February 6, 2026 • 38 mins
Chuck Zodda and Mike Armstrong break down a broad market rebound, Amazon’s earnings-driven selloff tied to surging AI capital spending, and what the latest labor data really says about hiring versus layoffs. The hour also tackles why new cars have become so expensive, Stellantis’ massive EV write-down as a cautionary tale, credit-card rate caps, consumer spending shifts, and AI’s growing threat to LegalZoom with insights from Barron’s Paul LaMonica.
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Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker with you here. We've got a
broad based rally taking place in markets, reversing much of
or all of yesterday's losses. In some cases. The S
and P five hundreds up ninety points, back above sixty
eight hundred, closing in on sixty nine hundred, about a
one point three percent move up. Today. Dow Jones Industrial
(01:32):
average is up eight hundred and eighty two points about
one point eight percent, and the Nasdaq composite of two
hundred and eighty five points about one and a quarter percent.
So tech still kind of the laggard out there, even
with some big names making big moves.
Speaker 3 (01:47):
To the upside.
Speaker 2 (01:49):
Tenure Treasury is up six tenths of a basis point
to four point two to one six percent, so not
much movement there. Dollar Index is down point two two
two percent to ninety seven forty nine, and we've got
gold up seventy six eighty ounce to forty nine sixty
six and thirty cents. Crude oil up another seventy six
(02:10):
cents a barrel to sixty four to oh five triple a.
National avatur gas prices up another nine tenths of a
cent overnight to two ninety even now about eight and
a half cents over the last months, so about a
three percent move up in gas prices since the start
of the year, and that is what we are seeing
moving in markets. Another big mover this morning, Amazon released
(02:33):
earnings after the bell yesterday. Basically, the earnings were fine,
their guidance was very heavy on capex, and much like
we've seen from other tech companies this week, Street didn't
love that, and so Amazon stocked down about eight percent
pre market, and despite that, most other tech companies chugging
along today, and so that's why you've got this relief
(02:54):
rally that's taking place after a sell off that has
uh few days here and again, we'll see where things
end up going. I don't know if you know, we're
all done with this or if we're you know, loading
up for that next leg down, But we'll see how
things go as we continue to get more economic data
(03:16):
that comes in next week, as we're gonna have a
jobs report, we're gonna have a CPI, so pretty full
week with both of those in the same week. Normally
that doesn't happen, but with the government shutdown for a
couple of days. This is what we ended up with here.
Speaker 4 (03:28):
By the way, that Amazon stock, as you mentioned, they
got beat up last year around the tariff releases back
in April, made up all those losses, but the stock
is still down about fourteen percent over the last twelve months,
which again speaks to the renewed questions and challenges to
anybody operating in this AI build that space peace.
Speaker 2 (03:50):
In Wall Street Journal, small companies still handing out raises.
The National Federation of Independent Businesses said that in January,
seasonally adjusted net thirty two percent reported raising compensation, up
one point from December. And again, I just don't know
like what the long term trend of this is, but
(04:12):
it's clear to me that at this point the labor
market has been weakening for a decent chunk of time,
probably the last three years now, yep. And there are
some signs in January that maybe we're starting to see
things bottoming out in the labor market, but I'm not
confident that I can say that yet, and we need
a couple more months of data to be able to
(04:34):
indicate that for sure.
Speaker 4 (04:35):
Yeah, the weakening that we're talking about has come almost
entirely from the pace of hiring rather than the pace
of firing the job cutting rates that we got, for instance,
from the Joltz report on yesterday Wednesday, yes yesterday, because
of the delay, it indicated that, I mean, the firing's
rate is still very consistently low. The filings for unemployment,
(04:58):
while they did jump this week, they didn't jump to
all that concerning of a level. And so the data
on the labor market seems to indicate that, yeah, the
weakness that we're seeing is mainly just new entrants to
the labor force finding a job or people that lost
a job finding a new one, rather than mass layoffs
affecting all sorts firms. In spite of headlines like whaty
(05:20):
got from Challenger Gray and Christmas yesterday, which most experts
discount heavily in terms of any sort of indication for
the future of the labor market.
Speaker 2 (05:28):
So I think next week's jobs report does take on
you're kind of a heightened importance. Then again, just because
is this something that's going to confirm some of the
other surrounding data that is indicating maybe the labor markets
starting to you know, bottom out and improve, or does
it come out and say no, actually, things are continuing
(05:51):
to worsen there. The expectations are for between forty and
seventy thousand jobs created, unemployment rates staying between four four
and four five gily, earnings zero point three percent, and
you know those are kind of the big ones that
we'll be looking at. And that report, by the way,
against on Wednesday because of the government shutdown, and then
(06:11):
on Friday we get CPI, so it's by the way,
next next week is great for economic data every day,
but Monday there's something interesting. Tuesday, we've got retail sales
for December. Wednesday, jobs report for January, Thursday, existing home
sales for January, Friday, CPI. It's a fun little run
(06:34):
that you've got there on the earning side of things.
When we take a look at what is in the pipeline.
We're through the big tech guys this week, so there's
not much excitement on that front. But you got Coca
Cola next week. You got robin Hood CVS Marriot, so
you know there's some interesting stuff that you can glean
from them. You've got McDonald's next week, which again we've
(06:57):
talked about now how McDonald's brings in less revenue than
uber which is just shocking. But that's the world that
we live in.
Speaker 4 (07:05):
A company that makes the food brings in less revenue
than the company that delivers it to your home.
Speaker 2 (07:10):
It's kind of the experience, right, Mike. I've said this
for a long long time. Laziness is the mother of invention.
You gotta embrace the laziness, not as you know, a person,
not as not as a lifestyle, but as a view
as to you know how, there's the thing in physics,
(07:31):
all things ten towards entropy. Sure, all things ten towards laziness.
That that's that's where we're actually, you know going. It's
we're gonna be those guys from Wally sitting in the
chairs while the food gets delivered to us, while the
show's beamed into our eyes.
Speaker 3 (07:47):
Do you like that vision? You know?
Speaker 2 (07:48):
It's it's it's where we're going.
Speaker 3 (07:50):
I could use an extra forty or fifty pounds, you could.
Speaker 2 (07:53):
You've been looking at a little scrawny these days.
Speaker 3 (07:55):
Man.
Speaker 2 (07:55):
You gotta you gotta beef up by it's the winter.
You gotta stay warm. In any case, this is what
we have on deck here. Let's take a quick break
when we come back. Why are new cars so expensive
right now? We'll discuss that. We've also got trivia right
after this.
Speaker 1 (08:10):
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(08:32):
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Time for trivia here in the Financial Exchange and of course,
on Sunday night, the Patriots will play the Seahawks at
Santa Clara for Super Bowl sixty. This will be the
second time the Super Bowl has taken place in Santa Clara.
(09:33):
The first was Super Bowl fifty. So our trivia question today,
what is the name of the stadium where super Bowl
sixty will be played? Once again? What is the name
of the stadium where super Bowl sixty will be played?
Be the seventh person today to text us at six
one seven three six two thirteen eighty five with the
correct answer along with the keyword trivia and win a
(09:56):
Financial Exchange showed T shirt. Once again, the seventh correct
bots two textas to the number six one seven three
six two thirteen eighty five with the correct answer along
with the keyword trivia, will win that T shirt. See
complete contest rules at Financial Exchange show dot com.
Speaker 2 (10:12):
Piece in Bloomberg it's titled very simply, why are new
cars so expensive in the US? Now? And I'll quote
a couple things here. The average figure broke fifty thousand
dollars for the first time last September hit fifty three
hundred and twenty six dollars in December according to the
Kelly Bluebook car Buying Guide. Researcher Edmunds dot com calculates
(10:36):
that the average has risen sixty one percent since twenty ten.
So sixty one percent in fifteen years is about a
three and a half percent annual price increase if you're
compounding it there, which is again high, but a lot
of that was concentrated in a couple of years, and
I'm guessing if you stripped out twenty one and twenty two,
you're probably looking at like two and a half percent
(10:57):
annual price inflation, which is not crazy.
