October 30, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss the job market possibly being at a tipping point. Michael Santoli (CNBC) joins the show to chat about big tech earnings and Fed's rate cut decision. It's sample-sale season. Cue the professional line standers. Chipotle stock plunges as chain lowers sales forecast. How the potato became a coveted prize for trick-or-treaters.
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Episode Transcript
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Speaker 1 (00:00):
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(01:06):
and Mike Armstrong.
Speaker 2 (01:09):
Chuck Mike Ducker with you here today.
Speaker 3 (01:11):
And if you liked the first three days of this week,
you probably don't like this one. It's the first three
days what we had small number of stocks, predominantly the
big tech stocks roaring ahead, and a lot of other
stocks in the S and P five hundred and NASDAC
kind of lagging behind. Breadth, as it's called, was very,
(01:34):
very weak. In fact, I think it was I forget
which day it was. It was either Monday or Tuesday.
We had the worst day since nineteen ninety in terms
of breadth where stocks still went up. There were over
two hundred and ninety more stocks that traded down then
up on one of those days. Again, I can't remember
if it was Monday or Tuesday, and yet we still
(01:55):
finished positive. That is the worst breadth performance for a
positive sa P five hundred day.
Speaker 2 (02:01):
Since nineteen ninety.
Speaker 3 (02:03):
Today, on the other hand, you've got the SNP down
twenty two points right now, about a third of a percent.
But at the moment, you've got two hundred and thirty
three stocks up, two hundred and thirty three more stocks
up than down. And so what's dragging the index. It
is big tech. It is Meta down twelve percent, Oracle
(02:25):
down four, Broadcom down three, AMD down three, Microsoft down three,
and Video down two. And so because of the big
you know waiting in the S and P five hundred,
those stocks being down outweighs the fact that Bank of
America is up one and a half, Starbucks is up
one and a half, Marriot's up one point two, Walmart's
(02:45):
up you know, one percent. That's still just not enough
to drag the index higher. So the Dow is up
three hundred and thirty six points. SNP is down twenty
one nasdak can posit down to twenty six. Let we
take a look at the bond market. Still a modest cell
happening there after J. Powell told folks yesterday, Hey, all
you that thought it was a given that we're gonna
(03:07):
cut again in December, I don't know if we're gonna
do that. So the ten year Treasury is up two
point nine basis points to four point oh eight seven.
Mortgage rates have responded as well. Thirty or fixed rate mortgage,
according to Mortgage News Daily, has moved from six point
one to three percent to six point twenty seven so
more than an eighth of a percent jump yesterday. There
(03:28):
gold not seeing a ton of volatility. It is up
seven dollars and twenty cents an ounce at four thousand,
seven dollars and twenty cents. And we've got crude oil
West Texas Intermediate down three cents a barrel to sixty
dollars and forty five cents, So not much movement on
that side. Big reason why a lot of those tech
(03:50):
stocks are moving. We had three big earnings reports yesterday
with Microsoft, Meta, and Alphabets. Today we're gonna have Apple
and Amazon after that bell. We'll talk about them in
just a minute, but we're gonna kick things off this hour.
The piece from Axios titled the job market may be
at a tipping point. This from Neil Irwin. Did Neil
used to be Wall Street Journal or was he New
(04:12):
York Times US? New York Times, New York Times? So
he's with Axios now, Mike, what is this tipping point
that we are hearing about?
Speaker 2 (04:18):
What's What's the tip.
Speaker 4 (04:19):
The same one that we've been talking about now for months,
which is that the pace of hiring has dramatically slowed.
There are not as many job openings as there were
for the last several years. The labor market appears to
be better in balance the same things that the FED
has talked about. The tipping point would be do you
continue this trend because the trend has been fewer companies hiring,
(04:41):
not huge layoffs, but some here and there. We've had
two big announcements just this week, and so were you
to follow the trend line, you would expect unemployment to rise,
You would expect this state of hiring to continue to
be weaker. But look, we've had several of these moments
where we get to this kind of uncomfortable level. One
of them was last summer when we were talking about
(05:01):
the som rule. All the time unemployment rate was moving up.
We talked about it. Usually the unemployment rate doesn't start
moving up and then just stop there. It did, It
paused and kind of settled into a level that we
are similarly at now. And so that is the potential
tipping point is do we head further in this direction
where companies feel under pressure and reduce their workforce or
(05:25):
are we just reaching a new equilibrium and it is well, Frankly,
if the FED doesn't know, then I'm not willing to
say that I have any definitive idea.
Speaker 5 (05:34):
No.
Speaker 3 (05:34):
I mean, look, the FED has access to better data
and they have better contacts than you and I do,
and so yeah, I think that's a fair place to
be the question on this. And Mark and I talked
about this a little bit yesterday. You know, you've got
some companies. Amazon just as an example, announced that they
were going to be laying off fourteen to thirty thousand
people as part of a restructuring that they're doing. And
(05:58):
one of the things that I think is interesting to
think about is the context of labor supply and demand
over time, and how it's similar to the housing market
in this respect in that one of the things I
wonder about are the people that are being laid off now,
the extra workers that were hired in twenty one and
(06:19):
twenty two when these companies thought they really had to
staff up, and remember how competitive it was for workers
then it was absolutely crazy, and so some of the
compensation packages were just nuts. And part of what I
wonder now is, hey, is this kind of time arbitrage
from these companies where they say, yeah, we're gonna fire
these workers that were brought on in twenty two and
(06:41):
twenty one with these crazy comp packages, and then we're
gonna let things sit for six months and the labor
market isn't as robust now, and if we need to
bring someone else on, we can do it with a
far less competitive pay package today than.
Speaker 2 (06:53):
Was required with that person that we're letting go now.
Speaker 4 (06:56):
Right, Yeah, you do wonder, like how I wonder if
I can pull this ups? This week announced what forty
three thousand, eight thousand job cuts? How much did they
have to ramp up back during twenty twenty when we
were all sitting on our couches and ordering everything that
we had in our homes online. Yeah, maybe this is
just a return to normalization on the labor force. But
(07:17):
I'll actually look it up after.
Speaker 5 (07:18):
The next break.
Speaker 4 (07:19):
But I don't know which direction we're headed on all this,
and the FED is admitting the same look. We could
be heading towards a much weaker labor market, or this
just could be a normalization after a very strange few
years and a come down from the sugar high.
Speaker 3 (07:36):
The counter to this is typically consumer spending leads, hiring
or layoffs. We have still not seen any meaningful shift
in consumer spending in the aggregate. You are seeing where
it's going moving around, but we're still running four to
six percent year over year and consumer spending. Yeah, remember
(07:56):
three percent of that's inflation, so it's like one to
three percent reels spending growth.
Speaker 2 (08:01):
And until that changes, it's.
Speaker 3 (08:03):
Tough for me to see layoffs happening because companies don't
just sit around and say, let's lay people off, you know,
like they do it because they don't have the demand
and they want to maintain margins. So demand leads hiring
or layoffs. To this point, we haven't seen a meaningful
broad based shift in demand.
Speaker 2 (08:21):
Quick break here.
Speaker 3 (08:22):
When we come back, we got Michael sand Totally from
CNBC joining us. We're gonna do some trivia as well.
That is coming up after the break.
Speaker 1 (08:31):
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Speaker 6 (09:09):
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Speaker 3 (09:39):
As promised, we are now joined by Michael Santoli from
CNBC here to talk about what is going on in markets.
Speaker 2 (09:47):
Michael, thank you so much for joining us today.
Speaker 7 (09:49):
I'm glad to do it. Thank you.
Speaker 3 (09:51):
J Powell yesterday tried to pour a little bit of
cold water on the idea of a December cut being
a given. What do you make of the market response
to it? Over the kind of first day or so
Since then, Yeah.
Speaker 7 (10:05):
It's just a little bit of a gut check for
just the absolute certainty that the market had priced in
about you know, at least another cut in December, maybe
one beyond that. It hasn't had a tremendous effect in
terms of where bond yields have gone, but I think
it was an interesting injection of doubt into a very
(10:26):
certain and somewhat complacent market. In fact, I see it
as part of this whole thing we went through in
the last twenty four hours, where you know, the assumption
of hey, Fed's going to keep cutting rates into a
decent economy, You've got AI momentum, and all of these
tech stock earnings, and then of course maybe some progress
on trade. Every one of those things, I would argue
came up a little bit short of the bulls' best
(10:47):
hopes for the for the outcomes, or just the recognition
that the market are already priced in a lot. When
it comes to Powell in particular, I always feel as
if the FED cher wants to preserve a lot of optionality.
