March 21, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss the fire that shutdown Heathrow Airport. FedEx isn't delivering big profits. Nikes comeback gets a brutal reality check. Micron's shares tumble amid concerns of pricing problems. Are retail investors being set up to hold the bag again? Single retirees face new challenges. Apple Intelligence isn't ready for prime time.
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Episode Transcript
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Speaker 1 (00:00):
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(00:20):
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(00:43):
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donation today. This is the Financial Exchange with Chuck Zada
(01:06):
and Mike Armstrong.
Speaker 2 (01:12):
Chuck, Mike and Tucker with you here as we try
to finish out the week. Well, we're gonna finish out
the week, I mean, god willing.
Speaker 3 (01:20):
Yeah, we don't really have to try that hard.
Speaker 2 (01:22):
Yeah, it's it's not really up to us whether or
not we finish out the week, just.
Speaker 4 (01:25):
A question of whether or not we can put on
a good show and figure finish up the week. The
question the show is gonna be okay today, not great,
not awful, and you're aiming for mediocre.
Speaker 2 (01:35):
It's it's gonna be middle of the road.
Speaker 4 (01:36):
You know.
Speaker 2 (01:37):
I see where we're at and everything, and it's it's
gonna be fine. So stick around, like you won't be disappointed,
but you're not going to walk out being like, Wow,
best thing I've ever seen. So I know you gotta
be honest with the people. Mike, you know some days,
Pedro Martinez one of my favorite quotes from me. You know,
you used to talk about being a pitcher in Major
League Baseball and say, look, you get thirty times a
(01:59):
year that you're gonna be on the bump, you know,
ready to go, And he said, twenty of those you're
gonna be just fine. You'll have your stuff and you'll
be Okay. Five of them, something's gonna click and you're
gonna be like, potentially ready to throw a no hitter,
and five of them you're gonna have nothing, and you
gotta figure out how to get through. This is one
of those twenty games where it's gonna be fine, you're
(02:21):
gonna be entertained byas, but it's not gonna be the
best show we ever did see.
Speaker 4 (02:24):
I would argue that this is gonna be the single
best show about airport fires that we've ever done.
Speaker 2 (02:32):
It's true because London Heathrow is closed today, not like
just hey, you know, things are operating at reduced capacity.
They have told people do not show up before eleven
fifty nine pm tonight because we are not open.
Speaker 3 (02:48):
No big deal.
Speaker 4 (02:48):
It's only the busiest airport in Europe. Not a big
deal at all, fourth busiest in the world.
Speaker 2 (02:53):
Yes, it's it is just a major, major hub for
any kind of international travel. And so you're gonna have
thirteen hundred flights either canceled or rerouted today. And the
big thing is, look, this is predominantly going to affect
European airlines. Sure, obviously you have, you know, US airlines
that fly over there as well, but the number of
(03:14):
flights is a fraction of what you know they're flying
domestically in the US, and a fraction of that total
thirteen hundred flights that are being affected there. Look, British
Airways alone is responsible for six hundred and seventy seven
of the flights that are canceled, so half of them
are just from one airline. And basically what's happened we
don't know all the details yet, but there is a
(03:36):
power substation nearby that apparently had some kind of catastrophic fire.
We don't know any details about how, why, or you
know exactly what happened, but basically it was bad enough
that even the backup generators for the airport, I don't
know if they were damaged because they're in a similar location,
which would seem to be a bad spot for a
backup generator. You probably don't want to put it right
(03:58):
next to your primary power. But the counter to that
on one level is, hey, all of the wiring is
already there, so you don't have to truly duplicate it.
But you know, generally you want your backups to be
somewhere else, but I don't know where they are. And
so the airport has been without power for the better
part of several hours now and they're saying, you know,
(04:18):
they're hoping to resolve it before the end of the day.
But the thing about airports, from what I gather, you
don't just walk up to the side of the airport,
push the reset button and have everything come back on
exactly as it was. And this is before you even
get into Gee there's you know, again, if you get
thirteen hundred flights being canceled, probably somewhere in the ballpark
(04:41):
of one hundred and fifty to one hundred and eighty
thousand people that are going to be disrupted as a
result of it, and the chaos that ensues where mostly
British airways is like how do we get your rebooked
or how do we compensate you for whatever has happened?
And so you've got some stuff to work through, some stuff.
Speaker 3 (04:59):
Yeah.
Speaker 4 (04:59):
So so that's what's going on in London right now.
And if you are planning to fly to Europe you
might already be delayed.
Speaker 2 (05:06):
Yes, so there's that. After the bell yesterday we had
FedEx report their earnings and for the fiscal year, they
are guiding lower in a range of eighteen to eighteen
sixty a share, below the eighteen ninety five average analyst estimate.
They also think that revenue might be slightly down versus
the prior year as well. This goes against previous guidance
(05:29):
that thought sales would be flat. As a result, the
shares opened down around ten percent in trading today, and
at one point I saw that they had fallen yeah,
about twelve percent, So, you know, just pretty choppy for FedEx.
And in terms of trying to you know, figure out,
(05:51):
you know, where the weakness is, they are saying it
is predominantly their industrial customers that are showing weakness right now.
And this gets it one of the things we talked about,
which is, hey, if you're not sure about where your
business is going to be going, you may pull back
on some projects and spending and things like that. And certainly,
(06:12):
look if you're talking about like shipping stuff. You know, again,
I know that a lot of times we think of
FedEx is just delivering Amazon packages, but they.
Speaker 3 (06:19):
Do a lot more believe than that.
Speaker 2 (06:21):
Yeah, they do some pretty heavy duty stuff for you know,
high end, big customers that need you know, big stuff
shipped around the country, and so there's some questions on
that side of things.
Speaker 4 (06:33):
I have to say, I am I'm not surprised that
FedEx would predict problems to their business based on trade escalation, right,
that's no wholly unsurprising that you would, you know, take
a hit to your business and your industrial customers if
it suddenly costs a lot more to bring products in
from other countries, or frankly, even if it doesn't cost more,
but you're just unsure of what it's going to cost,
(06:54):
then you might delay in order. The story over the
last few months, though, has been not that chuck. It's
been and hey, we need to get ahead of these
tariffs and so get all the stuff that we might
want into our country as quickly as possible. And in
spite of that, FedEx is saying for the third consecutive
quarter that we are going to lower our full year guidance.
And so again, lowering guidance is not the same thing
(07:16):
as reporting actual drops in sales, but they're doing both
here and I find that intriguing at the moment that
this might be if these tariffs should play out the
way that FedEx is worried this could be one of
the better quarters that they were actually able to report,
and those future results could be rather disappointing as well.
Speaker 2 (07:33):
Yeah, so you've got them with a disappointing quarter. Nike also,
quite honestly, is in I think the technical term is
deep doodo is the one that's out there. I have
no idea on. Granted, they have a new CEO who
came on board. Was it in the last quarter or
two October? Yeah, it was October. Yeah, So they have
(07:54):
a new CEO who came on board, but they seem
to be absolutely lost as far as where they are
trying to go with their business. They're guiding down on sales,
they're guiding down on margins. Basically, the whole business looks
to be in a pretty ugly spot right now. And
it's kind of fascinating to me because you talk about
(08:16):
companies and the value of their brand, and historically, one
of the things that you know has been true as
long as I've been alive at least, is in any
of the surveys out there, like the Nike logo in
the brand is it's like one of the most recognizable
symbols out there and one of the most powerful marketing
symbols out there, and it just doesn't seem to be
(08:37):
doing anything because they are really struggling when it comes
to being able to actually move product successfully.
Speaker 4 (08:46):
Yeah, there's been a few things on Nike's business over
the course of the last few years that have just
been all over the place.
Speaker 3 (08:52):
You know.
Speaker 4 (08:53):
During COVID, they basically ended a bunch of their partnerships
with third party retailers and said, if we're gonna sell
our sh is, we're going to sell our shoes. And
so they I believe, pulled them both from brick and
mortar as well as online retailers and said you want
to buy Nike stuff, come get it from us.
Speaker 3 (09:09):
That turned out to be a terrible idea.
Speaker 2 (09:10):
Didn't work, didn't work at all.