Speaker 4 (11:00):
But does run in contrast to other I'm just thinking about,
like other products that we use on a daily basis,
to think about what's happened with televisions and all the
stuff that's manufactured in China. It's gotten substantially cheaper over
the same timeframe, and so this one does stand out
in people's minds, both given the price point and the
pace of inflation.
Speaker 2 (11:17):
So the question is why are new cars so expensive
all of us? And the example is the answer is
because we want them to be so.
Speaker 4 (11:25):
In twenty ten, according to JD Power forty seven percent
of vehicle sales were cars in twenty twenty one, which
is the most reason data Jdpower had data on it
was twenty one and a half percent.
Speaker 2 (11:39):
We're cars, you're saying, cars versus trucks and service.
Speaker 4 (11:42):
So we have gone from a market where yeah, half
of vehicle sales in fifteen years ago were trucks and SUVs.
Now something like eighty percent of them are trucks or SUVs.
Speaker 3 (11:54):
So guess what. Those are more expensive? Guess what.
Speaker 4 (11:56):
It's what Americans want to drive. They also are buying
more in the way of electric vehicles, which tend to
run a higher price point, arguably lower maintenance cost depending
on who you ask. And there you have it. Cars
are way more expensive because of our buying habits. We
want bigger, more expensive cars, full stop. And by the way,
if you want those, the banking and finance industry will
(12:19):
absolutely find ways for you to be able to buy
them and come up with different maneuvers in the finance
sector to be able to make it so that you can.
I don't think they make them affordable, but so that
you can actually make the monthly payment on a regular basis.
Speaker 2 (12:36):
Because look, here's what the car companies have figured out.
People want to pay for nice stuff in their cars.
That's the deal. I'm on Toyota's website right now, and
I use them as the example just because they're one
of the few car companies that still actually makes cars,
not just SUVs. Remember four doesn't make them anymore. GM
(12:58):
doesn't make them anymore.
Speaker 4 (13:00):
You know, Jim make some cars, don't they? I don't
think so I'll get back to you on that.
Speaker 2 (13:05):
You can take a look. Maybe there's still like one
model that they have, not not many in any case.
So let's say that you wanted to buy an suv
and you're on the Toyota website, which I'm on right now.
There are plenty of options that you can buy for
under fifty thousand dollars, even in the suv you know area,
even if you're talking big SUVs. Toyota's Grand Highlander, which
(13:26):
is like almost two hundred inches long, it's a three
row suv that's you know, pretty significant, starts at forty
one and sixty dollars. That's MSRP. So I'm sure that
you can probably go you know, a couple grand under that.
When you're finally negotiating the thing. But does anyone buy
you know, the base model with you know, the cloth seat. No,
(13:48):
it's oh I gotta have the limited edition and that
well it's got a panoramic moon roof. Okay, yeah it
it really bright up the cabin. Okay. And and the
first you know, eighty years of cars that didn't have that.
That was a problem that Like, when I'm driving, I'm
(14:11):
looking forward, man, I don't care how light the cabin
is behind me, And I'm sure my passengers are just
fine not being able to look up and be like, oh,
look there's a cloud that looks like Mickey, like nice
is reflecting off your skin? So nice. It's easy, it's
so wonderful. So like I just I'm sorry. The reason
why cars are so expensive is because we want them
(14:34):
to be.
Speaker 4 (14:35):
By the way, GM's only sedans that they still make
are under the Cadillac brand.
Speaker 2 (14:39):
If you want to get a cheap SUV from Toyota, okay,
there you go too, right, No suv anyans? Okay, If
you want to get a cheap suv, you can do again.
I just gave you like a Grand Highlanders, a big
old truck. Thing is not small. You can get one
for forty one thousand dollars. Do people know they spend
sixty thousand on them. If you want to cheap little one,
(15:00):
you can get yourself a nice little base level rav
four for about thirty grand. Does anyone No, They gear
it up and it's cost you them forty two thousand
dollars in order to do it. And ultimately, look, everyone
has stuff that they spend on that's not in their
best financial interest. I do too. The problem is that
(15:22):
when we see people buying these cars and then can't
afford to buy them and default on them, it makes
me hurt because it's entirely an avoidable proposition because they're
always cheaper cars available. We're just talking new ones. If
you want to buy a used one, you can get
all kinds of cheaper stuff. But the people who buy
(15:43):
new cars are generally wealthy. They want to spend the
money on it, and they're comfortable doing it, even if
it may result in them eventually defaulting on those loans.
Speaker 4 (15:54):
By the way, Bloomberg's piece here they call out like
everything other than what we just talked about. The last
item on their lift is list is bigger featured loaded vehicles,
which I think is the majority of the increase. They
talk about the EV bump, the tarif effects, the pandemic effects, Like,
that's not what drove nice is up by sixty percent
over fifteen years.
Speaker 3 (16:11):
No.
Speaker 4 (16:12):
Yeah, they went and got more expensive during COVID, but
so did everything else. The reason that cars are having
an outsized and larger than average inflation effect is because
of buying habits. And if you want to buy cheap cars,
you can still go and buy a Jetta, you can
still go and buy a Civic, you can still go
buy a Corolla.
Speaker 3 (16:32):
But that's not really what we tend to buy.
Speaker 2 (16:35):
No, again, there are plenty of vehicles in the twenty
five to thirty five thousand dollars price range that you
can buy new. We decide not to, And look, that's fine,
but if you buy that expensive vehicle, Like, if you
buy the car for seventy thousand dollars, please don't tell
(16:56):
me you're making seventy thousand dollars a year. I was
gonna go, you can't complain about the payment. Yeah, that's
a you problem then, because no one made you buy
that vehicle. You know, it's one thing. Hey, if you're
trying to live in an expensive area and the rent
is too high because of you know, blah blah blah,
and this is where your job is. I get it,
(17:18):
Like you're not, like there's only so many places that
you can live. We've talked about this. Sure, if you're
trying to buy a vehicle, there's always a cheaper option.
You can't complain about the payment.
Speaker 4 (17:30):
Yeah, that is a pretty important distinction. Like, you know,
the argument of rent is too high, Like what are
you gonna do move away from your family and not
live in the area anymore. Like that is a genuine
issue that I think people should complain about.
Speaker 3 (17:43):
The I mean they.
Speaker 4 (17:46):
Should complain about that they can complain about without me
getting too frustrated. I think that the proposals that they
will throw out there to solve the housing problem is
a different story. But if you want to make cars
less expensive, it's super easy.
Speaker 2 (18:00):
Right, go on to Carvon or car max or whatever.
Search for cars under fifteen thousand dollars and you will
be able to buy something. Now you might be like, oh,
well that doesn't fit my needs, then don't complain to
me about the price.
Speaker 4 (18:15):
By the way, I love that every single year I
keep getting more and more confirmation that people are back
into minivans. I feel like I've been touting this thing
for ten years now, and minivan sales through the roof.
I'm like twenty percent or something this year. It's wild.
Speaker 2 (18:33):
It's because they're fantastic vehicles.
Speaker 4 (18:34):
Actually, they're top notch. They don't look great, No, they
look very silly, but who cares? But so do I
not trying to look cool, you know. Get like again,
I drive a super Uo out back. It's not the
coolest looking car. I'm a big loser, but you know
why I like it because it's not as expensive as
these other ones and it gets me around New England
in the winter.
Speaker 2 (18:55):
That's fine, It's fine with me.
Speaker 4 (18:58):
Yeah, Minivan sales up percent in twenty twenty five, three
hundred ninety five thousand of these things.
Speaker 3 (19:03):
Now, it's a huge increase.
Speaker 2 (19:05):
If you'll like the expensive carna'sy thing, that's totally fine.
But don't complain about the payment.
Speaker 3 (19:10):
Agreed.
Speaker 2 (19:10):
Yeah, markets remain heavily in positive territory. We got the
S and P five hundred. It's out ninety one point
of Rooneyes right now. That feels pretty good. After the
bludgeoning we took yesterday. We're going to take a quick
break right now. When we return, we've got the trivia answer,
We've got Wall Street Watch, and then we got a
(19:31):
bad case of Stilanthus.
Speaker 1 (19:39):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street Watch. A complete look at
what's moving market so far today right here on the
Financial Exchange Radio Network.