They don't I want to go six weeks with the
market thinking they know what comes next. When you have
a lot of things that are going to come in
the middle of it. Plus he's got a divided committee,
so he had a descent for doing nothing one descent
(11:10):
for making a bigger cut, and I think he has
to somewhat give voice to that in his commentary.
Speaker 3 (11:16):
I want to talk a little bit more about tech earnings.
You mentioned them. What do you make of what we've
seen so far and are we starting to see maybe
the first signs that investors may be starting to care
about how all this capex ends up impacting cash flow
and earnings down the road or is that just my
motivated reasoning at play here.
Speaker 7 (11:37):
No, you can definitely make the case that we are
seeing some of those concerned surface now. It wouldn't be
the first time, arguably, you know, Alphabet Google went through this.
The people were very skeptical that it could make it work,
you know, back a year year and a half ago,
and it came back from that. So now Meta is
the source of a lot of the doubt, and I
think it makes sense that Meta sort of has a
(11:59):
higher and proof here. They've really pivoted multiple times in
their AI strategy. Nobody's quite sure why they want to
build this so huge comprehensive model, like why do they
need to be a host of a of an AI
LLM or whatever they're going to do. Why can't they
just be a beneficiary of the proliferation of AI and
their advertising business. And you know they're doing it with
(12:21):
some debt. They're raising another twenty five billion dollars in
the corporate bomb market today that'll double their debt. So
it's not that old story of hey, these guys are
just kind of using the spare change their free cash
flow to make these investments. Interestingly, Zuckerberg Mark Zuckerberg said
that even if this ends up being kind of wasted
in the initial effort, we still have the assets. It
(12:41):
will still be worth something for, you know, the business
down the road. I'm not sure that's sort of reassuring
at this point, given how far the stocks have run.
But I do think it shows that these companies are
spending out of a sense of compulsion and urgency and
not because and because they sort of see the demand
and the moment. But it's it's sort of like, we'll
(13:02):
figure out exactly what the returns on this are going
to be down the road.
Speaker 3 (13:06):
We've had kind of a bumpy October but as we
get towards the end of it, you still have indices
that have risen meaningfully over the course of the month.
A lot of chatter about, hey, this is going to
continue as a year end rally. What ingredients typically need
to be present in order for that year end rally
to take shape and actually happen.
Speaker 7 (13:27):
I mean, it's kind of glib to say that mostly
you just need the calendar to turn to November. I mean,
that's not one hundred percent sury. There's like twenty percent
of the time when you actually don't have markets up
in the latter part of the year. Usually that's not
in a year that has not been as strong as
this one going into it. I do think you have
to make sure though, that investors sentiment and positioning and
(13:50):
speculative activity has not kind of gotten ahead of itself
an overshot, and I would argue we've kind of kind
of pressed up against that line over the last few weeks,
been a low quality rally in terms of like junkier,
more speculative companies leading. And then in the last few
days when the S and P five hundred did finally
break out of a two week range, which was no
(14:11):
big deal, but a two week range to a new high.
It was very narrow and it was the Semis and
it was the same old MAC seven stocks today. Interestingly,
you get to sell off in Meta. You have some
pressure on Microsoft, so you have an anti Nasdaq one
hundred day and it is rotating around. You have the
average stock in the market up half a percent in
the s top. So I guess it's trying to make
(14:32):
it work and stay on decent footing here. So it's
hard to fight the seasonal trends. But I always say
it's also you know, you don't want to defer to it.
That can't be the sum total of why you know
you're interested in stocks here.
Speaker 3 (14:44):
So you mentioned that, you know, markets have gotten a
little bit exuberant over the last you know, a couple
of weeks in particular, how do we reconcile that exuberance
with you know, we've been getting layoff announcements here and there.
Housing hasn't been particularly strong, We've got labor market concerns.
Speaker 2 (15:03):
How does all this fit together?
Speaker 3 (15:04):
Because I know a lot of our listeners are sitting
there like help make this make sense.
Speaker 2 (15:08):
What are your thoughts on it?
Speaker 7 (15:10):
Well, the exuberance is actually in parts of the market
that are pretty well removed from the here and now
US economy, I think you could argue, so you know,
I'm talking about not just the whole AI food chain,
which has got a life of its own, but really
long shot bets like quantum computing and you know, drone
(15:32):
technology and all of these things that feel like there's
a thing in the future, but they don't have earnings now,
so we don't have to worry about the actual economy.
I do think that you've seen some evidence though, within
the market, of some concern about the pace of growth.
Right so, consumer cycical stocks have suffered. You're seeing restaurant
stocks get hurt. You seeing the restaurant companies blame a
pullback and spending by certain consumers, younger and those making
(15:56):
less than one hundred thousand dollars. That's what Chipotle said today.
You've seen the home builder stocks and housing related really
struggle because there's really been no response to some downticks
and mortgage rates. So I think the market is kind
of registering those concerns. It's not panicking about them. It's
not pricing in a genuine downturn yet, but those parts
of the market did suffer after Powell tried to kind
(16:19):
of take away some of the certainty about a December
rate cut, So there might be a push pull there
in the story.
Speaker 3 (16:26):
Very good, Michael, appreciate the time today. Thank you so
much for the information, and we will talk to you soon.
Speaker 6 (16:32):
Great.
Speaker 7 (16:32):
Thank you.
Speaker 3 (16:33):
That is Michael santotally from CNBC talking about what we've
been seeing in markets in the last several weeks.
Speaker 6 (16:40):
All right, time for trivia here on the Financial Exchange
and for decades Networks aired It's the Gray Pumpkin Charlie
Brown leading up to Halloween. In twenty twenty, Apple bought
the rights to the Charlie Brown specials and ended a
fifty plus year run on network television television. So our
trivia question today, what year did It's the Great Pumpkin
(17:02):
Charlie Brown first air? Once again? What year did It's
the Great Pumpkin Charlie Brown first air? Be the fifth
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 fifth correct response to Texas to the number six
(17:23):
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 everybody to subscribe
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(17:44):
here on the Financial Exchange Radio Network.
Speaker 3 (17:47):
Mike, I want to get to previewing Apple earnings in
a little bit, but I want to cover one story first,
just because Tucker tossed it all the way at the
end of the stack, and this one I actually wanted
to pull up just because I think it's awesome.
Speaker 2 (18:01):
So it's potatoes. Occasionally you see.
Speaker 3 (18:04):
A world that is just completely no, it's not the
potato one.
Speaker 5 (18:09):
Okay, I'll get there later.
Speaker 2 (18:10):
Then.
Speaker 3 (18:10):
Yes, occasionally you see a world that's just like completely
divorced from what you understand.
Speaker 2 (18:15):
And today I saw that.
Speaker 3 (18:16):
So apparently in New York now it is sample sale week,
which I didn't even know was a thing, to be honest,
I didn't even really know what a sample sale was
before today. For those of you wondering, I guess it's
a time when high end, like luxury goods, retailers put
out their new stuff and sell it really cheaply for
(18:38):
like a very limited time so that you know, average
people can potentially afford it, but it's it's very limited supply.
So these huge lines develop as a result of it,
and you know, these are people that are you know,
again like waiting for the ability to potentially buy these things.
You're talking like hundreds of people in line here. And
(18:58):
there are companies that have started up in New York.
Specifically their job is to stand in line for other
people for hours on end.
Speaker 2 (19:05):
How much do you make for that?
Speaker 3 (19:06):
So there's a guy by the name of Robert Samuel.
Samuel who runs a company called Same Old Line Dudes,
and he had sixty one clients on opening day for
sample sales. Each standard is getting twenty five dollars an hour.
Speaker 2 (19:21):
Woo.
Speaker 3 (19:21):
So you do the math out, okay, and his business
is doing fifteen hundred dollars an hour.
Speaker 2 (19:28):
If you do that just for a day, it's thirty
six thousand dollars.
Speaker 3 (19:31):
In a day in revenue. Quick break here we got
trivia answer.
