November 25, 2025 • 38 mins
Mike Armstrong and Paul Lane share the dumb story of the day...how the S&P 500 could hit 8,000 in 2026. Home sellers who set prices too high and paying the price. Cash can feel safe, but it doesn't grow your wealth, portfolio strategist says. Are you excited to buy a car on Amazon? Turkeys might be cheaper this Thanksgiving, but everything thing else on the table is more expensive.
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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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(01:06):
and Paul Lane.
Speaker 2 (01:15):
Good morning, Welcome back to the Financial Exchange.
Speaker 3 (01:17):
Is Mike, Paul and Tucker with you on a Tuesday
here where markets are staging a bit of a recovery.
We've got the SMP flat that dows up six ten
percent and Nasdak's still off half a percent.
Speaker 2 (01:28):
A lot of that being dragged down by in.
Speaker 3 (01:30):
Video, whose stock price today is down nearly six percent
out of some concerns coming from AI world generally, but
less of the I guess general suspicion about AI and
more some specific and video concerns. We did get a
retail sales report this morning. It showed a small but
(01:50):
still a gain for the month of September. Remember we're
going to be getting data releases here that are a
couple months out of date now, so the September report
was not great, but also not terrible. You still saw
an increase in overall sales. Restaurants and bars saw a
good uptick, where as you saw drop in all sorts
of retail sporting goods, clothing, and other categories. You had
(02:14):
a consumer sentiment report that came out this morning from
the Census Bureau that reported the weakest consumer numbers since April,
and you had a producer price index report that came
out this morning that was.
Speaker 2 (02:28):
Fine. Are we gonna call it fine? Yeah?
Speaker 4 (02:30):
I think so.
Speaker 3 (02:31):
It was not concerning in any way, did not indicate
anything that I could see that would lead to marginally
higher consumer prices.
Speaker 2 (02:38):
And so once again puts the federal reserve.
Speaker 3 (02:41):
As we head into December again, the next big event
on the calendar here is the fed's next meeting. They
will be having their press conference and rate decision on
December tenth, so roughly two weeks from now. There's currently
an eighty three percent chance that rates come down by
another quarter per at that meeting. In terms of a
(03:04):
few areas related to interest rates, when we take a
look at thirty year fixed rate mortgages, which the FED
does not control but does influence through their policy and statements,
we've got the average thirty year fixed now sitting at
six point three to two percent, that's according to Mortgage
News Daily. Compared to this time the last year, we
(03:27):
were sitting at nearly seven percent on that same measure,
So pretty big decline in interest rates over the course
of the last year. And and that's about all that
I would focus on when it comes to markets. We
have this pending US Ukraine negotiation that seems like it's
not seems like it's not moving much. But you do
(03:48):
have oil prices falling, I think in regard to that
piece deal. Oil price is off two and three quarters
of percent this morning. Anything else catching your apple?
Speaker 4 (03:57):
I know small caps having a little bit of a
rally here up about one third percent.
Speaker 3 (04:02):
We alluded to one other story, which was the Nvidia
sell off that we are seeing. To put it plainly, Paul,
but why would you guess that we are seeing such
a steep sell off or in video stock today?
Speaker 4 (04:15):
Potentially Google encroaching on in Vidia's dominance and significant market
share in selling chips that are utilized to power large
length as models and the beginnings of the most prevalent
artificial intelligence that's out there on the market right now.
Google had not previously been in the market really of
(04:35):
selling the chips that they constructed themselves that are called TPUs,
but more recently, whether it's this news story that we
cover this morning regarding Meta potentially using some of the
chips by Google in its data centers in twenty twenty seven,
or renting some of them as early as next year,
and I believe anthropic buying a million from Google, this
(04:56):
was not something that was really prevalent with Google's business model.
That is thwarting the confidence that investors have in Nvidia
stock and the dominance that it has shown over the
last few years.
Speaker 5 (05:07):
Here by the way Google stock is or Alphabet stock
is now turned negative.
Speaker 4 (05:11):
It's cooled off. Yeah.
Speaker 3 (05:12):
Yeah, So look, I don't know where this goes next.
Speaker 2 (05:16):
But if if we get a month out.
Speaker 3 (05:20):
And Google's Gemini is the you know, front runner for
best generative AI tool out there, and you know, they
provide evidence that it was primarily trained on these chips,
and they have the ability to ramp these up, it
is a significant threat to in Nvidia's business in a
way that we haven't seen from some of the other
competition that's been mentioned out there, like a MD and
(05:41):
others leave it like that.
Speaker 4 (05:43):
Yeah, it puts a lot of It puts pressure on
a business that has had really high margins for Nvidia.
That is atypical for a long period of time with chips.
If you look back historically, usually there is some competition
creeping up, and we're seeing some of that now.
Speaker 3 (06:00):
So I want to move on to our dumb story
of the day from the folks over at Baron's. Sorry Barons,
but they have an article how the SNP could hit
eight thousand in twenty twenty six, and they I didn't frankly,
you know what, I'm just gonna admit it. I didn't
read the article. I didn't read the article. I don't
(06:22):
think you should read the article either. I'm just here
to do everyone a service here. But let's just do
some quick math. How could the S and P five
hundred hit eight by one thousand by the end of
next year. It would have to go up by twenty percent.
That insurmountable. Is that impossible? No, it's impossible. In fact,
twenty eight the SMP has gone up by at least
(06:45):
twenty percent thirty four times.
Speaker 4 (06:48):
And in twenty three and twenty four. I believe that's
a third of the time, say the third of the time.
So you're saying, there's a chance if you.
Speaker 3 (06:58):
If you were to roll a dice and get a
one or a two, that's about.
Speaker 2 (07:04):
The likelihood that you would that you would see this
happen next year. So if we're gonna talk about random chance,
then that's where we are. What a preposterous question to
even ask.
Speaker 4 (07:14):
Yeah, let's explain why it is so preposterous, because making
market projections for next year. This will happen, and we'll
cover more of these on the show, I'm sure in
the next month, because every analyst out there at the
major financial institutions is going to be asked to do
at Golden Sachs, Morgan, Merrill, et cetera. And it is
(07:35):
just the biggest fools errand out there. They're really it's
just so difficult to project. I mean, you can analyze
some of the economic threats and reposition portfolios, but just
picking a number.
Speaker 2 (07:47):
Does the AI bubble pop or not? No? One?
Speaker 3 (07:50):
If no, then you very likely could get to eight thousand.
Can we just leave it there?
Speaker 5 (07:55):
Like?
Speaker 2 (07:55):
What?
Speaker 3 (07:56):
Just a silly question? To even pose eight thousand on
the S and P five hundred is less than twenty
percent away from where we are right now. That is
not an insurmountable task. It would not be crazy for
that to happen. It would be potentially surprising because we
are going on three years of absolutely breakneck pace of
S and P five hundred gains. But you know, crazy impossible, No, no,
(08:19):
absolutely not. And as I just mentioned for the last
one hundred or so years, in about a third of
the cases, the market's gone up by more than twenty percent.
So this wouldn't be crazy. I don't think it's particularly likely,
but it's not crazy at all, and I don't see
any value by any bank that.
Speaker 2 (08:41):
By the way, all the banks go out and do this.
Speaker 3 (08:42):
They put together their predictions for where we get by
the end of next year, and they're all useless.
Speaker 2 (08:48):
They're all useless.
Speaker 3 (08:50):
They have to revise them fifteen times based on where
the market goes, and they don't actually base any of
their businesses on where the SMP is going to go.
They don't position any assets or plan anything based on
where the SMP forecast is going to bring them. So
it's useless and investors should ignore it in my humble opinion.
Anything else on the subject, Okay, I'll put it in
(09:11):
my festiv a stat.
Speaker 4 (09:12):
At the fire stings shut weeks. God just burned down. Parents.
Speaker 2 (09:15):
Let's take a quick break.
Speaker 3 (09:17):
When we return, We're playing a little bit of trivia
next on the Financial Exchange.
Speaker 1 (09:22):
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Speaker 5 (10:00):
Let us do a little bit trivia here on the
Financial Exchange on this day. Back in twenty twenty, Kitlyn
Clark made her college basketball debut with the stat line
of twenty seven points, eight rebounds, and four assays. Clark
would go on to set many college basketball records, including
most points of all time. So our trivia question today
(10:23):
is simply which college did Kaitlyn Clark play basketball for?
Once again, which college did Caitlyn Clark play basketball for?
Speaker 1 (10:32):
Uh?
