May 6, 2026 • 38 mins
AI stocks are soaring again, but history suggests investors may be underestimating the risks.
Chuck Zodda and Paul Lane break down the explosive rally in semiconductor stocks as AI demand drives massive gains across the tech sector, even as warnings about boom-and-bust cycles begin to grow louder.
Also covered:
Chuck Zodda and Paul Lane break down the explosive rally in semiconductor stocks as AI demand drives massive gains across the tech sector, even as warnings about boom-and-bust cycles begin to grow louder.
Also covered:
- Why chipmaker margins are reaching extreme levels again
- How AMD, NVIDIA, and AI infrastructure spending are reshaping markets
- Whether companies are actually using AI to replace workers
- Why mortgage rates are rising again despite hopes for Fed cuts
- The changing economics of Florida real estate after the pandemic boom
- Disney’s new long-term strategy focused on gaming and AI
- Why some experts believe emotionally aware robots may be closer than people think
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(00:42):
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(01:02):
This is the Financial Exchange with Chuck Zada and Paul lane.
Speaker 2 (01:08):
Yeah, it's Chuck, it's Paul, and it's Tucker with you.
And as we kick things off, we got stocks making
a big run to the top side here with all
your major US indices firmly in the green, which is
it's it's nice to see when the cute little Russell
(01:29):
two thousand, can you know, get up and you know,
follow the big brothers to uh well, whereever wherever it
is that they're going. I don't know, but in any case,
the S and P five hundreds up eighty eight points,
about one to quarter percent. The Dow is up six
hundred and fifty seven points about one point three percent.
NASDAK Composite up three hundred and sixty two points about
one point four to three percent. Fascinating thing. The Dow
(01:51):
still has not recaptured a new all time high from
earlier in the year because of its lack of technology exposure.
The other two new major indices are at all time
highs right now or you know, hit them today, but
the Dow not there yet. Tenuere Treasury down six point
two six point two basis points, reversing some of the
(02:14):
upward pressure on rates over the earlier part of the week.
Dollar index is down point five to three percent to
ninety seven to seventy nine, Gold up one hundred and
forty seven to sixty one ounce on that news to
forty seven sixteen and ten cents, and crude oil down
seven thirty nine a barrel on West Text Intermediate to
(02:36):
ninety four eighty eight. This on the back of airport
from Axios that the US and Iran may be nearing
a one page memorandum of understanding to begin negotiating on
things over the next thirty days or so. Again, whether
this turns into something or not, I don't know. We've
(02:57):
had a number of false starts over the last three
to four weeks. This that the initial reporting scene promising
and nothing came of it. Maybe this is different, maybe
it's not. I don't really know. We're gonna see exactly
what happens. But we do not have any movement through
the straight of horm moves just because of these headlines yet,
and ultimately that is what is going to drive the
(03:18):
economic impacts, either positive or negative. And so we'll have
to see what happens in the coming days and weeks
and whether this repute represents genuine progress or if this
is just kind of the latest in a couple of
false starts that we've seen in the last few weeks here.
So we'll keep you in the loop and keep you
(03:38):
informed on what is going on there. Speaking of what
artificial intelligence is, what it's what everyone wants to talk about,
except when we get sick of talking about it. But
we haven't talked about it yet today, so we're not
sick of it yet. AI is forcing CEOs to make
a stark choice layoff worker, make them do more. That's
(04:01):
the headline from the Wall Street Journal. And I think
that that headline is bull loney. But because it's not forcing,
it's not forcing CEOs to do either of those things
you'd like. No ceo is sitting around right now saying, well,
my only two choices are make my employees do more,
(04:22):
get rid of them like that. That's just not how
it works. Number one. The second piece, most companies right now,
most companies aren't anywhere near skilled enough at using artificial
intelligence to even think about laying off workers because of
the games. And on top of that, the make them
(04:46):
do more piece, they're not great at that either. Like
we're not seeing this, you know, giant rise in productivity
across every industry. It's just not happening. So what I
do think is in like the the examples that are
brought up in this piece are companies like you know,
Meta that's laying people off and Coinbase that's laying people off.
(05:08):
And look, here's the deal. The companies that are laying
people off and citing AI generally hired way too many
people in twenty twenty one to twenty two to begin with,
and are on the cutting edge of AI and tech,
and so they might have the experience to be able
to say, yes, it's because of this as well. If
(05:30):
you were to go to John Q law firm or
John Q you know, plumbing firm, or you know, any
other business that's not a bunch of people sitting at
screens coding and stuff like that, they probably didn't overhire
back in twenty one and twenty two and they probably
don't have the AI experience now to say that it's
(05:51):
worth laying people off.
Speaker 3 (05:52):
Yeah, that is accurate from a broad perspective. But ultimately,
when you're reading publication like the Wall Street Journal and
doing what we do on a daily basis, what you
care about the most is the market and the s
and P five hundreds, the best bestly tracked or the
best benchmark that you can track to kind of gauge
market performance. Tech is thirty plus percent waiting in the
(06:13):
s and P five hundreds. So that's why it gets
so much focus, is that these companies that are on
the cutting edge that actually can probably maybe attribute some
productivity enhancements or just are so far entrenched in this
technology of AI that they may have this decision to
make far quicker than, like you said, a regular law firm.
(06:35):
That's why to me it's of interest, and I agree
with you. It's not a binary path. Nothing ever is that, hey,
we either keep workers or fireworkers with AI. That's not
how you necessarily need to play it. But it is
an interesting strategic decision as to what these companies do,
but a lot of it depends on sort of where
(06:55):
their business stands. Meta is spending billions of dollars to
build out their AI infrastructure, and so as a result,
it makes sense for them to probably cut headcount a
little bit. Every business is different. I agree it's probably
too easy just say it's one way or another. But
I think the reason that it's it's worth talking about
is because tech is such a big waiting.
Speaker 4 (07:16):
In the market.
Speaker 3 (07:17):
Though, if you just look at the mass labor market,
I agree with you, companies are far far away from
this binary decision.
Speaker 2 (07:24):
The other piece that bothers me just about this framing
is like, okay, so you can either lay off workers
or make them do more. Paul. When's the last time
a boss went to an employee and said, you're doing
too much? Steve, CALLI come over here. I'd like you
to do less. I'd like you to do less.
Speaker 4 (07:46):
Oh, I don't know. I work too hard. I'm too productive.
Speaker 2 (07:49):
Right, Like, even without AI, like there's never been a
boss in history was like, hey, you know what you
gotta do. You got to produce less output from me?
They like you might have a boss who like cares
about is like, man, you're working too hard, Like you're
gonna burn yourself out. Like sure that happens, but it's
never Hey, do less for me. You're producing too much.
Speaker 3 (08:14):
You know you do far too much new business, right
you are too good at your job.
Speaker 2 (08:20):
Try to be worse. I'll take that in my banks, coach,
whatever you say. So, Like, even without AI, bosses always
want people to do more. You're always trying to find
better and newer and faster ways to do things. He
is just another iteration of that. Is the AI improvement
cycle faster than other ones that we've seen. Yeah, I'd
(08:41):
say that, but I just it feels like very much
a false choice that's being presented in this piece to me,
and so I didn't enjoy that that false choice. I
prefer true choices, all else being equal, Let's take a
quick break. When we come back, We've got some trivia,
(09:03):
and then let's talk about what we're seeing in chip
makerstocks right after.