Speaker 4 (09:12):
Okay, it turns out, you know, Nike, you are not
important enough for me to go there instead of shopping
on Amazon or at foot Locker or any of those places.
And so they had to reverse course in terms of,
you know, sports partnerships and sponsorships and things like that.
I'm not sure if they've missed the ball on that
fronts as much as as much has been the issue,
(09:35):
but I do wonder just in this new age of
like social media and the pace at which new companies
are able to produce sales online. I just think about
all of the like fashion sneaker brands that have been
coming out of the last few years, out of seeming
nowhere to compete with Nike and gaining traction quickly. Nike's
(09:57):
old tools of just you know, mainstream TV average tizing,
for example, might just not be the best approach that
they can deal with right now. You think about, you know,
on running and what's the what are some of these
jubbers all birds? Okay? Yeah, all of these companies A
six and you know do balance. If you do one
(10:19):
Google search for like fashion sneakers, then all of a sudden,
your entire Facebook feed and everything else is just scattered
with all sorts of very inexpensive brands. And today people
are more willing to take a bet on that or
rely on a Facebook suggestion than they were in decades
past when you'd say, you know, I don't know what
this brand is, how they what they do, or if
(10:41):
the shoes any good, I'm gonna go and go to
the old stalwart Nike.
Speaker 2 (10:46):
Let's take a quick break here. When we come back
We've gotten a lot of a lot of different consumer
earnings this week. I want to kind of look at
them in the in their totality and say, hey, what
are we hearing from companies about how spending is progressing.
We'll talk about that when we return.
Speaker 1 (11:04):
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Speaker 2 (12:24):
I want to talk a little bit about some of
the earnings that we've gotten from consumer companies this week,
just in the sense of, like, what are they telling
us about where consumer spending is, since that's such a
big driver of the economy. And I'll start with the
ones that we got yesterday, which were Nike, which obviously
was bad, and FedEx, which didn't really indicate much slow
(12:49):
down in their consumer business, but their corporate and industrial
stuff is kind of lackluster right now. Sure other ones
that we've seen in the last week or two. Delta
came out last week and said, hey, we've seen a
definite drop in bookings. That is, you know, potentially problematic
if it continues.
Speaker 4 (13:05):
Interesting stuff on Delta, though they're higher end bookings. International
for example, Holding up quite well.
Speaker 2 (13:11):
Yeah, so kind of a mixed bag.
Speaker 3 (13:13):
Yeah.
Speaker 2 (13:14):
Carnival Cruise Lines came out yesterday said hey, we're seeing
all kinds of crazy demand, no problems here at all. Okay,
it's kind of interesting. Williams Sonoma was either yesterday or
the day before Williams Sonoma. High end, you know, home
products and things like that. You know, you think dishes
and spatulas more expensive than spatulas, but I'm sure they
(13:37):
have this.
Speaker 3 (13:38):
We have a giant wooden spoon from them.
Speaker 2 (13:40):
Yeah, you know, think of like you know, place match
kinds of stuff. Yeah, great, great towels, you know, legendary.
They said, hey, everything looks great here, no problem. Darden
Restaurants mixed bag where they said, look the high end
stuff that we have where we've got capital grill and
things like that, we're seeing no slowdown. Everything looks good there.
(14:02):
The rest of our portfolio kind of not doing so well.
Speaker 3 (14:06):
And let's go starting to spell out a bit of
a story.
Speaker 2 (14:08):
I think that the story that we're seeing so far
on the consumer spending side of things is high income
and high spenders not really adjusting too much.
Speaker 3 (14:20):
Of the moment.
Speaker 2 (14:21):
The lower income portions of the population seem to be
pulling back in a fairly meaningful way right now. And Nike,
I don't really attribute to any of this nig I
just think they're not execution. I think they just have
execution problems there. So I think that we get back
to this idea of and this has been the case
for again the last five years. I remember coming out
(14:43):
of you know, the COVID stuff in twenty twenty, and
there was this idea of this K shaped recession where
those on the high end of the income spectrum we're
doing well, the ones on the low end are not.
It's kind of being exacerbated right now. And I feel
like that's a continuation of that story we're seeing here,
and I.
Speaker 4 (15:01):
Want to try and figured that one out here, Chuck like,
why why now? I guess is part of my question. Certainly,
last year was it last year you had student loan
payments restarting last fall?
Speaker 3 (15:12):
YEP, so it had student loans.
Speaker 2 (15:14):
Those are not common amongst lower income. They're fertiles, so
most of the people with student loans actually make pretty
good income.
Speaker 4 (15:21):
Yeah, I'm not really willing to attribute it to that.
I suppose the longer you just continue to rack up
credit card dead. Eventually you start hitting a wall there,
but I wouldn't expect that to be hit by every person.
At the same time, we haven't seen an uptick in unemployment,
especially not in lower paying jobs.
Speaker 2 (15:40):
Well, we have seen an upticke in unemployment. There has
been a half percentage point up ticket unemployment, and the
underemployment rate has been moving up as well. So I
guess more people that are part time that would want
to be full time.
Speaker 4 (15:52):
I guess what I'm a little bit more surprised by
is you know, we talk about the wealth effect, and
you started to see stock values come down, especially among
high flying sectors that really led the market over the
last few years. It's apparent to me or maybe the
data is so lagging that that doesn't seem to be
(16:13):
affecting spending on the high ten percent of income earners,
for example.
Speaker 2 (16:17):
I think there's a lag when it comes to the
wealth effect. Yeah, and part of it is, Look, most
of the damage that's been done to this market happened
since the start of March.
Speaker 3 (16:24):
True, there wasn't a whole lot of damage in January.
Speaker 2 (16:26):
No.
Speaker 3 (16:27):
In fact, markets reached all time highs in mid February and.
Speaker 2 (16:29):
You don't get your March statement or even your Q
one statement until the first week in April or so,
so you know, someone might be like, oh, like, yeah,
my portfolios. You know, fine, it's still you know, five
hundred thousand dollars. And then they get it, you know,
if we stay at these levels, they get it in
you know, April third, and they're like, oh, my five
hundred thousand has turned into four hundred and seventy thousand.
(16:51):
Maybe I should, you know, adjust how I was going
to be spending. So I'm not saying it will or
won't happen. It's I was talking with more ark Fandetti
about this earlier today and kind of the causality of hey,
do you see kind of what came first, chicken or egg?
Do you see markets that weaken and then you know,
(17:11):
spending weekends as a result, or do you see the opposite?
And it really depends on the economic environment and the
specific root causes, because you've seen both at different points historically,
there's nothing that you can point to definitively and be like, yes,
when markets go down X, that's when consumers pull back
on spending, and that's when the economy slows or vice versa.
It's not you know, definitively, Hey, spending slowed in the economy,
(17:35):
and so that's when markets pulled back. Why, it's very
much always something that's in flux, because the economy is
never in the same spot it was in yesterday.
Speaker 3 (17:43):
Yeah.
Speaker 4 (17:43):
Muhammad al Aarian was giving an interview two or three
days ago, and he was talking about a lot of
the soft data, because the soft data is something to
this point, well, yeah, softened quite a bit and also
hasn't been accompanied by drops in the hard data. And
the point that he made was, yes, this data was
unreliable for the COVID period, but if you go back further,
(18:08):
what he sees is soft data basically leading the hard
data by three to six months. And so we saw
the soft data turning in January and February, you know,
consumer sentiment, things along those lines. The question is are
we back to the normal pre COVID period or are
(18:28):
we still in this kind of weird, strange environment where
people respond exceedingly negatively when you ask them about how
they feel about things and then just continue on spending
like there is no tomorrow.
Speaker 3 (18:40):
I don't have a good answer for you.
Speaker 4 (18:41):
And and by the way nor does like the most
informed group of people about the economy, the Federal Reserve.
They were asked this specific question, will the hard data
follow the soft data, and they said, we don't know.
Speaker 2 (18:53):
We got no clue.
Speaker 4 (18:54):
Didn't work for the last four years, so let's not
count all this before it actually comes to pass.