Speaker 1 (19:36):
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 market so far today right here
on the Financial Exchange Radio Network.
Speaker 6 (19:58):
On one of Wall Street's the busiest days of the year,
markets are nixed territories it Investors react to the year
long trade truce between the US and China, comments from
FED treman Jerome Powell about future rate cuts, and of course,
big tech earnings from Alphabet, Microsoft and Meta. Right now,
the Dow is up by six tenths or one percent,
(20:20):
or two hundred and eighty one points higher. S and
P five hundreds down nearly four tenths of one percent
or twenty six points lower, Nasdaq down nearly one percent
or two hundred and twenty nine points. Russell two thousand
is up about a third of a percent, Tenure Treasure
reeled up two basis points at four point zero eight percent,
and crude oil is flat edging higher, trading at sixty
(20:41):
dollars in fifty two cents a barrel. Alphabet jumping by
five percent after the search Grant posted strong third quarter
results driven by revenue from Google Cloud and YouTube advertising.
Microsoft b quarterly expectations, where revenue from its Azeri cloud
business jumped forty percent. The company's finance chief did note
(21:02):
that capital spending will accelerate this fiscal year. Microsoft down
by three percent, Meta shares plunging twelve percent after the
Facebook parent reported stronger than expected third quarter earnings and revenue. However,
Meta raised its capital expenditures outlook to invest more in
artificial intelligence. Apple and Amazon are on deck later today
(21:23):
when they post their results after the closing bell. Outside
of big tech, Comcast beat earnings and revenue estimates for
the third quarter. However, the company said had lost one
hundred and four thousand broadband customers the fourth quarter in
a row. It failed to grow its broadband subscriber base.
Comcast shares of pulling back three percent. Starbucks posted weaker
(21:45):
than expected earnings, but posted same store sales growth for
the first time in nearly two years. Starbucks is edging
higher and Chipotle is sinking above fifteen percent after the
burrito chain posted a drop in net income while it's
quarterly revenue missed estimates. The restaurant group cited economic strains
were turning customers away from its stores. I'm Tucker Silvan,
(22:09):
that is Wall Street Watch and in the previous segment,
we asked the trivia question, what year did It's the
Great Pumpkin? Charlie Brown first air on TV, That would
be nineteen sixty six and from North Berwick, Maine is
our winner today, taking them a Financial Exchange Show T shirt.
Congrats to an. We play trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange
(22:32):
Show dot com.
Speaker 2 (22:34):
Mike, let's talk a little bit about Apple.
Speaker 5 (22:36):
Yeah, let's do that.
Speaker 4 (22:37):
They stand in pretty stark contrast to me when we
talked about Meta earlier, Right, Meta feeling this need to
invest on the promise of future growth on artificial intelligence,
and Apple I think at least taking the same lessons
out of their previous playbooks, which is we don't need
to be first to the market on this.
Speaker 2 (22:58):
Yeah, I think the the question.
Speaker 3 (23:01):
You know, I've compared Apple over the last year or
so to Toyota, who back in twenty twenty one and
twenty two, when everyone else was getting all EV happy
and saying, hey, we're gonna make nothing but EV's. By
twenty thirty, you know, we're gonna just you know, we're
gonna turn into evs because we're not even gonna be
people anymore. Toyota said, no, like, we're gonna, you know,
(23:23):
keep making hybrids and keep making internal combustion engine vehicles,
and yeah, we're gonna research evs and maybe we'll even
roll a couple out, but that's not gonna be us.
And and that approach turned out to be right. Apple's
kind of been doing that where look, all the other
big tech companies are going to spend like five six
hundred billion dollars next year trying to build out data
(23:46):
centers for artificial intelligence, and Apple's kind of sitting there, going,
We've got some ideas on AI. Here's like a little
Apple Intelligence thing on a phone that does bad summaries
of emails and conversations, and yeah, we'll get open AI
to maybe you know, plug their model into one of
our things.
Speaker 2 (24:03):
And but it's it's not really us.
Speaker 3 (24:05):
And so I don't think this quarter is going to
be like justification for that approach. That justification, if it
ends up, you know, coming to fruition, is going to
be over the next two to three years when they're
proven right or proven wrong this quarter. The question that
has been looming out there is, hey, you raised prices
on iPhones you got questions about demand in China. Are
(24:28):
you going to be able to hit those numbers and
show that you can still deliver the revenue if you're not,
you know, making AI the focus right now.
Speaker 5 (24:36):
Yeah, that is the question. And I mentioned I don't
think you're on the problem.
Speaker 4 (24:39):
But I my wife has an iPhone, I have a
Google Phone, and I've noticed, you know, a fairly big
difference in the usefulness of the AI powered assistance between
the two of them. But again, I don't think any
of that's risen to the point where somebody's about to
jump ship and you know, abandon their family who all
uses iPhones to go use a Google phone instead.
Speaker 5 (24:59):
So it it hasn't. It has not reached that crescendo yet.
Speaker 4 (25:02):
I really doubt it will in terms of differentiation for
Apple versus other products.
Speaker 5 (25:07):
Folks, it's nearing the end of the month.
Speaker 4 (25:09):
Want to talk to you about our annual new guide
on required minimum distributions. We do put one of these
out every year, but the rules have been changing. That's
such a fast pace that we've needed to update it
every single year. As we approach year end here, you've
got about sixty days left before the year end, and
the need to satisfy that IRS rule on ourmds. But
(25:32):
there's a lot to learn about the subject, and specifically,
the IRS has given additional time for folks to satisfy
those rmds. It started at seventy and a half and
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(25:53):
or when Congress really creates that leniency, you always know
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(26:14):
who's already there and you're trying to understand what the
implications will be for you, request our October guide on
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can also go online request it there at Armstrong Advisory
dot com. But that phone number once again eight hundred
three nine three for zero zero one.
Speaker 1 (26:51):
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Speaker 3 (27:06):
Got a couple of earnings reports in the food space today,
both with a well, I guess both kind of with
a Chipotle twist. Chipotle was one of them, but Starbucks
the other. Starbucks now has Brian Nickel, who formerly was
the CEO at Chipotle until when did he take the
Starbucks gig?
Speaker 2 (27:26):
Was it about a year and a half ago?
Speaker 1 (27:27):
Yeah?
Speaker 5 (27:27):
Thereabouts?
Speaker 2 (27:28):
Do you remember where he was before Chipotle?
Speaker 6 (27:31):
Oh, Taco Bell?
Speaker 2 (27:32):
Yeah, there we go.
Speaker 3 (27:33):
Look at that, full circle to my one of my favorites.
But so Starbucks up about one percent today and big
thing is global same store sales up one percent for
the quarter. They were expecting to see both global and
US ones with marginal declines, and so maybe starting to
turn the corner a little bit for Starbucks. I tend
(27:54):
to trust Brian Nickel because he just was a fantastic
operator both at Taco Bell and Chipotle. So maybe starting
to bear some fruit there. Chipotle, on the other hand,
they've got all kinds of problems. Yeah, stocks down fifteen
percent today. They're now guiding that their same store sales
are going to be down low single digits this year.
In February, they thought they were getting going to be
(28:16):
up mid to low single digits. So a big reversal there.
Foot traffic down point eight percent for the quarter, the
third straight quarter of declines. And in particular, they're saying
that consumers making less than one hundred thousand and between
the ages of twenty five and thirty five are seeing
particular challenges. They are not the only ones calling out
that age twenty five to thirty five demo, and so
(28:39):
I think there is some meat on that bone that
that demo is really struggling at the moment, and to.
Speaker 4 (28:44):
Turn that around, you have to deliver value to that consumer.
And I don't know how Chipotle does that given what
they've built their brand around, which is fresh ingredients and.
Speaker 5 (28:56):
Not taco bell.
Speaker 3 (28:57):
Frankly, there here is my advice to Chipotle as someone
who has has never worked for like a chain food place.
Chain restaurant. Yeah, that's the one ye food place. Chain
food place is the technical term. Uh, don't devalue your product,
right y'all. Remember Quizno's sure to guest the subs out
(29:22):
there like miles better than Subway. Yeah, but they decided
after they got private equity and everything, they decided they
were going to try to compete with Subway, and they
went down market and they got absolutely bludgeoned because that
wasn't where they lived. They had a great business and
they ruined it because they tried to be something that
they're not. If Chipotle tries to go down market, they
(29:42):
are going to get wrecked because the customers that like
them today will abandon them, and the customers they don't
have that they want are going to be able to
find cheaper stuff elsewhere because they can't go down market
far enough.