Speaker 1 (09:07):
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(10:00):
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(10:21):
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Speaker 2 (10:53):
Probably got a pcre from Bloomberg The AI booms chip
maker moment ignores history? What what exactly is ignoring?
Speaker 3 (11:01):
So basically, what's happened here over the course of particularly
this has been evident over the course of the last
month or so. There is an index out there that
tracks the semiconductors, and we've just seen that index absolutely roar.
It's up about I think fifty percent over the course
of the last month and one hundred and forty four
percent over the course of the past year. And so
(11:22):
initially when CHATCHIBT was released back in November of twenty
twenty two, we saw all these huge hyperscalers that we
talked about on the show so frequently their stocks just
tremendously appreciate Nvidia being the biggest benefactor, but others too,
like Alphabet and in Amazon and Meta. But what has
happened more recently is there's just been these absolutely meteoric
(11:47):
rises of companies like Micron and sand Disk, and those
are ones that are more integral in terms of producing
memory and other really key inputs to everything that goes
into semiconductor production and manufacturing. And so what this piece
points out in Bloomberg is that you're seeing margins in
(12:07):
this semiconductor space that are reaching about forty four percent.
And typically for listeners out there that just know the
semiconductor space in general or have followed it maybe back
into the late nineties, it's a boom and bus cycle.
You know, the margins tend to go very high, as
high as sixty percent in times when there's tremendous demand
for chips, and as low as thirteen percent when the
(12:29):
cyclicategic nature kind of ebbs and flows and changes the
market dynamics so that there's too much supply out there.
And so the parallel that's are the the warning I
guess that's being made here is that, yes, there is
tremendous demand for the semiconductors and what they produce today.
That's not to say that they're going to command these
margins in the future. And so really what the debate
(12:50):
comes down to, which which isn't necessarily covered in this
piece here, is how long does this momentum last?
Speaker 1 (12:55):
Check?
Speaker 3 (12:56):
You know, without semiconductors in the market in the S
and P five hundred year to date, without them we
be up two point two percent. We sit up at
about six percent year to date, So they've been a
huge contributor. The question is how long can this momentum sustain.
From everything I've read, there is still a tremendous amount
of appetite for the semiconductors. There's a tremendous shortage and
(13:17):
a lot of key components so it seems like there's
a momentum through twenty seven. But it's a good point
to make that, Hey, we've seen these high margins before.
It can be a boom and bus cycle, so just
be investor beware.
Speaker 4 (13:29):
I guess yeah.
Speaker 2 (13:30):
I think the two things that are true right now.
There's clearly not enough computing power to be able to
deal with all of the artificial intelligence need, and so
semiconductors are in crazy demand right now, and we're absolutely
going to need more of them in the future than
(13:50):
we currently have produced. Yep. The second piece that is
ultimately true is that every single semiconductor cycle end the
same way with shareholders in tears eventually, because these are
not companies that just you know, this is not an
index that corrects by like, you know, ten percent, and
(14:13):
it's like, oh, like everything's fine. Like no, Like when
you take a look at the draw downs that we've
seen from the Philadelphia Semiconductor Index, which goes back to
we pull the data on this, the oh no, this
is not the full data set. You're showing me garbage.
Come on, when we look at it. The data that
I have here goes back I think it's thirty two
(14:37):
years but let me take a look. Yeah, we go
back to nineteen ninety four. Uhh, when you look at
the corrections that we have seen, uh you know over
that time, it's one where again like forty to eighty
percent drops are not uncommon. Like just to put this
(14:57):
in perspective, in the last six years since the pandemic,
the Philadelphia Semiconductor Index saw one fifty percent dip into
twenty twenty two. That was when the broader market fell
what like twenty to twenty five percent. Yep, we saw
another one from mid twenty four through early twenty five
(15:19):
of around thirty five Oh no, sorry, hang on, did
the math there wrong? This one was this was a
forty three percent drop that we saw in from again
mid twenty fourth through early twenty five. And even if
(15:39):
you just want to take a look at like more
recent than that, like, hey, what have we seen like
with some of the volatility in the last you know
little bit here you saw like a twenty percent pullback
from the beginning of March to the end of March
when stocks as a hole went down ten percent.
Speaker 4 (15:57):
And a fifty percent jump in April.
Speaker 2 (15:59):
Yes, so like this is the high volatility area of
the market. It always has been yep, because the difference
between winning and losing in that market is so thin
that it's hey. When when things are going great, it
is as good as it gets for any company out there.
(16:22):
The second that that cycle turns, watch out below. Like
it is high risk, high reward, and that's just the
nature of that industry.
Speaker 3 (16:34):
The one last thing a lot is there's earnings growth
that justifies these price jumps. That they are making a
lot more money hand over fist. So just it's not
a speculative trading thing. This is backed by there's tremendous
demand for products. They're making more money. But the question is,
like I said before, how long does that last?
Speaker 2 (16:49):
Right? Like, if if you want to take a look,
I mean, look the biggest semiconductor name out there's in video.
So if if we pull up you know, good Old
in video, and let's look at forward pe ray ratio
and forward price to sales ratio just as an example
in videos. Forward Pe right now is twenty four. This
is a company that's been trading anywhere from like aside
(17:10):
from a brief period, and twenty twenty five generally been
trading like forty times forward earnings. The stock's actually gotten
cheaper relative to next year's earnings over you know, the
last you know year or two. Same thing. If we
take a look at you know, price to sales, it's
in the same boat there because the sales numbers are
just going absolutely nutty. It's trading thirteen x price to
(17:34):
sales right now. It's normally been like twenty to twenty five.
I'm not saying that this is like cheap, like absolute terms,
you could absolutely have this go from you know thirteen
x you know forward sales down to you know three.
It's not to say that that can't happen. But what
I am saying is this is a company that's been
growing into that. If you want to just look, you know,
trailing price to sales, it's twenty three x sales right now,
(18:00):
been as high as forty five three years ago. Okay,
now again, in Vidia also spent much of the twenty
and twenty tens at about two x price to sales.
So yeah, if again, if this market collapses, then you've
got something where you look at Nvidia and say, oh,
(18:20):
even if they're doing the revenue they are, historically they
were valued, you know, ninety percent lower than today I'm
not saying that that's going to happen because they keep
on just chugging along right now. But at some point
the music ends for every company in the semiconductor space
as far as the growth, and when that happens, it's
usually really painful for the sector as a whole. It's
(18:43):
there's no evidence showing up that we are there right now,
there is nothing there. Eventually it happens to all of them.
But this is where we are right now, taking a
look at markets as we head towards the bottom of
the hour, now is up six hundred and nine points,
the SMP is up eighty six, Nasdaq Composite up three
(19:04):
hundred and seventy six, So the broad based rally continuing
as we go through the day.
