November 19, 2025 • 39 mins
Chuck Zodda and Marc Fandetti discuss Target's earnings report showing soft demand. Is Target becoming the next Macy's? Lowe's gets a boost from pro builders. Nvidia earnings are a massive test for markets. Are investors fleeing tech stocks for dividend payers? New Social Security scam uses ‘high pressure’ scare tactics. What to watch for.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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(00:43):
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(01:06):
and Mark Vandetti.
Speaker 2 (01:10):
Chuck Mark Tucker with you here, and as we get
things kicked off, stock's pairing their gains as we go
through the day. The S and P five hundred, which
at one point today was up nearly sixty five points,
now up nineteen. The Dow is now off one hundred
and twenty points in the Nasdaq up about one hundred
and forty three and change, So a little bit of
(01:33):
intra day volatility continuing as stock's try to get off
the mat where they've been for the last few days.
I do always find an important to point out look
like this has not been any kind of major downturn
in the broader market. The S and P five hundred
as a whole is about four percent off all time
highs right now. That's not really notable in any way,
(01:55):
shape or form. Those kinds of things happened several times
a year, if not.
Speaker 1 (02:00):
More, and.
Speaker 2 (02:04):
The way things are being talked about feels different. But
ultimately I think there are two things going on there.
The first is if you look at the average SMP
five hundred stock, first of all, it didn't peak in October,
and second it's off more than ten percent from it's
fifty two week high. It's just the index has been
dragged higher by a small number of big names that
have rallied strongly. So if you own, you know, some
(02:24):
of these other stocks in large quantities, yeah, you can
be feeling more pain than the broader market, obviously. And
the other thing is, look, some of the recent pain
has been in the more AI centric areas, and so
that's kind of different from what we've seen the last
six months, and maybe people just feeling a little bit
on edge as a result. So you got mixed markets today,
(02:45):
but the S and P and Nasdaq still positive. Ten
year US Treasury down four tenths of a basis point
to four point one one seven. Bonds have been really
quiet over the last month or so, I suspect largely
because we've mostly been getting individual company earnings reports, and
the bond market, I feel, is just more conditioned to
(03:07):
respond to big macro reports, and that's not what earnings
reports provide you.
Speaker 3 (03:13):
If you think about bond's interest rates as having a
real component driven by real forces, economies, productive capacity, how
we're operating relative to that government's need for debt financing
over time, and maybe other idiosyncratic factors there's that real component,
and then there's the nominal. Well nominal is the overall,
but there's the expected inflation component. So either one of those.
(03:33):
The real component moves slowly and is not particularly volatile,
it shouldn't because it reflects underlying economic forces I'll call them,
and then the expected inflation component can jump around. But
we haven't had a lot of inflation data to go on.
So if you're I don't know how fare, it's just
like we haven't had any data to go or any
data period.
Speaker 2 (03:50):
Yeah, the tenure Treasury has been between four and four
and a quarter since the beginning of September.
Speaker 3 (03:55):
Now, yeah, I'm willing to this just speculation, obviously, but
it seems right to me that that's probably a function
of the absence of of of government data.
Speaker 2 (04:04):
It's kind of like it's, you know, the ten year
Treasury doesn't know what to do when Microsoft is like, yeah,
our earnings were good. Okay, what does that mean for
you know, growth and inflation. Yeah, it doesn't know what
to do with it. Whereas if you get a retail
sales report, it's, oh, like retail sales are in the toilet.
My yield should be lower because the ten years obviously
(04:26):
sentient and thinks about these things. Or hey, GDP blew
out top side and private investment is huge, Okay, ten
years got to move higher, like it's.
Speaker 3 (04:36):
Yeah, those things which if the real rate component and
then the expected inflation component again.
Speaker 2 (04:40):
And instead you get like you get markets. All the
bond people are like, okay, so target earnings were bad.
Why does this matter to us? Because like the bond
market doesn't know what to do with this, which does
bring me to, uh, you know, a segue of we
will talk about target earnings in just moment. But the
(05:01):
dollar index finding a little bit of strength day after
some recent weakness, up point four to five percent to
ninety nine to ninety. We've got gold also rallying today.
Find that interesting dollar up, gold up, that's not something
you always see. The price of gold up thirty dollars
and twenty cents an ounce, closing back in on forty
one hundred an ounce. And we got crude oil down
a dollar sixty three to fifty nine to eleven. This
(05:24):
on the back of some well a rumored piece plan
for Russia and Ukraine for like the eighth time this year.
And we'll see if it ends up coming to fruition
this time, let's talk a little bit about Target earnings.
Target reported before the bell. Quite honestly, they're just not
an important company to the broader economy at this point
(05:48):
in time. You just look at the numbers out there,
and yes, they still do one hundred billion dollars in revenue,
but that's been declining at about a two percent annualized
clip for the last couple of years. It's one where
the market cap of the company now reflects that shrinking
ice cube, that melting ice cube type situation where it's
(06:10):
only valued at thirty nine billion dollars. So it's not
important to the broader market. And I think the question
that investors are asking about Target now, since it is off,
you know, almost sixty almost seventy percent from its all
time high that it hit back in twenty twenty one,
the question investors are asking right now about Target is, hey,
(06:32):
are you going to become the next Macy's that we
have to watch out for in terms of you know,
store closures and sales of real estate and this and that.
Just because margins aside from that brief period in twenty
twenty one, margins have been on a slow and steady
decline since two thousand and seven. I mean, this is
(06:54):
almost a twenty year problem in the making, where margins
have declined from you know, almost nine percent down about
five percent on a trailing twelve month basis here, and
you just kind of look at it and say, yeah,
this is a company that has to figure some things
out in the coming years. It's not a bankruptcy risk
at the moment, but you could kind of see where
(07:16):
things go in five six years if they don't figure
out how do we improve our positioning?
Speaker 3 (07:22):
And headwinds have been mild, right, this has.
Speaker 2 (07:25):
Been a good environment for retailers.
Speaker 3 (07:27):
Right what happens if the economy contracts it and inevitably
will and a sector sector conditions have probably not helped
Staples as a group here year to date through I
think right now, I say I think because I'm using
a third party data source, they don't time stamp it.
But consumer Staples, of which target is a part there
(07:50):
at S and P five hundred, constituent of that sector group,
is the only sector group in the s of the
twelve I think it is in the S and P
five hundred that's down to date, just out.
Speaker 2 (08:03):
Of curiosity and I know you don't have the answer
to this, thank you. Why do Costco, Walmart and Target
end up in consumer staples but Amazon ends up in
consumer cyclical They sell all the same stuff, usually from
the exact same vendors.
Speaker 3 (08:19):
Yeah, slightly more growth sensitive when measured in a statistical way,
i e. Growth goes up one percent, Amazon sales go
up by a little bit more than that, and Target
in the rest of the staples go up by a
little less than that. You're right, I don't know off
the top of my head. How how would they bring Yeah,
it's probably something like that.
Speaker 2 (08:38):
You know. Another one that always just I kind of
wonder about Dollar General and Dollar Tree consumer staples, TJX
consumer discretionary. Yeah, why I'm not saying that they should
like I don't know which one they all should be in,
But there's just not that much difference between TJX and
(09:03):
you know, some of those other discounters. I know, the
margin of the discount is bigger, like Dollar Tree, you know,
hits a far lower price point than TJX. But okay,
Like you're a discount retailer that you know sells clothing
in some of your stores. Home goods has all kinds
of you know, other stuff like yeah, what what gives?
Speaker 1 (09:21):
Why?
Speaker 2 (09:21):
Why are these in different categories in the.
Speaker 3 (09:23):
Sn If you look at S and P Global's website,
they're the arbiter of this stuff. They didn't invent the concept,
but they're they're recognized, I think, repository for this information,
at least the most commonly cited one. They give a
definition similar to the one I gave, and I was
sort of being fast and loose, but it's it's it's
based on sensitivity to economic growth, and you'd measure it
in a statistical way the way that I suggested.
Speaker 2 (09:45):
So basically your answer is they're smarter than me, and
I should you know, go get my shinebox.
Speaker 3 (09:50):
They're definitely not smarter than you, but they have the
data and the junior analysts to help them.
Speaker 2 (09:56):
They probably smarter than me, you.