Speaker 4 (29:55):
It's all well and good, Chuck, but when your stock's
down forty four percent for the year, questions are getting asked.
Speaker 2 (30:01):
I think it's an execution problem.
Speaker 3 (30:04):
Like I mean, I don't like to, you know, say
that everything is you know, causation. But Brian Nickel left
and this company has not done well since then. Yeah,
like it has that feel more than anything else. And again,
there are companies that are succeeding in this space and figuring.
Speaker 2 (30:24):
Out how to make it work. They are not right now.
Speaker 3 (30:28):
And this I'm not saying like that whole you know,
restaurant space has questions, but this scale of decline feels
more like a Chipotle problem than.
Speaker 2 (30:38):
A restaurant in general problem to me. I don't know.
Speaker 5 (30:44):
No, yeah, I don't know.
Speaker 4 (30:47):
I'm not sure where I land on it. Obviously, there
is a consumer base that is struggling. I'm not sure
if it's an execution problem or just a moment in
time problem.
Speaker 3 (30:57):
Let's take a quick break. When we come back, we'll
do a little bit of stack roulette.
Speaker 1 (31:03):
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Speaker 2 (32:16):
Mike, what do you got for me for stack Roulett?
Speaker 4 (32:18):
I've got potatoes, as I a little potatoes. So tomorrow
the big day in my household for trick or treaders
making the rounds.
Speaker 5 (32:27):
And some.
Speaker 4 (32:30):
Guy had a funny idea a few years ago of
putting just potatoes along with other options in his you
know bowl for people to grab at a instead of candy.
And it's kind of sparked a phenomena where people are
actually doing this and kids are finding it funny, and
you know, go out there looking to maybe take a
(32:50):
potato home instead of big candy bars. And I've got
an interesting twist on this that I'm hoping to get
your take on. I'm thinking just a giant bowl of
mashed potatoes for this Halloween season, horrible idea. Just yeah,
the kid reaches and real I'm not talking about some
dry from the mixed mashed potato. I'm talking about some
(33:11):
hand mixed, buttery mashed potatoes because I I just imagine
the look of disappointment on this child's face reach in
for a candy bar and just come back with a
greasy potato filled hand.
Speaker 6 (33:24):
You just hear the slap in their bag.
Speaker 3 (33:26):
That's potatoes funny. The mashed potatoes, not the mashed potato,
is cruel.
Speaker 4 (33:31):
I did have GEMI for me create an image of
a disappointed child reaching in expecting Halloween candy and getting
mashed potatoes instead, and it did a did a phenomenal job.
So I probably won't create this because my wife won't approve.
Speaker 6 (33:47):
Not to mention the effort of the idea. Mashed potatoes
don't take you know, yeah, quick potatoes.
Speaker 2 (33:54):
They're not that long.
Speaker 6 (33:57):
Of potatoes you're making.
Speaker 4 (33:58):
And especially if nobody's eating it, I'm gonna toss those
I'm tossing those steamed or boiled potatoes right into the
kitchen aid for this.
Speaker 5 (34:04):
You know, I'm not gonna hand mash these things.
Speaker 6 (34:08):
Mash.
Speaker 2 (34:09):
Yeah.
Speaker 3 (34:09):
The only way to do it is through No, I'm
a big believer. The only way to do it is
through the kitchen aaid. Oh really Yeah, extra whip, oh yeah,
just that that's smoothness that you get there, fluffy, Oh yeah,
just it's as good as it gets.
Speaker 2 (34:24):
I don't know.
Speaker 4 (34:25):
I mean, I'm always a big fan of a good prank,
and this this seems like a good one to me.
Speaker 5 (34:31):
No one, no one's gonna get harmed from this.
Speaker 3 (34:33):
No. And I also don't think that you can improve
on it. Like I was trying to think, like, is
there something else that would be like as funny, and
I don't think so, because it's like it's a potato,
you know, it's not just.
Speaker 6 (34:46):
A candy alternative like, I'm trying to think of like
a cool alternative to candy. We always give it so
much candy.
Speaker 4 (34:52):
We always give out some garbage little toys just in
case kids are allergic to, you know, all sorts of
Halloween candy. But I feel bad about that too, because
nobody wants toys stupid things. So I think just I
like the idea of a potato.
Speaker 6 (35:05):
How about money? Just hand out money, just a dollar.
Speaker 5 (35:09):
Adams Adams Sandler.
Speaker 6 (35:10):
Movie, Big Daddy, Big Daddy? What else you got the watch?
Speaker 5 (35:14):
Give him the watch?
Speaker 6 (35:16):
It just robs them.
Speaker 5 (35:20):
What do you have for us?
Speaker 2 (35:21):
Jock? What about what.
Speaker 3 (35:22):
About like a shrimp? You know, like, what have you
got like shrimp cocktail?
Speaker 5 (35:26):
It depends how cold out it is.
Speaker 2 (35:28):
You know it's Halloween.
Speaker 4 (35:29):
It's cold now, there's sixty degree Halloween. Then that that
shrimp's not going to make it home.
Speaker 3 (35:34):
Hey listen, it's you got this nor'easter coming through and everything,
so we'll see. I want to talk a little bit
about Comcast earnings. So Comcast, do they have any Yes, okay,
but they're continuing to lose broadband subscribers, down one hundred
and four thousand. They also lost two hundred and fifty
(35:55):
seven thousand video subscribers.
Speaker 2 (35:57):
Not good.
Speaker 3 (35:58):
And this stocks down about four percent on this news.
It was worse earlier in the day. At one point
they were down north of ten percent. But the stock
is trying its best to rally here. But I think
it's important to just to like look at Comcast and
(36:19):
kind of where things have gone from them, because the
stock is now valued.
Speaker 2 (36:23):
It's dropped in value about fifty.
Speaker 3 (36:25):
Percent since it's twenty twenty one peak, and especially in
the last two years, it's just been kind of this
consistent slide and it's it's tough for me to see,
you know, how they reverse these trends given what we're
seeing from continued cord cutting. Uh. And when we look
(36:45):
at the you know, the broadband business, other alternatives that
have popped up, whether it's more competitive pricing from Verizon,
people using satellite based stuff like Starlink, whatever it might be.
You know that there's just some questions to you know,
what the business looks like in the future. Revenue was
down two point seven percent year over year. Their free
(37:08):
cash flow is better, which just means, hey, you're not
spending as much to maintain your network probably, but I
don't really know what the future looks like for the
company here. It's just what they're doing has not been
working for quite some time now.
Speaker 5 (37:20):
I'll take the opposite side of that one.
Speaker 4 (37:22):
I think that we are reaching a bottom for cord
cutting because quite frankly, the alternative, the the fubos and
the YouTube TVs of the world, have gotten so expensive
and have so many networks that they don't offer that
more and more people are turning back to the corded option.
Speaker 3 (37:40):
So I looked at it just because I was curious
when YouTube TV went through with their recent price increase,
and I still couldn't get the math to work. And
like the biggest problem with Comcast Verizon, you got to
pay for each freaking set top box.
Speaker 4 (37:54):
They're starting to provide options where you don't. But I agree, like,
I'm still not switching back, but I'll be honest, it's
a giant pain because I don't get TNT and I
do get nesson, and I have to cobble together.
Speaker 5 (38:04):
To watch what I want to watch.
Speaker 2 (38:05):
Your big TNT guy, If I want to watch playoff hockey, I.
Speaker 6 (38:08):
Am Brazolian isles. Yeah, the what Brazilian aisles come on? TNT.
Speaker 2 (38:13):
You know, Law and Order, that's the show. Okay, yeah,
got it, Okay, quick break here.
Speaker 3 (38:17):
We're going to be back in about twenty four hours
and we'll see you tomorrow to finish up the week
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
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(01:06):
and Mike Armstrong.
Speaker 2 (01:09):
Chuck Mike Ducker with you here today.
Speaker 3 (01:11):
And if you liked the first three days of this week,
you probably don't like this one. It's the first three
days what we had small number of stocks, predominantly the
big tech stocks roaring ahead, and a lot of other
stocks in the S and P five hundred and NASDAC
kind of lagging behind. Breadth, as it's called, was very,
(01:34):
very weak. In fact, I think it was I forget
which day it was. It was either Monday or Tuesday.