Speaker 1 (19:10):
Here.
Speaker 2 (19:11):
We're going to take a quick break. When we return,
I'm gonna talk about what we're seeing in mortgages for
rates and also far to real estate, how is it
evolving as we go through the twenty twenties. We'll discuss next.
Speaker 1 (19:40):
Bringing the latest financial news straight.
Speaker 4 (19:43):
To your radio.
Speaker 1 (19:44):
Every day, it's the Financial Exchange on the Financial Exchange
Radio Network. Till now Boom whoa street watch, treking the
stocks potato, and the headlines driving markets so far today
right here on the Financial Exchange Radio.
Speaker 5 (19:59):
Ne markets building on their rally after Axios reported this
morning that the US and around are closing in on
a one page memo to end the wars, sending oil
prices plunging. Traders are also encouraged by even more strong
tech earnings. Right now, the Dow is up over one
percent or five hundred and eighty seven points, S and
(20:20):
P five hundred up over one percent or eighty four points,
NASDAC up nearly one and a half percent, or three
hundred and seventy points. Russ In two thousand also up
over one percent. Ten year treasure Reel down six basis
points at four point three five percent, and oil down
seven percent, trading at ninety.
Speaker 4 (20:41):
Five dollars a barrel.
Speaker 5 (20:42):
AMD shares rallying seventeen percent after the chip maker posted
strong first quarter of sales and profit while also issuing
strong guidance. Another chip maker, and super micro Computer, also
posted a stronger than expected quarterly guidance despite a revenue miss,
sending shares up by fifteen percent. Meanwhile, Disney saw it's
revenue climb seven percent.
Speaker 4 (21:04):
From a year ago.
Speaker 5 (21:05):
While turnings beat expectations due to growing streaming margins. New
CEO Josh Deamero revealed his long term vision of the company,
focusing on technology to reach customers. Disney stock is up
by six percent. Elsewhere, in Vidia and Corning announced a
partnership to expand manufacturing of fiber optics for AI infrastructure.
In Vidia up by five percent, Corning up by fourteen percent.
(21:29):
Uber shares climbing eight percent after the right handling company
posted a rise in revenue and bookings for the previous quarter.
And media mogul Ted Turner has died at the age
of eighty seven. I'm Tucker Silvan. That is Wall Street
Watch and in the previous segment we asked you the
trivia question, what is the name of Henry David Thoro's
most famous book? That will be Walden and Tom from
(21:52):
Walfam Mass is our winner today, taking home the Financial
ex Change Show T shirt. Congrats to Tom and we
play trivia every day here on the Final Exchange. See
complete contest rules at Financial ex chainshow dot com.
Speaker 2 (22:05):
Before we go further and talk a little bit about housing,
did you guys know that this is today is the
sixteenth anniversary of the flash crash from twenty ten. No,
so the flash crash if for those of you listening
who don't remember it, it was a regular day in
the middle of May in twenty ten where the S
(22:28):
and P five hundred for no discernible reason, whether it
was not you know, a Middle East headline or anything
like that, but the S and P five hundred fell
about I'm sorry, the dow fell about nine percent in
a span of thirteen minutes, and the S and P
five hundred fell about ten percent as well during the
(22:49):
same time. And if you have a chance, like go
onto YouTube and if you just type in flash crash,
it's usually like the second or third one that comes up.
It's a video that shows the price action during the event,
but also has a call from one of the pit
traders who was watching it. They have these again, you
(23:13):
could you can listen to, you know, basically commentary about
what's going on, just from a trading perspective. It's not
it's not oh, here's why this is doing this. It's
more just, hey, here's like what's happening in markets, And
there's this guy who runs the commentary and was just
freaking out because again it was like everyone's sitting there
(23:33):
like why is this happening? And he's calling out like, oh,
we've got like this, now we've got this. Like it
just kept like worstening and worstening. So if you got
a couple of minutes, it's just kind of a cool
piece of financial markets history that you can check, check
out and look at, just because it was sixteen days
ago today. I thought about asking Tucker to play the audio,
(23:55):
but then I was like, if someone was just tuning
in with that, knowing what it is, it might just
scare the crap out of home. So I decided that
that was good call. Yeah, a good thing to ask
Tucker to do. Otherwise, but I was like, oh, like
we should do this day. And then I was driving
in and I was like, no, No, you're going to
cause like some real problems if you play something from
sixteen years ago and someone comes in like midstream and
(24:17):
is like, what's happening, Paul, Let's talk about mortgage rates.
What do we see over the last week?
Speaker 3 (24:23):
We've seen them jump up to six point four five
percent from six point three seven percent. Applications to buy
a home were just five percent higher than they were
a week ago, and as a result of the uptick
and mortgage rates to getting close to that six and
a half percent. Obviously, refinances were down a little bit
(24:43):
as well. It does look like, you know, I'm sure
you've covered it, that won't be a you know, hugely
robust year for the housing market this year. Perhaps we
see some increases the following year in twenty seven, but
with some of the stuff that we've seen recently with rates,
I believe we he got on the low end at
high five nines, but since haven't been able to get
(25:05):
back down to that.
Speaker 2 (25:06):
Level, folks. The Armstrong Advisory Group has a guide available
this month titled Consolidating Investment Accounts. If you're like most people,
you got an old four to one K over here,
you got an old one over there. You got three
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that you finally got a statement from. You got you know,
(25:28):
some savings bonds that your parents gave you and they're
held here. It's a mess, and here's the deal. There
are sometimes when it's actually appropriate to have that mess,
because different accounts have certain benefits that you want to keep.
There are other times when it makes sense to consolidate
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(25:48):
really receive anything special from having all these things scattered
out into different financial institutions. So this guy is all
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(26:10):
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Speaker 1 (26:31):
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, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (26:46):
Paul We got a piece in Bloomberg Opinion from Connor
Send Florida's Future more Wealth higher costs and less growth.
Talk to me about this. That sounds different from how
it's historically been viewed.
Speaker 3 (26:55):
Yeah, so Florida is going through a bit of a
shift on the real estate market side of things. Where
it was the state that I would bring up in
terms of just the weakness in the overall real estate
market over the course of the last few years, but
that dynamic has shifted quite a bit over the course
of the last six to twelve months or so. What
(27:16):
we saw post pandemic is obviously a huge amount of
migration to Florida. US home prices rose about forty one
percent from March of twenty twenty through June of twenty
twenty two. But US or Florida ones. I'm gonna get
to Florida a second, but that was US forty one percent.
Florida in that same time period, they spiked fifty one percent.
Speaker 4 (27:34):
And what we've just seen is the.
Speaker 3 (27:38):
Sort of correction that has occurred where like areas like
Punta Gorda in this same time span were up seventy
percent in terms of their price increases.
Speaker 2 (27:47):
Insane.