Speaker 5 (20:02):
Well I was seeing a strong rebound today after this
week's wildness and tech sell office investors have been concerned
about significant spending on AI. Right now, the Dow is
up one point eight percent, or eight hundred and ninety
two points higher, SMB five hundred, up nearly one and
a half percent, NASDAC also up over one and a
half percent, or three hundred.
Speaker 3 (20:23):
And fifty four points.
Speaker 5 (20:24):
Russell two thousand, up nearly three percent higher. Ten year
treasure reeled is mostly flat, trading at four point two
to one eight percent, and crewde oil up one and
a quarter percent, trading just above sixty four dollars a barrel.
Amazon stock sinking eight percent after the e commerce and
tech China now is a year sixty percent increase on
(20:46):
AI capital spending to two hundred billion dollars. Furthermore, excuse me,
Amazon Web Services revenue grew slower than its competitors Microsoft
and Alphabet. Meanwhile, jeep Makers still a reported charges of
about twenty six billion dollars as it scales back a
push into electric vehicles that stock down by twenty three percent. Elsewhere,
(21:09):
Roadblock shares rallying eleven percent now after the video game
company said revenue could grow by as much as twenty
nine percent this year, lifted by higher bookings and daily
active users and read at beat fourth quarter earnings forecasts.
The social network also offered an optimistic twenty twenty six
guidance and announced a one billion dollars share buy back program. However,
(21:32):
shares are off by about one percent. I'm Tucker Silvan
and that is Wall Street Watch. On the previous segment,
we asked you the trivia question, what is the name
of the Super Bowl where Super Bowl sixty will be
played this Sunday. It's going to be Levi Stadium. Jeff
from Bill Record Mass is our winner today, taking home
a Financial Exchange Show T shirt. Congrats to Jeff, and
(21:53):
we play trivia every day here in the Financial Exchange
See complete contest rules at Financial Exchange show dot com.
Speaker 3 (22:00):
It's pronounced Bella Rica.
Speaker 2 (22:02):
Bill Erica, bill Rica, bill Erica. Yeah, it's bill Rica.
Speaker 4 (22:07):
I love when my Midwestern family comes to visit and
talk about ald.
Speaker 2 (22:13):
Right, they're like, oh, yeah, I went from bill Erica
into Woburn and then uh hang ham, Yeah, then we
went to Borchester to Worcester and then Peabody. After that,
Let's talk a little bit more about Stilantis. So they're
taking this twenty six billion dollar charge because lo and behold,
not everyone wants to own e V's. And when we
(22:34):
talk about corporate lemming ship, this is what we're talking about,
is that all of these legacy automakers saw Tesla stocks
surging in twenty twenty one, and we're like, hey, like,
what's the secret sauce? Oh, they make EV's, we should
do that too, And they came up with these wildly
optimistic projections as to you know, how many Americans would
(22:56):
buy EV's, and as it turns out, those were all,
you know, really too aggressive. And by the way, the way,
Tesla the reason Tesla stock was up was because of
Elon Musk, not because like of the evs and so
they kind of missed the boat because Elon Musk doesn't
run any of these companies.
Speaker 4 (23:12):
By the way, I haven't talked about my new car
that we bought because my wife just started a new commute.
We bought a Ford Mustang Machi, which I'm very happy with.
Carbon copy of a Tesla.
Speaker 2 (23:21):
Yeah, it's basically the same.
Speaker 4 (23:23):
Every way shape or form. They very easily copied it.
The battery, the driving style. It is a carbon copy
of a Tesla suv in every way.
Speaker 2 (23:34):
So what we ended up with here in a span
of this five year period is these companies had to
take huge write downs and losses because this stuff ultimately
is not going to come to fruition. I say this
because when we talk about the AI space again like
it it feels similar in some respects there just in
(23:55):
terms of the scale of the build out in the
corporate lemming ship that we're seeing. But the difference there
is I do see a path to all of us
in the aggregate using way more AI in the next
ten years. Where's the evpie? So I was kind of like, okay,
like there's clearly like more demand than what was there
in twenty twenty, But is it gonna be like thirty
(24:16):
percent of all vehicles by twenty twenty eight, like they
were suggesting. No, clearly it's not. So just like when
you want evidence that CEOs tend to look at like
what's going on around them and say, oh, let's do
that because it's working. This is the classic example of it.
And now basically everyone but Toyota who stayed.
Speaker 4 (24:35):
Yeah, by the way, hats off to CEO and leadership
at Toyota for they saw resisting the trend.
Speaker 2 (24:40):
Yeah, they were like, no, we're not going to do this,
and it turned out to be the right move. So
we'll see how this ends up playing out. But right
now Apple has kind of been occupying the Toyota lane,
if you will, and saying no, like we're not going
to spend on this crazy build out and we're gonna
see you in the next few years if that's the
(25:01):
right move for them. So there's not but stillantis twenty
six billion dollars right off doesn't feel good.
Speaker 5 (25:10):
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It also shapes how your assets are treated over time.
And that's a key point from the estate planning attorneys
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(25:31):
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Speaker 1 (26:12):
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Armstrong do not endorse each other and are
not affiliated.
Speaker 2 (26:23):
Piece in the Wall Street Journal, the credit card rate
cap has stalled and issuers are doing just fine. I'm
not really sure there was really ever a great effort
from banks and credit card issuers to you know, do
anything to change credit card interest rates. There has not
been any effort from Congress to do so.
Speaker 4 (26:41):
I was going to say the effort that credit card
companies put on was lobbying the living heck out of
it was no, we're not going to do this, and
saying if you do this, it'll be a catastrophe, so
don't do it. And they appear to have won by
flushing that idea down the toilet, which is frankly where
it belonged. I don't I'm not applotting all of us,
for you know, half of America is carrying credit card balances.
I think that is bad, and I would like them
(27:04):
to pay that debt down. But there was only one
likely outcome if Congress actually passed a law incorporating a
ten percent limit on credit card interest rates, which was
a shortage in credit availability.
Speaker 3 (27:16):
So so that idea is that, and I'm sure we will.
Speaker 2 (27:21):
I did like.
Speaker 4 (27:23):
I did like Jamie Diamond's idea for this, yes, which
was okay, if you think this is such a great idea,
why don't you just go test it out in Massachusetts
and Vermont, where two lawmakers, are you know, really running
with the idea.
Speaker 3 (27:37):
Let's see how it goes there and then we can talk.
Speaker 4 (27:39):
About implementing it nationwide. Pretty tongue in cheek, smart idea there, Jamie.
Speaker 2 (27:44):
Cheaper tequila and canned cocktails were the only bright spots
for booze during a rough twenty twenty five. Spirits revenue
in the US fell to thirty six point four billion dollars,
but spirits base ready to drink canned cocktail revenue was
up sixteen four percent to three point eight billion.
Speaker 4 (28:01):
Of them in that camp, which camp buying. Pre Canned
cocktails were definitely a big spending area for the Armstrong
household in twenty twenty five. Cheaper tequila, by the way,
just the title cheaper tequila makes me think of some
of the worst hangovers in my life, so that that
doesn't really appeal to me. But the if you go walk,
(28:25):
you know, down the Spirit's aisle of Total Wine, you
will see a massive section now dedicated to pre bottled
and pre canned cocktails. That is definitely a growing segment.
But honestly, all of the I feel like all of
the trends from twenty twenty five are indicating people more
interested in their health and that has spoken to declining
(28:46):
alcohol sales across multiple segments, and same thing kind of
being mirrored in some parts of the food industry as well.
Speaker 2 (28:53):
Let's take a quick break. When we return, we are
joined by Paul Lamonica from Baron's.
Speaker 1 (28:58):
Right after this, daily interviews and full shows of the
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(29:19):
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one thirty two. This is the Financial Exchange Radio Network.
Speaker 6 (29:36):
Ladies and gentlemen, the weekend, as promised, we're now joined
by the one and only Paul Amonica from Barons.
Speaker 2 (29:56):
Here talk a little bit about legal Zoom today. Paul,
how you doing, I'm good. Thanks, how you guys doing.
We're doing well? So legal Zoom basically since ipoing has
not had a very good time, but this year it's
had a bad time as well, down about twenty one
year to date. What has happened in the first month
(30:18):
of the year that has investors concerned about Legal Zoom.
