brokerage account
and have fun doing that. I guess, like that's the
other one. Sure, your convention still happened. There's only one place.
I don't even know who plays Vegas anymore, But whoever's
playing Vegas there's only one place that you can see.
Then there's only one sphere. I don't know. Quick break,
(19:33):
We got the trivia answer in Wall Street Watch.
Speaker 5 (19:35):
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
look at what's moving markets so far today. Right here
(19:56):
on the Financial Exchange Radio Network.
Speaker 3 (19:58):
Markets are closing out the week in rally mode. Gold
is seeing much attention after The Financial Times reported that
the US imposed levies on one kilo bars, which would
mark a blow to Switzerland, a major refining hub. Right now,
the Dow is up by two tenths of one percent,
or about one hundred points, higher S and P five
hundreds up over half a percent or thirty four points,
(20:21):
Nasdaq is up seven tenths of one percent or one
hundred and fifty four points, and the Russell two thousand
is up by two tenths of one percent. Ten year
treasure reeled up four basis points at four point two
eighty seven percent, and crude oil flat at the moment,
trading at sixty three dollars in eighty cents a barrel.
Rocket Maker firefly Aerospace had a successful IPO yesterday as
(20:44):
it made its debut trading on the Nasdaq, surging thirty
four percent. However, that stock is giving back thirteen percent today. Meanwhile,
Sweet Green share is dropping more than twenty five percent
after the salad chain cut its twenty twenty five outlook
for the second quarter in a row. The company said
it saw issues with its loyalty program, weak consumer sentiment,
(21:06):
tariff headwinds in store challenges. Sticking with the restaurant space
where Wendy stock is up two percent despite a lower
full year profit forecast after its second quarter profit topped
analyst expectations despite headwinds in its US business. The company
cited a dynamic consumer environment and more challenging competition elsewhere.
(21:29):
Trade Desk dropping thirty nine percent after Bank of America
and Moffat Nathanson downgraded the stock, even after the tech
company had strong earnings. However, its CEO warned the during
the company's earnings call that some of the world's largest
brands are absolutely facing pressure from tariffs and inflation, and
Pinterest shares falling eight percent after the social media company
(21:52):
posted better than expected quarterly revenue, but its adjusted earnings
per share disappointed. I'm Tucker Silva and that is Wall
Street Watch. And in the previous segment, we asked you
the tribute question name one of the two actors Dustin
Hoffman shared an apartment with back in the early sixties. Well,
the two actors were Gene Hackman and Robert Duval. Jim
(22:15):
and Maine is our winner today taking on a Financial
Exchange Show t shirt. Congrats to Jim and we played
trivia every day here in the Financial Exchange. See complete
contest rules at Financial Exchange Show dot com.
Speaker 2 (22:26):
Mike, you want to talk a little bit about uh
ALS alternative investments in four one case if you want to, Nam,
I'm good. We discussed this. Well, now we have to Well, no, Tucker,
you put him in the stack. I said, yeah, I
said do what you want here. That's fine. I know
(22:47):
you said do what you want, but this is here,
so like I don't know, it's here, go for it. Then, Well, the.
Speaker 4 (22:53):
President basically signed an executive order asking ARISA to clarify
some stuff on this. It doesn't mean you're gonna have
alternative investments in your fourro one case tomorrow.
Speaker 2 (23:03):
I want to talk about it like that, Like we already.
I want to talk about like is this good or bad? Okay? Oh,
that's what one of these pieces is. It's like is
this good or bad? All right? If you want the
bad argument.
Speaker 4 (23:15):
Deal making in private equity has been under cline for
like four years in a row, and now they're turning
to four oh one k's as a possible source of
new funds.
Speaker 2 (23:22):
Always get worried that you're gonna be holding the bag
when someone talks about democratizing access. Yeah, why do they
want to give you access now? You know, like what
they've kept it away from you for so long? Why
now are they wanting to give you access? So that
makes you wonder a little bit. Yeah, other things, Uh,
there are only so many good alternative managers. It's just
(23:43):
like any other business. You look at real estate, and
there are some people that are really good at managing it.
There's some people that are really bad at it. And
so given that, how do you know that the good
ones are gonna make it down to the people that
are putting in twenty five dollars you know, every couple
of weeks, as opposed to hey, here's one hundred million
dollars for you to go invest in It's a lot
(24:03):
easier to get one hundred million dollars once than build
it through these little twenty five dollars deposits. So how
do you know that you're actually gonna have decent options
in your plan?