Speaker 3 (27:48):
It is just absolutely wild. And now we've seen that
same Punta Gorda, Florida area drop about twenty four percent
since June of twenty twenty two, so that now their
home price increases over that span from twenty twenty to
where we sit today are more closely tied to kind
of what we've seen on the over real estate market
in the United States. Now we're at a point where
(28:10):
there's been a lot of migration that was probably moved
forward by the pandemic, a lot of people fleeing California
or New York for the state income tax benefits that
Florida offers, but are starting to see finally that they
are clearing through inventory and they You've had companies like
Pulti Group mentioned that April saw a uptick in orders
(28:31):
for every Florida market and you've got about eighteen percent
increased statewide for new inventory across Florida, just you know,
pulling one of the home builders here. So a lot
more demand or perhaps working through some of that overpriced
inventory is what we've seen in Florida.
Speaker 2 (28:47):
Yeah, it's gonna be interesting to see how the state evolves.
As you know, these costs have risen because historically, i mean,
look talk to anyone for the last eighty years or so,
because quite honest, living in Florida before the advent of
air conditioning not really pleasant for most of the year,
generally unpleasant. Air conditioning is basically what's enabled this migration
(29:10):
from north to south in the United States, because otherwise
a lot of those parts like it. If you had
to actually live there year round with no air conditioning,
not just to like at home, but in public buildings,
you'd be like, yeah, all else being equal, I prefer
forty three feet of snow in Buffalo, you know, it
can stay in warm and make a fire or something.
(29:31):
So for the last eighty years, it's been Hey, these
areas have been just growth magnets because there's all this land.
The land was cheap, the labor was cheap, and so yeah,
have at it. And obviously, like it's changed for a
number of reasons that we've discussed, you know, for the
(29:51):
last several years. But the cost disparity between you know,
Florida and the Northeast, or Florida and the midwa West
has compressed quite a bit. And it's not just Florida,
by the way. You look at places like Nashville, Tennessee,
like Denver, you know, you go through all of the
these kind of boom towns of the twenty tens, they've
(30:13):
gone through the same thing as well, because that cost
disparity has just been arbitraged away by people who are like, oh, hey,
I made all this money in New York and now
I can go there. Well, yeah, when you bring your
money there, it's gonna drive up cost there if enough
people do that. And so that's what's happened. So it's
you know, there's still places where you can go. And look,
there's still differences between the cost of living in New
(30:35):
York and the cost of living in Charlotte, but they're
not as big as they used to be, right, And
if you really want to go to the places that
have that big cost of living disparity, the place that
you have to go are the places that people have
been leaving on a net basis for the last forty years,
not going to you know, like that's where you've got
(30:55):
to go. You've got to go to you know, bangor
Maine and North You've got to go to West Virginia.
You've got to go to the other you know, the
Ross belt area that's seen all the manufacturing. Those are
the places that you've got your arbitrage opportunities now for
you know, hey, can my money go further than in
(31:17):
the big city, because it's largely been eaten away when
you look at a lot of these other areas now.
And that's just kind of the where we sit today.
Let's take a quick break. When we come back, it's
time for a little bit of stack roulettes.
Speaker 1 (31:33):
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(31:54):
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Speaker 5 (32:16):
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Speaker 2 (32:55):
Paul, what you got for me for stack Roulette.
Speaker 3 (32:57):
Disney came out with Ernie today, their new CEO gave
his vision for the company going forward. What they saw
here from Disney's earnings is continued resiliency on their theme parks.
In terms of its revenue. They saw a seven percent
increase year over year on their theme parks. Global attendance
at the theme parks and I believe this ties in
(33:18):
the cruise ships as well. The attendance was up about
two percent domestically here in the US a little bit
of a decrease down about one percent in terms of
the park visits. In terms of what Disney's looking at
going forward, they had announced a partnership with open ai
to license its IP and their characters to open ai
(33:39):
to allow for the creation of AI generated video content.
But open Ai shelved its Soorro video tool for a
cost cutting measure, so that partnership has kind of been
temporarily abandoned. But really it seems like what the new
focuses on from a strategic.
Speaker 4 (33:58):
Standpoint is video games.
Speaker 3 (34:00):
They had done a one and a half billion dollar
investment with Epic Games. They're the ones behind Fortnite for
people who have grandkids, you know, out there, a very
popular game developed by Epic that was two years ago
that Disney made that one and a half billion investment
in Epic Games, and the investment was to build an
online world for Disney character So it seems like the
(34:20):
new CEO, Justin Merrow, his big focus here is how
they can make inroads within video games using you know,
the huge library of IP content that they had in
characters that they have perhaps within the video game space.
Speaker 2 (34:35):
Here, I want to talk a little bit about robots, alrighty. Specifically,
there's a piece from the Wall Street Journal, the rumba
Guy's second Act A robot you'll want to snuggle. So
Colin Angele is one of the founders of I Robot, uh,
and I don't know if he's a genius, but he's
(34:57):
way way smarter than me and has done things that
I will never do my life because he's really smart.
Like he spent time working at NASA's Jet Propulsional Laboratory
designing software for like actual Mars rovers that went up
to Mars and landed on it and did stuff there.
He's got a bachelor's in electrical engineering and a master's
(35:19):
in computer science from MIT. He's a smart, smart dude.
But then you also come across quotes like this when
talking about Jurassic Park. To him, the white bearded CEO
is the hero of the movie, not the villain, because
he was trying to take something that was always smoking
mirrors and turn it into something magical and real. That's
some of the sentiment behind what we're doing. And basically
(35:40):
what they're doing is trying to make robots that have
an emotional relationship with their owners, so like if you're
having a bad day, you can come and like pet
them and snuggle with them, or if you're having a
good day, it'll celebrate with you, and YadA YadA. And
you know, there's a part of Jurassic Park and like
a bunch of other movies where where you know they
(36:00):
say Hey, like scientists were busy, you know, too busy
figuring out if they could, they forgot to ask if
they should. And it seems to me that this is
one of those where, look, you probably can make a
robot that can, you know, interpret your emotions and snuggle
with you, and you know whatever, I'm just not sure
(36:23):
that we should. And it seems like Angle just didn't
pay attention to that part of the movie because even
from like some of these other quotes, you know, they
ask him as part of an interview here from the
Wall Street Journal, how do you responsibly build a system
that knows us intimately in one where we place greater
trust And they talk about like, hey, like people will
(36:47):
and should know that they're interacting with machine. I think
most of us feel warmth and connection two objects in
our lives, right, And it's like that's kind of different
from you know, your car doesn't emotionally understand you, and
you don't like it because because it snuggles you and
your you know, your shoes aren't like high fiving you
if you have like a good day at the office,
(37:07):
er run a personal best in the marathons. So I
don't know, I just I kind of struggle with this,
and I'm just not sure that we should be building
robots that can understand our emotions because I don't think
we are emotionally ready for that as humans.
Speaker 4 (37:29):
Quite honestly, I'm definitely not there yet.
Speaker 3 (37:32):
And he feels like if we kind of rank the
problems that someone's so gifted and smart should be tackling,
I feel like pets do a reasonable job kind of
meeting this objective, and perhaps it's better served elsewhere directing
sort of all the talents and ambition here rather than
putting together a roboat a robot emotional support dog. I
(37:56):
think there's other places we could go with development of robots. Yea,
And actually, I'm sorry.