Speaker 7 (30:23):
Yeah, a big part of that selloff was really concentrated
in this week the news that Anthropic, the big AI
large language model company that's going to be potentially going
public later this year, their claud Ai tool is adding
some legal functionality into it, which begs the question of,
(30:47):
you know, do you really need a company like legal
Zoom to do mundane legal tasks like setting up a
will or other estate planning, you know, trying to incorporate
rate a business divorce for you know, sadly the half
of the marriages in America that that wind up ending
that way. You know, you could just use maybe AI
(31:10):
for that. And that's one of the reasons why the
stock has taking a big tumble. It could be an overreaction.
I spoke to the CEO today and obviously it's you know,
he's talking his own book, but you know he thinks
that Wall Street's missing the boat a little bit here
because they are actually partnering, not necessarily with Anthropic, but
with some of the other AI giants like Perplexity and
open AI. So it's not like they're ignoring AI.
Speaker 1 (31:33):
No.
Speaker 2 (31:33):
The question that I guess I have when I look
at them is it's a company with very thin margins
for exactly so some reason you know you're talking net
income was twenty two million dollars on seven hundred and
twenty seven million in revenue. It doesn't seem like there's
much wiggle room where if there's even marginal disruption, it
does seem like they could be in some trouble.
Speaker 7 (31:54):
No, without question, and I think that is one of
the reasons why the stock took such a big hit
as it did this week, and it will probably remain fragile.
I mean, you look at Wall Street, they're not overly
optimistic either. There are more hold ratings and even a
(32:14):
cell rating or two on the stock than there are
buy ratings. It's clear that you know this is a
company that AI is disrupting it maybe more for the
negative then for the positive. And as you point out,
with low margins, it might be difficult to see how
(32:36):
the stock can move significantly higher in the near.
Speaker 2 (32:38):
Tun When we look at this I know that you
mentioned Anthropic rolling out potentially some legal tools on their platform.
Is this also one where someone might be able to
build a cheaper competitor to legal Zoom using AI tools
as well, and that could be a threat to them.
Speaker 7 (32:55):
It's possible. I mean, you know, is there the equivalent
of you know, deep Seek. You know that, you know,
the Chinese tech company that disrupted the Nvidia and the
whole chip sector last year before those stocks came up.
You're roaring back. I think it's possible. I think the
bigger issue isn't necessarily that legal Zoom faces a you know,
(33:19):
pure play AI competitor, as it is that AI just
makes legal Zoom, if not obsolete, less important in a
world where people might just use Anthropic Claud or eventually
open AI chat GPT to do some of these legal
tasks that are you know, you know, less complicated. I mean,
(33:43):
you know, setting up your will isn't the same thing
as you know, a Supreme Court case. You know about
the future of tariffs.
Speaker 2 (33:52):
Fair let's take a quick breaktion, We're not going to
take a quick break. What was I saying here, Paul,
We're gonna be we got to move on. But appreciate
you joining us and have a fantastic weekend. Enjoy the
super Bowl too. I hope you're who you're pulling for.
Speaker 7 (34:07):
You're you're not gonna like my answer, I.
Speaker 2 (34:09):
Mean maybe I will.
Speaker 7 (34:11):
I'm a Giants fan, So nfcin a boom two point.
Speaker 2 (34:18):
Zero, see what it is. Okay, we'll chat next week,
as we do every week. We will indeed, all right, Paul,
appreciate you joining us today. Thanks so much for the time.
Speaker 7 (34:28):
Thank you appreciate it.
Speaker 2 (34:30):
That is paul A Monica from Baron's talking about Legal.
Speaker 4 (34:33):
Zoom super Bowl ads, which are going for about eight
million dollars per this year, are going to be healthier
than ever and follows into that same trend we're just
talking about with alcohol sales. Clearly we have seen drop
offs there, wine, beer, even spirits now seeing that impact
and I'm just kind of fascinated to see what we're
(34:56):
going to be presented with because Pepsi is apparently doing
as they always do, but they are highlighting their Pepsi
zero sugar, their Poppy brand sodas, which I kind of
forgot that they owned. But these are sure low calorie,
low sugar sodas that are out there and then they
will have a lazed potato chip ad. But I'm wondering
what they're I think didn't they do a campaign highlighting
(35:16):
that potato chips are potatoes at some point, So I'm
guessing it's something healthful.
Speaker 2 (35:21):
Which is just a horrible ad campaign. I recognize that potatoes,
but oh, they're natural, they're vegetables, they're good for you.
Like okay, like we've been down this road before.
Speaker 4 (35:33):
You will also be hearing about a company that you know,
wants you to mail in all sorts of health self
at home health testing ads, hymns and hers I think
will be out there as well, even though they're facing
lawsuits about their you know, knockoff drugs that they're throwing
out there.
Speaker 3 (35:52):
And so yeah, I you know.
Speaker 2 (35:55):
What's one thing I would never do? Mail my blood.
Speaker 3 (36:00):
I mail my blood all over the place.
Speaker 2 (36:03):
Seems awfully messy. But like again, they're talking about like
mail order blood tests for stuff. I'm not going to
mail my blood anywhere.
Speaker 4 (36:11):
So one the only part of that that would have
me concerned would be that I don't I wouldn't feel
comfortable taking my own blood, and so that part is
freaking me out. The idea of dropping in the mail.
Like I, I'm not too worried about somebody intercepting my
blood and doing something with it.
Speaker 2 (36:27):
No one makes me mail my own blood.
Speaker 3 (36:31):
No one puts.
Speaker 2 (36:33):
So I got a real problem with mailing blood. I'm
sorry if that makes me, you know, kind of a
funny duddy. But uh, that's kind of where my limit is.
I don't mail blood.
Speaker 3 (36:46):
Don't you think the doctor mails your blood?
Speaker 2 (36:49):
Well, no, this is a take home blood.
Speaker 4 (36:51):
I understand, But, like you know, is the problem mailing
your own blood?
Speaker 3 (36:55):
Or is the problem because I would imagine go to
the doctor.
Speaker 2 (36:58):
The lab is down the hall from the doctor.
Speaker 3 (37:00):
Not always.
Speaker 4 (37:01):
I'd be willing to bet there's some mail out blood
orders that are going for certain tests.
Speaker 2 (37:04):
You make sure they are not mailed at all.
Speaker 3 (37:07):
Yeah.
Speaker 2 (37:07):
I specifically picked my doctor because they don't mail blood,
not mail blood. You got a big sign on the door,
we don't mail blood.
Speaker 3 (37:15):
Really interesting line to draw.
Speaker 2 (37:18):
I don't like. Listen. When I had my appendix out
thirteen years I.
Speaker 3 (37:24):
Get the privacy stuff. I understand.
Speaker 2 (37:27):
Here's where I comes from.
Speaker 4 (37:29):
Drones near your house. The blood in the mail thing
just has me scratching my head.
Speaker 2 (37:33):
Thirteen years fourteen years ago, I had my appendix taken
out to mail it. No, but I got a I
got I got a bill from my insurance company for
like one hundred dollars. I'm like, oh, great, like this
is wonderful, like appendix out and it's only one hundred bucks.
This is this is amazing bargain.
Speaker 3 (37:47):
Do you ever play that game?
Speaker 2 (37:48):
Operation A month later, I get a check from the
insurance company for two hundred dollars, which leads me to
believe my appendix ended up somewhere. I got paid one
hundred dollars to have my appendix taken out. Something doesn't
add up here. So I've been looking for that thing
ever since.
Speaker 3 (38:08):
Let's take a.
Speaker 2 (38:11):
Yeah, it's an antique. Let's take a no joke the
doctor when he takes it out, he's talking to me
after your appendix not very impressive. We're done for the weekend.
Have a great weekend, enjoy the super Bowl. We'll see
you Monday.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
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(00:20):
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a donation today. This is the Financial Exchange with Chuck
(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker with you here. We've got a
broad based rally taking place in markets, reversing much of
or all of yesterday's losses. In some cases. The S
and P five hundreds up ninety points, back above sixty
eight hundred, closing in on sixty nine hundred, about a
one point three percent move up. Today. Dow Jones Industrial
(01:32):
average is up eight hundred and eighty two points about
one point eight percent, and the Nasdaq composite of two
hundred and eighty five points about one and a quarter percent.