Speaker 5 (10:32):
Be the fifth person today to text us at six
one seven three six two thirteen eighty five with the
keyword trivia along with the correct answer, and you win
a Financial Exchange Show T shirt. Once again. The fifth
correct response to text us to the number six one
seven three six two thirteen eighty five with the correct
response and the keyword trivia will win that Financial Exchange
(10:57):
Show t shirt. See complete financial complete contest rules at
Financial Exchange Show dot com.
Speaker 3 (11:04):
Paul and Tucker, I have good news and I have
bad news when it comes to housing.
Speaker 2 (11:07):
Which one do you want to news first? All right?
Speaker 3 (11:10):
So the bad news is that home sellers have not
yet become accustomed to the twenty twenty five and what
I expect will be the twenty twenty six housing market.
They are still latched onto a price point that they
got fixated on, either when they bought their home back
in twenty twenty two or when they saw their neighbors
sell their home back in twenty twenty two, and it's
(11:31):
just not happening for them.
Speaker 2 (11:33):
I'm gonna use Florida as the.
Speaker 3 (11:35):
Is the use case here, just because it's, you know,
an easy place to pick on. But June of twenty
twenty two, the median listing price for a home in
Florida hit four ninety three five hundred, four hundred ninety
three thousand, five hundred dollars. Since then, it has come
down to four hundred and twenty five thousand. If you
watched your neighbor sell your home sell their home in
(11:57):
the exact same neighborhood two to three years ago go,
they are going to get a lot more for that home.
They will have gotten a lot more from that home
than you will be able to get today. That is
the case in Florida. It's probably the case in places
like Texas, Louisiana, Arizona, and other locations as well. I
think it's you know, particularly severe in Florida. But just
to point out for a minute here that same median
(12:19):
listing price in June of twenty nineteen across Florida was
three hundred and thirty thousand dollars. So long as you
didn't buy in twenty twenty two, you should still have
made a boatload of money on your home and can
sell it at a big state profit and are certainly
not underwater.
Speaker 4 (12:35):
Of course, but there's always the psychological impact of seeing,
you know, the other numbers that were in the market
in years prior. Florida is a great example to pick
for this. In general, it does seem like across the nation, though,
even as we focus on Florida, that there is a
heavier percentage of liftings that are seeing some sort of
(12:55):
price cut. And the piece that's outlining the Wall Street
Journal here makes a fair point that if you're looking
to sell your home quickly, then trying to find the
right price for it, a price that you don't have
to cut down, is going to allow you to sell
much faster. But I kind of scramble on my head,
is just because you picked a lower price and it
sells faster versus a higher price that sells for less.
(13:18):
You know, are you in the middle of those two
the right price versus what was too high? But then
you sell slightly higher than the right pace. You know,
I'm not sure if I can reconcile that exactly. Do
you pick that up?
Speaker 2 (13:29):
Well? I do. I think what a realtor will tell
you is if.
Speaker 3 (13:35):
You you'll end up being more damaged by putting it
at the higher price point.
Speaker 2 (13:39):
Because if a buyer sees a.
Speaker 3 (13:41):
Home that's been out there for ninety to one hundred
sittings on the market, h it's a sitting duck. They
assume that there's a problem and they are going to
beat you up on price, as opposed to if you
can create an environment where there's a competitive bid. Now,
on the other hand, yeah, if you prove if you
price that thing fifteen percent market value below market value.
You might get you know, enough bids to raise it
(14:03):
up to the fair market value, but you also might
just have you know, discounted yourself and psychologically set all
the buyers to that lower price point. So I think
there is a happy medium there. But the good news
for the market overall, again comparing to pre COVID, is
what I like to do when it comes to housing.
In October of this year, across the nation, there were
one point one million properties for sale. This includes condos
(14:26):
and single family residences. In October of twenty nineteen there
were one point two million. We're pretty close. I mean,
not that twenty nineteen was a screaming buyer's market, right,
There was still a lot of competition for housing. I
certainly didn't feel like I was getting the deal of
a century when I bought my own home in November
of twenty nineteen, but compared to today, it now looks
(14:50):
like it was a heck of a deal. And the
point that I would make is nationally we're about back
to where we were in terms of total inventory available
for sale. There is not happening is price dramatic price cuts,
and I think that that is largely tethered to the
fact that people are still psychologically attached to those price
(15:12):
points that they were able to get and their neighbors
were able to get over the course of the last
three years. And now in some markets that's still doable, right.
I was speaking to somebody just yesterday. They've been planning
on selling their home once they were able to get
into the retirement community they wanted to get into. Finally
they you know, they were accepted into the retirement community
because the space opened up. They listed their home for sale,
(15:34):
had an open house over the weekend, ten offers on
Monday morning, and they selected the highest offer on Monday,
and they're going to close very quickly.
Speaker 4 (15:42):
So Greater Boston area.
Speaker 2 (15:43):
Yes, yep.
Speaker 3 (15:44):
Obviously there's a big difference between real estate for sale
in New England and the northern half of the Midwest.
But yeah, there are markets that are still still testing
those prices that you have seen. But you know, again,
nationally we have yet to come back. Even on the
national basis, the median listing price is not up to
(16:05):
the peak that we saw back in June of twenty
twenty two, so people get tethered to those prices and
from what you know, I'm not a real estate expert.
From what I understand, though, you're doing yourself a disservice
if you get too tethered to those prices, and especially
you know, it's one thing when it's your primary residence,
but when it's a rental.
Speaker 2 (16:25):
Property, you just have to apply cold, hard math to it.
Speaker 1 (16:29):
Right.
Speaker 3 (16:29):
Ye if I sell this thing and turn around and
invest it elsewhere, how much can I make as a
replacement to that? And if it's if you're getting a
bad deal on the rent, then you gotta lower the
price and just move along. Because I've spoken to a
number of people in Florida, let's just say, who are
failing to do that math? And I think just waiting
for that comeback, I just don't see it coming.
Speaker 4 (16:54):
It's hard to the the extraneous force.
Speaker 2 (16:57):
Maybe I'm wrong.
Speaker 3 (16:58):
Maybe all of New York City is about to flee
the new mayor there and move to Florida. That was
the theory of one of my somebody that I work,
somebody that I know that was, you know, talking about
buying a bigger home in Florida. And they're like, we
got to rush to this because all the New Yorkers
are going to move down.
Speaker 2 (17:14):
I don't know. I'm not seeing a lot of evidence
of that. I don't.
Speaker 4 (17:17):
I don't know.
Speaker 2 (17:17):
I don't. I don't see a lot of evidence of that.
Speaker 3 (17:21):
McKinsey is explaining why AI won't take your job, even
though it can automate fifty seven percent of all US
work hours. So we're going to continue to see every
story published about this. And I will acknowledge for a
moment here that AI is a new emerging technology and
different from other technologies insofar as it mimics human behavior
(17:44):
more than any other technology I can think of. But
we've got a few centuries worth of history here to judge,
and every other time a new innovation has come along,
whether it's the steam engine or the printing press, we
have not been followed by two decades worth of high
unemployment and general terrible economic malaise. I guess I just
(18:11):
I don't know what new jobs are going to come about,
but I have a sense that it's not just going
to replace ten percent of the US workforce.
Speaker 4 (18:19):
I agree with you ultimately. As human beings, we crave
social interaction. I just am not ready to reach out
that far to a mass elimination of jobs.
Speaker 3 (18:31):
Even if it's not the human element of all this,
the desire to be around.
Speaker 2 (18:36):
People that causes all of it. Every time we've had.
Speaker 3 (18:39):
A big technological innovation, it has opened up new economic activities.
You create more productivity, Thereby there's more wealth, and thereby
there are new innovations, new technologies, new areas of the
labor market that did not previously exist because of that
technological advance. And I just really struggle to believe that
(19:00):
this is going to be the first technology in human
society that.
Speaker 2 (19:04):
Breaks that trend line. I'm with you, I just I
don't get it.
Speaker 3 (19:09):
In fact, you know, there's others that are arguing, no,
we're actually gonna have a labor shortage because Americans are
so bad at stem that we're not going to have
enough people to work in this AI sector to train
these models and actually get them up and running because
we're so bad at science and math here in the
United States. Quick break, we'll have the trivia winner and
a full market update next on the Financial.
Speaker 1 (19:29):
Exchange, 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
(19:53):
look at what's moving market so far. Today right here
on the Financial Exchange, Radio Network.
Speaker 5 (19:58):
Markets and Mixed Territs slorry Following yesterday's rally as traders
react to more economic data from the month of September.
The producer price index met expectations, while retail sales climb
zero point two percent, just below estimates of zero point
four percent. Right now, for markets, the DOWS up over
seven tents of a percent, or three hundred and thirty
(20:20):
two points. S and P five hundred is up about
a quarter percent or fifteen points higher. NASDAC down about
a quarter percent or fifty three points. RUSTED two thousand
is up over one point four percent. Tenure TREASREELD is
down two basis points at four point zero zero eight percent.