We had the worst day since nineteen ninety in terms
of breadth where stocks still went up. There were over
two hundred and ninety more stocks that traded down then
up on one of those days. Again, I can't remember
if it was Monday or Tuesday, and yet we still
(01:55):
finished positive. That is the worst breadth performance for a
positive sa P five hundred day.
Speaker 2 (02:01):
Since nineteen ninety.
Speaker 3 (02:03):
Today, on the other hand, you've got the SNP down
twenty two points right now, about a third of a percent.
But at the moment, you've got two hundred and thirty
three stocks up, two hundred and thirty three more stocks
up than down. And so what's dragging the index. It
is big tech. It is Meta down twelve percent, Oracle
(02:25):
down four, Broadcom down three, AMD down three, Microsoft down three,
and Video down two. And so because of the big
you know waiting in the S and P five hundred,
those stocks being down outweighs the fact that Bank of
America is up one and a half, Starbucks is up
one and a half, Marriot's up one point two, Walmart's
(02:45):
up you know, one percent. That's still just not enough
to drag the index higher. So the Dow is up
three hundred and thirty six points. SNP is down twenty
one nasdak can posit down to twenty six. Let we
take a look at the bond market. Still a modest cell
happening there after J. Powell told folks yesterday, Hey, all
you that thought it was a given that we're gonna
(03:07):
cut again in December, I don't know if we're gonna
do that. So the ten year Treasury is up two
point nine basis points to four point oh eight seven.
Mortgage rates have responded as well. Thirty or fixed rate mortgage,
according to Mortgage News Daily, has moved from six point
one to three percent to six point twenty seven so
more than an eighth of a percent jump yesterday. There
(03:28):
gold not seeing a ton of volatility. It is up
seven dollars and twenty cents an ounce at four thousand,
seven dollars and twenty cents. And we've got crude oil
West Texas Intermediate down three cents a barrel to sixty
dollars and forty five cents, So not much movement on
that side. Big reason why a lot of those tech
(03:50):
stocks are moving. We had three big earnings reports yesterday
with Microsoft, Meta, and Alphabets. Today we're gonna have Apple
and Amazon after that bell. We'll talk about them in
just a minute, but we're gonna kick things off this hour.
The piece from Axios titled the job market may be
at a tipping point. This from Neil Irwin. Did Neil
used to be Wall Street Journal or was he New
(04:12):
York Times US? New York Times, New York Times? So
he's with Axios now, Mike, what is this tipping point
that we are hearing about?
Speaker 2 (04:18):
What's What's the tip.
Speaker 4 (04:19):
The same one that we've been talking about now for months,
which is that the pace of hiring has dramatically slowed.
There are not as many job openings as there were
for the last several years. The labor market appears to
be better in balance the same things that the FED
has talked about. The tipping point would be do you
continue this trend because the trend has been fewer companies hiring,
(04:41):
not huge layoffs, but some here and there. We've had
two big announcements just this week, and so were you
to follow the trend line, you would expect unemployment to rise,
You would expect this state of hiring to continue to
be weaker. But look, we've had several of these moments
where we get to this kind of uncomfortable level. One
of them was last summer when we were talking about
(05:01):
the som rule. All the time unemployment rate was moving up.
We talked about it. Usually the unemployment rate doesn't start
moving up and then just stop there. It did, It
paused and kind of settled into a level that we
are similarly at now. And so that is the potential
tipping point is do we head further in this direction
where companies feel under pressure and reduce their workforce or
(05:25):
are we just reaching a new equilibrium and it is well, Frankly,
if the FED doesn't know, then I'm not willing to
say that I have any definitive idea.
Speaker 5 (05:34):
No.
Speaker 3 (05:34):
I mean, look, the FED has access to better data
and they have better contacts than you and I do,
and so yeah, I think that's a fair place to
be the question on this. And Mark and I talked
about this a little bit yesterday. You know, you've got
some companies. Amazon just as an example, announced that they
were going to be laying off fourteen to thirty thousand
people as part of a restructuring that they're doing. And
(05:58):
one of the things that I think is interesting to
think about is the context of labor supply and demand
over time, and how it's similar to the housing market
in this respect in that one of the things I
wonder about are the people that are being laid off now,
the extra workers that were hired in twenty one and
(06:19):
twenty two when these companies thought they really had to
staff up, and remember how competitive it was for workers
then it was absolutely crazy, and so some of the
compensation packages were just nuts. And part of what I
wonder now is, hey, is this kind of time arbitrage
from these companies where they say, yeah, we're gonna fire
these workers that were brought on in twenty two and
(06:41):
twenty one with these crazy comp packages, and then we're
gonna let things sit for six months and the labor
market isn't as robust now, and if we need to
bring someone else on, we can do it with a
far less competitive pay package today than.
Speaker 2 (06:53):
Was required with that person that we're letting go now.
Speaker 4 (06:56):
Right, Yeah, you do wonder, like how I wonder if
I can pull this ups? This week announced what forty
three thousand, eight thousand job cuts? How much did they
have to ramp up back during twenty twenty when we
were all sitting on our couches and ordering everything that
we had in our homes online. Yeah, maybe this is
just a return to normalization on the labor force. But
(07:17):
I'll actually look it up after.
Speaker 5 (07:18):
The next break.
Speaker 4 (07:19):
But I don't know which direction we're headed on all this,
and the FED is admitting the same look. We could
be heading towards a much weaker labor market, or this
just could be a normalization after a very strange few
years and a come down from the sugar high.
Speaker 3 (07:36):
The counter to this is typically consumer spending leads, hiring
or layoffs. We have still not seen any meaningful shift
in consumer spending in the aggregate. You are seeing where
it's going moving around, but we're still running four to
six percent year over year and consumer spending. Yeah, remember
(07:56):
three percent of that's inflation, so it's like one to
three percent reels spending growth.
Speaker 2 (08:01):
And until that changes, it's.
Speaker 3 (08:03):
Tough for me to see layoffs happening because companies don't
just sit around and say, let's lay people off, you know,
like they do it because they don't have the demand
and they want to maintain margins. So demand leads hiring
or layoffs. To this point, we haven't seen a meaningful
broad based shift in demand.
Speaker 2 (08:21):
Quick break here.
Speaker 3 (08:22):
When we come back, we got Michael sand Totally from
CNBC joining us. We're gonna do some trivia as well.
That is coming up after the break.
Speaker 1 (08:31):
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Speaker 6 (09:09):
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Speaker 3 (09:39):
As promised, we are now joined by Michael Santoli from
CNBC here to talk about what is going on in markets.
Speaker 2 (09:47):
Michael, thank you so much for joining us today.
Speaker 7 (09:49):
I'm glad to do it. Thank you.
Speaker 3 (09:51):
J Powell yesterday tried to pour a little bit of
cold water on the idea of a December cut being
a given. What do you make of the market response
to it? Over the kind of first day or so
Since then, Yeah.
Speaker 7 (10:05):
It's just a little bit of a gut check for
just the absolute certainty that the market had priced in
about you know, at least another cut in December, maybe
one beyond that. It hasn't had a tremendous effect in
terms of where bond yields have gone, but I think
it was an interesting injection of doubt into a very
(10:26):
certain and somewhat complacent market. In fact, I see it
as part of this whole thing we went through in
the last twenty four hours, where you know, the assumption
of hey, Fed's going to keep cutting rates into a
decent economy, You've got AI momentum, and all of these
tech stock earnings, and then of course maybe some progress
on trade. Every one of those things, I would argue
came up a little bit short of the bulls' best
(10:47):
hopes for the for the outcomes, or just the recognition
that the market are already priced in a lot. When
it comes to Powell in particular, I always feel as
if the FED cher wants to preserve a lot of optionality.
They don't I want to go six weeks with the
market thinking they know what comes next. When you have
a lot of things that are going to come in
the middle of it. Plus he's got a divided committee,
so he had a descent for doing nothing one descent
(11:10):
for making a bigger cut, and I think he has
to somewhat give voice to that in his commentary.
Speaker 3 (11:16):
I want to talk a little bit more about tech earnings.