Speaker 4 (24:13):
So, to be fair to remember's going to play the
opposite side of this for a moment. While I am
certain there are private equity funds, good ones that do
not want to attract small investors, part of the reason
they have not gone for smaller investors is because the
regulators have prevented them from doing so. There's been all
sorts of rules for years now when it comes to
alternative investments in private equity in particular, why.
Speaker 2 (24:36):
Are they pushing to change it now exactly?
Speaker 4 (24:38):
Well, yeah, I mean, fair question, but you know, arguably
they've been pushing to change it for a while, and
they faced a regulator and an administration that has been
unwilling to budge on it. And this one is so
I think you could take that argument that, yeah, this
just wasn't going to happen under the Biden administration, even
though the funds wanted it back then and wanted it
(24:58):
back during Obama, and it just couldn't get pushed over
the finish line at that point. But I'd be I
guess my point would be I would be highly suspicious,
like you.
Speaker 2 (25:08):
Are, good potential things. You could potentially get access to
asset classes with a little bit less correlation to other markets,
so they could prevent you know, you from seeing as
big as swings in any particular year. Potentially the downside
to that, hey, if markets are absolutely ripping a lot
of times, private investments tend to lag a little bit
on that side. And so do you sit there and wonder, gee,
(25:28):
why am I doing this in a market you know
that might be up thirty percent for the year. It
minds you know, hey, why is this holding only up ten? Like?
What gives? So those are things that you can consider
on this. Ultimately, the devil's going to be in the
details on this, and not just in the broader you know,
regulation and not legislation. But how do custodians and how
(25:49):
do plan managers decide what they're going to allow inside?
Do they have caps on how much of your retirement
assets can be in alternatives or will they allow you
to put one hundred percent in them if possible? What
kind of liquidity do you get because normally liquidity is
pretty bad in alts. Is it something that is monthly, quarterly?
(26:11):
Is it annually? How does that all work? Yeah, I
need to take my RMD and all of it's in
a private refund. Right, These are things we don't have
great answers to now, and so on those items, I'm
not going to be overly critical because we don't know.
It's just we're gonna have to see how it plays out.
Speaker 4 (26:25):
I want to talk to you folks about the brand
new guide for the month of August from the Armstrong
Advisory Group. It is titled Leaving a Lasting Legacy, and
the guide we go through a bunch of different estate
planning tools that our clients use to tailor their financial strategy.
Some of them obviously involve trusts and complex planning, but others,
(26:49):
you know, we spend a lot of time just talking about, Hey,
what are the cheap or free things that you can
do to develop a legacy and put together a coherent
and cohesive estate plan without having to spend thousands of
dollars with an attorney. Because there are things that can
be done on that front, everything from titling of assets.
(27:10):
In Massachusetts, for example, there's transfer on death deeds, all
sorts of things that you can look into and understand,
but especially with all the regulatory changes over the last
few years when it comes to iras the tax treatment
of them after you're gone, there's a lot of work
that can be done. If you have a goal of
leaving a legacy for your family, this is the guide
(27:31):
for you. You can get it by calling eight hundred three
nine three for zero zero one. Again that's the number
for the Armstrong Advisory Group and our free guide this
month is titled Leaving a Lasting Legacy. You can get
it by calling eight hundred three nine three for zero
zero one.
Speaker 1 (27:48):
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 into state planning advisors before making
any investment disay. Armstrong may contact you to offer investment
advisory services.
Speaker 4 (28:03):
Mike.
Speaker 2 (28:04):
In the last segment, we talked a little bit about Vegas.
Here's the counterpoint to it. Live Nation reporting their earnings
and indicating that their revenue is up sixteen percent from
the period the same period in last year and concert
revenue specifically up nineteen percent, and so this could be
part of the answer, which is, yeah, people aren't traveling
(28:25):
as much. Maybe they are doing more things locally as
their entertainment spend.
Speaker 4 (28:30):
Yeah, it's tough to make sense that, right. Like you
would think if we are in a tough economy, then
you would see both of these trends getting worse. Concerts
and Vegas travel and one's doing just fine. The other
one is suck and wins. So I have a pretty
tough time differentiating between those two.
Speaker 2 (28:49):
Let's take a quick break here. When we return, we
are going to be joined by Paul Lamonica from Barons,
and Paul is going to be talking to us about
right after this.