In crude oil down just over two percent lower, trading
(20:42):
at fifty seven dollars in fifty one cents a barrel.
According to the Information Meta, is in talks to spend
billions on Google's AI chips as Google steps up its
efforts to compete directly with Nvidia. After initially adding to
its recent rally in early trading, alphabets DOT is now
up only half a percent, and video shares are now
(21:04):
down by four percent. On the heels of that report
of the chip makers, including AMD are seeing sympathy losses. Meanwhile,
Best Buy shares arising four percent after the consumer electronics
retailer hiked its full year sales in earnings outlook after
beating earnings expectations. During the quarter. The retailer saw customers
upgrade tech devices in splurge on new computers, gaming consoles,
(21:28):
and smartphones elsewhere. After naming a new CEO, yesterday, Coles
reported better than expected third quarter results with a surprise profit.
Coles also upped its annual guidance, sending shares in the
struggling retailer surging thirty four percent now and Dick Sporting
Goods beach Street expectations for the previous quarter. However, the
company announced it will shutter some footlocker stores as part
(21:50):
of a larger restructuring so that the sneaker company doesn't
weigh on Dick's profits. Dick Sporting Goods stock is up
over one percent now. Silva and that is Wall Street watching.
On the previous segment, we asked you the trivia question
which college did Caitlin Clark play basketball for? That would
be Iowa. Bob from Griffin Georgia is our winner today
(22:11):
taking home my Financiers what. By the way, Bob, there
you go. Okay, thanks for that, taking home the Financial
Exchange Show t shirt and we play trivia every day
here in the Financial Exchange. See complete contest rules at
Financial Exchange Show dot com.
Speaker 4 (22:24):
Tucker, congrats, big day for coles Man. I'm happy for you.
Speaker 5 (22:28):
Every huge on the shows.
Speaker 3 (22:35):
CNBC has a piece today, Paul. Cash can feel safe,
but it doesn't grow your wealth. Portfolio strategists as well.
I'm going to debate that because I am on bank
Rate's website right now, and I see no fewer than
twelve separate banks that are willing to pay me four
percent or.
Speaker 2 (22:50):
More on my cash.
Speaker 3 (22:53):
A little bit tongue in cheek here, Nonetheless, why do
we as financial advisors spend so much time forocusing on
our clients cash and trying to largely minimize it. It's
not to say nobody should have people should have no
cash at all, but I think frequently you and I
come across people that we work with who are sitting.
Speaker 2 (23:13):
On entirely way too much.
Speaker 3 (23:15):
How does your approach to cash, I guess change as
clients' lives change.
Speaker 4 (23:19):
Yeah, so part of it has to be built on
their financial plan and whether they've amassed enough cash to
be invested as conservably as they are to withstand the
fact that inflation looms as the largest threat for anyone
who has a significant pile of cash.
Speaker 3 (23:35):
Right and if you're over, your inflation is running three percent.
So I'm if I'm doing the absolute best and earning
four percent real you know, real earnings, here, I'm making
one percent on my cash right exactly.
Speaker 4 (23:47):
And so I had a meeting with a perspective client
recently who had all of their money in cash, a
significant sum four to five hundred thousand in cash, and
had expenses on a monthly basis of about forty five
hundred bucks a month. And so if you kind of
extrapolate that, let's say it is, you know, five hundred grand,
(24:08):
collecting four percent interest on it, you're pulling twenty k
off of your your five hundred grand plus some social
Security gets you pretty close to the fifty.
Speaker 2 (24:17):
Right.
Speaker 4 (24:18):
It sounds like a good deal. The problem with that
is just what you mentioned before is that this person's
rent is not going to stay at twenty four hundred bucks. Well,
maybe if Boston puts in the rental the rent control,
then she might be in better shape. But the expenses
on her regular expenses for groceries and other arms, it
is not going to stay at that fixed you know,
(24:39):
forty five hundred bucks a month or five thousand bucks
a month. So the conversation I had with her is
I understand that you're reversed to risk and the fluctuation
of your assets makes you uncomfortable. But the current situation
that you have in place may be tenable today, but
I can assure you it's not tenable going forward because
inflation is going to make that lump sum you just
(25:00):
have it invested in cash not worth as much as
it is today in terms of real dollars.
Speaker 3 (25:04):
Yeah, I say it over and over again to folks.
Most people that I meet their most concerned about a
stock market crash. The biggest item on their list when
they think about their financial well being is what if
the stock market crashes? And easily the biggest risk to
their financial future is not a stock market crash, it's
(25:26):
usually what if inflation runs two percentage points higher for
the rest of your life than it has for the
last three decades.
Speaker 2 (25:33):
Easily a way bigger risk.
Speaker 3 (25:34):
To most people that I meet with, is that inflation
just eating them alive over the course of their retirement
and stock market maybe it does average returns or slightly
below average returns, and suddenly you cannot afford the lifestyle
that you had become accustomed to.
Speaker 2 (25:52):
Ultimately, you have to have enough. Where I always go
back to.
Speaker 3 (25:56):
With clients is, look, you have to hold enough cash
for you to feel confident that I can stick with
the investment plan that I your investment advisor and building
for you. And so if it less you sleep at night,
then you've got to do it. But you know, at
least try and find a bank that's going to pay
you more than Bank of America will on their cash.
Sorry to pick on your Bank America, but I am
a customer and you don't.
Speaker 2 (26:16):
Me as well.
Speaker 3 (26:17):
You don't have any savings accounts that pay me any cash.
Speaker 2 (26:20):
So ultimately that's what's most important.
Speaker 3 (26:23):
But you know, there's lots of alternatives to consider there,
like if I've got dead cash not working for me,
are there at least CDs that I can look at
or US treasuries that you know I can look at
as a solution.
Speaker 2 (26:34):
There. For many people, it's like.
Speaker 3 (26:36):
Hey, you know, if I'm gonna have dead cash anyway,
would I be better off with insurance of some kind?
Speaker 2 (26:40):
You know?
Speaker 3 (26:40):
Could I beef up my my life insurance or my
long term care insurance? And the tricky part of this
too is it all changes depending on how.
Speaker 2 (26:47):
Old you are.
Speaker 3 (26:48):
Right like, you're forty five years old, you got three
kids at home that you're trying to put through school,
and you're a dual working household where either of you
could lose your job. That's a completely different cash need
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kids in college, and suddenly have access to your iras
without being penalized. So it's important that you just speak
(27:12):
with somebody about what the right allocation of cash, bondstocks,
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like fifty eight versus fifty nine years old, can dramatically
change how much cash you should be sitting on in
the event of an emergency because of things like access
to retirement accounts, and people frequently fail to recognize it
(27:36):
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Speaker 2 (28:21):
You guys excited about buying your next car on Amazon?
Speaker 5 (28:24):
Oh yeah, I'm not fully closing the door in it. No,
no in interest me.
Speaker 2 (28:32):
I have never bought a car that didn't first test drive.
Speaker 5 (28:34):
Sure, you can go test drive it somewhere else and
then go buy it at Amazon. Yeah, just kind of
like you do if you go into a Dick Sporting
Goods or a Best Buy or something, you look up
the price while you're there, see the product in person,
trying your sneakers, and then order it on all.
Speaker 2 (28:49):
Right, So then a few questions.
Speaker 3 (28:50):
One, can Amazon actually get me into the car that
I'm test driving at the Hundai dealership cheaper than they're
willing to give it to me at the Hundai dealership?
Speaker 5 (28:58):
I mean, how can you be safe?
Speaker 2 (28:59):
Because if not that and it's a non.
Speaker 5 (29:00):
Starter, I think that's their only route here, right, Is
it lightly cheaper or some sort of incentive.
Speaker 2 (29:07):
In which case? In which case why.
Speaker 4 (29:10):
But if you're the car manufacturer, why would you allow
them to list it NOEP or how are they getting
that cost advantage?
Speaker 3 (29:18):
Imagine your dealers coming back to you and saying, I
have this MSRP listed at forty three thousand, five hundred.
I'm trying to negotiate a sale, and the customer keeps
opening up their Amazon app and showing me the exact
same car and the exact same color with all the
same features for forty one thousand, five hundred. I don't
know that they're going to be delivered. They'd be able
(29:39):
to deliver on vehicles at a cheaper price point.
Speaker 2 (29:43):
I hope they do. But I don't see why anyone
would go for it.
Speaker 4 (29:48):
Particularly when there's some competitors in this space too. I
don't know.
Speaker 2 (29:51):
I mean the customer would go for it.