Speaker 3 (09:58):
Know, depends on what domain you're talking about. It does
I know you're there as some math guys who you
know you wouldn't want change in your oil?
Speaker 2 (10:10):
Well, I don't know about that.
Speaker 3 (10:12):
How much did they charge?
Speaker 2 (10:13):
Yeah, what's the price?
Speaker 3 (10:14):
You know, at the right price, I don't care who
does If they pay me to you better just check your.
Speaker 2 (10:19):
You know, I got Yeah, there's always there's always someone
who's willing to figure it out. Let's take a quick
break here. When we come back, we've got what do
we have? We've got trivia, and then I want to
talk about Low's earnings after this. Low's up today, just
a couple of days after home Deep overported bad or
not bad, but weaker than expected earnings. Low's coming out
(10:40):
and up about five percent. What gives? What's the difference
We'll discuss after this.
Speaker 1 (10:45):
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Speaker 4 (11:22):
This segment of the Financial Exchange is powered by circle
K Convenience Stores. Circle K is now the official convenience
store of the dav Department of Massachusetts. On behalf of
Circle K. Thank you veterans for all you've done. Time
for trivia. You're on the Financial Exchange and on this
day in eighteen oh five, the Lewis and Clark Expedition
reached the Pacific Ocean. Lewis and Clark might never have
(11:45):
made it to the Pacific if it if they weren't
joined by a Native American woman who became their guide
and translator. So our trivia question today, what was the
name of the Native American woman who joined the Lewis
and Clark expedition as a guy and translator? Once again,
what was the name of the Native American woman who
joined the Lewis and Clark expedition as a guide and translator.
(12:09):
Be the ninth 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 once again. The ninth correct response to Texas 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. And want to remind
(12:30):
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Subscribe to our page and follow market activity all morning long.
Just search the Financial Exchange on YouTube and hit that
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Speaker 2 (12:42):
You more of a Merriwether Lewis fan or William Clark
fan mark.
Speaker 3 (12:48):
I always thought of them as as both being indispensable.
Of course, I have no idea what I'm talking about.
Speaker 2 (12:54):
Butter and Joey. You can't have one without the other.
Speaker 3 (12:56):
Oh no, I thoroughly enjoy just peanut butter. But I
see what you're getting at. Yeah, you know, who was
the senior of the.
Speaker 2 (13:02):
Two, Like, who really did the who ran the show?
Speaker 3 (13:06):
Yeah? Who was there? Like I was four years older, okay,
so presumably more experienced Lewis.
Speaker 2 (13:11):
Interestingly, he died like five years after the expedition. He
died really young, I think, like age thirty five or
thirty six. Uncertain circumstances. I don't think they ever figured
out it was a gunshot wound. No one ever figured
out if it was from someone else or self inflicted,
and so like kind of mysterious circumstances. Clark went on,
(13:32):
I think he was the governor of a state. Yeah,
he was the governor of Missouri. Well, not a state,
it was the territory at that point. But he was
the governor of Missouri Territory, you know, about a decade
or so after he went on the expedition. So there's that.
Speaker 3 (13:49):
Wow.
Speaker 2 (13:50):
Let's talk a little bit about Lowe's earnings. A day
after Home Depot reported, you know, modestly disappointing numbers, Low's
came out and had, you know, a nice little quarter.
And so it's one where I don't know what you
take from this other than Lose seems to have executed
well in the quarter. Home Depot maybe lacking a little
bit of execution, which is normally kind of the opposite
(14:11):
of how these companies move. Generally, Home Depot you say, hey,
they've got everything buttoned up and there. You know, they
run a really tight ship, and you know, Lows can
be a little bit more free flowing in terms of
how they manage quarter to quarter. But look, this is
a good quarter four Lows, and it's being rewarded by
the market up about five percent today.
Speaker 3 (14:31):
Are there any I don't follow this sector or these
stocks that closely, so pardon my ignorance, but are there
any meaningful differences in either customer base or geographic concentration
or anything that would suggest that the two should that
one could diverge dramatically other than just better, better management,
better operations, that one could diverge dramatically from the other overtime,
because I think of them as interchangeable.
Speaker 2 (14:50):
One signorant one difference you used to have was home
Depot is a little bit more focused on the professional contractor.
Lows bought a business called Foundation Building Materials earlier this
year that does a lot more professional contractor business, so
they kind of buffer that and bulk that up a
little bit. They're generally pretty similar at this point.
Speaker 3 (15:13):
Okay, so thank you.
Speaker 2 (15:15):
I don't know what would explain, you know, a key
divergence there.
Speaker 3 (15:19):
Okay, so if they both but if you're looking for
something that's indicative of what's going on with the broader
economy and not something idios, it's not something specific to
Lowser home Depots, we they probably both be reflecting it. Yeah,
that's maybe what I was getting at.
Speaker 2 (15:32):
Yeah, we've got in video earnings after the bell. Look,
we can talk about it, but ultimately they're expected to
sell billions of dollars worth of semiconductors. Tell everyone they're
going to continue to sell billions and maybe even trillions
of dollars of them into the future. And you and
I have no particularly insight into this, but.
Speaker 3 (15:51):
We do think, we think, we agree, maybe we don't
that that's no longer the really interesting and important question
for the economy. Yeah, they're gona a blowout quarter. Yeah, yeah,
we know. Everybody is up to their eyeballs in debt
to fund data centers, the hyperscalers, the so called hyperscalers. Anyway,
they're throwing it.
Speaker 2 (16:06):
Go ahead, can we talk about that for a second,
because there is something.
Speaker 3 (16:09):
Interesting thing you would save me.
Speaker 2 (16:11):
Yes, I'll say, their eyeballs in debt.
Speaker 3 (16:12):
Well, that's an exaggeration.
Speaker 2 (16:14):
No, no, no, no, I do want to talk about this
because one of the things that you are seeing done
in order to manage the appearance of debt levels is
the use of a bunch of special purpose vehicles to
get it off company balance sheets. The way this works,
like you just anyone listening, you might hear this from
time to time. The way it effectively works is, let's
say that Meta wants to borrow ten billion dollars to
(16:38):
go and build a data center, but they don't want
to take out ten billion in debt, because if you
keep doing that quarter after quarter, like eventually it hurts
your credit rating. So what these companies do is they
set up a separate corporation basically a shell, and they say, hey,
who wants to put money into this at a yield
of X in order to fund a data center construction.
The special purpose vehicle gets funded, and then Meta says,
(17:00):
we're going to pay why dollars a month or a
year whatever the framework is to that company to lease
the data center from them. So it appears on Meta's
financial statements as an operating expense related to that lease,
not as debt that's outstanding because the debt isn't technically
metas so in this way, and we've seen this done
(17:21):
and a number of times recently in recent history. Oracle
had a big one of these. Meta has one that's
ongoing with Blue Owl of all people like the company
that's in the news for you know, having some questions
about the private credit market right now. And so this
is the mechanism by which these companies borrow a bunch
of money in a lot of cases, but don't have it,
(17:43):
you know, show up on their balance sheets. You also
have companies that are now issuing bonds from their own
company in recent weeks in order to do this as well.
But when people talk about off balance sheet financing, this
is typically the mechanism that it's used, which is set
up a separate company, have people you know, lend that
(18:03):
company money, and then the parent company not really the
parent but the company that actually wants to operate the
facility in this case, they will then say, okay, we'll
lease that from the company and make payments to them,
which then funds the debt payments.
Speaker 3 (18:17):
Actually, so the reason I was poo pooing in video's
upcoming earnings report is that we know, I'm comfortable saying
we know it's going to be great, and we know
they're going to say tremendous things, but if credit dries up,
the promise will not be realized. So I'm not sure
it matters for the big questions that you might be asking,
(18:39):
what's economic growth going to be next year, over the
next five years, are the trends going to change? Is
productivity going to pick up? Because that why is that important? Well,
productivity is the main determinative standard of living over time.
It's also a big driver of earnings and snock prices.
And I'm just not sure that anything in Vidia tells
us today will answer the question unless you own it.
I don't want to diminish the importance of that if
you do. And you know, as you said at the
(19:01):
beginning of the first hour, they're the biggest component of
the S and P five ponder, So it matters for everybody,
but doesn't matter for the long term, I'm not sure.