Speaker 2 (38:01):
The quote that I just read it was the most
recent one, was actually from the co CEO of the
company that he's with now, by the name of Ira Renfrew.
So again, sorry, I want to make sure that quote
is properly attributed.
Speaker 1 (38:14):
There.
Speaker 2 (38:15):
Let's take a quick break for the whole rest of
the day, But tomorrow's Thursday. We do a show on Thursdays,
and you just join us. Then it'll be kind of
fun at least
The Financial Exchange is produced by Money Matters Radio and
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(01:02):
This is the Financial Exchange with Chuck Zada and Paul lane.
Speaker 2 (01:08):
Yeah, it's Chuck, it's Paul, and it's Tucker with you.
And as we kick things off, we got stocks making
a big run to the top side here with all
your major US indices firmly in the green, which is
it's it's nice to see when the cute little Russell
(01:29):
two thousand, can you know, get up and you know,
follow the big brothers to uh well, whereever wherever it
is that they're going. I don't know, but in any case,
the S and P five hundreds up eighty eight points,
about one to quarter percent. The Dow is up six
hundred and fifty seven points about one point three percent.
NASDAK Composite up three hundred and sixty two points about
one point four to three percent. Fascinating thing. The Dow
(01:51):
still has not recaptured a new all time high from
earlier in the year because of its lack of technology exposure.
The other two new major indices are at all time
highs right now or you know, hit them today, but
the Dow not there yet. Tenuere Treasury down six point
two six point two basis points, reversing some of the
(02:14):
upward pressure on rates over the earlier part of the week.
Dollar index is down point five to three percent to
ninety seven to seventy nine, Gold up one hundred and
forty seven to sixty one ounce on that news to
forty seven sixteen and ten cents, and crude oil down
seven thirty nine a barrel on West Text Intermediate to
(02:36):
ninety four eighty eight. This on the back of airport
from Axios that the US and Iran may be nearing
a one page memorandum of understanding to begin negotiating on
things over the next thirty days or so. Again, whether
this turns into something or not, I don't know. We've
(02:57):
had a number of false starts over the last three
to four weeks. This that the initial reporting scene promising
and nothing came of it. Maybe this is different, maybe
it's not. I don't really know. We're gonna see exactly
what happens. But we do not have any movement through
the straight of horm moves just because of these headlines yet,
and ultimately that is what is going to drive the
(03:18):
economic impacts, either positive or negative. And so we'll have
to see what happens in the coming days and weeks
and whether this repute represents genuine progress or if this
is just kind of the latest in a couple of
false starts that we've seen in the last few weeks here.
So we'll keep you in the loop and keep you
(03:38):
informed on what is going on there. Speaking of what
artificial intelligence is, what it's what everyone wants to talk about,
except when we get sick of talking about it. But
we haven't talked about it yet today, so we're not
sick of it yet. AI is forcing CEOs to make
a stark choice layoff worker, make them do more. That's
(04:01):
the headline from the Wall Street Journal. And I think
that that headline is bull loney. But because it's not forcing,
it's not forcing CEOs to do either of those things
you'd like. No ceo is sitting around right now saying, well,
my only two choices are make my employees do more,
(04:22):
get rid of them like that. That's just not how
it works. Number one. The second piece, most companies right now,
most companies aren't anywhere near skilled enough at using artificial
intelligence to even think about laying off workers because of
the games. And on top of that, the make them
(04:46):
do more piece, they're not great at that either. Like
we're not seeing this, you know, giant rise in productivity
across every industry. It's just not happening. So what I
do think is in like the the examples that are
brought up in this piece are companies like you know,
Meta that's laying people off and Coinbase that's laying people off.
(05:08):
And look, here's the deal. The companies that are laying
people off and citing AI generally hired way too many
people in twenty twenty one to twenty two to begin with,
and are on the cutting edge of AI and tech,
and so they might have the experience to be able
to say, yes, it's because of this as well. If
(05:30):
you were to go to John Q law firm or
John Q you know, plumbing firm, or you know, any
other business that's not a bunch of people sitting at
screens coding and stuff like that, they probably didn't overhire
back in twenty one and twenty two and they probably
don't have the AI experience now to say that it's
(05:51):
worth laying people off.
Speaker 3 (05:52):
Yeah, that is accurate from a broad perspective. But ultimately,
when you're reading publication like the Wall Street Journal and
doing what we do on a daily basis, what you
care about the most is the market and the s
and P five hundreds, the best bestly tracked or the
best benchmark that you can track to kind of gauge
market performance. Tech is thirty plus percent waiting in the
(06:13):
s and P five hundreds. So that's why it gets
so much focus, is that these companies that are on
the cutting edge that actually can probably maybe attribute some
productivity enhancements or just are so far entrenched in this
technology of AI that they may have this decision to
make far quicker than, like you said, a regular law firm.
(06:35):
That's why to me it's of interest, and I agree
with you. It's not a binary path. Nothing ever is that, hey,
we either keep workers or fireworkers with AI. That's not
how you necessarily need to play it. But it is
an interesting strategic decision as to what these companies do,
but a lot of it depends on sort of where
(06:55):
their business stands. Meta is spending billions of dollars to
build out their AI infrastructure, and so as a result,
it makes sense for them to probably cut headcount a
little bit. Every business is different. I agree it's probably
too easy just say it's one way or another. But
I think the reason that it's it's worth talking about
is because tech is such a big waiting.
Speaker 4 (07:16):
In the market.
Speaker 3 (07:17):
Though, if you just look at the mass labor market,
I agree with you, companies are far far away from
this binary decision.
Speaker 2 (07:24):
The other piece that bothers me just about this framing
is like, okay, so you can either lay off workers
or make them do more. Paul. When's the last time
a boss went to an employee and said, you're doing
too much? Steve, CALLI come over here. I'd like you
to do less. I'd like you to do less.
Speaker 4 (07:46):
Oh, I don't know. I work too hard. I'm too productive.
Speaker 2 (07:49):
Right, Like, even without AI, like there's never been a
boss in history was like, hey, you know what you
gotta do. You got to produce less output from me?
They like you might have a boss who like cares
about is like, man, you're working too hard, Like you're
gonna burn yourself out. Like sure that happens, but it's
never Hey, do less for me. You're producing too much.
Speaker 3 (08:14):
You know you do far too much new business, right
you are too good at your job.
Speaker 2 (08:20):
Try to be worse. I'll take that in my banks, coach,
whatever you say. So, Like, even without AI, bosses always
want people to do more. You're always trying to find
better and newer and faster ways to do things. He
is just another iteration of that. Is the AI improvement
cycle faster than other ones that we've seen. Yeah, I'd
(08:41):
say that, but I just it feels like very much
a false choice that's being presented in this piece to me,
and so I didn't enjoy that that false choice. I
prefer true choices, all else being equal, Let's take a
quick break. When we come back, We've got some trivia,
(09:03):
and then let's talk about what we're seeing in chip
makerstocks right after.
Speaker 1 (09:07):
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Speaker 5 (09:40):
The Financial looks Change streams live every day on YouTube.