Speaker 2 (19:00):
Yeah, and what we're hearing from companies is kind of
the same thing. It's like, yeah, we're seeing some weakness
in some areas, other places we're not, and so we'll
have to see how it goes. I know that we're
kind of a broken record on that because I've been
saying that for like the last three months.
Speaker 3 (19:14):
Yeah, just wake me up in a year.
Speaker 2 (19:16):
But it's like, we're just gonna have to see how
things go because there's a wide range of outcomes as
far as where things can go economically over the next
three to six months, and we're just gonna have to
see where it goes. Quick Break Wall Street watches next.
Speaker 1 (19:41):
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Watch a complete look and what's moving market so far
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Speaker 5 (20:00):
Markets are modestly selling off to wrap up the week
a little bit of a bumpy ride so far this morning,
with the SMP five hundred is currently on pace to
extend its losing street streak to five straight weeks. Investors
are also reacting to a new batch of corporate earnings
from FedEx, Nike, and Micron Technology. At the moment, the
(20:22):
Dow is down by nine tenths of a percent or
three hundred and seventy four points, SMP five hundred down
by three quarters of percent or forty one points, and
the Nasdaq is down by six tenths of a percent
or one hundred and six points. RUSSED two thousand selling
off one on a third percent or twenty seven points lower.
Ten year treasure reeled is flat at four point two
(20:42):
three percent, and crude oil flat as well, trading just
above sixty eight dollars a barrel. FEDEC shares down ten
percent after the delivery Giant reduced its full year guidance,
citing weakness in the US industrial economy. UPS also seeing
sympathy losses on the day in reaction to that news.
(21:03):
UPS shares down by three percent. Meanwhile, Nike shares also
sinking today, now down nearly seven percent, after the athletic
apparel maker warned that its sales will fall in the
current quarter as it continues to push discounts to clear inventory. Elsewhere,
Micron Technology stocked down by seven percent, despite the chip
(21:23):
maker beating street forecast for the previous quarter. According to
the Minnesota Star Tribune, steel producer Cleveland Cliffs will temporarily
idle two factories, resulting in hundreds of job cuts. That
decision comes as automakers have reduced orders amid uncertainty link
to President Trump's tariff policies. Cleveland Cliff shares down by
(21:44):
three percent. US Steel offered weak guidance for the current quarter,
sending that stock down by one percent, and home builder
Leonard guided for lower than expected new orders for its
fiscal second quarter. However, its earnings and revenue beat expectations
and our shares down by six percent. I'm Tucker Silva
and that's Wall Street.
Speaker 3 (22:04):
Watch.
Speaker 2 (22:05):
Hey, Chuck.
Speaker 4 (22:05):
Remember that nice little market rally we got on the
on the FED meeting.
Speaker 3 (22:09):
Yeah, it's gone.
Speaker 2 (22:11):
Oh yeah.
Speaker 4 (22:12):
SMP was sitting at fifty six thirty seven at two
pm on Wednesday before the FED release their data, we
got a nice little bump in shares and it's now
sitting at fifty six twenty two. So don't respond to
day to day moves in the markets, I think is
the short term lesson there.
Speaker 2 (22:30):
Micron Technology reported earnings after the bell yesterday. They are
the biggest US manufacturer of memory chips. They gave good forecasts,
good numbers, and they said, look, AI is you know,
causing us to you know, be able, not causing, but
it's allowing us to expand our business. And despite that,
Micron shares down almost seven percent in trading today, And
(22:52):
so this continues a run of companies. Hey, even if
you're reporting good earnings still ending up being punished. This
despite micro initially being up a couple percentage points after
they reported yesterday, but just unable to hold onto those
gains there.
Speaker 4 (23:11):
Yeah, it's not exactly a good sign when you have
solid earnings being punished. It doesn't necessarily spell disaster, but
clearly investors are are nervous, and I think are generally
this year have been just dumping what's done fairly well
over the last few years. Right, you think about the
(23:31):
Magnificent seven, for example, not exactly, highly susceptible to trade risk,
for example, but I haven't performed terribly well. Well, I
mean some of them are. Some of them are, but
I mean Amazon, Amazon susceptible to it here and there.
Amazon's hugely susceptible to it. Half the stuff they sell
has made in China. Yeah, there's a huge ish the
(23:54):
ones that I think are you know, susceptible. When you
talk about, you know, the potential for trade issues, the
only one that I think are let me give you
the ones that I think are insulated there, Microsoft, Google.
Speaker 3 (24:03):
And Meta right.
Speaker 2 (24:05):
Other than that, in video potentially major problems, Apple, potentially
major problems. Amazon huge issues, you know, depending on where
China tariffs go, and Tesla certainly you know, problems from
a supply chain perspective. Yeah. So I think four out
of the seven a half real issues on that side
of things, And even the ones that I said, like, hey,
probably not anything huge, still have some things they could
(24:28):
have to deal with because of all the spending they're
doing on AI depending on how tariffs end up, you know,
potentially weighing on the cost of you know, those imports.
Because remember, even though in Vidia is a US based company,
They're not really making any of their stuff here right now.
You know, the production is happening in Taiwan semiconductor, and
those factories in Arizona are not spooled up producing you know,
(24:49):
state of the art in Vidia chips at the moment.
So yeah, some some questions you know, on on those
piece from is this Bloomberg? Yep, yeah, it is Bloomberg.
The headline is money losing retail crowd keeps buying stocks
as market teeters. And again we get different data on
(25:09):
this every day. This one says individual traders put more
than twelve billion dollars into US equities in the weekend
in March nineteenth, according to data from JP Morgan Chase. Okay,
sure they so a few different things on this. The
first is all of these numbers that get tossed around
in these pieces, they're estimates because no one actually has
(25:32):
one hundred percent clear data into who is a retail
trader and who is not in terms of how things
are executing. Because the companies, the companies that are reporting
this are not the exchanges, because the exchanges have value
in being able to you know, not publicly make available
who's trading on any particular product on any particular day.
(25:52):
So these are all estimates. And furthermore, the the really
good estimates that banks make on this stuff and the
trading does make on this stuff, they don't publish. Yeah,
they think it gives them an edge. Correct. So I'm
not saying that this is twelve million, twelve billionaire. It's not.
(26:14):
It's just it's an estimated. It's one bank's estimate, and
take it for what it's worthy.
Speaker 4 (26:19):
The estimate also is that so far this year, retail
traders as a group have lost seven percent for the year,
while the S and P as we know is dropped
I don't know where were four percent for the year,
which again I could hypothetically buy that the average retail
investor has more exposure to Magnificent seven, which has done
(26:40):
worse than the market. But I just I'm not sure
I buy these numbers. And I also don't know that
there's much that you should do with these numbers other
than so, yeah, recognize that in the last few severe
quick market downturns, oftentimes retail traders have been left hold
in the bag more than your.
Speaker 3 (26:57):
Institutional ones, but not always.
Speaker 4 (27:00):
How many hedge funds blew out over the course of
the last few years on massive swings and markets.
Speaker 3 (27:05):
Many is the answer Many.
Speaker 2 (27:07):
Take a quick break here. When we come back, we'll
talk about some of the different challenges that single retirees face. It's,
you know, again, something that has always been you know,
the issue. Hey, I'm a single retiree. You know my
situation is different from those who are married. But some
new challenges cropping up in recent years. We'll discuss those
and how you can try to navigate them.
Speaker 1 (27:30):
After this, The Financial Exchange streams live on YouTube. Like
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(27:50):
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Speaker 2 (28:05):
All right, Mike, we got this piece from Barons here.
It's titled single Retirees face New Challenges. Here are the
ways to cope? What kind of new challenges to single
retirees face today?
Speaker 4 (28:19):
So I'll get to the existing challenges that have always
been there, and I've got some stats to go there.
But I think the new ones have to do with
just the social interactions that we're having in twenty twenty
five compared to even ten years ago, and whether it's
because of social media or you know, COVID, a number
(28:42):
of different things have changed the ways in which we
interact with each other. And globally there have been higher
reports of loneliness and just fewer in person social interactions
than we had in previous generations. And so I think
that's the number one new challenge that are facing people.
It's not changed to social security or taxes or any rules.