You mentioned them. What do you make of what we've
seen so far and are we starting to see maybe
the first signs that investors may be starting to care
about how all this capex ends up impacting cash flow
and earnings down the road or is that just my
motivated reasoning at play here.
Speaker 7 (11:37):
No, you can definitely make the case that we are
seeing some of those concerned surface now. It wouldn't be
the first time, arguably, you know, Alphabet Google went through this.
The people were very skeptical that it could make it work,
you know, back a year year and a half ago,
and it came back from that. So now Meta is
the source of a lot of the doubt, and I
think it makes sense that Meta sort of has a
(11:59):
higher and proof here. They've really pivoted multiple times in
their AI strategy. Nobody's quite sure why they want to
build this so huge comprehensive model, like why do they
need to be a host of a of an AI
LLM or whatever they're going to do. Why can't they
just be a beneficiary of the proliferation of AI and
their advertising business. And you know they're doing it with
(12:21):
some debt. They're raising another twenty five billion dollars in
the corporate bomb market today that'll double their debt. So
it's not that old story of hey, these guys are
just kind of using the spare change their free cash
flow to make these investments. Interestingly, Zuckerberg Mark Zuckerberg said
that even if this ends up being kind of wasted
in the initial effort, we still have the assets. It
(12:41):
will still be worth something for, you know, the business
down the road. I'm not sure that's sort of reassuring
at this point, given how far the stocks have run.
But I do think it shows that these companies are
spending out of a sense of compulsion and urgency and
not because and because they sort of see the demand
and the moment. But it's it's sort of like, we'll
(13:02):
figure out exactly what the returns on this are going
to be down the road.
Speaker 3 (13:06):
We've had kind of a bumpy October but as we
get towards the end of it, you still have indices
that have risen meaningfully over the course of the month.
A lot of chatter about, hey, this is going to
continue as a year end rally. What ingredients typically need
to be present in order for that year end rally
to take shape and actually happen.
Speaker 7 (13:27):
I mean, it's kind of glib to say that mostly
you just need the calendar to turn to November. I mean,
that's not one hundred percent sury. There's like twenty percent
of the time when you actually don't have markets up
in the latter part of the year. Usually that's not
in a year that has not been as strong as
this one going into it. I do think you have
to make sure though, that investors sentiment and positioning and
(13:50):
speculative activity has not kind of gotten ahead of itself
an overshot, and I would argue we've kind of kind
of pressed up against that line over the last few weeks,
been a low quality rally in terms of like junkier,
more speculative companies leading. And then in the last few
days when the S and P five hundred did finally
break out of a two week range, which was no
(14:11):
big deal, but a two week range to a new high.
It was very narrow and it was the Semis and
it was the same old MAC seven stocks today. Interestingly,
you get to sell off in Meta. You have some
pressure on Microsoft, so you have an anti Nasdaq one
hundred day and it is rotating around. You have the
average stock in the market up half a percent in
the s top. So I guess it's trying to make
(14:32):
it work and stay on decent footing here. So it's
hard to fight the seasonal trends. But I always say
it's also you know, you don't want to defer to it.
That can't be the sum total of why you know
you're interested in stocks here.
Speaker 3 (14:44):
So you mentioned that, you know, markets have gotten a
little bit exuberant over the last you know, a couple
of weeks in particular, how do we reconcile that exuberance
with you know, we've been getting layoff announcements here and there.
Housing hasn't been particularly strong, We've got labor market concerns.
Speaker 2 (15:03):
How does all this fit together?
Speaker 3 (15:04):
Because I know a lot of our listeners are sitting
there like help make this make sense.
Speaker 2 (15:08):
What are your thoughts on it?
Speaker 7 (15:10):
Well, the exuberance is actually in parts of the market
that are pretty well removed from the here and now
US economy, I think you could argue, so you know,
I'm talking about not just the whole AI food chain,
which has got a life of its own, but really
long shot bets like quantum computing and you know, drone
(15:32):
technology and all of these things that feel like there's
a thing in the future, but they don't have earnings now,
so we don't have to worry about the actual economy.
I do think that you've seen some evidence though, within
the market, of some concern about the pace of growth.
Right so, consumer cycical stocks have suffered. You're seeing restaurant
stocks get hurt. You seeing the restaurant companies blame a
pullback and spending by certain consumers, younger and those making
(15:56):
less than one hundred thousand dollars. That's what Chipotle said today.
You've seen the home builder stocks and housing related really
struggle because there's really been no response to some downticks
and mortgage rates. So I think the market is kind
of registering those concerns. It's not panicking about them. It's
not pricing in a genuine downturn yet, but those parts
of the market did suffer after Powell tried to kind
(16:19):
of take away some of the certainty about a December
rate cut, So there might be a push pull there
in the story.
Speaker 3 (16:26):
Very good, Michael, appreciate the time today. Thank you so
much for the information, and we will talk to you soon.
Speaker 6 (16:32):
Great.
Speaker 7 (16:32):
Thank you.
Speaker 3 (16:33):
That is Michael santotally from CNBC talking about what we've
been seeing in markets in the last several weeks.
Speaker 6 (16:40):
All right, time for trivia here on the Financial Exchange
and for decades Networks aired It's the Gray Pumpkin Charlie
Brown leading up to Halloween. In twenty twenty, Apple bought
the rights to the Charlie Brown specials and ended a
fifty plus year run on network television television. So our
trivia question today, what year did It's the Great Pumpkin
(17:02):
Charlie Brown first air? Once again? What year did It's
the Great Pumpkin Charlie Brown first air? Be the fifth
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 fifth correct response to Texas to the number six
(17:23):
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 everybody to subscribe
to our YouTube page. Will you find daily interviews like
the one you just heard with Michael Santoli of CNBC
and full shows of the Financial Exchange. You'll get caught
up on anything and everything you might have missed right
(17:44):
here on the Financial Exchange Radio Network.
Speaker 3 (17:47):
Mike, I want to get to previewing Apple earnings in
a little bit, but I want to cover one story first,
just because Tucker tossed it all the way at the
end of the stack, and this one I actually wanted
to pull up just because I think it's awesome.
Speaker 2 (18:01):
So it's potatoes. Occasionally you see.
Speaker 3 (18:04):
A world that is just completely no, it's not the
potato one.
Speaker 5 (18:09):
Okay, I'll get there later.
Speaker 2 (18:10):
Then.
Speaker 3 (18:10):
Yes, occasionally you see a world that's just like completely
divorced from what you understand.
Speaker 2 (18:15):
And today I saw that.
Speaker 3 (18:16):
So apparently in New York now it is sample sale week,
which I didn't even know was a thing, to be honest,
I didn't even really know what a sample sale was
before today. For those of you wondering, I guess it's
a time when high end, like luxury goods, retailers put
out their new stuff and sell it really cheaply for
(18:38):
like a very limited time so that you know, average
people can potentially afford it, but it's it's very limited supply.
So these huge lines develop as a result of it,
and you know, these are people that are you know,
again like waiting for the ability to potentially buy these things.
You're talking like hundreds of people in line here. And
(18:58):
there are companies that have started up in New York.
Specifically their job is to stand in line for other
people for hours on end.
Speaker 2 (19:05):
How much do you make for that?
Speaker 3 (19:06):
So there's a guy by the name of Robert Samuel.
Samuel who runs a company called Same Old Line Dudes,
and he had sixty one clients on opening day for
sample sales. Each standard is getting twenty five dollars an hour.
Speaker 2 (19:21):
Woo.
Speaker 3 (19:21):
So you do the math out, okay, and his business
is doing fifteen hundred dollars an hour.
Speaker 2 (19:28):
If you do that just for a day, it's thirty
six thousand dollars.
Speaker 3 (19:31):
In a day in revenue. Quick break here we got
trivia answer.
Speaker 1 (19:36):
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 market so far today right here
on the Financial Exchange Radio Network.
Speaker 6 (19:58):
On one of Wall Street's the busiest days of the year,
markets are nixed territories it Investors react to the year
long trade truce between the US and China, comments from
FED treman Jerome Powell about future rate cuts, and of course,
big tech earnings from Alphabet, Microsoft and Meta. Right now,
the Dow is up by six tenths or one percent,
(20:20):
or two hundred and eighty one points higher. S and
P five hundreds down nearly four tenths of one percent
or twenty six points lower, Nasdaq down nearly one percent
or two hundred and twenty nine points. Russell two thousand
is up about a third of a percent, Tenure Treasure
reeled up two basis points at four point zero eight percent,
and crude oil is flat edging higher, trading at sixty
(20:41):
dollars in fifty two cents a barrel. Alphabet jumping by
five percent after the search Grant posted strong third quarter
results driven by revenue from Google Cloud and YouTube advertising.