Speaker 2 (19:08):
Take a quick break here. When we come back, we'll
talk about whether investors are actually rotating from tech stocks
to dividend paying stocks. And we've also got the trivia answer.
We've got Wall Street Watch and just a bunch of
other stuff, so make sure you stick around.
Speaker 1 (19:45):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Word
time now for Wall Street Watch. A complete look at
what's moving market so far today right here on the
Financial Exchange Radio Network.
Speaker 4 (20:03):
After rallying in earlier trading, markets are now pulling back
slightly and are now mixed ahead of Nvidia's big earnings
report to out after the closing bell and Video stock
at the moment is up over two percent right now.
The Dow is now down a quarter percent, or one
hundred and ten points. SMP five hundred is up three
tenths of a percent or nineteen points higher, NAZDAC up
(20:25):
six tenths of one percent or one hundred and thirty
four points. RUSTED two thousand now up only a quarter percent.
Tenure Treasure Deealed is flat at four point one point
one three percent, and crude oiled down over two percent lower.
Trading a fifty nine dollars in thirty one cents a barrel,
Target reported a decline in third quarter sales as the
(20:46):
company saw shoppyes spending in shoppers hunting for value. Target
also cut its annual profit outlook and said it would
invest billions to upgrade stores to help lift sales. Target
shares are now down about one percent. Meanwhile, Lowe this
is up five percent after the retailer beat third quarter
earnings expectations, where its online business helped offset weakness in
(21:07):
the home improvement sector. Another retail in TJX, beat third
quarter earnings and revenue estimates. The parent company to TJ
Max and Marshalls, lifted its annual outlook again as it
continues to win over inflation weary shoppers. Target shares are
actually now down modestly. They were up earlier. Alphabet shares
are jumping four percent one day after Google launched its
(21:29):
updated Gemini AI model. Separately, Loop Capital upgraded the stock
to buy from hold and upped its price target. And
Constellation Energy stock is climbing about six percent after the
company received a one billion dollar loan from the government
to restart its Crane Clean Energy Center nuclear plants. I'm
Tucker Silva and that is Wall Street Watch. And in
(21:51):
the previous segment, we asked you the question what was
the name of the Native American woman who joined the
Lewis and Clark expedition as a guide and translator. That
would be Sakajawea. Chuck from Newton, New Hampshire is our
winner today, taking home the Financial Exchange Show t shirt.
Congrats to Chuck and we play trivia every day here
in the Financial Exchange. See complete contest rules at Financial
(22:13):
Exchange Show. Dot Com got a piece here from Bloomberg.
Rotation from Tech leads investors to dividend paying stocks like Yeah,
who's the investor who goes, hey, I've been you know,
really happy riding you know in video and broadcom for
the last couple of years. You know what I need
now dividends. Yeah, like that that investor doesn't really exist
(22:35):
in any meaningful quantity. Furthermore, when you look at some
of the highest dividend payers that are out there in
the S and P five hundred, these are companies that
are like trading horribly for the last year or so.
You got Stanley Black Anddecker with a five percent dividend
that's trading near it's fifty two week lows. Same thing
when you look at Hormel Foods. You've got Verizon in
(22:55):
a similar boat. You got Pfizer that is, you know,
kind of just right in the middle of its fifty
two week range. UPS is one of the highest dividends
in the S and P. It's pretty close to a
fifty two week low right now.
Speaker 1 (23:07):
I just.
Speaker 2 (23:09):
The facts don't really support this. Given what we've seen
from how dividend payers have largely performed.
Speaker 3 (23:15):
They might instead be picking up the value effect. Tech
has sold off, so large cap growth is sold off.
Value has performed better, and dividend is high. Dividend yield
stocks are uber value and the value is defined as
relatively low price to book. I believe is the is
the way Russell constructs their their value index. That's the
(23:39):
that's the measure they use the largest one hundred paying
the largest one hundred dividend payers as calculated by Dow Jones.
They have an index, and you can, you know, buy
investment products that are indexed to that that that attempt
to replicate the performance of this index. That's like seventy
percent value companies. So I think what's happening here is
(24:00):
value overtaking growth. We've seen that year to date growth,
large cap growth is down like four percent, large cap
values down, you know, only one and a half or something,
which is not unusual.
Speaker 2 (24:09):
In Wait, large cap you're saying down.
Speaker 3 (24:13):
Isn't large cap value down?
Speaker 2 (24:14):
How can large cap growth and value be down when
the index is up as much as it is month
to date?
Speaker 3 (24:19):
Right now?
Speaker 2 (24:20):
You said year to date?
Speaker 3 (24:21):
Oh, I'm sorry, month on my bad? Okay, thank you, Chuck,
thank you.
Speaker 2 (24:24):
Sorry, I'm sending I'm going How could how can all
of this be down still?
Speaker 3 (24:28):
And catch on your part? Thank you? Yep, month to day,
Thank you. I was trying to refer to the most
recent hiccup.
Speaker 2 (24:36):
That makes more sense, folks, Thank you. If you're trying
to make sense out of what's moving in markets. You
might be h worth might be worth your time to
give Armstrong Advisory Group call. Armstrong Advisory Group works with
families throughout the New England region, really throughout the country.
There are a number of states that we are fully
licensed to operate in and you can give us a
(24:59):
call to help so that so we can help you
take a look at your portfolio, your financial plan and
see if it makes sense for where you are in
your life, in your finances and figure out, hey, how
do we finish twenty twenty five on a good note
and then get ready to move into twenty twenty six.
There's a lot moving in markets right now, some real
(25:22):
questions about what things look like in twenty six. So
if you want a second set of eyes on your
portfolio or financial plan, call eight hundred three nine three
four zero zero one. That number again is eight hundred
three nine three for zero zero one.
Speaker 1 (25:40):
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 decisions. Armstrong may contact you to offer Investment Advisory.
Speaker 2 (25:54):
Services CNBC flagging through the Office of Inspector General a
new social security scam that is out there right now,
and basically here's what is happening. Recipients get an email
that has the subject line alert social Security Account Issues Detected,
(26:20):
and then there's an attachment with fake letterhead that is
supposedly from the Social Security Administration Office of the Inspector
General that says that your Social Security number may be
suspended within twenty four hours and that your case may
be referred for criminal prosecution. So a couple things, and
basically then says like call this number or you know,
give us money in order to make sure that this
(26:41):
doesn't happen. So a couple of things. The first is
that generally this is not how the Social Security Administration
communicates with you. They basically will not communicate with you
in this fashion. The second is your Social secure number
cannot be suspended.
Speaker 3 (27:03):
Look, Mark, I know you're kind of giggling, but look,
I know I'm trying to suppress a chuck.
Speaker 2 (27:08):
There's plenty of stuff where like I have no idea
how I go to the DMV to like try to
change a cars registration, and I'm sitting there, and I
feel like a complete idiot because I'm like, do I
fill out this form or that form? And you know what,
what's the difference between the title and the license and
the registration? And honestly, I can't even answer all those
(27:29):
questions neither. Like it's a I probably could if I, like,
you know, had some assistance, but otherwise it's hard. So
here's the thing. Your Social Security number cannot be suspended.
Social Security will never send an email saying, hey, this
is gonna happen, please call us and give us money
in order to not suspend it. Uh. And generally again,
(27:52):
anytime that you get a request from any organization asking
for money, delete the email. Not delete it, but just
like hold the email off to the side, hang up
the phone, whatever it is that you do. Find the
actual contact number for the organization on their actual website
or outside letterheader notifications that you've received, you know, officially
(28:13):
from them in the past, and call that number and
see if it's legit. I probably have to do this,
quite honestly, a dozen times a year. Most of the
time it is something that's legit. But I'm just like
hyper paranoid about this, and just like always looking for
someone to scam me. So I'm very defensive about this,
having had you know, a number of identity theft issues
(28:35):
and things like that. My intenta are basically always up,
but it's never so urgent that they need money right now.
Number one and number two, just take a second and
think before you act, because it can save you like
thousands of dollars and a whole bunch of hassle if
you just think through it. Because no one ever needs
(28:57):
the money that quickly.
Speaker 3 (29:00):
Good advice like no one could advice.
Speaker 2 (29:01):
I mean, even if you're paying your mortgage, they give
you like a fifteen day grace period, and that's that's
a mortgage for a house. The Social Security Administration is
not going to turn your solid Security number off if
you don't pay them in eight minutes.