Speaker 3 (29:53):
Again, like the customer, I would buy the car from
Amazon if they're going to offer it to me for
a cheaper price point. But if I'm the dealer in
this case, which is, by the way, in the US,
like autosystem, the entity that has all the power with
the manufacturers, they're gonna say screw you unless you're willing
to completely cut off your dealer supply. I don't see
(30:15):
how this works. Like it's one thing when you're Amazon
and you can create a you know, proprietary USB cable
that you can sell for half the price of the
one at best Buy because it's you know, off brand
and not mentioned. But that's not what you can do here.
You're not gonna come up with the Amazon car. I
don't I don't know.
Speaker 2 (30:32):
I'm not sure this is gonna be successful.
Speaker 5 (30:34):
Well, Hyundai has been the number one or the car
that started it with the Amazon and now Ford recently
at an announcement. I don't know if it's new, but
it's used cars. I don't know when that goes.
Speaker 3 (30:46):
If it's used cars, then that's a different story that
actually works because there's there is no definitive price point
for a used car, so like Carvana. So I mean
if that's the case, then Carvan is screwed. Oh yeah,
but yeah, I don't know.
Speaker 4 (31:00):
For me, the touch and feel, the test start thing
is is really not that important. I was thinking back
at some of my cars. I've sat in them, but
haven't really drove them around whatever.
Speaker 2 (31:09):
For a used car, I don't think i'd be willing
to buy it because that's.
Speaker 4 (31:13):
I have a relationship with a If not for a
relationship family friend relationship, then yes, I would be more
focused on it.
Speaker 2 (31:20):
Yeah, I mean with a used car.
Speaker 3 (31:22):
I know how Carvana works, Like you've got the seven
day trial period, but you know you still have to
get the insurance. It's still gonna be a giant pain
if you have to return the thing because you don't
like it. I would not be willing to do so
on a used car, and I don't understand how the
new car business would work, So I don't know.
Speaker 5 (31:36):
Text out of the five aweight says Amazon has volume
and has repeatedly taken a loss to corner the market.
Speaker 2 (31:42):
Agreed, right right, Like I absolutely agreed.
Speaker 3 (31:45):
So I think they would be willing to take a
loss on this, and I think on the used cars
they'd be willing to put carbon out of business for it.
But on new cars, I just don't know if the
manufacturer is going to be willing to bankrupt their dealers
in order to go do.
Speaker 5 (31:58):
This textra that they let you try and shoes for free.
The same thing is coming for cars.
Speaker 2 (32:03):
Yeah, all right.
Speaker 4 (32:04):
I hate buying cars. So if Amazon can make that
easier too than.
Speaker 5 (32:08):
Any any anything, then the current process of buying a car,
because it's dog crap and it needs to change, and
all you dealers need to get your crap together because
it's an awful, awful, awful process.
Speaker 4 (32:22):
Stop going to the back room to your manager.
Speaker 5 (32:25):
It's it's awful. My mother in law just spent like
for a used truck, spent literally seven hours at the
dealership to get the best possible price.
Speaker 2 (32:35):
It's what what are we doing?
Speaker 4 (32:37):
It's like a hostage situation, it is.
Speaker 3 (32:39):
It's like who's gonna bend for It's just that when
I bought our new Miniva, it was actually a very
pleasant buying experience. That was in part because they had
me completely over a barrel because they had the.
Speaker 2 (32:48):
Only new sienna for available.
Speaker 3 (32:50):
Yeah, they knew available for sale in the entire state
of Massachusetts. So there was got I was paying it.
But it was very pleasant.
Speaker 5 (32:57):
I'm sure it was.
Speaker 3 (32:58):
Let's oh yeah, let's take a quick break where we
come back of it as Stack roulettas next.
Speaker 1 (33:05):
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Speaker 5 (33:43):
This year's DAB five K was another incredible success, with
over fifteen hundred runners and walkers, all supporting the Disabled
American Veterans Department of Massachusetts. The race results in photo
galleries are available to see and if you didn't have
a chance to participate but would still like to support
our great American heroes, please visit DAV fivek dot Boston.
(34:03):
Early access registration for next year's race is now open
through November thirtieth, so just a few days left. Discounts
are available to head over to DAV fivek dot Boston
and register today. That's DAV fivek dot Boston. Then, before
we hit stack Roulette, just a couple of follow up
texts on the previous conversation regarding the car buying process
(34:28):
and Amazon being you know, involved in that scenario. One
text says Amazon's going to get into the insurance and
registration process as well. Another texter said, if I'm buying
a used car, I need to get in it and
smell it, which I completely agree with.
Speaker 3 (34:45):
Yeah, that's it's a real problem for used car business
that it's like the cigarette smell it you get every
once in a while.
Speaker 2 (34:54):
That's just not easy to get out.
Speaker 5 (34:56):
Oh, Jerry couldn't get rid of the smell bo and
a sob.
Speaker 3 (34:59):
Yeah, big problem the insurance and registration piece. I guess
I don't fully understand what goes into all of that.
But you know, I know you have to do all
of that as part of the registration piece. The interesting
question to me would be does Amazon want to ensure cars?
Speaker 1 (35:13):
Don't?
Speaker 2 (35:14):
I don't think so.
Speaker 3 (35:16):
That was the piece of Tesla's business that was always
like out there as the big compelling item was, Oh,
Tesla's because the self driving features are going to be
so good at driving that the insurance costs are going
to go down, and so Tesla is going to build
out this own insurance business to capture that lower risk.
And the exact opposite happened. It wasn't that there, you know,
(35:37):
more accidents. It's just that the cars were so technologically
forward that every time there was an accident, the insurance
cost was through the roof. And because of all the replacements,
all the replacement costs, the battery damage that could be done,
like all those things were really really expensive in Tesla's
and so the whole theory was, hey, we'll be able
to ensure these cars for less because of self driving,
(35:59):
and the exact dopset happened to it.
Speaker 2 (36:01):
What do you have for us for stack with that ball?
Speaker 4 (36:03):
Your turkey is cheaper this Thanksgiving? That's about it.
Speaker 2 (36:07):
I need to buy one of those, like, now, do
I still have time.
Speaker 4 (36:09):
To follow you?
Speaker 2 (36:10):
Yeah? About that? Yeah?
Speaker 4 (36:12):
You still got time?
Speaker 5 (36:14):
Microwave it be fine.
Speaker 4 (36:17):
Several estimates of Thanksgiving meal costs that listed out it
was there's two different ways of looking at it. A
President Trump had said that it's twenty five percent cheaper
than twenty twenty four Thanksgiving dinner. But apparently according to
US Peace in Bloomberg, this was just fifteen items compared
to the traditional twenty nine items last year.
Speaker 2 (36:40):
So if I buy half the stuff, then it's twenty
five percent cheaper.
Speaker 4 (36:42):
Correct. The consulting firm Jeloyd estimated that the cost of
a home cooked meal of turkey, stuffing, mass potatoes, sweet potato,
cast role, green bean castrole, dinner, rolls, cranberry sauce, and
pump pie was up zero point six percent over twenty
twenty four.
Speaker 3 (37:00):
Right, So basically prices are slightly somewhere between down five
percent according to the American Farm Bureau and up two
to three percent according to Wells Fargo. Correct, So somewhere
between down five and up three either way.
Speaker 5 (37:13):
We know it costs money that we have cogot.
Speaker 3 (37:16):
It, folks, you can take that to the bank. Prices
are somewhere up or down around eight percent of where
they were last year.
Speaker 4 (37:24):
I hope that.
Speaker 2 (37:26):
Yeah, I hope that's really useful information for you.
Speaker 3 (37:28):
As we close out the program today. Taking a look
around at markets, we've got the Dow and SMP strongly
in positive territory now, Dow up nine tenths and percent,
SMP up four tenths and percent. The Nasdaq still holding
on to some losses here. We've got the NAZAC down
sixteen points a little bit less than one tenth of
one percent. Oil was moving earlier on rumors of an
(37:48):
agreement at least from the Ukrainian side for a piece deal.
Oil price is still today down to fifty seven dollars
and fifty six cents. That's off two percent compared to yesterday.
We'll be back at it tomorrow for our Wednesday program.
Hope everyone traveling for Thanksgiving does so safely and has
a lovely Thanksgiving, Happy Thanksgiving, and we'll be back at
(38:09):
it tomorrow
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
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
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Armstrong and Money Matters Radio do not compensate each other
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Exchange with Mike Armstrong and Paul Lane, your exclusive look
at business and financial news affecting your day, your city,
(00:43):
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heroes by visiting DAV five dot Boston and making a
donation today. This is the Financial Exchange with Mike Armstrong
(01:06):
and Paul Lane.