Microsoft b quarterly expectations, where revenue from its Azeri cloud
business jumped forty percent. The company's finance chief did note
(21:02):
that capital spending will accelerate this fiscal year. Microsoft down
by three percent, Meta shares plunging twelve percent after the
Facebook parent reported stronger than expected third quarter earnings and revenue. However,
Meta raised its capital expenditures outlook to invest more in
artificial intelligence. Apple and Amazon are on deck later today
(21:23):
when they post their results after the closing bell. Outside
of big tech, Comcast beat earnings and revenue estimates for
the third quarter. However, the company said had lost one
hundred and four thousand broadband customers the fourth quarter in
a row. It failed to grow its broadband subscriber base.
Comcast shares of pulling back three percent. Starbucks posted weaker
(21:45):
than expected earnings, but posted same store sales growth for
the first time in nearly two years. Starbucks is edging
higher and Chipotle is sinking above fifteen percent after the
burrito chain posted a drop in net income while it's
quarterly revenue missed estimates. The restaurant group cited economic strains
were turning customers away from its stores. I'm Tucker Silvan,
(22:09):
that is Wall Street Watch and in the previous segment,
we asked the trivia question, what year did It's the
Great Pumpkin? Charlie Brown first air on TV, That would
be nineteen sixty six and from North Berwick, Maine is
our winner today, taking them a Financial Exchange Show T shirt.
Congrats to an. We play trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange
(22:32):
Show dot com.
Speaker 2 (22:34):
Mike, let's talk a little bit about Apple.
Speaker 5 (22:36):
Yeah, let's do that.
Speaker 4 (22:37):
They stand in pretty stark contrast to me when we
talked about Meta earlier, Right, Meta feeling this need to
invest on the promise of future growth on artificial intelligence,
and Apple I think at least taking the same lessons
out of their previous playbooks, which is we don't need
to be first to the market on this.
Speaker 2 (22:58):
Yeah, I think the the question.
Speaker 3 (23:01):
You know, I've compared Apple over the last year or
so to Toyota, who back in twenty twenty one and
twenty two, when everyone else was getting all EV happy
and saying, hey, we're gonna make nothing but EV's. By
twenty thirty, you know, we're gonna just you know, we're
gonna turn into evs because we're not even gonna be
people anymore. Toyota said, no, like, we're gonna, you know,
(23:23):
keep making hybrids and keep making internal combustion engine vehicles,
and yeah, we're gonna research evs and maybe we'll even
roll a couple out, but that's not gonna be us.
And and that approach turned out to be right. Apple's
kind of been doing that where look, all the other
big tech companies are going to spend like five six
hundred billion dollars next year trying to build out data
(23:46):
centers for artificial intelligence, and Apple's kind of sitting there, going,
We've got some ideas on AI. Here's like a little
Apple Intelligence thing on a phone that does bad summaries
of emails and conversations, and yeah, we'll get open AI
to maybe you know, plug their model into one of
our things.
Speaker 2 (24:03):
And but it's it's not really us.
Speaker 3 (24:05):
And so I don't think this quarter is going to
be like justification for that approach. That justification, if it
ends up, you know, coming to fruition, is going to
be over the next two to three years when they're
proven right or proven wrong this quarter. The question that
has been looming out there is, hey, you raised prices
on iPhones you got questions about demand in China. Are
(24:28):
you going to be able to hit those numbers and
show that you can still deliver the revenue if you're not,
you know, making AI the focus right now.
Speaker 5 (24:36):
Yeah, that is the question. And I mentioned I don't
think you're on the problem.
Speaker 4 (24:39):
But I my wife has an iPhone, I have a
Google Phone, and I've noticed, you know, a fairly big
difference in the usefulness of the AI powered assistance between
the two of them. But again, I don't think any
of that's risen to the point where somebody's about to
jump ship and you know, abandon their family who all
uses iPhones to go use a Google phone instead.
Speaker 5 (24:59):
So it it hasn't. It has not reached that crescendo yet.
Speaker 4 (25:02):
I really doubt it will in terms of differentiation for
Apple versus other products.
Speaker 5 (25:07):
Folks, it's nearing the end of the month.
Speaker 4 (25:09):
Want to talk to you about our annual new guide
on required minimum distributions. We do put one of these
out every year, but the rules have been changing. That's
such a fast pace that we've needed to update it
every single year. As we approach year end here, you've
got about sixty days left before the year end, and
the need to satisfy that IRS rule on ourmds. But
(25:32):
there's a lot to learn about the subject, and specifically,
the IRS has given additional time for folks to satisfy
those rmds. It started at seventy and a half and
moved to seventy three. It is now seventy five for
a lot of people before those rmds start. But you
always whenever the IRS creates more leniency around a rule,
(25:53):
or when Congress really creates that leniency, you always know
there's going to be an offset, and there isn't this
case too, there's the threat of higher taxes later when
you start withdrawing those funds or when you leave those
funds to a loved one after you are gone. If
you want to learn more about this subject, if you
are approaching RMD age, or if you have a parent
(26:14):
who's already there and you're trying to understand what the
implications will be for you, request our October guide on
Understanding Required minimum Distributions. Not only will we explain the rules,
but we talk about strategies to minimize the tax impact
of the rmds. Common approaches such as ROTH conversions and
donating portions of it to charity, but you need the
(26:34):
guide to get started. The number to request it is
eight hundred three nine three for zero zero one. You
can also go online request it there at Armstrong Advisory
dot com. But that phone number once again eight hundred
three nine three for zero zero one.
Speaker 1 (26:51):
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 services.
Speaker 3 (27:06):
Got a couple of earnings reports in the food space today,
both with a well, I guess both kind of with
a Chipotle twist. Chipotle was one of them, but Starbucks
the other. Starbucks now has Brian Nickel, who formerly was
the CEO at Chipotle until when did he take the
Starbucks gig?
Speaker 2 (27:26):
Was it about a year and a half ago?
Speaker 1 (27:27):
Yeah?
Speaker 5 (27:27):
Thereabouts?
Speaker 2 (27:28):
Do you remember where he was before Chipotle?
Speaker 6 (27:31):
Oh, Taco Bell?
Speaker 2 (27:32):
Yeah, there we go.
Speaker 3 (27:33):
Look at that, full circle to my one of my favorites.
But so Starbucks up about one percent today and big
thing is global same store sales up one percent for
the quarter. They were expecting to see both global and
US ones with marginal declines, and so maybe starting to
turn the corner a little bit for Starbucks. I tend
(27:54):
to trust Brian Nickel because he just was a fantastic
operator both at Taco Bell and Chipotle. So maybe starting
to bear some fruit there. Chipotle, on the other hand,
they've got all kinds of problems. Yeah, stocks down fifteen
percent today. They're now guiding that their same store sales
are going to be down low single digits this year.
In February, they thought they were getting going to be
(28:16):
up mid to low single digits. So a big reversal there.
Foot traffic down point eight percent for the quarter, the
third straight quarter of declines. And in particular, they're saying
that consumers making less than one hundred thousand and between
the ages of twenty five and thirty five are seeing
particular challenges. They are not the only ones calling out
that age twenty five to thirty five demo, and so
(28:39):
I think there is some meat on that bone that
that demo is really struggling at the moment, and to.
Speaker 4 (28:44):
Turn that around, you have to deliver value to that consumer.
And I don't know how Chipotle does that given what
they've built their brand around, which is fresh ingredients and.
Speaker 5 (28:56):
Not taco bell.
Speaker 3 (28:57):
Frankly, there here is my advice to Chipotle as someone
who has has never worked for like a chain food place.