Speaker 1 (29:12):
Right.
Speaker 3 (29:13):
If you have some free time, though, you can call
the number and you can tell them I'm trying to
get some money into Russia. Could you maybe help me with.
Speaker 2 (29:19):
I don't think you should do that. No, I don't
think you should know that.
Speaker 3 (29:22):
They'll hang up very quickly, and that's how you know
their scam.
Speaker 2 (29:25):
I've had a buddy of mine who's actually gone through
and basically he actually ended up working with the FBI
to catch a whole phantom debt scam collection group. Like
there have been articles that have been like published about this.
It took like five or six years, but he basically
would start like calling scammers back to like track down
(29:45):
where they had gotten their scam materials from and ended
up uncovering this whole group of phantom debt scammers that
led up to this guy who had like stolen like
not not stolen, but basically like defrauded people out of
like millions of dollars. I guess he had some extra time.
(30:06):
You know, I got a couple of kids. I can't
really spend my evenings doing it.
Speaker 1 (30:10):
Yeah.
Speaker 3 (30:10):
I might have just paid him the five hundred bucks
and saved myself to twenty hours.
Speaker 2 (30:14):
But no, he ended up working with the FBI to
build a case against these scammers and got some of
them thrown in jail. It's wild, that's incredible. Let's take
a quatitisten when we return, We've got stack roulette after this.
Speaker 1 (30:30):
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Speaker 2 (32:13):
Mark. What do you got for me for stack of roulettes?
Speaker 3 (32:17):
Can I talk about the trade deficit? Because the New
York Times ran a story this morning sure about the
trade deficit shrinking following the rollout of tariffs. Exports stayed
the same in August, specifically, imports went down. The New
York Times attributes this to tariffs. They say, well, they've
(32:39):
changed patterns of trade. I was surprised that the New
York Times made that statement, because it's wrong. Tariffs don't.
And so I wanted to use this as I don't know,
teachable moment, maybe for myself and for anyone who's interested
in the suburbs.
Speaker 2 (32:50):
And the trade deficits still up here to date.
Speaker 3 (32:51):
And we're yeah, we're up like twenty something percent year
over year, and that's actually that's a great point. The
pattern of trade is not determined by tariffs. There are
countries with high tariffs and a trade surplus, countries with
high tariffs and a trade deficit, and just about everything
in between. It's determined. And this is not This is
not evident. You don't figure this out just using common sense.
You have to be tauded, or at least I did.
(33:13):
And it's not common sense. So I don't think anybody
could figure this out on their own, other than the
people that discover the concept. The patterns of trade are
determined by relative productivity, wages, and most fundamentally, the trade
deficits determined by savings. The less we save all else equal,
the more we import. Those two things don't seem connected,
(33:33):
but they are. And if you want to learn more
about this subject, there's a great economic historian. His name
is Doug Irwin. He teaches it Dartmouth, and he wrote
a book called Free Trade under Fire. Now Irwin has
his own opinion with respect to free trade. He thinks
it's largely a good thing. But he presents a balanced,
straightforward explanation of the idea of balance of trade. What
(33:58):
drives trade deficits over time? And if trade deficits vex
you how you can fix them, namely increasing savings. But
check out Dugger wins free Trade under Fire. You can
get it at Amazon, they get the digital version Google Books. Whatever.
It's like ten bucks really worthwhile read if you're interested
in this subject.
Speaker 2 (34:16):
Let's see, I'm want to talk a little bit about
robotaxis shifting gears. Are you guys pro robotaxi or anti
robotaxi or robotaxi neutral?
Speaker 4 (34:26):
Ultimately I'm pro, but it does give me pause?
Speaker 2 (34:30):
What's the actually? Hang on, marklet what's your pro robotaxi,
anti or neutral?
Speaker 3 (34:36):
I'd like to see it rolled out on a wider scale.
But good find I think it's I think it's fantastic.
I think it's a great concept.
Speaker 2 (34:43):
Tucker, What's what gives your use? That that pause?
Speaker 3 (34:46):
Dying?
Speaker 2 (34:50):
Okay, give me more injury? What he did again?
Speaker 4 (34:59):
Like the I'm stuck? I cost a frobic.
Speaker 2 (35:02):
How is this different from driving in a car with
a human?
Speaker 4 (35:05):
No? I think it's better, but I just don't know
if it's there yet or not. That's all fair. I
believe in the technology.
Speaker 3 (35:12):
It's just a pun.
Speaker 2 (35:13):
What if it's there yet? No? You said, oh fair?
Speaker 3 (35:17):
Another pun?
Speaker 1 (35:18):
Yeah?
Speaker 2 (35:18):
How fit? That's not a pun cab fair. Oh oh yeah,
it's a stretch.
Speaker 3 (35:23):
Oh good, suck.
Speaker 2 (35:26):
It, Tucker, listen, arbiter of puns. Yeah, so I know.
I I do think it's the question of okay, like
is this here yet? But guys, I gotta tell you so, Like,
I was driving into work this morning. It's five point
forty five in the morning. I'm on one twenty eight,
and there's a bunch of flashing lights. And the reason
why is that an eighteen wheeler had rolled off into
(35:46):
the meeting and they were trying to hoist it back
onto the road. I don't know if like anyone was
hurt or not, but like, obviously something went wrong and
this truck was on the side of the road. Whenever
we have, you know, traffic accidents with humans, they rarely
make any kind of large news. This despite the fact
that traffic accidents kill tens of thousands of people a
(36:08):
year in the United States. What I do know is
that hey, anytime that a Tesla slams into something with
its autopilot on, we get a huge news thing about
this is unsafe. And I'm not saying that autonomous driving
is inherently safe or not. What I am saying is
(36:29):
we need to get past the reporting of every single
thing that goes wrong with autonomous vehicles, because if we're
gonna be honest with us ourselves, we couldn't do our like.
We couldn't possibly finish our show in two hours if
we covered every traffic accident caused by some idiot who
is texting while he should have been looking.
Speaker 3 (36:50):
At the road.
Speaker 4 (36:51):
I mean, in my commute in Chuck, traffic was horrendous
in two circumstances because of a driver who clearly was
not paying attention a straight road. It was a straight
road the person in front of him twice And how
many of those do you It's just like there's no turns.
Speaker 2 (37:08):
I know you were just texting and didn't see the
person in front of you, So accidents. I don't know
if autonomous vehicles are safer today generally, Like the literature
that we have from WEIMO, who files these regular reports,
is that they're significantly safer. But I do know we
can't just be like the machine is bad and the
(37:30):
person's good, because if we're gonna be honest with ourselves,
there are a lot of really bad drivers out there,
and we could save ourselves an awful lot of lives
and insurance costs if we replace those bad drivers and
time autonomous vehicles. Tucker's an efficiency person. First, I just
want to pay less.
Speaker 3 (37:48):
But when you hear a number like that, any number,
any context, you gotta ask, what's the rate? How many
accidents per trip? Yes, that can be abused too, but
it's good to.
Speaker 2 (37:57):
Know it can be. But you know, again, like this
is where we need to get to if we're gonna
have an honest conversation about autonomous driving. Is Hey, human drivers.
The reason why we have auto insurance and the rates
are what they are is because human drivers are not
(38:17):
very good. We're pretty bad.
Speaker 3 (38:20):
I mean, you think so. I always marvel it. I
marveled that there aren't more accidents.
Speaker 2 (38:26):
And it's not the lack of accidents, it's that we've
built the cars to be really safe so fewer people
get hurt. Interesting, you know, like that's that's where I
tend to land. Is like you see these wrecks on
like the highway, and it's like, oh, the person walked away,
and you're like, I have no idea how they did.
Let's take a quick break for the rest of the
day and we'll be back tomorrow recapping in video earnings
(38:49):
and the September jobs reports.
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(00:43):
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(01:06):
and Mark Vandetti.
Speaker 2 (01:10):
Chuck Mark Tucker with you here, and as we get
things kicked off, stock's pairing their gains as we go
through the day. The S and P five hundred, which
at one point today was up nearly sixty five points,
now up nineteen. The Dow is now off one hundred
and twenty points in the Nasdaq up about one hundred
and forty three and change, So a little bit of
(01:33):
intra day volatility continuing as stock's try to get off
the mat where they've been for the last few days.