(29:03):
It is changes to how we as humans are interacting
with each other in twenty twenty five compared to previous generations.
Speaker 2 (29:11):
From a financial perspective, when we look at, you know,
kind of the big financial things that single retirees face,
a lot of those, as you mentioned are still the same. Hey,
if you previously were married, you go from potentially you know,
two social Security benefits down to one.
Speaker 1 (29:27):
Uh.
Speaker 2 (29:28):
It becomes something where you know, you just try to
figure out, Hey, From a living space perspective, do I
need to have you know, the same size home that
I did previously? How do I cover you know, things
like healthcare and long term care costs? Those things become
problematic potentially as you get older, and you know that
(29:48):
certainly is something that you've always had to deal with
as a retiree or a single retiree. There have not
been any major changes to the programs that form the
backbone of you know, tirese financial situation in Social Security,
Medicare and things like that.
Speaker 4 (30:04):
But when do talk about something called a widow's tax
right where sure that that's been mentioned before, probably on
this program, where it's one thing when you go through
a divorce and you split assets. But let's play out
the scenario of a widow or a widower. You effectively
have your tax brackets cut in half, but you retain
most of the income that you had while there were
(30:27):
two people living. Right, and you might need most of
the income that you previously because certainly your expenses don't
get cut in half. You might get rid of a car,
but you usually don't sell a home. You usually don't
move in the case of a loss of a spouse.
The really compelling stuff to me are the actual studies
on things like life expectancy and need for care on
a married couple versus a single individual.
Speaker 3 (30:48):
So I'll cite a few of these.
Speaker 4 (30:49):
One Boston College has this Center for Retirement Studies that
does some really interesting research, and they did something like
a twenty or thirty year study, yeah, on retirees and
their interactions with long term care, and what they found
was that married men and women about sixty percent sixty
percent of women, sixty one percent of men ended up
(31:11):
needing some sort of moderate to severe long term care
that could mean a facility, that could mean you know,
home care, but you know, sixty plus percent of them
who were married needed that. When you looked at the
same type of care for unmarried women and men, it
went from sixty to sixty six percent for women and
(31:33):
sixty one to sixty four percent for men, So a
pretty significant jump in those that need that type of
care because quite frankly, when you're married, a spouse ends
up providing a lot of the care and it's not
all that severe. Likewise, on the life expectancy side of things,
I found this to be pretty wild. Sixty five year
old married men life expectancy eighteen point six years. Divorced
(31:55):
sixty five year old men sixteen point three years. It's
a two year life expectancy gap. And the same pretty
much holds true for women. Twenty one point one years
of life expectancy versus nineteen point seven for a sixty
five year old. So what's the lesson. I guess get married. No,
(32:15):
that's not the lesson that I'm pointing out. I think
the lesson is doing some planning here, because nobody thinks
about the loss of the spouse in terms of their plans.
But I'll mention one other thing with all of this.
You know we talked about not a lot of changes.
Medicaid is on the table for being changed. Why does
that matter when we're talking about single retirees. Well, if
(32:38):
you're more likely to need severe long term care, you're
more likely to end up in a nursing home. If
Medicaid gets cut, what does that mean? It means that
the reimbursement rates that Medicaid pays for people in nursing
homes go down.
Speaker 3 (32:51):
Chuck.
Speaker 4 (32:52):
I know this isn't a well known subject, but like
what happens if the Medicaid reimbursement rate goes down for
everybody that's paying privately, goes up, Costs probably goes up.
We're already in New England talking about fifteen thousand dollars
a month. If you see Medicaid cut their reimbursements. There
then you have a large pool of people who are
getting the same level of care but not paying for
(33:13):
it much, and Medicaid's not kicking in as much, meaning
anybody who has assets could end up paying a lot more.
This is not a pleasant subject to talk about it though,
I want to be clear about that. It's not a
terribly pleasant subject to talk about if you are approaching
retirement in maybe one of those non standard type situations.
Maybe you're divorced, maybe you're separated, maybe you've lost a
(33:36):
loved one and you're trying to figure out what comes next.
I know it's intimidating and it's really difficult to talk about,
but it really really pays off to do this thinking
ahead of time, to figure out how your state plan
is going to work into your financial plan, to figure out,
(33:56):
you know what, if there's an age difference between us,
how do we plan for those later years?
Speaker 3 (34:01):
And the time to do it.
Speaker 4 (34:03):
I'm not saying don't do anything if you're already in
your sixties and seventies, but the time to address these
types of things is when you still can buy insurance,
when you still can look at solutions that will help
you address these problems for the future if you have
questions along these lines and you could use some of
that consultation. The numbers eight hundred three nine three for
zero zero one for the Armstrong Advisory Group and again
(34:25):
that phone number eight hundred three nine three for zero
zero one.
Speaker 1 (34:30):
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
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advisory services.
Speaker 2 (34:45):
Have either of you seen anyone who has used or
shown you anything they've done with Apple Intelligence since it
was released last night?
Speaker 3 (34:55):
Fall?
Speaker 5 (34:56):
So, I actually just purchased the base I phone sixteen.
Speaker 2 (35:02):
How's how's how's it running?
Speaker 5 (35:04):
Kind of like the old one at a ten R
still texts, still calls. Yeah, I mean it's a little lighter,
it's a little faster, yeah, But huge difference. And in
terms of Apple Intelligence, like I was prompted to like
go through tutorials and everything.
Speaker 2 (35:18):
Skip the So here's the thing with Apple Intelligence. The
early reviews are bad to quite bad. Uh, you had
news organizations that basically pulled their content from it because
their stories were being summarized incorrectly. Uh, it is not
summarizing your messages correctly, and this and that, and it
(35:39):
seems like they botched the rollout. So a report from
Bloomberg has said that Tim Cook is internally moving on
from the current head of like Siri and their their
AI department, John Jenandrea, which is just a great name, Like.
Speaker 3 (35:55):
The am so nice guys, so nice to named twice.
Speaker 2 (35:58):
What a great name. I mean, I knew someone in
college named Peter Peterman and I thought that was good.
But John gen Andrea, Yeah, that's pretty good, is right
up there with it. But here's where I think. I'm
just trying to wrap my head around this. So Apple's
so Tim Cook saying, look, we need to get better
at you know, AI for the consumer. Okay, fine, so
(36:19):
let's go get someone who you know, really has this
AI background and you know, some kind of you know,
really focused in this area or something they are bringing.
And again this is from Bloomberg's reporting, the guy who
headed up the vision pro headset is going to take
over running their AI department.
Speaker 3 (36:41):
Now, let's be fair, neither of us know.
Speaker 2 (36:43):
Nope, but I do know that the vision Pro headset
has not really been popular. I don't think it was
expected to be particularly popular. It was kind of a
public beta test almost.
Speaker 3 (36:54):
But seemingly no big picture AI expertise.
Speaker 2 (36:59):
I'm just trying to figure out where And look, I
am a believer that hey, if if, if you actually
think that you can do something with AI to you know,
help individuals that's based on your phone and not having
to use you know, crazy amounts of computing power to
do so. Okay, like that's an approach I can get behind.
(37:20):
But Apple has not executed well to begin with, and
quite honestly, like the last two things that they've you know,
hyped up in the last year, it's been the Vision
Pro and Apple Intelligence. Yea fair case that both of
them have been flops. Now that the Vision Pro was
expected to be a flop given that it costs thirty
five hundred dollars, but Apple Intelligence was not expected to
(37:40):
be a flop.
Speaker 4 (37:41):
Right, And I go back to look, series been pretty
lacking for quite some time now.
Speaker 2 (37:46):
Well, hey, at least it's not like it is it
Google or Amazon that announced last week that they're no
longer going to allow you to store your recordings locally.
You have to upload it to them.
Speaker 3 (37:57):
I don't know.
Speaker 2 (37:57):
I forget which one of them was, but you know,
there's some pretty dystopian stuff that's happening here, and I'm
very happy that I have as few devices of these
as possible in my home.
Speaker 4 (38:06):
I think it's finally starting to catch up to Apple that, Okay,
we've avoided this for as long as we can, we
need to actually do something.
Speaker 2 (38:12):
I guess this is something. We'll see how it goes.