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(10:00):
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(10:21):
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Speaker 2 (10:53):
Probably got a pcre from Bloomberg The AI booms chip
maker moment ignores history? What what exactly is ignoring?
Speaker 3 (11:01):
So basically, what's happened here over the course of particularly
this has been evident over the course of the last
month or so. There is an index out there that
tracks the semiconductors, and we've just seen that index absolutely roar.
It's up about I think fifty percent over the course
of the last month and one hundred and forty four
percent over the course of the past year. And so
(11:22):
initially when CHATCHIBT was released back in November of twenty
twenty two, we saw all these huge hyperscalers that we
talked about on the show so frequently their stocks just
tremendously appreciate Nvidia being the biggest benefactor, but others too,
like Alphabet and in Amazon and Meta. But what has
happened more recently is there's just been these absolutely meteoric
(11:47):
rises of companies like Micron and sand Disk, and those
are ones that are more integral in terms of producing
memory and other really key inputs to everything that goes
into semiconductor production and manufacturing. And so what this piece
points out in Bloomberg is that you're seeing margins in
(12:07):
this semiconductor space that are reaching about forty four percent.
And typically for listeners out there that just know the
semiconductor space in general or have followed it maybe back
into the late nineties, it's a boom and bus cycle.
You know, the margins tend to go very high, as
high as sixty percent in times when there's tremendous demand
for chips, and as low as thirteen percent when the
(12:29):
cyclicategic nature kind of ebbs and flows and changes the
market dynamics so that there's too much supply out there.
And so the parallel that's are the the warning I
guess that's being made here is that, yes, there is
tremendous demand for the semiconductors and what they produce today.
That's not to say that they're going to command these
margins in the future. And so really what the debate
(12:50):
comes down to, which which isn't necessarily covered in this
piece here, is how long does this momentum last?
Speaker 1 (12:55):
Check?
Speaker 3 (12:56):
You know, without semiconductors in the market in the S
and P five hundred year to date, without them we
be up two point two percent. We sit up at
about six percent year to date, So they've been a
huge contributor. The question is how long can this momentum sustain.
From everything I've read, there is still a tremendous amount
of appetite for the semiconductors. There's a tremendous shortage and
(13:17):
a lot of key components so it seems like there's
a momentum through twenty seven. But it's a good point
to make that, Hey, we've seen these high margins before.
It can be a boom and bus cycle, so just
be investor beware.
Speaker 4 (13:29):
I guess yeah.
Speaker 2 (13:30):
I think the two things that are true right now.
There's clearly not enough computing power to be able to
deal with all of the artificial intelligence need, and so
semiconductors are in crazy demand right now, and we're absolutely
going to need more of them in the future than
(13:50):
we currently have produced. Yep. The second piece that is
ultimately true is that every single semiconductor cycle end the
same way with shareholders in tears eventually, because these are
not companies that just you know, this is not an
index that corrects by like, you know, ten percent, and
(14:13):
it's like, oh, like everything's fine. Like no, Like when
you take a look at the draw downs that we've
seen from the Philadelphia Semiconductor Index, which goes back to
we pull the data on this, the oh no, this
is not the full data set. You're showing me garbage.
Come on, when we look at it. The data that
I have here goes back I think it's thirty two
(14:37):
years but let me take a look. Yeah, we go
back to nineteen ninety four. Uhh, when you look at
the corrections that we have seen, uh you know over
that time, it's one where again like forty to eighty
percent drops are not uncommon. Like just to put this
(14:57):
in perspective, in the last six years since the pandemic,
the Philadelphia Semiconductor Index saw one fifty percent dip into
twenty twenty two. That was when the broader market fell
what like twenty to twenty five percent. Yep, we saw
another one from mid twenty four through early twenty five
(15:19):
of around thirty five Oh no, sorry, hang on, did
the math there wrong? This one was this was a
forty three percent drop that we saw in from again
mid twenty fourth through early twenty five. And even if
(15:39):
you just want to take a look at like more
recent than that, like, hey, what have we seen like
with some of the volatility in the last you know
little bit here you saw like a twenty percent pullback
from the beginning of March to the end of March
when stocks as a hole went down ten percent.
Speaker 4 (15:57):
And a fifty percent jump in April.
Speaker 2 (15:59):
Yes, so like this is the high volatility area of
the market. It always has been yep, because the difference
between winning and losing in that market is so thin
that it's hey. When when things are going great, it
is as good as it gets for any company out there.
(16:22):
The second that that cycle turns, watch out below. Like
it is high risk, high reward, and that's just the
nature of that industry.
Speaker 3 (16:34):
The one last thing a lot is there's earnings growth
that justifies these price jumps. That they are making a
lot more money hand over fist. So just it's not
a speculative trading thing. This is backed by there's tremendous
demand for products. They're making more money. But the question is,
like I said before, how long does that last?
Speaker 2 (16:49):
Right? Like, if if you want to take a look,
I mean, look the biggest semiconductor name out there's in video.
So if if we pull up you know, good Old
in video, and let's look at forward pe ray ratio
and forward price to sales ratio just as an example
in videos. Forward Pe right now is twenty four. This
is a company that's been trading anywhere from like aside
(17:10):
from a brief period, and twenty twenty five generally been
trading like forty times forward earnings. The stock's actually gotten
cheaper relative to next year's earnings over you know, the
last you know year or two. Same thing. If we
take a look at you know, price to sales, it's
in the same boat there because the sales numbers are
just going absolutely nutty. It's trading thirteen x price to
(17:34):
sales right now. It's normally been like twenty to twenty five.
I'm not saying that this is like cheap, like absolute terms,
you could absolutely have this go from you know thirteen
x you know forward sales down to you know three.
It's not to say that that can't happen. But what
I am saying is this is a company that's been
growing into that. If you want to just look, you know,
trailing price to sales, it's twenty three x sales right now,
(18:00):
been as high as forty five three years ago. Okay,
now again, in Vidia also spent much of the twenty
and twenty tens at about two x price to sales.
So yeah, if again, if this market collapses, then you've
got something where you look at Nvidia and say, oh,
(18:20):
even if they're doing the revenue they are, historically they
were valued, you know, ninety percent lower than today I'm
not saying that that's going to happen because they keep
on just chugging along right now. But at some point
the music ends for every company in the semiconductor space
as far as the growth, and when that happens, it's
usually really painful for the sector as a whole. It's
(18:43):
there's no evidence showing up that we are there right now,
there is nothing there. Eventually it happens to all of them.
But this is where we are right now, taking a
look at markets as we head towards the bottom of
the hour, now is up six hundred and nine points,
the SMP is up eighty six, Nasdaq Composite up three
(19:04):
hundred and seventy six, So the broad based rally continuing
as we go through the day.
Speaker 1 (19:10):
Here.
Speaker 2 (19:11):
We're going to take a quick break. When we return,
I'm gonna talk about what we're seeing in mortgages for
rates and also far to real estate, how is it
evolving as we go through the twenty twenties. We'll discuss next.
Speaker 1 (19:40):
Bringing the latest financial news straight.
Speaker 4 (19:43):
To your radio.