I do always find an important to point out look
like this has not been any kind of major downturn
in the broader market. The S and P five hundred
as a whole is about four percent off all time
highs right now. That's not really notable in any way,
(01:55):
shape or form. Those kinds of things happened several times
a year, if not.
Speaker 1 (02:00):
More, and.
Speaker 2 (02:04):
The way things are being talked about feels different. But
ultimately I think there are two things going on there.
The first is if you look at the average SMP
five hundred stock, first of all, it didn't peak in October,
and second it's off more than ten percent from it's
fifty two week high. It's just the index has been
dragged higher by a small number of big names that
have rallied strongly. So if you own, you know, some
(02:24):
of these other stocks in large quantities, yeah, you can
be feeling more pain than the broader market, obviously. And
the other thing is, look, some of the recent pain
has been in the more AI centric areas, and so
that's kind of different from what we've seen the last
six months, and maybe people just feeling a little bit
on edge as a result. So you got mixed markets today,
(02:45):
but the S and P and Nasdaq still positive. Ten
year US Treasury down four tenths of a basis point
to four point one one seven. Bonds have been really
quiet over the last month or so, I suspect largely
because we've mostly been getting individual company earnings reports, and
the bond market, I feel, is just more conditioned to
(03:07):
respond to big macro reports, and that's not what earnings
reports provide you.
Speaker 3 (03:13):
If you think about bond's interest rates as having a
real component driven by real forces, economies, productive capacity, how
we're operating relative to that government's need for debt financing
over time, and maybe other idiosyncratic factors there's that real component,
and then there's the nominal. Well nominal is the overall,
but there's the expected inflation component. So either one of those.
(03:33):
The real component moves slowly and is not particularly volatile,
it shouldn't because it reflects underlying economic forces I'll call them,
and then the expected inflation component can jump around. But
we haven't had a lot of inflation data to go on.
So if you're I don't know how fare, it's just
like we haven't had any data to go or any
data period.
Speaker 2 (03:50):
Yeah, the tenure Treasury has been between four and four
and a quarter since the beginning of September.
Speaker 3 (03:55):
Now, yeah, I'm willing to this just speculation, obviously, but
it seems right to me that that's probably a function
of the absence of of of government data.
Speaker 2 (04:04):
It's kind of like it's, you know, the ten year
Treasury doesn't know what to do when Microsoft is like, yeah,
our earnings were good. Okay, what does that mean for
you know, growth and inflation. Yeah, it doesn't know what
to do with it. Whereas if you get a retail
sales report, it's, oh, like retail sales are in the toilet.
My yield should be lower because the ten years obviously
(04:26):
sentient and thinks about these things. Or hey, GDP blew
out top side and private investment is huge, Okay, ten
years got to move higher, like it's.
Speaker 3 (04:36):
Yeah, those things which if the real rate component and
then the expected inflation component again.
Speaker 2 (04:40):
And instead you get like you get markets. All the
bond people are like, okay, so target earnings were bad.
Why does this matter to us? Because like the bond
market doesn't know what to do with this, which does
bring me to, uh, you know, a segue of we
will talk about target earnings in just moment. But the
(05:01):
dollar index finding a little bit of strength day after
some recent weakness, up point four to five percent to
ninety nine to ninety. We've got gold also rallying today.
Find that interesting dollar up, gold up, that's not something
you always see. The price of gold up thirty dollars
and twenty cents an ounce, closing back in on forty
one hundred an ounce. And we got crude oil down
a dollar sixty three to fifty nine to eleven. This
(05:24):
on the back of some well a rumored piece plan
for Russia and Ukraine for like the eighth time this year.
And we'll see if it ends up coming to fruition
this time, let's talk a little bit about Target earnings.
Target reported before the bell. Quite honestly, they're just not
an important company to the broader economy at this point
(05:48):
in time. You just look at the numbers out there,
and yes, they still do one hundred billion dollars in revenue,
but that's been declining at about a two percent annualized
clip for the last couple of years. It's one where
the market cap of the company now reflects that shrinking
ice cube, that melting ice cube type situation where it's
(06:10):
only valued at thirty nine billion dollars. So it's not
important to the broader market. And I think the question
that investors are asking about Target now, since it is off,
you know, almost sixty almost seventy percent from its all
time high that it hit back in twenty twenty one,
the question investors are asking right now about Target is, hey,
(06:32):
are you going to become the next Macy's that we
have to watch out for in terms of you know,
store closures and sales of real estate and this and that.
Just because margins aside from that brief period in twenty
twenty one, margins have been on a slow and steady
decline since two thousand and seven. I mean, this is
(06:54):
almost a twenty year problem in the making, where margins
have declined from you know, almost nine percent down about
five percent on a trailing twelve month basis here, and
you just kind of look at it and say, yeah,
this is a company that has to figure some things
out in the coming years. It's not a bankruptcy risk
at the moment, but you could kind of see where
(07:16):
things go in five six years if they don't figure
out how do we improve our positioning?
Speaker 3 (07:22):
And headwinds have been mild, right, this has.
Speaker 2 (07:25):
Been a good environment for retailers.
Speaker 3 (07:27):
Right what happens if the economy contracts it and inevitably
will and a sector sector conditions have probably not helped
Staples as a group here year to date through I
think right now, I say I think because I'm using
a third party data source, they don't time stamp it.
But consumer Staples, of which target is a part there
(07:50):
at S and P five hundred, constituent of that sector group,
is the only sector group in the s of the
twelve I think it is in the S and P
five hundred that's down to date, just out.
Speaker 2 (08:03):
Of curiosity and I know you don't have the answer
to this, thank you. Why do Costco, Walmart and Target
end up in consumer staples but Amazon ends up in
consumer cyclical They sell all the same stuff, usually from
the exact same vendors.
Speaker 3 (08:19):
Yeah, slightly more growth sensitive when measured in a statistical way,
i e. Growth goes up one percent, Amazon sales go
up by a little bit more than that, and Target
in the rest of the staples go up by a
little less than that. You're right, I don't know off
the top of my head. How how would they bring Yeah,
it's probably something like that.
Speaker 2 (08:38):
You know. Another one that always just I kind of
wonder about Dollar General and Dollar Tree consumer staples, TJX
consumer discretionary. Yeah, why I'm not saying that they should
like I don't know which one they all should be in,
But there's just not that much difference between TJX and
(09:03):
you know, some of those other discounters. I know, the
margin of the discount is bigger, like Dollar Tree, you know,
hits a far lower price point than TJX. But okay,
Like you're a discount retailer that you know sells clothing
in some of your stores. Home goods has all kinds
of you know, other stuff like yeah, what what gives?
Speaker 1 (09:21):
Why?
Speaker 2 (09:21):
Why are these in different categories in the.
Speaker 3 (09:23):
Sn If you look at S and P Global's website,
they're the arbiter of this stuff. They didn't invent the concept,
but they're they're recognized, I think, repository for this information,
at least the most commonly cited one. They give a
definition similar to the one I gave, and I was
sort of being fast and loose, but it's it's it's
based on sensitivity to economic growth, and you'd measure it
in a statistical way the way that I suggested.
Speaker 2 (09:45):
So basically your answer is they're smarter than me, and
I should you know, go get my shinebox.
Speaker 3 (09:50):
They're definitely not smarter than you, but they have the
data and the junior analysts to help them.
Speaker 2 (09:56):
They probably smarter than me, you.
Speaker 3 (09:58):
Know, depends on what domain you're talking about. It does
I know you're there as some math guys who you
know you wouldn't want change in your oil?
Speaker 2 (10:10):
Well, I don't know about that.
Speaker 3 (10:12):
How much did they charge?
Speaker 2 (10:13):
Yeah, what's the price?
Speaker 3 (10:14):
You know, at the right price, I don't care who
does If they pay me to you better just check your.
Speaker 2 (10:19):
You know, I got Yeah, there's always there's always someone
who's willing to figure it out. Let's take a quick
break here. When we come back, we've got what do
we have? We've got trivia, and then I want to
talk about Low's earnings after this. Low's up today, just
a couple of days after home Deep overported bad or
not bad, but weaker than expected earnings. Low's coming out
(10:40):
and up about five percent. What gives? What's the difference
We'll discuss after this.