Chain restaurant. Yeah, that's the one ye food place. Chain
food place is the technical term. Uh, don't devalue your product,
right y'all. Remember Quizno's sure to guest the subs out
(29:22):
there like miles better than Subway. Yeah, but they decided
after they got private equity and everything, they decided they
were going to try to compete with Subway, and they
went down market and they got absolutely bludgeoned because that
wasn't where they lived. They had a great business and
they ruined it because they tried to be something that
they're not. If Chipotle tries to go down market, they
(29:42):
are going to get wrecked because the customers that like
them today will abandon them, and the customers they don't
have that they want are going to be able to
find cheaper stuff elsewhere because they can't go down market
far enough.
Speaker 4 (29:55):
It's all well and good, Chuck, but when your stock's
down forty four percent for the year, questions are getting asked.
Speaker 2 (30:01):
I think it's an execution problem.
Speaker 3 (30:04):
Like I mean, I don't like to, you know, say
that everything is you know, causation. But Brian Nickel left
and this company has not done well since then. Yeah,
like it has that feel more than anything else. And again,
there are companies that are succeeding in this space and figuring.
Speaker 2 (30:24):
Out how to make it work. They are not right now.
Speaker 3 (30:28):
And this I'm not saying like that whole you know,
restaurant space has questions, but this scale of decline feels
more like a Chipotle problem than.
Speaker 2 (30:38):
A restaurant in general problem to me. I don't know.
Speaker 5 (30:44):
No, yeah, I don't know.
Speaker 4 (30:47):
I'm not sure where I land on it. Obviously, there
is a consumer base that is struggling. I'm not sure
if it's an execution problem or just a moment in
time problem.
Speaker 3 (30:57):
Let's take a quick break. When we come back, we'll
do a little bit of stack roulette.
Speaker 1 (31:03):
Find daily interviews and full shows of The Financial Exchange
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This is the Financial Exchange Radio Network. The Financial Exchange
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(31:23):
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Speaker 6 (31:40):
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Speaker 2 (32:16):
Mike, what do you got for me for stack Roulett?
Speaker 4 (32:18):
I've got potatoes, as I a little potatoes. So tomorrow
the big day in my household for trick or treaders
making the rounds.
Speaker 5 (32:27):
And some.
Speaker 4 (32:30):
Guy had a funny idea a few years ago of
putting just potatoes along with other options in his you
know bowl for people to grab at a instead of candy.
And it's kind of sparked a phenomena where people are
actually doing this and kids are finding it funny, and
you know, go out there looking to maybe take a
(32:50):
potato home instead of big candy bars. And I've got
an interesting twist on this that I'm hoping to get
your take on. I'm thinking just a giant bowl of
mashed potatoes for this Halloween season, horrible idea. Just yeah,
the kid reaches and real I'm not talking about some
dry from the mixed mashed potato. I'm talking about some
(33:11):
hand mixed, buttery mashed potatoes because I I just imagine
the look of disappointment on this child's face reach in
for a candy bar and just come back with a
greasy potato filled hand.
Speaker 6 (33:24):
You just hear the slap in their bag.
Speaker 3 (33:26):
That's potatoes funny. The mashed potatoes, not the mashed potato,
is cruel.
Speaker 4 (33:31):
I did have GEMI for me create an image of
a disappointed child reaching in expecting Halloween candy and getting
mashed potatoes instead, and it did a did a phenomenal job.
So I probably won't create this because my wife won't approve.
Speaker 6 (33:47):
Not to mention the effort of the idea. Mashed potatoes
don't take you know, yeah, quick potatoes.
Speaker 2 (33:54):
They're not that long.
Speaker 6 (33:57):
Of potatoes you're making.
Speaker 4 (33:58):
And especially if nobody's eating it, I'm gonna toss those
I'm tossing those steamed or boiled potatoes right into the
kitchen aid for this.
Speaker 5 (34:04):
You know, I'm not gonna hand mash these things.
Speaker 6 (34:08):
Mash.
Speaker 2 (34:09):
Yeah.
Speaker 3 (34:09):
The only way to do it is through No, I'm
a big believer. The only way to do it is
through the kitchen aaid. Oh really Yeah, extra whip, oh yeah,
just that that's smoothness that you get there, fluffy, Oh yeah,
just it's as good as it gets.
Speaker 2 (34:24):
I don't know.
Speaker 4 (34:25):
I mean, I'm always a big fan of a good prank,
and this this seems like a good one to me.
Speaker 5 (34:31):
No one, no one's gonna get harmed from this.
Speaker 3 (34:33):
No. And I also don't think that you can improve
on it. Like I was trying to think, like, is
there something else that would be like as funny, and
I don't think so, because it's like it's a potato,
you know, it's not just.
Speaker 6 (34:46):
A candy alternative like, I'm trying to think of like
a cool alternative to candy. We always give it so
much candy.
Speaker 4 (34:52):
We always give out some garbage little toys just in
case kids are allergic to, you know, all sorts of
Halloween candy. But I feel bad about that too, because
nobody wants toys stupid things. So I think just I
like the idea of a potato.
Speaker 6 (35:05):
How about money? Just hand out money, just a dollar.
Speaker 5 (35:09):
Adams Adams Sandler.
Speaker 6 (35:10):
Movie, Big Daddy, Big Daddy? What else you got the watch?
Speaker 5 (35:14):
Give him the watch?
Speaker 6 (35:16):
It just robs them.
Speaker 5 (35:20):
What do you have for us?
Speaker 2 (35:21):
Jock? What about what.
Speaker 3 (35:22):
About like a shrimp? You know, like, what have you
got like shrimp cocktail?
Speaker 5 (35:26):
It depends how cold out it is.
Speaker 2 (35:28):
You know it's Halloween.
Speaker 4 (35:29):
It's cold now, there's sixty degree Halloween. Then that that
shrimp's not going to make it home.
Speaker 3 (35:34):
Hey listen, it's you got this nor'easter coming through and everything,
so we'll see. I want to talk a little bit
about Comcast earnings. So Comcast, do they have any Yes, okay,
but they're continuing to lose broadband subscribers, down one hundred
and four thousand. They also lost two hundred and fifty
(35:55):
seven thousand video subscribers.
Speaker 2 (35:57):
Not good.
Speaker 3 (35:58):
And this stocks down about four percent on this news.
It was worse earlier in the day. At one point
they were down north of ten percent. But the stock
is trying its best to rally here. But I think
it's important to just to like look at Comcast and
(36:19):
kind of where things have gone from them, because the
stock is now valued.
Speaker 2 (36:23):
It's dropped in value about fifty.
Speaker 3 (36:25):
Percent since it's twenty twenty one peak, and especially in
the last two years, it's just been kind of this
consistent slide and it's it's tough for me to see,
you know, how they reverse these trends given what we're
seeing from continued cord cutting. Uh. And when we look
(36:45):
at the you know, the broadband business, other alternatives that
have popped up, whether it's more competitive pricing from Verizon,
people using satellite based stuff like Starlink, whatever it might be.
You know that there's just some questions to you know,
what the business looks like in the future. Revenue was
down two point seven percent year over year. Their free
(37:08):
cash flow is better, which just means, hey, you're not
spending as much to maintain your network probably, but I
don't really know what the future looks like for the
company here. It's just what they're doing has not been
working for quite some time now.
Speaker 5 (37:20):
I'll take the opposite side of that one.
Speaker 4 (37:22):
I think that we are reaching a bottom for cord
cutting because quite frankly, the alternative, the the fubos and
the YouTube TVs of the world, have gotten so expensive
and have so many networks that they don't offer that
more and more people are turning back to the corded option.
Speaker 3 (37:40):
So I looked at it just because I was curious
when YouTube TV went through with their recent price increase,
and I still couldn't get the math to work. And
like the biggest problem with Comcast Verizon, you got to
pay for each freaking set top box.
Speaker 4 (37:54):
They're starting to provide options where you don't. But I agree, like,
I'm still not switching back, but I'll be honest, it's
a giant pain because I don't get TNT and I
do get nesson, and I have to cobble together.
Speaker 5 (38:04):
To watch what I want to watch.
Speaker 2 (38:05):
Your big TNT guy, If I want to watch playoff hockey, I.
Speaker 6 (38:08):
Am Brazolian isles. Yeah, the what Brazilian aisles come on? TNT.
Speaker 2 (38:13):
You know, Law and Order, that's the show. Okay, yeah,
got it, Okay, quick break here.
Speaker 3 (38:17):
We're going to be back in about twenty four hours
and we'll see you tomorrow to finish up the week
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