Speaker 2 (01:15):
Good morning, Welcome back to the Financial Exchange.
Speaker 3 (01:17):
Is Mike, Paul and Tucker with you on a Tuesday
here where markets are staging a bit of a recovery.
We've got the SMP flat that dows up six ten
percent and Nasdak's still off half a percent.
Speaker 2 (01:28):
A lot of that being dragged down by in.
Speaker 3 (01:30):
Video, whose stock price today is down nearly six percent
out of some concerns coming from AI world generally, but
less of the I guess general suspicion about AI and
more some specific and video concerns. We did get a
retail sales report this morning. It showed a small but
(01:50):
still a gain for the month of September. Remember we're
going to be getting data releases here that are a
couple months out of date now, so the September report
was not great, but also not terrible. You still saw
an increase in overall sales. Restaurants and bars saw a
good uptick, where as you saw drop in all sorts
of retail sporting goods, clothing, and other categories. You had
(02:14):
a consumer sentiment report that came out this morning from
the Census Bureau that reported the weakest consumer numbers since April,
and you had a producer price index report that came
out this morning that was.
Speaker 2 (02:28):
Fine. Are we gonna call it fine? Yeah?
Speaker 4 (02:30):
I think so.
Speaker 3 (02:31):
It was not concerning in any way, did not indicate
anything that I could see that would lead to marginally
higher consumer prices.
Speaker 2 (02:38):
And so once again puts the federal reserve.
Speaker 3 (02:41):
As we head into December again, the next big event
on the calendar here is the fed's next meeting. They
will be having their press conference and rate decision on
December tenth, so roughly two weeks from now. There's currently
an eighty three percent chance that rates come down by
another quarter per at that meeting. In terms of a
(03:04):
few areas related to interest rates, when we take a
look at thirty year fixed rate mortgages, which the FED
does not control but does influence through their policy and statements,
we've got the average thirty year fixed now sitting at
six point three to two percent, that's according to Mortgage
News Daily. Compared to this time the last year, we
(03:27):
were sitting at nearly seven percent on that same measure,
So pretty big decline in interest rates over the course
of the last year. And and that's about all that
I would focus on when it comes to markets. We
have this pending US Ukraine negotiation that seems like it's
not seems like it's not moving much. But you do
(03:48):
have oil prices falling, I think in regard to that
piece deal. Oil price is off two and three quarters
of percent this morning. Anything else catching your apple?
Speaker 4 (03:57):
I know small caps having a little bit of a
rally here up about one third percent.
Speaker 3 (04:02):
We alluded to one other story, which was the Nvidia
sell off that we are seeing. To put it plainly, Paul,
but why would you guess that we are seeing such
a steep sell off or in video stock today?
Speaker 4 (04:15):
Potentially Google encroaching on in Vidia's dominance and significant market
share in selling chips that are utilized to power large
length as models and the beginnings of the most prevalent
artificial intelligence that's out there on the market right now.
Google had not previously been in the market really of
(04:35):
selling the chips that they constructed themselves that are called TPUs,
but more recently, whether it's this news story that we
cover this morning regarding Meta potentially using some of the
chips by Google in its data centers in twenty twenty seven,
or renting some of them as early as next year,
and I believe anthropic buying a million from Google, this
(04:56):
was not something that was really prevalent with Google's business model.
That is thwarting the confidence that investors have in Nvidia
stock and the dominance that it has shown over the
last few years.
Speaker 5 (05:07):
Here by the way Google stock is or Alphabet stock
is now turned negative.
Speaker 4 (05:11):
It's cooled off. Yeah.
Speaker 3 (05:12):
Yeah, So look, I don't know where this goes next.
Speaker 2 (05:16):
But if if we get a month out.
Speaker 3 (05:20):
And Google's Gemini is the you know, front runner for
best generative AI tool out there, and you know, they
provide evidence that it was primarily trained on these chips,
and they have the ability to ramp these up, it
is a significant threat to in Nvidia's business in a
way that we haven't seen from some of the other
competition that's been mentioned out there, like a MD and
(05:41):
others leave it like that.
Speaker 4 (05:43):
Yeah, it puts a lot of It puts pressure on
a business that has had really high margins for Nvidia.
That is atypical for a long period of time with chips.
If you look back historically, usually there is some competition
creeping up, and we're seeing some of that now.
Speaker 3 (06:00):
So I want to move on to our dumb story
of the day from the folks over at Baron's. Sorry Barons,
but they have an article how the SNP could hit
eight thousand in twenty twenty six, and they I didn't frankly,
you know what, I'm just gonna admit it. I didn't
read the article. I didn't read the article. I don't
(06:22):
think you should read the article either. I'm just here
to do everyone a service here. But let's just do
some quick math. How could the S and P five
hundred hit eight by one thousand by the end of
next year. It would have to go up by twenty percent.
That insurmountable. Is that impossible? No, it's impossible. In fact,
twenty eight the SMP has gone up by at least
(06:45):
twenty percent thirty four times.
Speaker 4 (06:48):
And in twenty three and twenty four. I believe that's
a third of the time, say the third of the time.
So you're saying, there's a chance if you.
Speaker 3 (06:58):
If you were to roll a dice and get a
one or a two, that's about.
Speaker 2 (07:04):
The likelihood that you would that you would see this
happen next year. So if we're gonna talk about random chance,
then that's where we are. What a preposterous question to
even ask.
Speaker 4 (07:14):
Yeah, let's explain why it is so preposterous, because making
market projections for next year. This will happen, and we'll
cover more of these on the show, I'm sure in
the next month, because every analyst out there at the
major financial institutions is going to be asked to do
at Golden Sachs, Morgan, Merrill, et cetera. And it is
(07:35):
just the biggest fools errand out there. They're really it's
just so difficult to project. I mean, you can analyze
some of the economic threats and reposition portfolios, but just
picking a number.
Speaker 2 (07:47):
Does the AI bubble pop or not? No? One?
Speaker 3 (07:50):
If no, then you very likely could get to eight thousand.
Can we just leave it there?
Speaker 5 (07:55):
Like?
Speaker 2 (07:55):
What?
Speaker 3 (07:56):
Just a silly question? To even pose eight thousand on
the S and P five hundred is less than twenty
percent away from where we are right now. That is
not an insurmountable task. It would not be crazy for
that to happen. It would be potentially surprising because we
are going on three years of absolutely breakneck pace of
S and P five hundred gains. But you know, crazy impossible, No, no,
(08:19):
absolutely not. And as I just mentioned for the last
one hundred or so years, in about a third of
the cases, the market's gone up by more than twenty percent.
So this wouldn't be crazy. I don't think it's particularly likely,
but it's not crazy at all, and I don't see
any value by any bank that.
Speaker 2 (08:41):
By the way, all the banks go out and do this.
Speaker 3 (08:42):
They put together their predictions for where we get by
the end of next year, and they're all useless.
Speaker 2 (08:48):
They're all useless.
Speaker 3 (08:50):
They have to revise them fifteen times based on where
the market goes, and they don't actually base any of
their businesses on where the SMP is going to go.
They don't position any assets or plan anything based on
where the SMP forecast is going to bring them. So
it's useless and investors should ignore it in my humble opinion.
Anything else on the subject, Okay, I'll put it in
(09:11):
my festiv a stat.
Speaker 4 (09:12):
At the fire stings shut weeks. God just burned down. Parents.
Speaker 2 (09:15):
Let's take a quick break.
Speaker 3 (09:17):
When we return, We're playing a little bit of trivia
next on the Financial Exchange.
Speaker 1 (09:22):
Here the Financial Exchange every day from eleven to noon,
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Speaker 5 (10:00):
Let us do a little bit trivia here on the
Financial Exchange on this day. Back in twenty twenty, Kitlyn
Clark made her college basketball debut with the stat line
of twenty seven points, eight rebounds, and four assays. Clark
would go on to set many college basketball records, including
most points of all time. So our trivia question today
(10:23):
is simply which college did Kaitlyn Clark play basketball for?
Once again, which college did Caitlyn Clark play basketball for?
Speaker 1 (10:32):
Uh?
Speaker 5 (10:32):
Be the fifth person today to text us at six
one seven three six two thirteen eighty five with the
keyword trivia along with the correct answer, and you win
a Financial Exchange Show T shirt. Once again. The fifth
correct response to text us to the number six one
seven three six two thirteen eighty five with the correct
response and the keyword trivia will win that Financial Exchange
(10:57):
Show t shirt. See complete financial complete contest rules at
Financial Exchange Show dot com.
Speaker 3 (11:04):
Paul and Tucker, I have good news and I have
bad news when it comes to housing.