Speaker 1 (10:45):
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Speaker 4 (11:22):
This segment of the Financial Exchange is powered by circle
K Convenience Stores. Circle K is now the official convenience
store of the dav Department of Massachusetts. On behalf of
Circle K. Thank you veterans for all you've done. Time
for trivia. You're on the Financial Exchange and on this
day in eighteen oh five, the Lewis and Clark Expedition
reached the Pacific Ocean. Lewis and Clark might never have
(11:45):
made it to the Pacific if it if they weren't
joined by a Native American woman who became their guide
and translator. So our trivia question today, what was the
name of the Native American woman who joined the Lewis
and Clark expedition as a guy and translator? Once again,
what was the name of the Native American woman who
joined the Lewis and Clark expedition as a guide and translator.
(12:09):
Be the ninth 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 once again. The ninth correct response to Texas 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. And want to remind
(12:30):
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Subscribe to our page and follow market activity all morning long.
Just search the Financial Exchange on YouTube and hit that
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Speaker 2 (12:42):
You more of a Merriwether Lewis fan or William Clark
fan mark.
Speaker 3 (12:48):
I always thought of them as as both being indispensable.
Of course, I have no idea what I'm talking about.
Speaker 2 (12:54):
Butter and Joey. You can't have one without the other.
Speaker 3 (12:56):
Oh no, I thoroughly enjoy just peanut butter. But I
see what you're getting at. Yeah, you know, who was
the senior of the.
Speaker 2 (13:02):
Two, Like, who really did the who ran the show?
Speaker 3 (13:06):
Yeah? Who was there? Like I was four years older, okay,
so presumably more experienced Lewis.
Speaker 2 (13:11):
Interestingly, he died like five years after the expedition. He
died really young, I think, like age thirty five or
thirty six. Uncertain circumstances. I don't think they ever figured
out it was a gunshot wound. No one ever figured
out if it was from someone else or self inflicted,
and so like kind of mysterious circumstances. Clark went on,
(13:32):
I think he was the governor of a state. Yeah,
he was the governor of Missouri. Well, not a state,
it was the territory at that point. But he was
the governor of Missouri Territory, you know, about a decade
or so after he went on the expedition. So there's that.
Speaker 3 (13:49):
Wow.
Speaker 2 (13:50):
Let's talk a little bit about Lowe's earnings. A day
after Home Depot reported, you know, modestly disappointing numbers, Low's
came out and had, you know, a nice little quarter.
And so it's one where I don't know what you
take from this other than Lose seems to have executed
well in the quarter. Home Depot maybe lacking a little
bit of execution, which is normally kind of the opposite
(14:11):
of how these companies move. Generally, Home Depot you say, hey,
they've got everything buttoned up and there. You know, they
run a really tight ship, and you know, Lows can
be a little bit more free flowing in terms of
how they manage quarter to quarter. But look, this is
a good quarter four Lows, and it's being rewarded by
the market up about five percent today.
Speaker 3 (14:31):
Are there any I don't follow this sector or these
stocks that closely, so pardon my ignorance, but are there
any meaningful differences in either customer base or geographic concentration
or anything that would suggest that the two should that
one could diverge dramatically other than just better, better management,
better operations, that one could diverge dramatically from the other overtime,
because I think of them as interchangeable.
Speaker 2 (14:50):
One signorant one difference you used to have was home
Depot is a little bit more focused on the professional contractor.
Lows bought a business called Foundation Building Materials earlier this
year that does a lot more professional contractor business, so
they kind of buffer that and bulk that up a
little bit. They're generally pretty similar at this point.
Speaker 3 (15:13):
Okay, so thank you.
Speaker 2 (15:15):
I don't know what would explain, you know, a key
divergence there.
Speaker 3 (15:19):
Okay, so if they both but if you're looking for
something that's indicative of what's going on with the broader
economy and not something idios, it's not something specific to
Lowser home Depots, we they probably both be reflecting it. Yeah,
that's maybe what I was getting at.
Speaker 2 (15:32):
Yeah, we've got in video earnings after the bell. Look,
we can talk about it, but ultimately they're expected to
sell billions of dollars worth of semiconductors. Tell everyone they're
going to continue to sell billions and maybe even trillions
of dollars of them into the future. And you and
I have no particularly insight into this, but.
Speaker 3 (15:51):
We do think, we think, we agree, maybe we don't
that that's no longer the really interesting and important question
for the economy. Yeah, they're gona a blowout quarter. Yeah, yeah,
we know. Everybody is up to their eyeballs in debt
to fund data centers, the hyperscalers, the so called hyperscalers. Anyway,
they're throwing it.
Speaker 2 (16:06):
Go ahead, can we talk about that for a second,
because there is something.
Speaker 3 (16:09):
Interesting thing you would save me.
Speaker 2 (16:11):
Yes, I'll say, their eyeballs in debt.
Speaker 3 (16:12):
Well, that's an exaggeration.
Speaker 2 (16:14):
No, no, no, no, I do want to talk about this
because one of the things that you are seeing done
in order to manage the appearance of debt levels is
the use of a bunch of special purpose vehicles to
get it off company balance sheets. The way this works,
like you just anyone listening, you might hear this from
time to time. The way it effectively works is, let's
say that Meta wants to borrow ten billion dollars to
(16:38):
go and build a data center, but they don't want
to take out ten billion in debt, because if you
keep doing that quarter after quarter, like eventually it hurts
your credit rating. So what these companies do is they
set up a separate corporation basically a shell, and they say, hey,
who wants to put money into this at a yield
of X in order to fund a data center construction.
The special purpose vehicle gets funded, and then Meta says,
(17:00):
we're going to pay why dollars a month or a
year whatever the framework is to that company to lease
the data center from them. So it appears on Meta's
financial statements as an operating expense related to that lease,
not as debt that's outstanding because the debt isn't technically
metas so in this way, and we've seen this done
(17:21):
and a number of times recently in recent history. Oracle
had a big one of these. Meta has one that's
ongoing with Blue Owl of all people like the company
that's in the news for you know, having some questions
about the private credit market right now. And so this
is the mechanism by which these companies borrow a bunch
of money in a lot of cases, but don't have it,
(17:43):
you know, show up on their balance sheets. You also
have companies that are now issuing bonds from their own
company in recent weeks in order to do this as well.
But when people talk about off balance sheet financing, this
is typically the mechanism that it's used, which is set
up a separate company, have people you know, lend that
(18:03):
company money, and then the parent company not really the
parent but the company that actually wants to operate the
facility in this case, they will then say, okay, we'll
lease that from the company and make payments to them,
which then funds the debt payments.
Speaker 3 (18:17):
Actually, so the reason I was poo pooing in video's
upcoming earnings report is that we know, I'm comfortable saying
we know it's going to be great, and we know
they're going to say tremendous things, but if credit dries up,
the promise will not be realized. So I'm not sure
it matters for the big questions that you might be asking,
(18:39):
what's economic growth going to be next year, over the
next five years, are the trends going to change? Is
productivity going to pick up? Because that why is that important? Well,
productivity is the main determinative standard of living over time.
It's also a big driver of earnings and snock prices.
And I'm just not sure that anything in Vidia tells
us today will answer the question unless you own it.
I don't want to diminish the importance of that if
you do. And you know, as you said at the
(19:01):
beginning of the first hour, they're the biggest component of
the S and P five ponder, So it matters for everybody,
but doesn't matter for the long term, I'm not sure.
Speaker 2 (19:08):
Take a quick break here. When we come back, we'll
talk about whether investors are actually rotating from tech stocks
to dividend paying stocks. And we've also got the trivia answer.
We've got Wall Street Watch and just a bunch of
other stuff, so make sure you stick around.
Speaker 1 (19:45):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Word
time now for Wall Street Watch. A complete look at
what's moving market so far today right here on the
Financial Exchange Radio Network.
Speaker 4 (20:03):
After rallying in earlier trading, markets are now pulling back
slightly and are now mixed ahead of Nvidia's big earnings
report to out after the closing bell and Video stock
at the moment is up over two percent right now.
The Dow is now down a quarter percent, or one
hundred and ten points. SMP five hundred is up three
tenths of a percent or nineteen points higher, NAZDAC up
(20:25):
six tenths of one percent or one hundred and thirty
four points. RUSTED two thousand now up only a quarter percent.