So tech still kind of the laggard out there, even
with some big names making big moves.
Speaker 3 (01:47):
To the upside.
Speaker 2 (01:49):
Tenure Treasury is up six tenths of a basis point
to four point two to one six percent, so not
much movement there. Dollar Index is down point two two
two percent to ninety seven forty nine, and we've got
gold up seventy six eighty ounce to forty nine sixty
six and thirty cents. Crude oil up another seventy six
(02:10):
cents a barrel to sixty four to oh five triple a.
National avatur gas prices up another nine tenths of a
cent overnight to two ninety even now about eight and
a half cents over the last months, so about a
three percent move up in gas prices since the start
of the year, and that is what we are seeing
moving in markets. Another big mover this morning, Amazon released
(02:33):
earnings after the bell yesterday. Basically, the earnings were fine,
their guidance was very heavy on capex, and much like
we've seen from other tech companies this week, Street didn't
love that, and so Amazon stocked down about eight percent
pre market, and despite that, most other tech companies chugging
along today, and so that's why you've got this relief
(02:54):
rally that's taking place after a sell off that has
uh few days here and again, we'll see where things
end up going. I don't know if you know, we're
all done with this or if we're you know, loading
up for that next leg down, But we'll see how
things go as we continue to get more economic data
(03:16):
that comes in next week, as we're gonna have a
jobs report, we're gonna have a CPI, so pretty full
week with both of those in the same week. Normally
that doesn't happen, but with the government shutdown for a
couple of days. This is what we ended up with here.
Speaker 4 (03:28):
By the way, that Amazon stock, as you mentioned, they
got beat up last year around the tariff releases back
in April, made up all those losses, but the stock
is still down about fourteen percent over the last twelve months,
which again speaks to the renewed questions and challenges to
anybody operating in this AI build that space peace.
Speaker 2 (03:50):
In Wall Street Journal, small companies still handing out raises.
The National Federation of Independent Businesses said that in January,
seasonally adjusted net thirty two percent reported raising compensation, up
one point from December. And again, I just don't know
like what the long term trend of this is, but
(04:12):
it's clear to me that at this point the labor
market has been weakening for a decent chunk of time,
probably the last three years now, yep. And there are
some signs in January that maybe we're starting to see
things bottoming out in the labor market, but I'm not
confident that I can say that yet, and we need
a couple more months of data to be able to
(04:34):
indicate that for sure.
Speaker 4 (04:35):
Yeah, the weakening that we're talking about has come almost
entirely from the pace of hiring rather than the pace
of firing the job cutting rates that we got, for instance,
from the Joltz report on yesterday Wednesday, yes yesterday, because
of the delay, it indicated that, I mean, the firing's
rate is still very consistently low. The filings for unemployment,
(04:58):
while they did jump this week, they didn't jump to
all that concerning of a level. And so the data
on the labor market seems to indicate that, yeah, the
weakness that we're seeing is mainly just new entrants to
the labor force finding a job or people that lost
a job finding a new one, rather than mass layoffs
affecting all sorts firms. In spite of headlines like whaty
(05:20):
got from Challenger Gray and Christmas yesterday, which most experts
discount heavily in terms of any sort of indication for
the future of the labor market.
Speaker 2 (05:28):
So I think next week's jobs report does take on
you're kind of a heightened importance. Then again, just because
is this something that's going to confirm some of the
other surrounding data that is indicating maybe the labor markets
starting to you know, bottom out and improve, or does
it come out and say no, actually, things are continuing
(05:51):
to worsen there. The expectations are for between forty and
seventy thousand jobs created, unemployment rates staying between four four
and four five gily, earnings zero point three percent, and
you know those are kind of the big ones that
we'll be looking at. And that report, by the way,
against on Wednesday because of the government shutdown, and then
(06:11):
on Friday we get CPI, so it's by the way,
next next week is great for economic data every day,
but Monday there's something interesting. Tuesday, we've got retail sales
for December. Wednesday, jobs report for January, Thursday, existing home
sales for January, Friday, CPI. It's a fun little run
(06:34):
that you've got there on the earning side of things.
When we take a look at what is in the pipeline.
We're through the big tech guys this week, so there's
not much excitement on that front. But you got Coca
Cola next week. You got robin Hood CVS Marriot, so
you know there's some interesting stuff that you can glean
from them. You've got McDonald's next week, which again we've
(06:57):
talked about now how McDonald's brings in less revenue than
uber which is just shocking. But that's the world that
we live in.
Speaker 4 (07:05):
A company that makes the food brings in less revenue
than the company that delivers it to your home.
Speaker 2 (07:10):
It's kind of the experience, right, Mike. I've said this
for a long long time. Laziness is the mother of invention.
You gotta embrace the laziness, not as you know, a person,
not as not as a lifestyle, but as a view
as to you know how, there's the thing in physics,
(07:31):
all things ten towards entropy. Sure, all things ten towards laziness.
That that's that's where we're actually, you know going. It's
we're gonna be those guys from Wally sitting in the
chairs while the food gets delivered to us, while the
show's beamed into our eyes.
Speaker 3 (07:47):
Do you like that vision? You know?
Speaker 2 (07:48):
It's it's it's where we're going.
Speaker 3 (07:50):
I could use an extra forty or fifty pounds, you could.
Speaker 2 (07:53):
You've been looking at a little scrawny these days.
Speaker 3 (07:55):
Man.
Speaker 2 (07:55):
You gotta you gotta beef up by it's the winter.
You gotta stay warm. In any case, this is what
we have on deck here. Let's take a quick break
when we come back. Why are new cars so expensive
right now? We'll discuss that. We've also got trivia right
after this.
Speaker 1 (08:10):
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Time for trivia here in the Financial Exchange and of course,
on Sunday night, the Patriots will play the Seahawks at
Santa Clara for Super Bowl sixty. This will be the
second time the Super Bowl has taken place in Santa Clara.
(09:33):
The first was Super Bowl fifty. So our trivia question today,
what is the name of the stadium where super Bowl
sixty will be played? Once again? What is the name
of the stadium where super Bowl sixty will be played?
Be the seventh person today to text us at six
one seven three six two thirteen eighty five with the
correct answer along with the keyword trivia and win a
(09:56):
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six two thirteen eighty five with the correct answer along
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complete contest rules at Financial Exchange show dot com.
Speaker 2 (10:12):
Piece in Bloomberg it's titled very simply, why are new
cars so expensive in the US? Now? And I'll quote
a couple things here. The average figure broke fifty thousand
dollars for the first time last September hit fifty three
hundred and twenty six dollars in December according to the
Kelly Bluebook car Buying Guide. Researcher Edmunds dot com calculates
(10:36):
that the average has risen sixty one percent since twenty ten.
So sixty one percent in fifteen years is about a
three and a half percent annual price increase if you're
compounding it there, which is again high, but a lot
of that was concentrated in a couple of years, and
I'm guessing if you stripped out twenty one and twenty two,
you're probably looking at like two and a half percent
(10:57):
annual price inflation, which is not crazy.
Speaker 4 (11:00):
But does run in contrast to other I'm just thinking about,
like other products that we use on a daily basis,
to think about what's happened with televisions and all the
stuff that's manufactured in China. It's gotten substantially cheaper over
the same timeframe, and so this one does stand out
in people's minds, both given the price point and the
pace of inflation.
Speaker 2 (11:17):
So the question is why are new cars so expensive
all of us? And the example is the answer is
because we want them to be so.
Speaker 4 (11:25):
In twenty ten, according to JD Power forty seven percent
of vehicle sales were cars in twenty twenty one, which
is the most reason data Jdpower had data on it
was twenty one and a half percent.
Speaker 2 (11:39):
We're cars, you're saying, cars versus trucks and service.
Speaker 4 (11:42):
So we have gone from a market where yeah, half
of vehicle sales in fifteen years ago were trucks and SUVs.
Now something like eighty percent of them are trucks or SUVs.