Speaker 2 (11:07):
Which one do you want to news first? All right?
Speaker 3 (11:10):
So the bad news is that home sellers have not
yet become accustomed to the twenty twenty five and what
I expect will be the twenty twenty six housing market.
They are still latched onto a price point that they
got fixated on, either when they bought their home back
in twenty twenty two or when they saw their neighbors
sell their home back in twenty twenty two, and it's
(11:31):
just not happening for them.
Speaker 2 (11:33):
I'm gonna use Florida as the.
Speaker 3 (11:35):
Is the use case here, just because it's, you know,
an easy place to pick on. But June of twenty
twenty two, the median listing price for a home in
Florida hit four ninety three five hundred, four hundred ninety
three thousand, five hundred dollars. Since then, it has come
down to four hundred and twenty five thousand. If you
watched your neighbor sell your home sell their home in
(11:57):
the exact same neighborhood two to three years ago go,
they are going to get a lot more for that home.
They will have gotten a lot more from that home
than you will be able to get today. That is
the case in Florida. It's probably the case in places
like Texas, Louisiana, Arizona, and other locations as well. I
think it's you know, particularly severe in Florida. But just
to point out for a minute here that same median
(12:19):
listing price in June of twenty nineteen across Florida was
three hundred and thirty thousand dollars. So long as you
didn't buy in twenty twenty two, you should still have
made a boatload of money on your home and can
sell it at a big state profit and are certainly
not underwater.
Speaker 4 (12:35):
Of course, but there's always the psychological impact of seeing,
you know, the other numbers that were in the market
in years prior. Florida is a great example to pick
for this. In general, it does seem like across the nation, though,
even as we focus on Florida, that there is a
heavier percentage of liftings that are seeing some sort of
(12:55):
price cut. And the piece that's outlining the Wall Street
Journal here makes a fair point that if you're looking
to sell your home quickly, then trying to find the
right price for it, a price that you don't have
to cut down, is going to allow you to sell
much faster. But I kind of scramble on my head,
is just because you picked a lower price and it
sells faster versus a higher price that sells for less.
(13:18):
You know, are you in the middle of those two
the right price versus what was too high? But then
you sell slightly higher than the right pace. You know,
I'm not sure if I can reconcile that exactly. Do
you pick that up?
Speaker 2 (13:29):
Well? I do. I think what a realtor will tell
you is if.
Speaker 3 (13:35):
You you'll end up being more damaged by putting it
at the higher price point.
Speaker 2 (13:39):
Because if a buyer sees a.
Speaker 3 (13:41):
Home that's been out there for ninety to one hundred
sittings on the market, h it's a sitting duck. They
assume that there's a problem and they are going to
beat you up on price, as opposed to if you
can create an environment where there's a competitive bid. Now,
on the other hand, yeah, if you prove if you
price that thing fifteen percent market value below market value.
You might get you know, enough bids to raise it
(14:03):
up to the fair market value, but you also might
just have you know, discounted yourself and psychologically set all
the buyers to that lower price point. So I think
there is a happy medium there. But the good news
for the market overall, again comparing to pre COVID, is
what I like to do when it comes to housing.
In October of this year, across the nation, there were
one point one million properties for sale. This includes condos
(14:26):
and single family residences. In October of twenty nineteen there
were one point two million. We're pretty close. I mean,
not that twenty nineteen was a screaming buyer's market, right,
There was still a lot of competition for housing. I
certainly didn't feel like I was getting the deal of
a century when I bought my own home in November
of twenty nineteen, but compared to today, it now looks
(14:50):
like it was a heck of a deal. And the
point that I would make is nationally we're about back
to where we were in terms of total inventory available
for sale. There is not happening is price dramatic price cuts,
and I think that that is largely tethered to the
fact that people are still psychologically attached to those price
(15:12):
points that they were able to get and their neighbors
were able to get over the course of the last
three years. And now in some markets that's still doable, right.
I was speaking to somebody just yesterday. They've been planning
on selling their home once they were able to get
into the retirement community they wanted to get into. Finally
they you know, they were accepted into the retirement community
because the space opened up. They listed their home for sale,
(15:34):
had an open house over the weekend, ten offers on
Monday morning, and they selected the highest offer on Monday,
and they're going to close very quickly.
Speaker 4 (15:42):
So Greater Boston area.
Speaker 2 (15:43):
Yes, yep.
Speaker 3 (15:44):
Obviously there's a big difference between real estate for sale
in New England and the northern half of the Midwest.
But yeah, there are markets that are still still testing
those prices that you have seen. But you know, again,
nationally we have yet to come back. Even on the
national basis, the median listing price is not up to
(16:05):
the peak that we saw back in June of twenty
twenty two, so people get tethered to those prices and
from what you know, I'm not a real estate expert.
From what I understand, though, you're doing yourself a disservice
if you get too tethered to those prices, and especially
you know, it's one thing when it's your primary residence,
but when it's a rental.
Speaker 2 (16:25):
Property, you just have to apply cold, hard math to it.
Speaker 1 (16:29):
Right.
Speaker 3 (16:29):
Ye if I sell this thing and turn around and
invest it elsewhere, how much can I make as a
replacement to that? And if it's if you're getting a
bad deal on the rent, then you gotta lower the
price and just move along. Because I've spoken to a
number of people in Florida, let's just say, who are
failing to do that math? And I think just waiting
for that comeback, I just don't see it coming.
Speaker 4 (16:54):
It's hard to the the extraneous force.
Speaker 2 (16:57):
Maybe I'm wrong.
Speaker 3 (16:58):
Maybe all of New York City is about to flee
the new mayor there and move to Florida. That was
the theory of one of my somebody that I work,
somebody that I know that was, you know, talking about
buying a bigger home in Florida. And they're like, we
got to rush to this because all the New Yorkers
are going to move down.
Speaker 2 (17:14):
I don't know. I'm not seeing a lot of evidence
of that. I don't.
Speaker 4 (17:17):
I don't know.
Speaker 2 (17:17):
I don't. I don't see a lot of evidence of that.
Speaker 3 (17:21):
McKinsey is explaining why AI won't take your job, even
though it can automate fifty seven percent of all US
work hours. So we're going to continue to see every
story published about this. And I will acknowledge for a
moment here that AI is a new emerging technology and
different from other technologies insofar as it mimics human behavior
(17:44):
more than any other technology I can think of. But
we've got a few centuries worth of history here to judge,
and every other time a new innovation has come along,
whether it's the steam engine or the printing press, we
have not been followed by two decades worth of high
unemployment and general terrible economic malaise. I guess I just
(18:11):
I don't know what new jobs are going to come about,
but I have a sense that it's not just going
to replace ten percent of the US workforce.
Speaker 4 (18:19):
I agree with you ultimately. As human beings, we crave
social interaction. I just am not ready to reach out
that far to a mass elimination of jobs.
Speaker 3 (18:31):
Even if it's not the human element of all this,
the desire to be around.
Speaker 2 (18:36):
People that causes all of it. Every time we've had.
Speaker 3 (18:39):
A big technological innovation, it has opened up new economic activities.
You create more productivity, Thereby there's more wealth, and thereby
there are new innovations, new technologies, new areas of the
labor market that did not previously exist because of that
technological advance. And I just really struggle to believe that
(19:00):
this is going to be the first technology in human
society that.
Speaker 2 (19:04):
Breaks that trend line. I'm with you, I just I
don't get it.
Speaker 3 (19:09):
In fact, you know, there's others that are arguing, no,
we're actually gonna have a labor shortage because Americans are
so bad at stem that we're not going to have
enough people to work in this AI sector to train
these models and actually get them up and running because
we're so bad at science and math here in the
United States. Quick break, we'll have the trivia winner and
a full market update next on the Financial.
Speaker 1 (19:29):
Exchange, 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
(19:53):
look at what's moving market so far. Today right here
on the Financial Exchange, Radio Network.
Speaker 5 (19:58):
Markets and Mixed Territs slorry Following yesterday's rally as traders
react to more economic data from the month of September.
The producer price index met expectations, while retail sales climb
zero point two percent, just below estimates of zero point
four percent. Right now, for markets, the DOWS up over
seven tents of a percent, or three hundred and thirty
(20:20):
two points. S and P five hundred is up about
a quarter percent or fifteen points higher. NASDAC down about
a quarter percent or fifty three points. RUSTED two thousand
is up over one point four percent. Tenure TREASREELD is
down two basis points at four point zero zero eight percent.
In crude oil down just over two percent lower, trading
(20:42):
at fifty seven dollars in fifty one cents a barrel.