Tenure Treasure Deealed is flat at four point one point
one three percent, and crude oiled down over two percent lower.
Trading a fifty nine dollars in thirty one cents a barrel,
Target reported a decline in third quarter sales as the
(20:46):
company saw shoppyes spending in shoppers hunting for value. Target
also cut its annual profit outlook and said it would
invest billions to upgrade stores to help lift sales. Target
shares are now down about one percent. Meanwhile, Lowe this
is up five percent after the retailer beat third quarter
earnings expectations, where its online business helped offset weakness in
(21:07):
the home improvement sector. Another retail in TJX, beat third
quarter earnings and revenue estimates. The parent company to TJ
Max and Marshalls, lifted its annual outlook again as it
continues to win over inflation weary shoppers. Target shares are
actually now down modestly. They were up earlier. Alphabet shares
are jumping four percent one day after Google launched its
(21:29):
updated Gemini AI model. Separately, Loop Capital upgraded the stock
to buy from hold and upped its price target. And
Constellation Energy stock is climbing about six percent after the
company received a one billion dollar loan from the government
to restart its Crane Clean Energy Center nuclear plants. I'm
Tucker Silva and that is Wall Street Watch. And in
(21:51):
the previous segment, we asked you the question what was
the name of the Native American woman who joined the
Lewis and Clark expedition as a guide and translator. That
would be Sakajawea. Chuck from Newton, New Hampshire is our
winner today, taking home the Financial Exchange Show t shirt.
Congrats to Chuck and we play trivia every day here
in the Financial Exchange. See complete contest rules at Financial
(22:13):
Exchange Show. Dot Com got a piece here from Bloomberg.
Rotation from Tech leads investors to dividend paying stocks like Yeah,
who's the investor who goes, hey, I've been you know,
really happy riding you know in video and broadcom for
the last couple of years. You know what I need
now dividends. Yeah, like that that investor doesn't really exist
(22:35):
in any meaningful quantity. Furthermore, when you look at some
of the highest dividend payers that are out there in
the S and P five hundred, these are companies that
are like trading horribly for the last year or so.
You got Stanley Black Anddecker with a five percent dividend
that's trading near it's fifty two week lows. Same thing
when you look at Hormel Foods. You've got Verizon in
(22:55):
a similar boat. You got Pfizer that is, you know,
kind of just right in the middle of its fifty
two week range. UPS is one of the highest dividends
in the S and P. It's pretty close to a
fifty two week low right now.
Speaker 1 (23:07):
I just.
Speaker 2 (23:09):
The facts don't really support this. Given what we've seen
from how dividend payers have largely performed.
Speaker 3 (23:15):
They might instead be picking up the value effect. Tech
has sold off, so large cap growth is sold off.
Value has performed better, and dividend is high. Dividend yield
stocks are uber value and the value is defined as
relatively low price to book. I believe is the is
the way Russell constructs their their value index. That's the
(23:39):
that's the measure they use the largest one hundred paying
the largest one hundred dividend payers as calculated by Dow Jones.
They have an index, and you can, you know, buy
investment products that are indexed to that that that attempt
to replicate the performance of this index. That's like seventy
percent value companies. So I think what's happening here is
(24:00):
value overtaking growth. We've seen that year to date growth,
large cap growth is down like four percent, large cap
values down, you know, only one and a half or something,
which is not unusual.
Speaker 2 (24:09):
In Wait, large cap you're saying down.
Speaker 3 (24:13):
Isn't large cap value down?
Speaker 2 (24:14):
How can large cap growth and value be down when
the index is up as much as it is month
to date?
Speaker 3 (24:19):
Right now?
Speaker 2 (24:20):
You said year to date?
Speaker 3 (24:21):
Oh, I'm sorry, month on my bad? Okay, thank you, Chuck,
thank you.
Speaker 2 (24:24):
Sorry, I'm sending I'm going How could how can all
of this be down still?
Speaker 3 (24:28):
And catch on your part? Thank you? Yep, month to day,
Thank you. I was trying to refer to the most
recent hiccup.
Speaker 2 (24:36):
That makes more sense, folks, Thank you. If you're trying
to make sense out of what's moving in markets. You
might be h worth might be worth your time to
give Armstrong Advisory Group call. Armstrong Advisory Group works with
families throughout the New England region, really throughout the country.
There are a number of states that we are fully
licensed to operate in and you can give us a
(24:59):
call to help so that so we can help you
take a look at your portfolio, your financial plan and
see if it makes sense for where you are in
your life, in your finances and figure out, hey, how
do we finish twenty twenty five on a good note
and then get ready to move into twenty twenty six.
There's a lot moving in markets right now, some real
(25:22):
questions about what things look like in twenty six. So
if you want a second set of eyes on your
portfolio or financial plan, call eight hundred three nine three
four zero zero one. That number again is eight hundred
three nine three for zero zero one.
Speaker 1 (25:40):
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 decisions. Armstrong may contact you to offer Investment Advisory.
Speaker 2 (25:54):
Services CNBC flagging through the Office of Inspector General a
new social security scam that is out there right now,
and basically here's what is happening. Recipients get an email
that has the subject line alert social Security Account Issues Detected,
(26:20):
and then there's an attachment with fake letterhead that is
supposedly from the Social Security Administration Office of the Inspector
General that says that your Social Security number may be
suspended within twenty four hours and that your case may
be referred for criminal prosecution. So a couple things, and
basically then says like call this number or you know,
give us money in order to make sure that this
(26:41):
doesn't happen. So a couple of things. The first is
that generally this is not how the Social Security Administration
communicates with you. They basically will not communicate with you
in this fashion. The second is your Social secure number
cannot be suspended.
Speaker 3 (27:03):
Look, Mark, I know you're kind of giggling, but look,
I know I'm trying to suppress a chuck.
Speaker 2 (27:08):
There's plenty of stuff where like I have no idea
how I go to the DMV to like try to
change a cars registration, and I'm sitting there, and I
feel like a complete idiot because I'm like, do I
fill out this form or that form? And you know what,
what's the difference between the title and the license and
the registration? And honestly, I can't even answer all those
(27:29):
questions neither. Like it's a I probably could if I, like,
you know, had some assistance, but otherwise it's hard. So
here's the thing. Your Social Security number cannot be suspended.
Social Security will never send an email saying, hey, this
is gonna happen, please call us and give us money
in order to not suspend it. Uh. And generally again,
(27:52):
anytime that you get a request from any organization asking
for money, delete the email. Not delete it, but just
like hold the email off to the side, hang up
the phone, whatever it is that you do. Find the
actual contact number for the organization on their actual website
or outside letterheader notifications that you've received, you know, officially
(28:13):
from them in the past, and call that number and
see if it's legit. I probably have to do this,
quite honestly, a dozen times a year. Most of the
time it is something that's legit. But I'm just like
hyper paranoid about this, and just like always looking for
someone to scam me. So I'm very defensive about this,
having had you know, a number of identity theft issues
(28:35):
and things like that. My intenta are basically always up,
but it's never so urgent that they need money right now.
Number one and number two, just take a second and
think before you act, because it can save you like
thousands of dollars and a whole bunch of hassle if
you just think through it. Because no one ever needs
(28:57):
the money that quickly.
Speaker 3 (29:00):
Good advice like no one could advice.
Speaker 2 (29:01):
I mean, even if you're paying your mortgage, they give
you like a fifteen day grace period, and that's that's
a mortgage for a house. The Social Security Administration is
not going to turn your solid Security number off if
you don't pay them in eight minutes.
Speaker 1 (29:12):
Right.
Speaker 3 (29:13):
If you have some free time, though, you can call
the number and you can tell them I'm trying to
get some money into Russia. Could you maybe help me with.
Speaker 2 (29:19):
I don't think you should do that. No, I don't
think you should know that.
Speaker 3 (29:22):
They'll hang up very quickly, and that's how you know
their scam.
Speaker 2 (29:25):
I've had a buddy of mine who's actually gone through
and basically he actually ended up working with the FBI
to catch a whole phantom debt scam collection group. Like
there have been articles that have been like published about this.
It took like five or six years, but he basically
would start like calling scammers back to like track down
(29:45):
where they had gotten their scam materials from and ended
up uncovering this whole group of phantom debt scammers that
led up to this guy who had like stolen like
not not stolen, but basically like defrauded people out of
like millions of dollars. I guess he had some extra time.