Speaker 1 (29:02):
Here the Financial Exchange every day from eleven to noon,
non Serrius XM's business radio channel one thirty two. Keep
it here for the latest business and financial news and
the trends on Wall Street. The Financial Exchange is now
life on Serious XM's business radio channel one thirty two.
Faces the Financial Exchange Radio Network. The Financial Exchange streams
(29:24):
live on YouTube. Subscribe to our page and stay up
to date on breaking business news all morning long. Face
is the Financial Exchange Radio Network ladies and gentlemen the weekend.
Speaker 3 (29:38):
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Speaker 2 (30:08):
As promised, We're not joined by Paul Amonica from Barons
here to talk a little bit about Broadcom. Paul, how
is it that Broadcom somehow gets left out of the
conversation for the Magnificent Seven, despite you know, being the
sixth biggest company by market cap in the S and
P five hundred.
Speaker 6 (30:27):
Yeah, no, that's a great question. It's worth more than
Tesla right now. And broadcomstock has done better than all
of the Magnificent seven stocks except in Vidia. You know,
Microsoft and Meta have had great years, but in Vidia,
excuse me, Broadcom is up more than thirty percent, So
I've feel quipped that maybe we should you know, rename
(30:47):
rename it the Grade eight or the Exceptional eight. But
you know, putting all of that aside, I mean, obviously
Wall Street loves to have certain monikers. I mean we
used to have the fang stocks and now at the
mag seven. Broadcom make no mistake, is a legitimate you know,
chip powerhouse, you know, benefiting from strong demand for artificial intelligence.
(31:11):
You know, one person that I quoted in the story
joke that they're kind of the poor man's in video,
you know, because they don't have as dominant a market
shares and video does. But you know, you look at
the stock, it's definitely not poor in terms of its valuation.
It's trading at a premium doing video.
Speaker 2 (31:29):
Right now, What's like the specific niche that they fill
in that AI ecosystem? Why are they important to it? Like,
what do they do that's so special?
Speaker 6 (31:38):
Yeah, they have AI chips that are used and bought
by a lot of the hyperscalers. So companies like alphabet
and Meta platforms are big customers. You know, I believe
they have relationship you know, with Apple on some chips
as well, So you know, they are just part of
(31:59):
this water tech ecosystem, particularly with regards to all of
those hyperscalers that is spending so much money on artificial
intelligence technology right now. So they are, along with Nvidio,
one of the big beneficiaries in a way that Intel
is not. That's why Intel's a stock that's been struggling
(32:21):
as of late, you know, and we've now seen some
of the political pressure with some of the comments from
the President about their CEO as well.
Speaker 2 (32:29):
So how come even with the performance that Broadcom has
put together over the last four or five years, how
come they get no love? Why can't they get into
the Max seven? Why can't we make it the Elite eight?
What's going on here?
Speaker 6 (32:41):
No, I mean it's a great question. I mean, to
be fair, I mean it is all about just a
silly Wall Street moniker that might be a little dated.
I wouldn't go so far to say they get no love.
Speaker 2 (32:54):
The stock's up.
Speaker 6 (32:55):
More than thirty percent this year, trading at a pe
of around you know, forty five or so times forward
earnings estimates, So they are clearly beloved by investors. And
you know, many analysts have you know, price targets on
the stock that are you know, pretty bullish. As well.
(33:17):
So this is not a company that is unloved.
Speaker 2 (33:21):
You know, forty four out.
Speaker 6 (33:22):
Of forty nine analysts have a buy on it. But
as actually, as I pointed out in the story last week,
the price target hasn't come up yet, so I think
you might see analysts need to rush to raise their
price targets, particularly when the company reports earnings again in September.
Last check, the price target was below three hundred as
the consensus. Even though analysts have a buy rating on
(33:44):
the stock, stock's already over three hundred. So there's a
bit of a disconnect there. If you love the stock
right now, I think it's a buy, should go higher,
but the price target's below where it's currently trading.
Speaker 2 (33:57):
Very good, Paul. We appreciate you joining us today. Thank
you so much for the time, and I hope you
have a great weekend. Sand you guys.
Speaker 6 (34:05):
Thanks a lot.
Speaker 2 (34:05):
That is Paul Lamonica talking about broad coom here, Mike,
what do you think about that we're gonna rebrand, do
a little elitat or is that too march madness?