But it's uh, I don't know. It doesn't seem like
much quick break here. Hour two coming up in a
bit
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(01:06):
and Mike Armstrong.
Speaker 2 (01:12):
Chuck, Mike and Tucker with you here as we try
to finish out the week. Well, we're gonna finish out
the week, I mean, god willing.
Speaker 3 (01:20):
Yeah, we don't really have to try that hard.
Speaker 2 (01:22):
Yeah, it's it's not really up to us whether or
not we finish out the week, just.
Speaker 4 (01:25):
A question of whether or not we can put on
a good show and figure finish up the week. The
question the show is gonna be okay today, not great,
not awful, and you're aiming for mediocre.
Speaker 2 (01:35):
It's it's gonna be middle of the road.
Speaker 4 (01:36):
You know.
Speaker 2 (01:37):
I see where we're at and everything, and it's it's
gonna be fine. So stick around, like you won't be disappointed,
but you're not going to walk out being like, Wow,
best thing I've ever seen. So I know you gotta
be honest with the people. Mike, you know some days,
Pedro Martinez one of my favorite quotes from me. You know,
you used to talk about being a pitcher in Major
League Baseball and say, look, you get thirty times a
(01:59):
year that you're gonna be on the bump, you know,
ready to go, And he said, twenty of those you're
gonna be just fine. You'll have your stuff and you'll
be Okay. Five of them, something's gonna click and you're
gonna be like, potentially ready to throw a no hitter,
and five of them you're gonna have nothing, and you
gotta figure out how to get through. This is one
of those twenty games where it's gonna be fine, you're
(02:21):
gonna be entertained byas, but it's not gonna be the
best show we ever did see.
Speaker 4 (02:24):
I would argue that this is gonna be the single
best show about airport fires that we've ever done.
Speaker 2 (02:32):
It's true because London Heathrow is closed today, not like
just hey, you know, things are operating at reduced capacity.
They have told people do not show up before eleven
fifty nine pm tonight because we are not open.
Speaker 3 (02:48):
No big deal.
Speaker 4 (02:48):
It's only the busiest airport in Europe. Not a big
deal at all, fourth busiest in the world.
Speaker 2 (02:53):
Yes, it's it is just a major, major hub for
any kind of international travel. And so you're gonna have
thirteen hundred flights either canceled or rerouted today. And the
big thing is, look, this is predominantly going to affect
European airlines. Sure, obviously you have, you know, US airlines
that fly over there as well, but the number of
(03:14):
flights is a fraction of what you know they're flying
domestically in the US, and a fraction of that total
thirteen hundred flights that are being affected there. Look, British
Airways alone is responsible for six hundred and seventy seven
of the flights that are canceled, so half of them
are just from one airline. And basically what's happened we
don't know all the details yet, but there is a
(03:36):
power substation nearby that apparently had some kind of catastrophic fire.
We don't know any details about how, why, or you
know exactly what happened, but basically it was bad enough
that even the backup generators for the airport, I don't
know if they were damaged because they're in a similar location,
which would seem to be a bad spot for a
backup generator. You probably don't want to put it right
(03:58):
next to your primary power. But the counter to that
on one level is, hey, all of the wiring is
already there, so you don't have to truly duplicate it.
But you know, generally you want your backups to be
somewhere else, but I don't know where they are. And
so the airport has been without power for the better
part of several hours now and they're saying, you know,
(04:18):
they're hoping to resolve it before the end of the day.
But the thing about airports, from what I gather, you
don't just walk up to the side of the airport,
push the reset button and have everything come back on
exactly as it was. And this is before you even
get into Gee there's you know, again, if you get
thirteen hundred flights being canceled, probably somewhere in the ballpark
(04:41):
of one hundred and fifty to one hundred and eighty
thousand people that are going to be disrupted as a
result of it, and the chaos that ensues where mostly
British airways is like how do we get your rebooked
or how do we compensate you for whatever has happened?
And so you've got some stuff to work through, some stuff.
Speaker 3 (04:59):
Yeah.
Speaker 4 (04:59):
So so that's what's going on in London right now.
And if you are planning to fly to Europe you
might already be delayed.
Speaker 2 (05:06):
Yes, so there's that. After the bell yesterday we had
FedEx report their earnings and for the fiscal year, they
are guiding lower in a range of eighteen to eighteen
sixty a share, below the eighteen ninety five average analyst estimate.
They also think that revenue might be slightly down versus
the prior year as well. This goes against previous guidance
(05:29):
that thought sales would be flat. As a result, the
shares opened down around ten percent in trading today, and
at one point I saw that they had fallen yeah,
about twelve percent, So, you know, just pretty choppy for FedEx.
And in terms of trying to you know, figure out,
(05:51):
you know, where the weakness is, they are saying it
is predominantly their industrial customers that are showing weakness right now.
And this gets it one of the things we talked about,
which is, hey, if you're not sure about where your
business is going to be going, you may pull back
on some projects and spending and things like that. And certainly,
(06:12):
look if you're talking about like shipping stuff. You know, again,
I know that a lot of times we think of
FedEx is just delivering Amazon packages, but they.
Speaker 3 (06:19):
Do a lot more believe than that.
Speaker 2 (06:21):
Yeah, they do some pretty heavy duty stuff for you know,
high end, big customers that need you know, big stuff
shipped around the country, and so there's some questions on
that side of things.
Speaker 4 (06:33):
I have to say, I am I'm not surprised that
FedEx would predict problems to their business based on trade escalation, right,
that's no wholly unsurprising that you would, you know, take
a hit to your business and your industrial customers if
it suddenly costs a lot more to bring products in
from other countries, or frankly, even if it doesn't cost more,
but you're just unsure of what it's going to cost,
(06:54):
then you might delay in order. The story over the
last few months, though, has been not that chuck. It's
been and hey, we need to get ahead of these
tariffs and so get all the stuff that we might
want into our country as quickly as possible. And in
spite of that, FedEx is saying for the third consecutive
quarter that we are going to lower our full year guidance.
And so again, lowering guidance is not the same thing
(07:16):
as reporting actual drops in sales, but they're doing both
here and I find that intriguing at the moment that
this might be if these tariffs should play out the
way that FedEx is worried this could be one of
the better quarters that they were actually able to report,
and those future results could be rather disappointing as well.
Speaker 2 (07:33):
Yeah, so you've got them with a disappointing quarter. Nike also,
quite honestly, is in I think the technical term is
deep doodo is the one that's out there. I have
no idea on. Granted, they have a new CEO who
came on board. Was it in the last quarter or
two October? Yeah, it was October. Yeah, So they have
(07:54):
a new CEO who came on board, but they seem
to be absolutely lost as far as where they are
trying to go with their business. They're guiding down on sales,
they're guiding down on margins. Basically, the whole business looks
to be in a pretty ugly spot right now. And
it's kind of fascinating to me because you talk about
(08:16):
companies and the value of their brand, and historically, one
of the things that you know has been true as
long as I've been alive at least, is in any
of the surveys out there, like the Nike logo in
the brand is it's like one of the most recognizable
symbols out there and one of the most powerful marketing
symbols out there, and it just doesn't seem to be
(08:37):
doing anything because they are really struggling when it comes
to being able to actually move product successfully.
Speaker 4 (08:46):
Yeah, there's been a few things on Nike's business over
the course of the last few years that have just
been all over the place.
Speaker 3 (08:52):
You know.
Speaker 4 (08:53):
During COVID, they basically ended a bunch of their partnerships
with third party retailers and said, if we're gonna sell
our sh is, we're going to sell our shoes. And
so they I believe, pulled them both from brick and
mortar as well as online retailers and said you want
to buy Nike stuff, come get it from us.
Speaker 3 (09:09):
That turned out to be a terrible idea.
Speaker 2 (09:10):
Didn't work, didn't work at all.
Speaker 4 (09:12):
Okay, it turns out, you know, Nike, you are not
important enough for me to go there instead of shopping
on Amazon or at foot Locker or any of those places.
And so they had to reverse course in terms of,
you know, sports partnerships and sponsorships and things like that.