Speaker 1 (19:44):
Every day, it's the Financial Exchange on the Financial Exchange
Radio Network. Till now Boom whoa street watch, treking the
stocks potato, and the headlines driving markets so far today
right here on the Financial Exchange Radio.
Speaker 5 (19:59):
Ne markets building on their rally after Axios reported this
morning that the US and around are closing in on
a one page memo to end the wars, sending oil
prices plunging. Traders are also encouraged by even more strong
tech earnings. Right now, the Dow is up over one
percent or five hundred and eighty seven points, S and
(20:20):
P five hundred up over one percent or eighty four points,
NASDAC up nearly one and a half percent, or three
hundred and seventy points. Russ In two thousand also up
over one percent. Ten year treasure Reel down six basis
points at four point three five percent, and oil down
seven percent, trading at ninety.
Speaker 4 (20:41):
Five dollars a barrel.
Speaker 5 (20:42):
AMD shares rallying seventeen percent after the chip maker posted
strong first quarter of sales and profit while also issuing
strong guidance. Another chip maker, and super micro Computer, also
posted a stronger than expected quarterly guidance despite a revenue miss,
sending shares up by fifteen percent. Meanwhile, Disney saw it's
revenue climb seven percent.
Speaker 4 (21:04):
From a year ago.
Speaker 5 (21:05):
While turnings beat expectations due to growing streaming margins. New
CEO Josh Deamero revealed his long term vision of the company,
focusing on technology to reach customers. Disney stock is up
by six percent. Elsewhere, in Vidia and Corning announced a
partnership to expand manufacturing of fiber optics for AI infrastructure.
In Vidia up by five percent, Corning up by fourteen percent.
(21:29):
Uber shares climbing eight percent after the right handling company
posted a rise in revenue and bookings for the previous quarter.
And media mogul Ted Turner has died at the age
of eighty seven. I'm Tucker Silvan. That is Wall Street
Watch and in the previous segment we asked you the
trivia question, what is the name of Henry David Thoro's
most famous book? That will be Walden and Tom from
(21:52):
Walfam Mass is our winner today, taking home the Financial
ex Change Show T shirt. Congrats to Tom and we
play trivia every day here on the Final Exchange. See
complete contest rules at Financial ex chainshow dot com.
Speaker 2 (22:05):
Before we go further and talk a little bit about housing,
did you guys know that this is today is the
sixteenth anniversary of the flash crash from twenty ten. No,
so the flash crash if for those of you listening
who don't remember it, it was a regular day in
the middle of May in twenty ten where the S
(22:28):
and P five hundred for no discernible reason, whether it
was not you know, a Middle East headline or anything
like that, but the S and P five hundred fell
about I'm sorry, the dow fell about nine percent in
a span of thirteen minutes, and the S and P
five hundred fell about ten percent as well during the
(22:49):
same time. And if you have a chance, like go
onto YouTube and if you just type in flash crash,
it's usually like the second or third one that comes up.
It's a video that shows the price action during the event,
but also has a call from one of the pit
traders who was watching it. They have these again, you
(23:13):
could you can listen to, you know, basically commentary about
what's going on, just from a trading perspective. It's not
it's not oh, here's why this is doing this. It's
more just, hey, here's like what's happening in markets, And
there's this guy who runs the commentary and was just
freaking out because again it was like everyone's sitting there
(23:33):
like why is this happening? And he's calling out like, oh,
we've got like this, now we've got this. Like it
just kept like worstening and worstening. So if you got
a couple of minutes, it's just kind of a cool
piece of financial markets history that you can check, check
out and look at, just because it was sixteen days
ago today. I thought about asking Tucker to play the audio,
(23:55):
but then I was like, if someone was just tuning
in with that, knowing what it is, it might just
scare the crap out of home. So I decided that
that was good call. Yeah, a good thing to ask
Tucker to do. Otherwise, but I was like, oh, like
we should do this day. And then I was driving
in and I was like, no, No, you're going to
cause like some real problems if you play something from
sixteen years ago and someone comes in like midstream and
(24:17):
is like, what's happening, Paul, Let's talk about mortgage rates.
What do we see over the last week?
Speaker 3 (24:23):
We've seen them jump up to six point four five
percent from six point three seven percent. Applications to buy
a home were just five percent higher than they were
a week ago, and as a result of the uptick
and mortgage rates to getting close to that six and
a half percent. Obviously, refinances were down a little bit
(24:43):
as well. It does look like, you know, I'm sure
you've covered it, that won't be a you know, hugely
robust year for the housing market this year. Perhaps we
see some increases the following year in twenty seven, but
with some of the stuff that we've seen recently with rates,
I believe we he got on the low end at
high five nines, but since haven't been able to get
(25:05):
back down to that.
Speaker 2 (25:06):
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(25:28):
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(25:48):
really receive anything special from having all these things scattered
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(26:10):
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three nine three for zero zero one, or request the
guide at Armstrong Advisory dot com.
Speaker 1 (26:31):
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, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (26:46):
Paul We got a piece in Bloomberg Opinion from Connor
Send Florida's Future more Wealth higher costs and less growth.
Talk to me about this. That sounds different from how
it's historically been viewed.
Speaker 3 (26:55):
Yeah, so Florida is going through a bit of a
shift on the real estate market side of things. Where
it was the state that I would bring up in
terms of just the weakness in the overall real estate
market over the course of the last few years, but
that dynamic has shifted quite a bit over the course
of the last six to twelve months or so. What
(27:16):
we saw post pandemic is obviously a huge amount of
migration to Florida. US home prices rose about forty one
percent from March of twenty twenty through June of twenty
twenty two. But US or Florida ones. I'm gonna get
to Florida a second, but that was US forty one percent.
Florida in that same time period, they spiked fifty one percent.
Speaker 4 (27:34):
And what we've just seen is the.
Speaker 3 (27:38):
Sort of correction that has occurred where like areas like
Punta Gorda in this same time span were up seventy
percent in terms of their price increases.
Speaker 2 (27:47):
Insane.
Speaker 3 (27:48):
It is just absolutely wild. And now we've seen that
same Punta Gorda, Florida area drop about twenty four percent
since June of twenty twenty two, so that now their
home price increases over that span from twenty twenty to
where we sit today are more closely tied to kind
of what we've seen on the over real estate market
in the United States. Now we're at a point where
(28:10):
there's been a lot of migration that was probably moved
forward by the pandemic, a lot of people fleeing California
or New York for the state income tax benefits that
Florida offers, but are starting to see finally that they
are clearing through inventory and they You've had companies like
Pulti Group mentioned that April saw a uptick in orders
(28:31):
for every Florida market and you've got about eighteen percent
increased statewide for new inventory across Florida, just you know,
pulling one of the home builders here. So a lot
more demand or perhaps working through some of that overpriced
inventory is what we've seen in Florida.
Speaker 2 (28:47):
Yeah, it's gonna be interesting to see how the state evolves.