(30:06):
You know, I got a couple of kids. I can't
really spend my evenings doing it.
Speaker 1 (30:10):
Yeah.
Speaker 3 (30:10):
I might have just paid him the five hundred bucks
and saved myself to twenty hours.
Speaker 2 (30:14):
But no, he ended up working with the FBI to
build a case against these scammers and got some of
them thrown in jail. It's wild, that's incredible. Let's take
a quatitisten when we return, We've got stack roulette after this.
Speaker 1 (30:30):
Here the Financial Exchange every day from eleven to noon,
Non serious 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.
Face He's the Financial Exchange Radio Network.
Speaker 5 (30:50):
We're proud to announce that circle K is now the
official convenience store of the DAV Department of Massachusetts at
circle K. Supporting those who bravely served our country isn't
just a commitment, it's a heartfelt mission. Circle K is
honored to stand with the DAV Department of Massachusetts to
ensure that veterans receive the care and recognition they deserve.
If you'd like to do your part, please visit DAVMA
(31:12):
dot org.
Speaker 1 (31:13):
Thank you for standing with circle K and the DAV
Department of.
Speaker 5 (31:15):
Massachusetts, and thank you veterans for all you've done.
Speaker 1 (31:21):
The Financial Exchange streams 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.
Speaker 4 (31:35):
This year's DAV five k was another incredible success, with
over fifteen hundred runners and walkers all supporting the Disabled
American Veterans Department of Massachusetts. The race results and photo
galleries are available to c If you didn't have a
chance to participate, but would still like to support our
great American heroes. Please visit dav fivek dot Boston. Early
(31:58):
access registration for next US Race is now open through
November thirtieth. Discounts are available, so head over to dav
fivek dot Boston and register today. That's dav fivek dot Boston.
Speaker 2 (32:13):
Mark. What do you got for me for stack of roulettes?
Speaker 3 (32:17):
Can I talk about the trade deficit? Because the New
York Times ran a story this morning sure about the
trade deficit shrinking following the rollout of tariffs. Exports stayed
the same in August, specifically, imports went down. The New
York Times attributes this to tariffs. They say, well, they've
(32:39):
changed patterns of trade. I was surprised that the New
York Times made that statement, because it's wrong. Tariffs don't.
And so I wanted to use this as I don't know,
teachable moment, maybe for myself and for anyone who's interested
in the suburbs.
Speaker 2 (32:50):
And the trade deficits still up here to date.
Speaker 3 (32:51):
And we're yeah, we're up like twenty something percent year
over year, and that's actually that's a great point. The
pattern of trade is not determined by tariffs. There are
countries with high tariffs and a trade surplus, countries with
high tariffs and a trade deficit, and just about everything
in between. It's determined. And this is not This is
not evident. You don't figure this out just using common sense.
You have to be tauded, or at least I did.
(33:13):
And it's not common sense. So I don't think anybody
could figure this out on their own, other than the
people that discover the concept. The patterns of trade are
determined by relative productivity, wages, and most fundamentally, the trade
deficits determined by savings. The less we save all else equal,
the more we import. Those two things don't seem connected,
(33:33):
but they are. And if you want to learn more
about this subject, there's a great economic historian. His name
is Doug Irwin. He teaches it Dartmouth, and he wrote
a book called Free Trade under Fire. Now Irwin has
his own opinion with respect to free trade. He thinks
it's largely a good thing. But he presents a balanced,
straightforward explanation of the idea of balance of trade. What
(33:58):
drives trade deficits over time? And if trade deficits vex
you how you can fix them, namely increasing savings. But
check out Dugger wins free Trade under Fire. You can
get it at Amazon, they get the digital version Google Books. Whatever.
It's like ten bucks really worthwhile read if you're interested
in this subject.
Speaker 2 (34:16):
Let's see, I'm want to talk a little bit about
robotaxis shifting gears. Are you guys pro robotaxi or anti
robotaxi or robotaxi neutral?
Speaker 4 (34:26):
Ultimately I'm pro, but it does give me pause?
Speaker 2 (34:30):
What's the actually? Hang on, marklet what's your pro robotaxi,
anti or neutral?
Speaker 3 (34:36):
I'd like to see it rolled out on a wider scale.
But good find I think it's I think it's fantastic.
I think it's a great concept.
Speaker 2 (34:43):
Tucker, What's what gives your use? That that pause?
Speaker 3 (34:46):
Dying?
Speaker 2 (34:50):
Okay, give me more injury? What he did again?
Speaker 4 (34:59):
Like the I'm stuck? I cost a frobic.
Speaker 2 (35:02):
How is this different from driving in a car with
a human?
Speaker 4 (35:05):
No? I think it's better, but I just don't know
if it's there yet or not. That's all fair. I
believe in the technology.
Speaker 3 (35:12):
It's just a pun.
Speaker 2 (35:13):
What if it's there yet? No? You said, oh fair?
Speaker 3 (35:17):
Another pun?
Speaker 1 (35:18):
Yeah?
Speaker 2 (35:18):
How fit? That's not a pun cab fair. Oh oh yeah,
it's a stretch.
Speaker 3 (35:23):
Oh good, suck.
Speaker 2 (35:26):
It, Tucker, listen, arbiter of puns. Yeah, so I know.
I I do think it's the question of okay, like
is this here yet? But guys, I gotta tell you so, Like,
I was driving into work this morning. It's five point
forty five in the morning. I'm on one twenty eight,
and there's a bunch of flashing lights. And the reason
why is that an eighteen wheeler had rolled off into
(35:46):
the meeting and they were trying to hoist it back
onto the road. I don't know if like anyone was
hurt or not, but like, obviously something went wrong and
this truck was on the side of the road. Whenever
we have, you know, traffic accidents with humans, they rarely
make any kind of large news. This despite the fact
that traffic accidents kill tens of thousands of people a
(36:08):
year in the United States. What I do know is
that hey, anytime that a Tesla slams into something with
its autopilot on, we get a huge news thing about
this is unsafe. And I'm not saying that autonomous driving
is inherently safe or not. What I am saying is
(36:29):
we need to get past the reporting of every single
thing that goes wrong with autonomous vehicles, because if we're
gonna be honest with us ourselves, we couldn't do our like.
We couldn't possibly finish our show in two hours if
we covered every traffic accident caused by some idiot who
is texting while he should have been looking.
Speaker 3 (36:50):
At the road.
Speaker 4 (36:51):
I mean, in my commute in Chuck, traffic was horrendous
in two circumstances because of a driver who clearly was
not paying attention a straight road. It was a straight
road the person in front of him twice And how
many of those do you It's just like there's no turns.
Speaker 2 (37:08):
I know you were just texting and didn't see the
person in front of you, So accidents. I don't know
if autonomous vehicles are safer today generally, Like the literature
that we have from WEIMO, who files these regular reports,
is that they're significantly safer. But I do know we
can't just be like the machine is bad and the
(37:30):
person's good, because if we're gonna be honest with ourselves,
there are a lot of really bad drivers out there,
and we could save ourselves an awful lot of lives
and insurance costs if we replace those bad drivers and
time autonomous vehicles. Tucker's an efficiency person. First, I just
want to pay less.
Speaker 3 (37:48):
But when you hear a number like that, any number,
any context, you gotta ask, what's the rate? How many
accidents per trip? Yes, that can be abused too, but
it's good to.
Speaker 2 (37:57):
Know it can be. But you know, again, like this
is where we need to get to if we're gonna
have an honest conversation about autonomous driving. Is Hey, human drivers.
The reason why we have auto insurance and the rates
are what they are is because human drivers are not
(38:17):
very good. We're pretty bad.
Speaker 3 (38:20):
I mean, you think so. I always marvel it. I
marveled that there aren't more accidents.
Speaker 2 (38:26):
And it's not the lack of accidents, it's that we've
built the cars to be really safe so fewer people
get hurt. Interesting, you know, like that's that's where I
tend to land. Is like you see these wrecks on
like the highway, and it's like, oh, the person walked away,
and you're like, I have no idea how they did.
Let's take a quick break for the rest of the
day and we'll be back tomorrow recapping in video earnings
(38:49):
and the September jobs reports.
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