Speaker 3 (11:54):
So guess what. Those are more expensive? Guess what.
Speaker 4 (11:56):
It's what Americans want to drive. They also are buying
more in the way of electric vehicles, which tend to
run a higher price point, arguably lower maintenance cost depending
on who you ask. And there you have it. Cars
are way more expensive because of our buying habits. We
want bigger, more expensive cars, full stop. And by the way,
if you want those, the banking and finance industry will
(12:19):
absolutely find ways for you to be able to buy
them and come up with different maneuvers in the finance
sector to be able to make it so that you can.
I don't think they make them affordable, but so that
you can actually make the monthly payment on a regular basis.
Speaker 2 (12:36):
Because look, here's what the car companies have figured out.
People want to pay for nice stuff in their cars.
That's the deal. I'm on Toyota's website right now, and
I use them as the example just because they're one
of the few car companies that still actually makes cars,
not just SUVs. Remember four doesn't make them anymore. GM
(12:58):
doesn't make them anymore.
Speaker 4 (13:00):
You know, Jim make some cars, don't they? I don't
think so I'll get back to you on that.
Speaker 2 (13:05):
You can take a look. Maybe there's still like one
model that they have, not not many in any case.
So let's say that you wanted to buy an suv
and you're on the Toyota website, which I'm on right now.
There are plenty of options that you can buy for
under fifty thousand dollars, even in the suv you know area,
even if you're talking big SUVs. Toyota's Grand Highlander, which
(13:26):
is like almost two hundred inches long, it's a three
row suv that's you know, pretty significant, starts at forty
one and sixty dollars. That's MSRP. So I'm sure that
you can probably go you know, a couple grand under that.
When you're finally negotiating the thing. But does anyone buy
you know, the base model with you know, the cloth seat. No,
(13:48):
it's oh I gotta have the limited edition and that
well it's got a panoramic moon roof. Okay, yeah it
it really bright up the cabin. Okay. And and the
first you know, eighty years of cars that didn't have that.
That was a problem that Like, when I'm driving, I'm
(14:11):
looking forward, man, I don't care how light the cabin
is behind me, And I'm sure my passengers are just
fine not being able to look up and be like, oh,
look there's a cloud that looks like Mickey, like nice
is reflecting off your skin? So nice. It's easy, it's
so wonderful. So like I just I'm sorry. The reason
why cars are so expensive is because we want them
(14:34):
to be.
Speaker 4 (14:35):
By the way, GM's only sedans that they still make
are under the Cadillac brand.
Speaker 2 (14:39):
If you want to get a cheap SUV from Toyota, okay,
there you go too, right, No suv anyans? Okay, If
you want to get a cheap suv, you can do again.
I just gave you like a Grand Highlanders, a big
old truck. Thing is not small. You can get one
for forty one thousand dollars. Do people know they spend
sixty thousand on them. If you want to cheap little one,
(15:00):
you can get yourself a nice little base level rav
four for about thirty grand. Does anyone No, They gear
it up and it's cost you them forty two thousand
dollars in order to do it. And ultimately, look, everyone
has stuff that they spend on that's not in their
best financial interest. I do too. The problem is that
(15:22):
when we see people buying these cars and then can't
afford to buy them and default on them, it makes
me hurt because it's entirely an avoidable proposition because they're
always cheaper cars available. We're just talking new ones. If
you want to buy a used one, you can get
all kinds of cheaper stuff. But the people who buy
(15:43):
new cars are generally wealthy. They want to spend the
money on it, and they're comfortable doing it, even if
it may result in them eventually defaulting on those loans.
Speaker 4 (15:54):
By the way, Bloomberg's piece here they call out like
everything other than what we just talked about. The last
item on their lift is list is bigger featured loaded vehicles,
which I think is the majority of the increase. They
talk about the EV bump, the tarif effects, the pandemic effects, Like,
that's not what drove nice is up by sixty percent
over fifteen years.
Speaker 3 (16:11):
No.
Speaker 4 (16:12):
Yeah, they went and got more expensive during COVID, but
so did everything else. The reason that cars are having
an outsized and larger than average inflation effect is because
of buying habits. And if you want to buy cheap cars,
you can still go and buy a Jetta, you can
still go and buy a Civic, you can still go
buy a Corolla.
Speaker 3 (16:32):
But that's not really what we tend to buy.
Speaker 2 (16:35):
No, again, there are plenty of vehicles in the twenty
five to thirty five thousand dollars price range that you
can buy new. We decide not to, And look, that's fine,
but if you buy that expensive vehicle, Like, if you
buy the car for seventy thousand dollars, please don't tell
(16:56):
me you're making seventy thousand dollars a year. I was
gonna go, you can't complain about the payment. Yeah, that's
a you problem then, because no one made you buy
that vehicle. You know, it's one thing. Hey, if you're
trying to live in an expensive area and the rent
is too high because of you know, blah blah blah,
and this is where your job is. I get it,
(17:18):
Like you're not, like there's only so many places that
you can live. We've talked about this. Sure, if you're
trying to buy a vehicle, there's always a cheaper option.
You can't complain about the payment.
Speaker 4 (17:30):
Yeah, that is a pretty important distinction. Like, you know,
the argument of rent is too high, Like what are
you gonna do move away from your family and not
live in the area anymore. Like that is a genuine
issue that I think people should complain about.
Speaker 3 (17:43):
The I mean they.
Speaker 4 (17:46):
Should complain about that they can complain about without me
getting too frustrated. I think that the proposals that they
will throw out there to solve the housing problem is
a different story. But if you want to make cars
less expensive, it's super easy.
Speaker 2 (18:00):
Right, go on to Carvon or car max or whatever.
Search for cars under fifteen thousand dollars and you will
be able to buy something. Now you might be like, oh,
well that doesn't fit my needs, then don't complain to
me about the price.
Speaker 4 (18:15):
By the way, I love that every single year I
keep getting more and more confirmation that people are back
into minivans. I feel like I've been touting this thing
for ten years now, and minivan sales through the roof.
I'm like twenty percent or something this year. It's wild.
Speaker 2 (18:33):
It's because they're fantastic vehicles.
Speaker 4 (18:34):
Actually, they're top notch. They don't look great, No, they
look very silly, but who cares? But so do I
not trying to look cool, you know. Get like again,
I drive a super Uo out back. It's not the
coolest looking car. I'm a big loser, but you know
why I like it because it's not as expensive as
these other ones and it gets me around New England
in the winter.
Speaker 2 (18:55):
That's fine, It's fine with me.
Speaker 4 (18:58):
Yeah, Minivan sales up percent in twenty twenty five, three
hundred ninety five thousand of these things.
Speaker 3 (19:03):
Now, it's a huge increase.
Speaker 2 (19:05):
If you'll like the expensive carna'sy thing, that's totally fine.
But don't complain about the payment.
Speaker 3 (19:10):
Agreed.
Speaker 2 (19:10):
Yeah, markets remain heavily in positive territory. We got the
S and P five hundred. It's out ninety one point
of Rooneyes right now. That feels pretty good. After the
bludgeoning we took yesterday. We're going to take a quick
break right now. When we return, we've got the trivia answer,
We've got Wall Street Watch, and then we got a
(19:31):
bad case of Stilanthus.
Speaker 1 (19:39):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street Watch. A complete look at
what's moving market so far today right here on the
Financial Exchange Radio Network.
Speaker 5 (20:02):
Well I was seeing a strong rebound today after this
week's wildness and tech sell office investors have been concerned
about significant spending on AI. Right now, the Dow is
up one point eight percent, or eight hundred and ninety
two points higher, SMB five hundred, up nearly one and
a half percent, NASDAC also up over one and a
half percent, or three hundred.
Speaker 3 (20:23):
And fifty four points.
Speaker 5 (20:24):
Russell two thousand, up nearly three percent higher. Ten year
treasure reeled is mostly flat, trading at four point two
to one eight percent, and crewde oil up one and
a quarter percent, trading just above sixty four dollars a barrel.