I'm not sure if they've missed the ball on that
fronts as much as as much has been the issue,
(09:35):
but I do wonder just in this new age of
like social media and the pace at which new companies
are able to produce sales online. I just think about
all of the like fashion sneaker brands that have been
coming out of the last few years, out of seeming
nowhere to compete with Nike and gaining traction quickly. Nike's
(09:57):
old tools of just you know, mainstream TV average tizing,
for example, might just not be the best approach that
they can deal with right now. You think about, you know,
on running and what's the what are some of these
jubbers all birds? Okay? Yeah, all of these companies A
six and you know do balance. If you do one
(10:19):
Google search for like fashion sneakers, then all of a sudden,
your entire Facebook feed and everything else is just scattered
with all sorts of very inexpensive brands. And today people
are more willing to take a bet on that or
rely on a Facebook suggestion than they were in decades
past when you'd say, you know, I don't know what
this brand is, how they what they do, or if
(10:41):
the shoes any good, I'm gonna go and go to
the old stalwart Nike.
Speaker 2 (10:46):
Let's take a quick break here. When we come back
We've gotten a lot of a lot of different consumer
earnings this week. I want to kind of look at
them in the in their totality and say, hey, what
are we hearing from companies about how spending is progressing.
We'll talk about that when we return.
Speaker 1 (11:04):
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Speaker 2 (12:24):
I want to talk a little bit about some of
the earnings that we've gotten from consumer companies this week,
just in the sense of, like, what are they telling
us about where consumer spending is, since that's such a
big driver of the economy. And I'll start with the
ones that we got yesterday, which were Nike, which obviously
was bad, and FedEx, which didn't really indicate much slow
(12:49):
down in their consumer business, but their corporate and industrial
stuff is kind of lackluster right now. Sure other ones
that we've seen in the last week or two. Delta
came out last week and said, hey, we've seen a
definite drop in bookings. That is, you know, potentially problematic
if it continues.
Speaker 4 (13:05):
Interesting stuff on Delta, though they're higher end bookings. International
for example, Holding up quite well.
Speaker 2 (13:11):
Yeah, so kind of a mixed bag.
Speaker 3 (13:13):
Yeah.
Speaker 2 (13:14):
Carnival Cruise Lines came out yesterday said hey, we're seeing
all kinds of crazy demand, no problems here at all. Okay,
it's kind of interesting. Williams Sonoma was either yesterday or
the day before Williams Sonoma. High end, you know, home
products and things like that. You know, you think dishes
and spatulas more expensive than spatulas, but I'm sure they
(13:37):
have this.
Speaker 3 (13:38):
We have a giant wooden spoon from them.
Speaker 2 (13:40):
Yeah, you know, think of like you know, place match
kinds of stuff. Yeah, great, great towels, you know, legendary.
They said, hey, everything looks great here, no problem. Darden
Restaurants mixed bag where they said, look the high end
stuff that we have where we've got capital grill and
things like that, we're seeing no slowdown. Everything looks good there.
(14:02):
The rest of our portfolio kind of not doing so well.
Speaker 3 (14:06):
And let's go starting to spell out a bit of
a story.
Speaker 2 (14:08):
I think that the story that we're seeing so far
on the consumer spending side of things is high income
and high spenders not really adjusting too much.
Speaker 3 (14:20):
Of the moment.
Speaker 2 (14:21):
The lower income portions of the population seem to be
pulling back in a fairly meaningful way right now. And Nike,
I don't really attribute to any of this nig I
just think they're not execution. I think they just have
execution problems there. So I think that we get back
to this idea of and this has been the case
for again the last five years. I remember coming out
(14:43):
of you know, the COVID stuff in twenty twenty, and
there was this idea of this K shaped recession where
those on the high end of the income spectrum we're
doing well, the ones on the low end are not.
It's kind of being exacerbated right now. And I feel
like that's a continuation of that story we're seeing here,
and I.
Speaker 4 (15:01):
Want to try and figured that one out here, Chuck like,
why why now? I guess is part of my question. Certainly,
last year was it last year you had student loan
payments restarting last fall?
Speaker 3 (15:12):
YEP, so it had student loans.
Speaker 2 (15:14):
Those are not common amongst lower income. They're fertiles, so
most of the people with student loans actually make pretty
good income.
Speaker 4 (15:21):
Yeah, I'm not really willing to attribute it to that.
I suppose the longer you just continue to rack up
credit card dead. Eventually you start hitting a wall there,
but I wouldn't expect that to be hit by every person.
At the same time, we haven't seen an uptick in unemployment,
especially not in lower paying jobs.
Speaker 2 (15:40):
Well, we have seen an upticke in unemployment. There has
been a half percentage point up ticket unemployment, and the
underemployment rate has been moving up as well. So I
guess more people that are part time that would want
to be full time.
Speaker 4 (15:52):
I guess what I'm a little bit more surprised by
is you know, we talk about the wealth effect, and
you started to see stock values come down, especially among
high flying sectors that really led the market over the
last few years. It's apparent to me or maybe the
data is so lagging that that doesn't seem to be
(16:13):
affecting spending on the high ten percent of income earners,
for example.
Speaker 2 (16:17):
I think there's a lag when it comes to the
wealth effect. Yeah, and part of it is, Look, most
of the damage that's been done to this market happened
since the start of March.
Speaker 3 (16:24):
True, there wasn't a whole lot of damage in January.
Speaker 2 (16:26):
No.
Speaker 3 (16:27):
In fact, markets reached all time highs in mid February and.
Speaker 2 (16:29):
You don't get your March statement or even your Q
one statement until the first week in April or so,
so you know, someone might be like, oh, like, yeah,
my portfolios. You know, fine, it's still you know, five
hundred thousand dollars. And then they get it, you know,
if we stay at these levels, they get it in
you know, April third, and they're like, oh, my five
hundred thousand has turned into four hundred and seventy thousand.
(16:51):
Maybe I should, you know, adjust how I was going
to be spending. So I'm not saying it will or
won't happen. It's I was talking with more ark Fandetti
about this earlier today and kind of the causality of hey,
do you see kind of what came first, chicken or egg?
Do you see markets that weaken and then you know,
(17:11):
spending weekends as a result, or do you see the opposite?
And it really depends on the economic environment and the
specific root causes, because you've seen both at different points historically,
there's nothing that you can point to definitively and be like, yes,
when markets go down X, that's when consumers pull back
on spending, and that's when the economy slows or vice versa.
It's not you know, definitively, Hey, spending slowed in the economy,
(17:35):
and so that's when markets pulled back. Why, it's very
much always something that's in flux, because the economy is
never in the same spot it was in yesterday.
Speaker 3 (17:43):
Yeah.
Speaker 4 (17:43):
Muhammad al Aarian was giving an interview two or three
days ago, and he was talking about a lot of
the soft data, because the soft data is something to
this point, well, yeah, softened quite a bit and also
hasn't been accompanied by drops in the hard data. And
the point that he made was, yes, this data was
unreliable for the COVID period, but if you go back further,
(18:08):
what he sees is soft data basically leading the hard
data by three to six months. And so we saw
the soft data turning in January and February, you know,
consumer sentiment, things along those lines. The question is are
we back to the normal pre COVID period or are
(18:28):
we still in this kind of weird, strange environment where
people respond exceedingly negatively when you ask them about how
they feel about things and then just continue on spending
like there is no tomorrow.
Speaker 3 (18:40):
I don't have a good answer for you.
Speaker 4 (18:41):
And and by the way nor does like the most
informed group of people about the economy, the Federal Reserve.
They were asked this specific question, will the hard data
follow the soft data, and they said, we don't know.
Speaker 2 (18:53):
We got no clue.
Speaker 4 (18:54):
Didn't work for the last four years, so let's not
count all this before it actually comes to pass.
Speaker 2 (19:00):
Yeah, and what we're hearing from companies is kind of
the same thing. It's like, yeah, we're seeing some weakness
in some areas, other places we're not, and so we'll
have to see how it goes. I know that we're
kind of a broken record on that because I've been
saying that for like the last three months.
Speaker 3 (19:14):
Yeah, just wake me up in a year.