According to the Information Meta, is in talks to spend
billions on Google's AI chips as Google steps up its
efforts to compete directly with Nvidia. After initially adding to
its recent rally in early trading, alphabets DOT is now
up only half a percent, and video shares are now
(21:04):
down by four percent. On the heels of that report
of the chip makers, including AMD are seeing sympathy losses. Meanwhile,
Best Buy shares arising four percent after the consumer electronics
retailer hiked its full year sales in earnings outlook after
beating earnings expectations. During the quarter. The retailer saw customers
upgrade tech devices in splurge on new computers, gaming consoles,
(21:28):
and smartphones elsewhere. After naming a new CEO, yesterday, Coles
reported better than expected third quarter results with a surprise profit.
Coles also upped its annual guidance, sending shares in the
struggling retailer surging thirty four percent now and Dick Sporting
Goods beach Street expectations for the previous quarter. However, the
company announced it will shutter some footlocker stores as part
(21:50):
of a larger restructuring so that the sneaker company doesn't
weigh on Dick's profits. Dick Sporting Goods stock is up
over one percent now. Silva and that is Wall Street watching.
On the previous segment, we asked you the trivia question
which college did Caitlin Clark play basketball for? That would
be Iowa. Bob from Griffin Georgia is our winner today
(22:11):
taking home my Financiers what. By the way, Bob, there
you go. Okay, thanks for that, taking home the Financial
Exchange Show t shirt and we play trivia every day
here in the Financial Exchange. See complete contest rules at
Financial Exchange Show dot com.
Speaker 4 (22:24):
Tucker, congrats, big day for coles Man. I'm happy for you.
Speaker 5 (22:28):
Every huge on the shows.
Speaker 3 (22:35):
CNBC has a piece today, Paul. Cash can feel safe,
but it doesn't grow your wealth. Portfolio strategists as well.
I'm going to debate that because I am on bank
Rate's website right now, and I see no fewer than
twelve separate banks that are willing to pay me four
percent or.
Speaker 2 (22:50):
More on my cash.
Speaker 3 (22:53):
A little bit tongue in cheek here, Nonetheless, why do
we as financial advisors spend so much time forocusing on
our clients cash and trying to largely minimize it. It's
not to say nobody should have people should have no
cash at all, but I think frequently you and I
come across people that we work with who are sitting.
Speaker 2 (23:13):
On entirely way too much.
Speaker 3 (23:15):
How does your approach to cash, I guess change as
clients' lives change.
Speaker 4 (23:19):
Yeah, so part of it has to be built on
their financial plan and whether they've amassed enough cash to
be invested as conservably as they are to withstand the
fact that inflation looms as the largest threat for anyone
who has a significant pile of cash.
Speaker 3 (23:35):
Right and if you're over, your inflation is running three percent.
So I'm if I'm doing the absolute best and earning
four percent real you know, real earnings, here, I'm making
one percent on my cash right exactly.
Speaker 4 (23:47):
And so I had a meeting with a perspective client
recently who had all of their money in cash, a
significant sum four to five hundred thousand in cash, and
had expenses on a monthly basis of about forty five
hundred bucks a month. And so if you kind of
extrapolate that, let's say it is, you know, five hundred grand,
(24:08):
collecting four percent interest on it, you're pulling twenty k
off of your your five hundred grand plus some social
Security gets you pretty close to the fifty.
Speaker 2 (24:17):
Right.
Speaker 4 (24:18):
It sounds like a good deal. The problem with that
is just what you mentioned before is that this person's
rent is not going to stay at twenty four hundred bucks. Well,
maybe if Boston puts in the rental the rent control,
then she might be in better shape. But the expenses
on her regular expenses for groceries and other arms, it
is not going to stay at that fixed you know,
(24:39):
forty five hundred bucks a month or five thousand bucks
a month. So the conversation I had with her is
I understand that you're reversed to risk and the fluctuation
of your assets makes you uncomfortable. But the current situation
that you have in place may be tenable today, but
I can assure you it's not tenable going forward because
inflation is going to make that lump sum you just
(25:00):
have it invested in cash not worth as much as
it is today in terms of real dollars.
Speaker 3 (25:04):
Yeah, I say it over and over again to folks.
Most people that I meet their most concerned about a
stock market crash. The biggest item on their list when
they think about their financial well being is what if
the stock market crashes? And easily the biggest risk to
their financial future is not a stock market crash, it's
(25:26):
usually what if inflation runs two percentage points higher for
the rest of your life than it has for the
last three decades.
Speaker 2 (25:33):
Easily a way bigger risk.
Speaker 3 (25:34):
To most people that I meet with, is that inflation
just eating them alive over the course of their retirement
and stock market maybe it does average returns or slightly
below average returns, and suddenly you cannot afford the lifestyle
that you had become accustomed to.
Speaker 2 (25:52):
Ultimately, you have to have enough. Where I always go
back to.
Speaker 3 (25:56):
With clients is, look, you have to hold enough cash
for you to feel confident that I can stick with
the investment plan that I your investment advisor and building
for you. And so if it less you sleep at night,
then you've got to do it. But you know, at
least try and find a bank that's going to pay
you more than Bank of America will on their cash.
Sorry to pick on your Bank America, but I am
a customer and you don't.
Speaker 2 (26:16):
Me as well.
Speaker 3 (26:17):
You don't have any savings accounts that pay me any cash.
Speaker 2 (26:20):
So ultimately that's what's most important.
Speaker 3 (26:23):
But you know, there's lots of alternatives to consider there,
like if I've got dead cash not working for me,
are there at least CDs that I can look at
or US treasuries that you know I can look at
as a solution.
Speaker 2 (26:34):
There. For many people, it's like.
Speaker 3 (26:36):
Hey, you know, if I'm gonna have dead cash anyway,
would I be better off with insurance of some kind?
Speaker 2 (26:40):
You know?
Speaker 3 (26:40):
Could I beef up my my life insurance or my
long term care insurance? And the tricky part of this
too is it all changes depending on how.
Speaker 2 (26:47):
Old you are.
Speaker 3 (26:48):
Right like, you're forty five years old, you got three
kids at home that you're trying to put through school,
and you're a dual working household where either of you
could lose your job. That's a completely different cash need
than if you are fifty nine and a half, still working,
kids in college, and suddenly have access to your iras
without being penalized. So it's important that you just speak
(27:12):
with somebody about what the right allocation of cash, bondstocks,
other assets to have is going into these different stages
of life, because, like I mentioned, even just a year
like fifty eight versus fifty nine years old, can dramatically
change how much cash you should be sitting on in
the event of an emergency because of things like access
to retirement accounts, and people frequently fail to recognize it
(27:36):
and therefore miss out on a bunch of asset growth
that they could otherwise be achieving. If you have questions
along those lines, Hey, how much cash should I be
holding for this stage of my life? What are the
real risks that I face as I go into that
next stage of life? Give the Armstrong Advisory Group a
call numbers eight hundred and three nine three for zero
zero one. You can book a time for us to
call you back at Armstrong Advisory dot com. But that
(27:59):
number once again for your free consultation and free chat
is eight hundred three nine three four zero zero one.
Speaker 1 (28:06):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (28:21):
You guys excited about buying your next car on Amazon?
Speaker 5 (28:24):
Oh yeah, I'm not fully closing the door in it. No,
no in interest me.
Speaker 2 (28:32):
I have never bought a car that didn't first test drive.
Speaker 5 (28:34):
Sure, you can go test drive it somewhere else and
then go buy it at Amazon. Yeah, just kind of
like you do if you go into a Dick Sporting
Goods or a Best Buy or something, you look up
the price while you're there, see the product in person,
trying your sneakers, and then order it on all.
Speaker 2 (28:49):
Right, So then a few questions.
Speaker 3 (28:50):
One, can Amazon actually get me into the car that
I'm test driving at the Hundai dealership cheaper than they're
willing to give it to me at the Hundai dealership?
Speaker 5 (28:58):
I mean, how can you be safe?
Speaker 2 (28:59):
Because if not that and it's a non.
Speaker 5 (29:00):
Starter, I think that's their only route here, right, Is
it lightly cheaper or some sort of incentive.
Speaker 2 (29:07):
In which case? In which case why.
Speaker 4 (29:10):
But if you're the car manufacturer, why would you allow
them to list it NOEP or how are they getting
that cost advantage?
Speaker 3 (29:18):
Imagine your dealers coming back to you and saying, I
have this MSRP listed at forty three thousand, five hundred.
I'm trying to negotiate a sale, and the customer keeps
opening up their Amazon app and showing me the exact
same car and the exact same color with all the
same features for forty one thousand, five hundred. I don't
know that they're going to be delivered. They'd be able
(29:39):
to deliver on vehicles at a cheaper price point.