Amazon stock sinking eight percent after the e commerce and
tech China now is a year sixty percent increase on
(20:46):
AI capital spending to two hundred billion dollars. Furthermore, excuse me,
Amazon Web Services revenue grew slower than its competitors Microsoft
and Alphabet. Meanwhile, jeep Makers still a reported charges of
about twenty six billion dollars as it scales back a
push into electric vehicles that stock down by twenty three percent. Elsewhere,
(21:09):
Roadblock shares rallying eleven percent now after the video game
company said revenue could grow by as much as twenty
nine percent this year, lifted by higher bookings and daily
active users and read at beat fourth quarter earnings forecasts.
The social network also offered an optimistic twenty twenty six
guidance and announced a one billion dollars share buy back program. However,
(21:32):
shares are off by about one percent. I'm Tucker Silvan
and that is Wall Street Watch. On the previous segment,
we asked you the trivia question, what is the name
of the Super Bowl where Super Bowl sixty will be
played this Sunday. It's going to be Levi Stadium. Jeff
from Bill Record Mass is our winner today, taking home
a Financial Exchange Show T shirt. Congrats to Jeff, and
(21:53):
we play trivia every day here in the Financial Exchange
See complete contest rules at Financial Exchange show dot com.
Speaker 3 (22:00):
It's pronounced Bella Rica.
Speaker 2 (22:02):
Bill Erica, bill Rica, bill Erica. Yeah, it's bill Rica.
Speaker 4 (22:07):
I love when my Midwestern family comes to visit and
talk about ald.
Speaker 2 (22:13):
Right, they're like, oh, yeah, I went from bill Erica
into Woburn and then uh hang ham, Yeah, then we
went to Borchester to Worcester and then Peabody. After that,
Let's talk a little bit more about Stilantis. So they're
taking this twenty six billion dollar charge because lo and behold,
not everyone wants to own e V's. And when we
(22:34):
talk about corporate lemming ship, this is what we're talking about,
is that all of these legacy automakers saw Tesla stocks
surging in twenty twenty one, and we're like, hey, like,
what's the secret sauce? Oh, they make EV's, we should
do that too, And they came up with these wildly
optimistic projections as to you know, how many Americans would
(22:56):
buy EV's, and as it turns out, those were all,
you know, really too aggressive. And by the way, the way,
Tesla the reason Tesla stock was up was because of
Elon Musk, not because like of the evs and so
they kind of missed the boat because Elon Musk doesn't
run any of these companies.
Speaker 4 (23:12):
By the way, I haven't talked about my new car
that we bought because my wife just started a new commute.
We bought a Ford Mustang Machi, which I'm very happy with.
Carbon copy of a Tesla.
Speaker 2 (23:21):
Yeah, it's basically the same.
Speaker 4 (23:23):
Every way shape or form. They very easily copied it.
The battery, the driving style. It is a carbon copy
of a Tesla suv in every way.
Speaker 2 (23:34):
So what we ended up with here in a span
of this five year period is these companies had to
take huge write downs and losses because this stuff ultimately
is not going to come to fruition. I say this
because when we talk about the AI space again like
it it feels similar in some respects there just in
(23:55):
terms of the scale of the build out in the
corporate lemming ship that we're seeing. But the difference there
is I do see a path to all of us
in the aggregate using way more AI in the next
ten years. Where's the evpie? So I was kind of like, okay,
like there's clearly like more demand than what was there
in twenty twenty, But is it gonna be like thirty
(24:16):
percent of all vehicles by twenty twenty eight, like they
were suggesting. No, clearly it's not. So just like when
you want evidence that CEOs tend to look at like
what's going on around them and say, oh, let's do
that because it's working. This is the classic example of it.
And now basically everyone but Toyota who stayed.
Speaker 4 (24:35):
Yeah, by the way, hats off to CEO and leadership
at Toyota for they saw resisting the trend.
Speaker 2 (24:40):
Yeah, they were like, no, we're not going to do this,
and it turned out to be the right move. So
we'll see how this ends up playing out. But right
now Apple has kind of been occupying the Toyota lane,
if you will, and saying no, like we're not going
to spend on this crazy build out and we're gonna
see you in the next few years if that's the
(25:01):
right move for them. So there's not but stillantis twenty
six billion dollars right off doesn't feel good.
Speaker 5 (25:10):
Estate planning is about more than just deciding who inherits what.
It also shapes how your assets are treated over time.
And that's a key point from the estate planning attorneys
at Cushing and Dolan. Without a clear plan and a
state can't face significant tax exposure as well as long
term care costs that can put pressure on your savings.
(25:31):
Trust often play an important role in your overall plan
because they can help address tax concerns and long term
care planning while still allowing you to retain control during
your lifetime. Cushing and Dolan have put together a guide
called back to the Basics, a complete guide to an
estate in Asset protection plan. It walks through how these
(25:54):
planning pieces fit together and what to consider as you
prepare for the years ahead. To get your cop call
eight sixty six eight four eight five six nine nine.
That's eight sixty six eight four eight five six nine nine,
or you can request it from their website legal exchange
show dot com.
Speaker 1 (26:12):
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Armstrong do not endorse each other and are
not affiliated.
Speaker 2 (26:23):
Piece in the Wall Street Journal, the credit card rate
cap has stalled and issuers are doing just fine. I'm
not really sure there was really ever a great effort
from banks and credit card issuers to you know, do
anything to change credit card interest rates. There has not
been any effort from Congress to do so.
Speaker 4 (26:41):
I was going to say the effort that credit card
companies put on was lobbying the living heck out of
it was no, we're not going to do this, and
saying if you do this, it'll be a catastrophe, so
don't do it. And they appear to have won by
flushing that idea down the toilet, which is frankly where
it belonged. I don't I'm not applotting all of us,
for you know, half of America is carrying credit card balances.
I think that is bad, and I would like them
(27:04):
to pay that debt down. But there was only one
likely outcome if Congress actually passed a law incorporating a
ten percent limit on credit card interest rates, which was
a shortage in credit availability.
Speaker 3 (27:16):
So so that idea is that, and I'm sure we will.
Speaker 2 (27:21):
I did like.
Speaker 4 (27:23):
I did like Jamie Diamond's idea for this, yes, which
was okay, if you think this is such a great idea,
why don't you just go test it out in Massachusetts
and Vermont, where two lawmakers, are you know, really running
with the idea.
Speaker 3 (27:37):
Let's see how it goes there and then we can talk.
Speaker 4 (27:39):
About implementing it nationwide. Pretty tongue in cheek, smart idea there, Jamie.
Speaker 2 (27:44):
Cheaper tequila and canned cocktails were the only bright spots
for booze during a rough twenty twenty five. Spirits revenue
in the US fell to thirty six point four billion dollars,
but spirits base ready to drink canned cocktail revenue was
up sixteen four percent to three point eight billion.
Speaker 4 (28:01):
Of them in that camp, which camp buying. Pre Canned
cocktails were definitely a big spending area for the Armstrong
household in twenty twenty five. Cheaper tequila, by the way,
just the title cheaper tequila makes me think of some
of the worst hangovers in my life, so that that
doesn't really appeal to me. But the if you go walk,
(28:25):
you know, down the Spirit's aisle of Total Wine, you
will see a massive section now dedicated to pre bottled
and pre canned cocktails. That is definitely a growing segment.
But honestly, all of the I feel like all of
the trends from twenty twenty five are indicating people more
interested in their health and that has spoken to declining
(28:46):
alcohol sales across multiple segments, and same thing kind of
being mirrored in some parts of the food industry as well.
Speaker 2 (28:53):
Let's take a quick break. When we return, we are
joined by Paul Lamonica from Baron's.
Speaker 1 (28:58):
Right after this, daily interviews and full shows of the
Financial Exchange on our YouTube page. Like us on YouTube
and get caught up on anything and everything you might
have missed. This is the Financial Exchange Radio Network. The
Financial Exchange is life on Series XM's Business Radio Channel
one thirty two weekdays from eleven to noon. Get the
(29:19):
latest business and financial news from across the country and
around the world, and keep up to date on how
it might affect your wallet. That's the Financial Exchange weekdays
from eleven to noon on Series XM's Business Radio Channel
one thirty two. This is the Financial Exchange Radio Network.
Speaker 6 (29:36):
Ladies and gentlemen, the weekend, as promised, we're now joined
by the one and only Paul Amonica from Barons.