Speaker 2 (19:16):
But it's like, we're just gonna have to see how
things go because there's a wide range of outcomes as
far as where things can go economically over the next
three to six months, and we're just gonna have to
see where it goes. Quick Break Wall Street watches next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time Now for Wall Street.
Watch a complete look and what's moving market so far
today Right here on the Financial Exchange Radio network.
Speaker 5 (20:00):
Markets are modestly selling off to wrap up the week
a little bit of a bumpy ride so far this morning,
with the SMP five hundred is currently on pace to
extend its losing street streak to five straight weeks. Investors
are also reacting to a new batch of corporate earnings
from FedEx, Nike, and Micron Technology. At the moment, the
(20:22):
Dow is down by nine tenths of a percent or
three hundred and seventy four points, SMP five hundred down
by three quarters of percent or forty one points, and
the Nasdaq is down by six tenths of a percent
or one hundred and six points. RUSSED two thousand selling
off one on a third percent or twenty seven points lower.
Ten year treasure reeled is flat at four point two
(20:42):
three percent, and crude oil flat as well, trading just
above sixty eight dollars a barrel. FEDEC shares down ten
percent after the delivery Giant reduced its full year guidance,
citing weakness in the US industrial economy. UPS also seeing
sympathy losses on the day in reaction to that news.
(21:03):
UPS shares down by three percent. Meanwhile, Nike shares also
sinking today, now down nearly seven percent, after the athletic
apparel maker warned that its sales will fall in the
current quarter as it continues to push discounts to clear inventory. Elsewhere,
Micron Technology stocked down by seven percent, despite the chip
(21:23):
maker beating street forecast for the previous quarter. According to
the Minnesota Star Tribune, steel producer Cleveland Cliffs will temporarily
idle two factories, resulting in hundreds of job cuts. That
decision comes as automakers have reduced orders amid uncertainty link
to President Trump's tariff policies. Cleveland Cliff shares down by
(21:44):
three percent. US Steel offered weak guidance for the current quarter,
sending that stock down by one percent, and home builder
Leonard guided for lower than expected new orders for its
fiscal second quarter. However, its earnings and revenue beat expectations
and our shares down by six percent. I'm Tucker Silva
and that's Wall Street.
Speaker 3 (22:04):
Watch.
Speaker 2 (22:05):
Hey, Chuck.
Speaker 4 (22:05):
Remember that nice little market rally we got on the
on the FED meeting.
Speaker 3 (22:09):
Yeah, it's gone.
Speaker 2 (22:11):
Oh yeah.
Speaker 4 (22:12):
SMP was sitting at fifty six thirty seven at two
pm on Wednesday before the FED release their data, we
got a nice little bump in shares and it's now
sitting at fifty six twenty two. So don't respond to
day to day moves in the markets, I think is
the short term lesson there.
Speaker 2 (22:30):
Micron Technology reported earnings after the bell yesterday. They are
the biggest US manufacturer of memory chips. They gave good forecasts,
good numbers, and they said, look, AI is you know,
causing us to you know, be able, not causing, but
it's allowing us to expand our business. And despite that,
Micron shares down almost seven percent in trading today, And
(22:52):
so this continues a run of companies. Hey, even if
you're reporting good earnings still ending up being punished. This
despite micro initially being up a couple percentage points after
they reported yesterday, but just unable to hold onto those
gains there.
Speaker 4 (23:11):
Yeah, it's not exactly a good sign when you have
solid earnings being punished. It doesn't necessarily spell disaster, but
clearly investors are are nervous, and I think are generally
this year have been just dumping what's done fairly well
over the last few years. Right, you think about the
(23:31):
Magnificent seven, for example, not exactly, highly susceptible to trade risk,
for example, but I haven't performed terribly well. Well, I
mean some of them are. Some of them are, but
I mean Amazon, Amazon susceptible to it here and there.
Amazon's hugely susceptible to it. Half the stuff they sell
has made in China. Yeah, there's a huge ish the
(23:54):
ones that I think are you know, susceptible. When you
talk about, you know, the potential for trade issues, the
only one that I think are let me give you
the ones that I think are insulated there, Microsoft, Google.
Speaker 3 (24:03):
And Meta right.
Speaker 2 (24:05):
Other than that, in video potentially major problems, Apple, potentially
major problems. Amazon huge issues, you know, depending on where
China tariffs go, and Tesla certainly you know, problems from
a supply chain perspective. Yeah. So I think four out
of the seven a half real issues on that side
of things, And even the ones that I said, like, hey,
probably not anything huge, still have some things they could
(24:28):
have to deal with because of all the spending they're
doing on AI depending on how tariffs end up, you know,
potentially weighing on the cost of you know, those imports.
Because remember, even though in Vidia is a US based company,
They're not really making any of their stuff here right now.
You know, the production is happening in Taiwan semiconductor, and
those factories in Arizona are not spooled up producing you know,
(24:49):
state of the art in Vidia chips at the moment.
So yeah, some some questions you know, on on those
piece from is this Bloomberg? Yep, yeah, it is Bloomberg.
The headline is money losing retail crowd keeps buying stocks
as market teeters. And again we get different data on
(25:09):
this every day. This one says individual traders put more
than twelve billion dollars into US equities in the weekend
in March nineteenth, according to data from JP Morgan Chase. Okay,
sure they so a few different things on this. The
first is all of these numbers that get tossed around
in these pieces, they're estimates because no one actually has
(25:32):
one hundred percent clear data into who is a retail
trader and who is not in terms of how things
are executing. Because the companies, the companies that are reporting
this are not the exchanges, because the exchanges have value
in being able to you know, not publicly make available
who's trading on any particular product on any particular day.
(25:52):
So these are all estimates. And furthermore, the the really
good estimates that banks make on this stuff and the
trading does make on this stuff, they don't publish. Yeah,
they think it gives them an edge. Correct. So I'm
not saying that this is twelve million, twelve billionaire. It's not.
(26:14):
It's just it's an estimated. It's one bank's estimate, and
take it for what it's worthy.
Speaker 4 (26:19):
The estimate also is that so far this year, retail
traders as a group have lost seven percent for the year,
while the S and P as we know is dropped
I don't know where were four percent for the year,
which again I could hypothetically buy that the average retail
investor has more exposure to Magnificent seven, which has done
(26:40):
worse than the market. But I just I'm not sure
I buy these numbers. And I also don't know that
there's much that you should do with these numbers other
than so, yeah, recognize that in the last few severe
quick market downturns, oftentimes retail traders have been left hold
in the bag more than your.
Speaker 3 (26:57):
Institutional ones, but not always.
Speaker 4 (27:00):
How many hedge funds blew out over the course of
the last few years on massive swings and markets.
Speaker 3 (27:05):
Many is the answer Many.
Speaker 2 (27:07):
Take a quick break here. When we come back, we'll
talk about some of the different challenges that single retirees face. It's,
you know, again, something that has always been you know,
the issue. Hey, I'm a single retiree. You know my
situation is different from those who are married. But some
new challenges cropping up in recent years. We'll discuss those
and how you can try to navigate them.
Speaker 1 (27:30):
After this, The Financial Exchange streams live on YouTube. Like
our page and stay up to date on breaking business news.
All morning, Long Face is the Financial Exchange Radio Network.
Miss any of the show. The Financial Exchange Show podcast
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(27:50):
button and leave us a five star review. This is
the Financial Exchange Radio Network.
Speaker 2 (28:05):
All right, Mike, we got this piece from Barons here.
It's titled single Retirees face New Challenges. Here are the
ways to cope? What kind of new challenges to single
retirees face today?
Speaker 4 (28:19):
So I'll get to the existing challenges that have always
been there, and I've got some stats to go there.
But I think the new ones have to do with
just the social interactions that we're having in twenty twenty
five compared to even ten years ago, and whether it's
because of social media or you know, COVID, a number
(28:42):
of different things have changed the ways in which we
interact with each other. And globally there have been higher
reports of loneliness and just fewer in person social interactions
than we had in previous generations. And so I think
that's the number one new challenge that are facing people.
It's not changed to social security or taxes or any rules.
(29:03):
It is changes to how we as humans are interacting
with each other in twenty twenty five compared to previous generations.