Speaker 2 (29:43):
I hope they do. But I don't see why anyone
would go for it.
Speaker 4 (29:48):
Particularly when there's some competitors in this space too. I
don't know.
Speaker 2 (29:51):
I mean the customer would go for it.
Speaker 3 (29:53):
Again, like the customer, I would buy the car from
Amazon if they're going to offer it to me for
a cheaper price point. But if I'm the dealer in
this case, which is, by the way, in the US,
like autosystem, the entity that has all the power with
the manufacturers, they're gonna say screw you unless you're willing
to completely cut off your dealer supply. I don't see
(30:15):
how this works. Like it's one thing when you're Amazon
and you can create a you know, proprietary USB cable
that you can sell for half the price of the
one at best Buy because it's you know, off brand
and not mentioned. But that's not what you can do here.
You're not gonna come up with the Amazon car. I
don't I don't know.
Speaker 2 (30:32):
I'm not sure this is gonna be successful.
Speaker 5 (30:34):
Well, Hyundai has been the number one or the car
that started it with the Amazon and now Ford recently
at an announcement. I don't know if it's new, but
it's used cars. I don't know when that goes.
Speaker 3 (30:46):
If it's used cars, then that's a different story that
actually works because there's there is no definitive price point
for a used car, so like Carvana. So I mean
if that's the case, then Carvan is screwed. Oh yeah,
but yeah, I don't know.
Speaker 4 (31:00):
For me, the touch and feel, the test start thing
is is really not that important. I was thinking back
at some of my cars. I've sat in them, but
haven't really drove them around whatever.
Speaker 2 (31:09):
For a used car, I don't think i'd be willing
to buy it because that's.
Speaker 4 (31:13):
I have a relationship with a If not for a
relationship family friend relationship, then yes, I would be more
focused on it.
Speaker 2 (31:20):
Yeah, I mean with a used car.
Speaker 3 (31:22):
I know how Carvana works, Like you've got the seven
day trial period, but you know you still have to
get the insurance. It's still gonna be a giant pain
if you have to return the thing because you don't
like it. I would not be willing to do so
on a used car, and I don't understand how the
new car business would work, So I don't know.
Speaker 5 (31:36):
Text out of the five aweight says Amazon has volume
and has repeatedly taken a loss to corner the market.
Speaker 2 (31:42):
Agreed, right right, Like I absolutely agreed.
Speaker 3 (31:45):
So I think they would be willing to take a
loss on this, and I think on the used cars
they'd be willing to put carbon out of business for it.
But on new cars, I just don't know if the
manufacturer is going to be willing to bankrupt their dealers
in order to go do.
Speaker 5 (31:58):
This textra that they let you try and shoes for free.
The same thing is coming for cars.
Speaker 2 (32:03):
Yeah, all right.
Speaker 4 (32:04):
I hate buying cars. So if Amazon can make that
easier too than.
Speaker 5 (32:08):
Any any anything, then the current process of buying a car,
because it's dog crap and it needs to change, and
all you dealers need to get your crap together because
it's an awful, awful, awful process.
Speaker 4 (32:22):
Stop going to the back room to your manager.
Speaker 5 (32:25):
It's it's awful. My mother in law just spent like
for a used truck, spent literally seven hours at the
dealership to get the best possible price.
Speaker 2 (32:35):
It's what what are we doing?
Speaker 4 (32:37):
It's like a hostage situation, it is.
Speaker 3 (32:39):
It's like who's gonna bend for It's just that when
I bought our new Miniva, it was actually a very
pleasant buying experience. That was in part because they had
me completely over a barrel because they had the.
Speaker 2 (32:48):
Only new sienna for available.
Speaker 3 (32:50):
Yeah, they knew available for sale in the entire state
of Massachusetts. So there was got I was paying it.
But it was very pleasant.
Speaker 5 (32:57):
I'm sure it was.
Speaker 3 (32:58):
Let's oh yeah, let's take a quick break where we
come back of it as Stack roulettas next.
Speaker 1 (33:05):
Find daily interviews and full shows of The Financial Exchange
on our YouTube page. Subscribe to our page 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 latest business
(33:26):
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 5 (33:43):
This year's DAB five K was another incredible success, with
over fifteen hundred runners and walkers, all supporting the Disabled
American Veterans Department of Massachusetts. The race results in photo
galleries are available to see and if you didn't have
a chance to participate but would still like to support
our great American heroes, please visit DAV fivek dot Boston.
(34:03):
Early access registration for next year's race is now open
through November thirtieth, so just a few days left. Discounts
are available to head over to DAV fivek dot Boston
and register today. That's DAV fivek dot Boston. Then, before
we hit stack Roulette, just a couple of follow up
texts on the previous conversation regarding the car buying process
(34:28):
and Amazon being you know, involved in that scenario. One
text says Amazon's going to get into the insurance and
registration process as well. Another texter said, if I'm buying
a used car, I need to get in it and
smell it, which I completely agree with.
Speaker 3 (34:45):
Yeah, that's it's a real problem for used car business
that it's like the cigarette smell it you get every
once in a while.
Speaker 2 (34:54):
That's just not easy to get out.
Speaker 5 (34:56):
Oh, Jerry couldn't get rid of the smell bo and
a sob.
Speaker 3 (34:59):
Yeah, big problem the insurance and registration piece. I guess
I don't fully understand what goes into all of that.
But you know, I know you have to do all
of that as part of the registration piece. The interesting
question to me would be does Amazon want to ensure cars?
Speaker 1 (35:13):
Don't?
Speaker 2 (35:14):
I don't think so.
Speaker 3 (35:16):
That was the piece of Tesla's business that was always
like out there as the big compelling item was, Oh,
Tesla's because the self driving features are going to be
so good at driving that the insurance costs are going
to go down, and so Tesla is going to build
out this own insurance business to capture that lower risk.
And the exact opposite happened. It wasn't that there, you know,
(35:37):
more accidents. It's just that the cars were so technologically
forward that every time there was an accident, the insurance
cost was through the roof. And because of all the replacements,
all the replacement costs, the battery damage that could be done,
like all those things were really really expensive in Tesla's
and so the whole theory was, hey, we'll be able
to ensure these cars for less because of self driving,
(35:59):
and the exact dopset happened to it.
Speaker 2 (36:01):
What do you have for us for stack with that ball?
Speaker 4 (36:03):
Your turkey is cheaper this Thanksgiving? That's about it.
Speaker 2 (36:07):
I need to buy one of those, like, now, do
I still have time.
Speaker 4 (36:09):
To follow you?
Speaker 2 (36:10):
Yeah? About that? Yeah?
Speaker 4 (36:12):
You still got time?
Speaker 5 (36:14):
Microwave it be fine.
Speaker 4 (36:17):
Several estimates of Thanksgiving meal costs that listed out it
was there's two different ways of looking at it. A
President Trump had said that it's twenty five percent cheaper
than twenty twenty four Thanksgiving dinner. But apparently according to
US Peace in Bloomberg, this was just fifteen items compared
to the traditional twenty nine items last year.
Speaker 2 (36:40):
So if I buy half the stuff, then it's twenty
five percent cheaper.
Speaker 4 (36:42):
Correct. The consulting firm Jeloyd estimated that the cost of
a home cooked meal of turkey, stuffing, mass potatoes, sweet potato,
cast role, green bean castrole, dinner, rolls, cranberry sauce, and
pump pie was up zero point six percent over twenty
twenty four.
Speaker 3 (37:00):
Right, So basically prices are slightly somewhere between down five
percent according to the American Farm Bureau and up two
to three percent according to Wells Fargo. Correct, So somewhere
between down five and up three either way.
Speaker 5 (37:13):
We know it costs money that we have cogot.
Speaker 3 (37:16):
It, folks, you can take that to the bank. Prices
are somewhere up or down around eight percent of where
they were last year.
Speaker 4 (37:24):
I hope that.
Speaker 2 (37:26):
Yeah, I hope that's really useful information for you.
Speaker 3 (37:28):
As we close out the program today. Taking a look
around at markets, we've got the Dow and SMP strongly
in positive territory now, Dow up nine tenths and percent,
SMP up four tenths and percent. The Nasdaq still holding
on to some losses here. We've got the NAZAC down
sixteen points a little bit less than one tenth of
one percent. Oil was moving earlier on rumors of an
(37:48):
agreement at least from the Ukrainian side for a piece deal.
Oil price is still today down to fifty seven dollars
and fifty six cents. That's off two percent compared to yesterday.
We'll be back at it tomorrow for our Wednesday program.
Hope everyone traveling for Thanksgiving does so safely and has
a lovely Thanksgiving, Happy Thanksgiving, and we'll be back at
(38:09):
it tomorrow
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