Speaker 2 (29:56):
Here talk a little bit about legal Zoom today. Paul,
how you doing, I'm good. Thanks, how you guys doing.
We're doing well? So legal Zoom basically since ipoing has
not had a very good time, but this year it's
had a bad time as well, down about twenty one
year to date. What has happened in the first month
(30:18):
of the year that has investors concerned about Legal Zoom.
Speaker 7 (30:23):
Yeah, a big part of that selloff was really concentrated
in this week the news that Anthropic, the big AI
large language model company that's going to be potentially going
public later this year, their claud Ai tool is adding
some legal functionality into it, which begs the question of,
(30:47):
you know, do you really need a company like legal
Zoom to do mundane legal tasks like setting up a
will or other estate planning, you know, trying to incorporate
rate a business divorce for you know, sadly the half
of the marriages in America that that wind up ending
that way. You know, you could just use maybe AI
(31:10):
for that. And that's one of the reasons why the
stock has taking a big tumble. It could be an overreaction.
I spoke to the CEO today and obviously it's you know,
he's talking his own book, but you know he thinks
that Wall Street's missing the boat a little bit here
because they are actually partnering, not necessarily with Anthropic, but
with some of the other AI giants like Perplexity and
open AI. So it's not like they're ignoring AI.
Speaker 1 (31:33):
No.
Speaker 2 (31:33):
The question that I guess I have when I look
at them is it's a company with very thin margins
for exactly so some reason you know you're talking net
income was twenty two million dollars on seven hundred and
twenty seven million in revenue. It doesn't seem like there's
much wiggle room where if there's even marginal disruption, it
does seem like they could be in some trouble.
Speaker 7 (31:54):
No, without question, and I think that is one of
the reasons why the stock took such a big hit
as it did this week, and it will probably remain fragile.
I mean, you look at Wall Street, they're not overly
optimistic either. There are more hold ratings and even a
(32:14):
cell rating or two on the stock than there are
buy ratings. It's clear that you know this is a
company that AI is disrupting it maybe more for the
negative then for the positive. And as you point out,
with low margins, it might be difficult to see how
(32:36):
the stock can move significantly higher in the near.
Speaker 2 (32:38):
Tun When we look at this I know that you
mentioned Anthropic rolling out potentially some legal tools on their platform.
Is this also one where someone might be able to
build a cheaper competitor to legal Zoom using AI tools
as well, and that could be a threat to them.
Speaker 7 (32:55):
It's possible. I mean, you know, is there the equivalent
of you know, deep Seek. You know that, you know,
the Chinese tech company that disrupted the Nvidia and the
whole chip sector last year before those stocks came up.
You're roaring back. I think it's possible. I think the
bigger issue isn't necessarily that legal Zoom faces a you know,
(33:19):
pure play AI competitor, as it is that AI just
makes legal Zoom, if not obsolete, less important in a
world where people might just use Anthropic Claud or eventually
open AI chat GPT to do some of these legal
tasks that are you know, you know, less complicated. I mean,
(33:43):
you know, setting up your will isn't the same thing
as you know, a Supreme Court case. You know about
the future of tariffs.
Speaker 2 (33:52):
Fair let's take a quick breaktion, We're not going to
take a quick break. What was I saying here, Paul,
We're gonna be we got to move on. But appreciate
you joining us and have a fantastic weekend. Enjoy the
super Bowl too. I hope you're who you're pulling for.
Speaker 7 (34:07):
You're you're not gonna like my answer, I.
Speaker 2 (34:09):
Mean maybe I will.
Speaker 7 (34:11):
I'm a Giants fan, So nfcin a boom two point.
Speaker 2 (34:18):
Zero, see what it is. Okay, we'll chat next week,
as we do every week. We will indeed, all right, Paul,
appreciate you joining us today. Thanks so much for the time.
Speaker 7 (34:28):
Thank you appreciate it.
Speaker 2 (34:30):
That is paul A Monica from Baron's talking about Legal.
Speaker 4 (34:33):
Zoom super Bowl ads, which are going for about eight
million dollars per this year, are going to be healthier
than ever and follows into that same trend we're just
talking about with alcohol sales. Clearly we have seen drop
offs there, wine, beer, even spirits now seeing that impact
and I'm just kind of fascinated to see what we're
(34:56):
going to be presented with because Pepsi is apparently doing
as they always do, but they are highlighting their Pepsi
zero sugar, their Poppy brand sodas, which I kind of
forgot that they owned. But these are sure low calorie,
low sugar sodas that are out there and then they
will have a lazed potato chip ad. But I'm wondering
what they're I think didn't they do a campaign highlighting
(35:16):
that potato chips are potatoes at some point, So I'm
guessing it's something healthful.
Speaker 2 (35:21):
Which is just a horrible ad campaign. I recognize that potatoes,
but oh, they're natural, they're vegetables, they're good for you.
Like okay, like we've been down this road before.
Speaker 4 (35:33):
You will also be hearing about a company that you know,
wants you to mail in all sorts of health self
at home health testing ads, hymns and hers I think
will be out there as well, even though they're facing
lawsuits about their you know, knockoff drugs that they're throwing
out there.
Speaker 3 (35:52):
And so yeah, I you know.
Speaker 2 (35:55):
What's one thing I would never do? Mail my blood.
Speaker 3 (36:00):
I mail my blood all over the place.
Speaker 2 (36:03):
Seems awfully messy. But like again, they're talking about like
mail order blood tests for stuff. I'm not going to
mail my blood anywhere.
Speaker 4 (36:11):
So one the only part of that that would have
me concerned would be that I don't I wouldn't feel
comfortable taking my own blood, and so that part is
freaking me out. The idea of dropping in the mail.
Like I, I'm not too worried about somebody intercepting my
blood and doing something with it.
Speaker 2 (36:27):
No one makes me mail my own blood.
Speaker 3 (36:31):
No one puts.
Speaker 2 (36:33):
So I got a real problem with mailing blood. I'm
sorry if that makes me, you know, kind of a
funny duddy. But uh, that's kind of where my limit is.
I don't mail blood.
Speaker 3 (36:46):
Don't you think the doctor mails your blood?
Speaker 2 (36:49):
Well, no, this is a take home blood.
Speaker 4 (36:51):
I understand, But, like you know, is the problem mailing
your own blood?
Speaker 3 (36:55):
Or is the problem because I would imagine go to
the doctor.
Speaker 2 (36:58):
The lab is down the hall from the doctor.
Speaker 3 (37:00):
Not always.
Speaker 4 (37:01):
I'd be willing to bet there's some mail out blood
orders that are going for certain tests.
Speaker 2 (37:04):
You make sure they are not mailed at all.
Speaker 3 (37:07):
Yeah.
Speaker 2 (37:07):
I specifically picked my doctor because they don't mail blood,
not mail blood. You got a big sign on the door,
we don't mail blood.
Speaker 3 (37:15):
Really interesting line to draw.
Speaker 2 (37:18):
I don't like. Listen. When I had my appendix out
thirteen years I.
Speaker 3 (37:24):
Get the privacy stuff. I understand.
Speaker 2 (37:27):
Here's where I comes from.
Speaker 4 (37:29):
Drones near your house. The blood in the mail thing
just has me scratching my head.
Speaker 2 (37:33):
Thirteen years fourteen years ago, I had my appendix taken
out to mail it. No, but I got a I
got I got a bill from my insurance company for
like one hundred dollars. I'm like, oh, great, like this
is wonderful, like appendix out and it's only one hundred bucks.
This is this is amazing bargain.
Speaker 3 (37:47):
Do you ever play that game?
Speaker 2 (37:48):
Operation A month later, I get a check from the
insurance company for two hundred dollars, which leads me to
believe my appendix ended up somewhere. I got paid one
hundred dollars to have my appendix taken out. Something doesn't
add up here. So I've been looking for that thing
ever since.
Speaker 3 (38:08):
Let's take a.
Speaker 2 (38:11):
Yeah, it's an antique. Let's take a no joke the
doctor when he takes it out, he's talking to me
after your appendix not very impressive. We're done for the weekend.
Have a great weekend, enjoy the super Bowl. We'll see
you Monday.
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