Speaker 2 (29:11):
From a financial perspective, when we look at, you know,
kind of the big financial things that single retirees face,
a lot of those, as you mentioned are still the same. Hey,
if you previously were married, you go from potentially you know,
two social Security benefits down to one.
Speaker 1 (29:27):
Uh.
Speaker 2 (29:28):
It becomes something where you know, you just try to
figure out, Hey, From a living space perspective, do I
need to have you know, the same size home that
I did previously? How do I cover you know, things
like healthcare and long term care costs? Those things become
problematic potentially as you get older, and you know that
(29:48):
certainly is something that you've always had to deal with
as a retiree or a single retiree. There have not
been any major changes to the programs that form the
backbone of you know, tirese financial situation in Social Security,
Medicare and things like that.
Speaker 4 (30:04):
But when do talk about something called a widow's tax
right where sure that that's been mentioned before, probably on
this program, where it's one thing when you go through
a divorce and you split assets. But let's play out
the scenario of a widow or a widower. You effectively
have your tax brackets cut in half, but you retain
most of the income that you had while there were
(30:27):
two people living. Right, and you might need most of
the income that you previously because certainly your expenses don't
get cut in half. You might get rid of a car,
but you usually don't sell a home. You usually don't
move in the case of a loss of a spouse.
The really compelling stuff to me are the actual studies
on things like life expectancy and need for care on
a married couple versus a single individual.
Speaker 3 (30:48):
So I'll cite a few of these.
Speaker 4 (30:49):
One Boston College has this Center for Retirement Studies that
does some really interesting research, and they did something like
a twenty or thirty year study, yeah, on retirees and
their interactions with long term care, and what they found
was that married men and women about sixty percent sixty
percent of women, sixty one percent of men ended up
(31:11):
needing some sort of moderate to severe long term care
that could mean a facility, that could mean you know,
home care, but you know, sixty plus percent of them
who were married needed that. When you looked at the
same type of care for unmarried women and men, it
went from sixty to sixty six percent for women and
(31:33):
sixty one to sixty four percent for men, So a
pretty significant jump in those that need that type of
care because quite frankly, when you're married, a spouse ends
up providing a lot of the care and it's not
all that severe. Likewise, on the life expectancy side of things,
I found this to be pretty wild. Sixty five year
old married men life expectancy eighteen point six years. Divorced
(31:55):
sixty five year old men sixteen point three years. It's
a two year life expectancy gap. And the same pretty
much holds true for women. Twenty one point one years
of life expectancy versus nineteen point seven for a sixty
five year old. So what's the lesson. I guess get married. No,
(32:15):
that's not the lesson that I'm pointing out. I think
the lesson is doing some planning here, because nobody thinks
about the loss of the spouse in terms of their plans.
But I'll mention one other thing with all of this.
You know we talked about not a lot of changes.
Medicaid is on the table for being changed. Why does
that matter when we're talking about single retirees. Well, if
(32:38):
you're more likely to need severe long term care, you're
more likely to end up in a nursing home. If
Medicaid gets cut, what does that mean? It means that
the reimbursement rates that Medicaid pays for people in nursing
homes go down.
Speaker 3 (32:51):
Chuck.
Speaker 4 (32:52):
I know this isn't a well known subject, but like
what happens if the Medicaid reimbursement rate goes down for
everybody that's paying privately, goes up, Costs probably goes up.
We're already in New England talking about fifteen thousand dollars
a month. If you see Medicaid cut their reimbursements. There
then you have a large pool of people who are
getting the same level of care but not paying for
(33:13):
it much, and Medicaid's not kicking in as much, meaning
anybody who has assets could end up paying a lot more.
This is not a pleasant subject to talk about it though,
I want to be clear about that. It's not a
terribly pleasant subject to talk about if you are approaching
retirement in maybe one of those non standard type situations.
Maybe you're divorced, maybe you're separated, maybe you've lost a
(33:36):
loved one and you're trying to figure out what comes next.
I know it's intimidating and it's really difficult to talk about,
but it really really pays off to do this thinking
ahead of time, to figure out how your state plan
is going to work into your financial plan, to figure out,
(33:56):
you know what, if there's an age difference between us,
how do we plan for those later years?
Speaker 3 (34:01):
And the time to do it.
Speaker 4 (34:03):
I'm not saying don't do anything if you're already in
your sixties and seventies, but the time to address these
types of things is when you still can buy insurance,
when you still can look at solutions that will help
you address these problems for the future if you have
questions along these lines and you could use some of
that consultation. The numbers eight hundred three nine three for
zero zero one for the Armstrong Advisory Group and again
(34:25):
that phone number eight hundred three nine three for zero
zero one.
Speaker 1 (34:30):
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 make contact you to offer investment
advisory services.
Speaker 2 (34:45):
Have either of you seen anyone who has used or
shown you anything they've done with Apple Intelligence since it
was released last night?
Speaker 3 (34:55):
Fall?
Speaker 5 (34:56):
So, I actually just purchased the base I phone sixteen.
Speaker 2 (35:02):
How's how's how's it running?
Speaker 5 (35:04):
Kind of like the old one at a ten R
still texts, still calls. Yeah, I mean it's a little lighter,
it's a little faster, yeah, But huge difference. And in
terms of Apple Intelligence, like I was prompted to like
go through tutorials and everything.
Speaker 2 (35:18):
Skip the So here's the thing with Apple Intelligence. The
early reviews are bad to quite bad. Uh, you had
news organizations that basically pulled their content from it because
their stories were being summarized incorrectly. Uh, it is not
summarizing your messages correctly, and this and that, and it
(35:39):
seems like they botched the rollout. So a report from
Bloomberg has said that Tim Cook is internally moving on
from the current head of like Siri and their their
AI department, John Jenandrea, which is just a great name, Like.
Speaker 3 (35:55):
The am so nice guys, so nice to named twice.
Speaker 2 (35:58):
What a great name. I mean, I knew someone in
college named Peter Peterman and I thought that was good.
But John gen Andrea, Yeah, that's pretty good, is right
up there with it. But here's where I think. I'm
just trying to wrap my head around this. So Apple's
so Tim Cook saying, look, we need to get better
at you know, AI for the consumer. Okay, fine, so
(36:19):
let's go get someone who you know, really has this
AI background and you know, some kind of you know,
really focused in this area or something they are bringing.
And again this is from Bloomberg's reporting, the guy who
headed up the vision pro headset is going to take
over running their AI department.
Speaker 3 (36:41):
Now, let's be fair, neither of us know.
Speaker 2 (36:43):
Nope, but I do know that the vision Pro headset
has not really been popular. I don't think it was
expected to be particularly popular. It was kind of a
public beta test almost.
Speaker 3 (36:54):
But seemingly no big picture AI expertise.
Speaker 2 (36:59):
I'm just trying to figure out where And look, I
am a believer that hey, if if, if you actually
think that you can do something with AI to you know,
help individuals that's based on your phone and not having
to use you know, crazy amounts of computing power to
do so. Okay, like that's an approach I can get behind.
(37:20):
But Apple has not executed well to begin with, and
quite honestly, like the last two things that they've you know,
hyped up in the last year, it's been the Vision
Pro and Apple Intelligence. Yea fair case that both of
them have been flops. Now that the Vision Pro was
expected to be a flop given that it costs thirty
five hundred dollars, but Apple Intelligence was not expected to
(37:40):
be a flop.
Speaker 4 (37:41):
Right, And I go back to look, series been pretty
lacking for quite some time now.
Speaker 2 (37:46):
Well, hey, at least it's not like it is it
Google or Amazon that announced last week that they're no
longer going to allow you to store your recordings locally.
You have to upload it to them.
Speaker 3 (37:57):
I don't know.
Speaker 2 (37:57):
I forget which one of them was, but you know,
there's some pretty dystopian stuff that's happening here, and I'm
very happy that I have as few devices of these
as possible in my home.
Speaker 4 (38:06):
I think it's finally starting to catch up to Apple that, Okay,
we've avoided this for as long as we can, we
need to actually do something.
Speaker 2 (38:12):
I guess this is something. We'll see how it goes.
But it's uh, I don't know. It doesn't seem like
much quick break here. Hour two coming up in a
bit
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