As you know, these costs have risen because historically, i mean,
look talk to anyone for the last eighty years or so,
because quite honest, living in Florida before the advent of
air conditioning not really pleasant for most of the year,
generally unpleasant. Air conditioning is basically what's enabled this migration
(29:10):
from north to south in the United States, because otherwise
a lot of those parts like it. If you had
to actually live there year round with no air conditioning,
not just to like at home, but in public buildings,
you'd be like, yeah, all else being equal, I prefer
forty three feet of snow in Buffalo, you know, it
can stay in warm and make a fire or something.
(29:31):
So for the last eighty years, it's been Hey, these
areas have been just growth magnets because there's all this land.
The land was cheap, the labor was cheap, and so yeah,
have at it. And obviously, like it's changed for a
number of reasons that we've discussed, you know, for the
(29:51):
last several years. But the cost disparity between you know,
Florida and the Northeast, or Florida and the midwa West
has compressed quite a bit. And it's not just Florida,
by the way. You look at places like Nashville, Tennessee,
like Denver, you know, you go through all of the
these kind of boom towns of the twenty tens, they've
(30:13):
gone through the same thing as well, because that cost
disparity has just been arbitraged away by people who are like, oh, hey,
I made all this money in New York and now
I can go there. Well, yeah, when you bring your
money there, it's gonna drive up cost there if enough
people do that. And so that's what's happened. So it's
you know, there's still places where you can go. And look,
there's still differences between the cost of living in New
(30:35):
York and the cost of living in Charlotte, but they're
not as big as they used to be, right, And
if you really want to go to the places that
have that big cost of living disparity, the place that
you have to go are the places that people have
been leaving on a net basis for the last forty years,
not going to you know, like that's where you've got
(30:55):
to go. You've got to go to you know, bangor
Maine and North You've got to go to West Virginia.
You've got to go to the other you know, the
Ross belt area that's seen all the manufacturing. Those are
the places that you've got your arbitrage opportunities now for
you know, hey, can my money go further than in
(31:17):
the big city, because it's largely been eaten away when
you look at a lot of these other areas now.
And that's just kind of the where we sit today.
Let's take a quick break. When we come back, it's
time for a little bit of stack roulettes.
Speaker 1 (31:33):
From markets to money, to business and financial news. Watch
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Financial Exchange is life on Series XM's Business Radio Channel
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(31:54):
latest business and financial news from across the country and
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one thirty two. Face He's the Financial Exchange Radio Network.
Speaker 5 (32:16):
The Financial Exchange is a proud partner of the Disabled
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DAV five K on Saturday November seventh at Fort Independence
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(32:39):
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Donate today at DAV fivek dot Boston. That's DAV five
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Speaker 2 (32:55):
Paul, what you got for me for stack Roulette.
Speaker 3 (32:57):
Disney came out with Ernie today, their new CEO gave
his vision for the company going forward. What they saw
here from Disney's earnings is continued resiliency on their theme parks.
In terms of its revenue. They saw a seven percent
increase year over year on their theme parks. Global attendance
at the theme parks and I believe this ties in
(33:18):
the cruise ships as well. The attendance was up about
two percent domestically here in the US a little bit
of a decrease down about one percent in terms of
the park visits. In terms of what Disney's looking at
going forward, they had announced a partnership with open ai
to license its IP and their characters to open ai
(33:39):
to allow for the creation of AI generated video content.
But open Ai shelved its Soorro video tool for a
cost cutting measure, so that partnership has kind of been
temporarily abandoned. But really it seems like what the new
focuses on from a strategic.
Speaker 4 (33:58):
Standpoint is video games.
Speaker 3 (34:00):
They had done a one and a half billion dollar
investment with Epic Games. They're the ones behind Fortnite for
people who have grandkids, you know, out there, a very
popular game developed by Epic that was two years ago
that Disney made that one and a half billion investment
in Epic Games, and the investment was to build an
online world for Disney character So it seems like the
(34:20):
new CEO, Justin Merrow, his big focus here is how
they can make inroads within video games using you know,
the huge library of IP content that they had in
characters that they have perhaps within the video game space.
Speaker 2 (34:35):
Here, I want to talk a little bit about robots, alrighty. Specifically,
there's a piece from the Wall Street Journal, the rumba
Guy's second Act A robot you'll want to snuggle. So
Colin Angele is one of the founders of I Robot, uh,
and I don't know if he's a genius, but he's
(34:57):
way way smarter than me and has done things that
I will never do my life because he's really smart.
Like he spent time working at NASA's Jet Propulsional Laboratory
designing software for like actual Mars rovers that went up
to Mars and landed on it and did stuff there.
He's got a bachelor's in electrical engineering and a master's
(35:19):
in computer science from MIT. He's a smart, smart dude.
But then you also come across quotes like this when
talking about Jurassic Park. To him, the white bearded CEO
is the hero of the movie, not the villain, because
he was trying to take something that was always smoking
mirrors and turn it into something magical and real. That's
some of the sentiment behind what we're doing. And basically
(35:40):
what they're doing is trying to make robots that have
an emotional relationship with their owners, so like if you're
having a bad day, you can come and like pet
them and snuggle with them, or if you're having a
good day, it'll celebrate with you, and YadA YadA. And
you know, there's a part of Jurassic Park and like
a bunch of other movies where where you know they
(36:00):
say Hey, like scientists were busy, you know, too busy
figuring out if they could, they forgot to ask if
they should. And it seems to me that this is
one of those where, look, you probably can make a
robot that can, you know, interpret your emotions and snuggle
with you, and you know whatever, I'm just not sure
(36:23):
that we should. And it seems like Angle just didn't
pay attention to that part of the movie because even
from like some of these other quotes, you know, they
ask him as part of an interview here from the
Wall Street Journal, how do you responsibly build a system
that knows us intimately in one where we place greater
trust And they talk about like, hey, like people will
(36:47):
and should know that they're interacting with machine. I think
most of us feel warmth and connection two objects in
our lives, right, And it's like that's kind of different
from you know, your car doesn't emotionally understand you, and
you don't like it because because it snuggles you and
your you know, your shoes aren't like high fiving you
if you have like a good day at the office,
(37:07):
er run a personal best in the marathons. So I
don't know, I just I kind of struggle with this,
and I'm just not sure that we should be building
robots that can understand our emotions because I don't think
we are emotionally ready for that as humans.
Speaker 4 (37:29):
Quite honestly, I'm definitely not there yet.
Speaker 3 (37:32):
And he feels like if we kind of rank the
problems that someone's so gifted and smart should be tackling,
I feel like pets do a reasonable job kind of
meeting this objective, and perhaps it's better served elsewhere directing
sort of all the talents and ambition here rather than
putting together a roboat a robot emotional support dog. I
(37:56):
think there's other places we could go with development of robots. Yea,
And actually, I'm sorry.
Speaker 2 (38:01):
The quote that I just read it was the most
recent one, was actually from the co CEO of the
company that he's with now, by the name of Ira Renfrew.
So again, sorry, I want to make sure that quote
is properly attributed.
Speaker 1 (38:14):
There.
Speaker 2 (38:15):
Let's take a quick break for the whole rest of
the day, But tomorrow's Thursday. We do a show on Thursdays,
and you just join us. Then it'll be kind of
fun at least
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