Speaker 4 (34:15):
I mean we've gone from what were all the acronyms
that we've had.
Speaker 2 (34:19):
For we went through fang fang. Yeah.
Speaker 4 (34:22):
Yeah, it'll probably shift at some point because it doesn't
look like Tesla's doing much recently.
Speaker 2 (34:27):
Maybe do we just can you? Can you be kicked
out of the mag seven?
Speaker 1 (34:31):
No?
Speaker 2 (34:31):
I think you have to rebrand it. You have to rebrand? Well,
what if we just want a different seven? No? No,
Super seven can't do it? No, okay, gotta do it.
Speaker 4 (34:42):
Did you guys already cover McDonald's and the adult Happy Meal?
Speaker 2 (34:48):
No, no idea what I'm talking about.
Speaker 4 (34:49):
Okay, So on August twelfth, McDonald's is reviving a bunch
of different brands and putting out adult happy meals with
mystery Shakes and all sorts of characters that you haven't
heard from in a while, characters like who Michael, I forget,
I've got a picture Hamburglar? Yeah, you got the Hamburglar
(35:10):
in here? Grimace, Grimace is in here. They're going to
be making cards. I think of these characters and Mystery Shake.
While I do think that McDonald's is going to struggle
to actually execute on this because the ice cream machine
is gonna be down and all sorts of problems.
Speaker 2 (35:28):
This is going to drive traffic. People are going to
be all over.
Speaker 4 (35:31):
This, you know, between Disney adults and everything else playing
in nostalgia right now?
Speaker 2 (35:35):
Yeah, look out, well happy Gilmore too did. That was
an objectively terrible but that's all you had to do,
was all you had to do was sit there, and
you were already subscribed to Netflix.
Speaker 4 (35:44):
I think that people are going to head to McDonald's
after August twelfth to grab one of these things.
Speaker 2 (35:47):
How long are they going to be out there for.
Speaker 4 (35:49):
I don't have a date on it begins August twelfth.
Speaker 3 (35:52):
I don't know how waiting in mine. Yeah, it's a
limited time. Yeah, sounds stupid me.
Speaker 2 (36:00):
Honestly, I wouldn't want it either. But I think that
people are gonna be all over this adult happy meal.
Feels tough to me.
Speaker 7 (36:08):
We'll say it feels at rush it. It feels a
little too close to dressing yourself up as a baby. Okay,
never heard of that one, But all right, exactly there's
a reason why I don't know, just U doesn't doesn't
quite quick for me. Speaking of which, this Wall Street
(36:29):
Journal piece the homeowners who decided that having just one
pool wasn't enough.
Speaker 2 (36:34):
I hate these people. The people are the reporters.
Speaker 4 (36:38):
So I'm trying people who cares about the millionaires that
have two pools in their house? Like, no, I don't
care about that. Why Wall Street Journal are you printing
a story on it? Who cares to get people upset?
To get people obsesssions accomplished?
Speaker 2 (36:54):
I guess. The other question is who lacks the self aware?
I guess if you have two pools, do you generally
lack the self awareness to not be interviewed about it? Yeah?
Like you know, now.
Speaker 4 (37:07):
Super yachts with pools in them, like welcome to pool.
People and their inordinate wealth make all sorts of stupid
decisions and uh yeah, who cares?
Speaker 2 (37:19):
This is a dumb piece, like especially like reading some
of the captions on the photos. Matthias Johnson's indoor pool
has decorative dolphins.
Speaker 3 (37:28):
Oh good, Matthias is stupid dolphins in your pool?
Speaker 2 (37:32):
Beam?
Speaker 4 (37:32):
So here's what Wall Street Journal is playing into, though,
is the immense interest that everybody has and seeing other
people's homes. This is why Zillow is now like the
if you track its visits and volumes to like a
social media app, it's like the seventh in the world
or something like that. So, yeah, people are fascinated with
this stuff, and so I'm sure it's getting the clicks,
(37:53):
but just give me a break.
Speaker 2 (37:56):
Yeah, honestly, would rather read about someone's private jets if
they have a lot of money. Yeah, do you like this? Yeah,
if you got two jets, triples are safe. Now now
we're talking. What was it Jeff Immelt that had the
backup jet when he was at GE in case the
primary broke down. Boy, that's a blast from the past.
We're done for the day, done for the week. Markets
(38:16):
remain broadly positive. Have a great weekend. We'll see you Monday.
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