May 5, 2026 • 38 mins
Markets are rebounding but major risks are still building beneath the surface.
Mike Armstrong and Paul Lane break down why stocks are moving higher even as tensions in the Strait of Hormuz continue to disrupt global oil supply and keep energy markets on edge.
Also covered:
Mike Armstrong and Paul Lane break down why stocks are moving higher even as tensions in the Strait of Hormuz continue to disrupt global oil supply and keep energy markets on edge.
Also covered:
- Why semiconductor stocks and AI demand are driving market momentum
- How rising Treasury yields are pushing mortgage rates higher
- The growing debate over data centers and their impact on local economies
- Why Apple is exploring new chip production outside of Taiwan
- What geopolitical risks could mean for global supply chains
- The reality behind the so-called $110 trillion wealth transfer
- Why AI still isn’t ready to replace human decision-making
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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.
Speaker 2 (01:07):
Lane, Good morning, Welcome back to the Financial Exchange. It's Mike,
Paul and Tucker with you on a Tuesday where we've
got markets in rebound mode. S and P five hundred
up fifty eight points, eight tenths of a percent, NASDAK
up almost a full percentage point, and the Dow Jones
Industrial Average up about three quarters of eight percent. This
is after yesterday's fog of war news, strikes on multiple
(01:30):
ships in the Straight of Horn, moves, big tension, and
strikes between Iran and the UAE. In spite of all that,
the US still claiming that the ceasefire remains intact and
no new escalation after we sunk I think seven ships,
seven Iranian ships yesterday. That's been enough to allow oil
(01:52):
prices to pull back a little bit from the presbice.
We still are above one hundred bucks a barrel, but
prices are down about four and a half percent this morning.
And yeah, again, I think the big positive news is
this very well could have blown up to a new
level here where US was striking at new assets in Iran,
(02:13):
but it hasn't. To this point, I don't think anything's
done on that front, and clearly the most important piece
about whether or not ships are moving through the strait
remain status quo. They aren't, and nothing to me indicates
that this is in any way over. But it hasn't
further escalated from where we were yesterday. I guess is
the good news.
Speaker 3 (02:33):
We got jolts out this morning at ten am.
Speaker 2 (02:36):
That's the job Openings Labor Turnover Survey, basically indicating that
the state of hiring and the state of firing in
the country has not changed much. I suspect when we
get the Labor Market report on Friday of this week,
which will be measuring unemployment rate pace of hiring in
the month of April, I don't expect that we're going
to see a big spike or decrease in the unemployment rate.
(02:57):
I think this moment in time is going to remain
all about inflation for the FED in terms of its
dual mandate, and they won't really have much of an
employment situation to be worried about at this point in time.
Anything else catching your eyes, Paul, in terms of markets
or any other factors out there.
Speaker 4 (03:13):
We're about to jump into it a little bit. But
the Nasdaq and the semiconductor companies continue to rise quite significantly.
That's something that certainly has stood out and has been
the case for the last month or so.
Speaker 2 (03:24):
Yeah, I guess one other point to mention. We saw
yield spiking yesterday, especially on that thirty year treasury rate
on the news out of Iran, and today we are
seeing that reflected in mortgage rates, with the Mortgage News
daily average thirty year sitting at six point five six percent.
Now that is up from its pre Iran war high
of five point nine to nine percent, So sorry, pre
(03:47):
Iran war low of five point nine nine percent. So
we will see where things go on the interest rate
and oil market front, and obviously is the main item
that all of us are monitoring. But with recent earnings
and everything else, eyes are turning back to the semiconductor space,
and with a recent vote in the state of Maine
and then following a veto from the governor, there a
(04:08):
lot of eyes on data center construction and how local
municipalities are dealing with it. We've got a piece from
the Bloomberg editorial board. Data centers are not the enemy,
they are the future. And this is something that I
think local municipalities are going to be dealing with for
the next several years weighing the benefits and costs of
(04:31):
allowing this type of construction in their area.
Speaker 4 (04:33):
You had to sort of set the stage here, what
are the positives on having data centers come to your
state municipality. The positive is it's a pretty easy way
to learn tax dollars that don't come with one much
consumption associated with a data center.
Speaker 2 (04:47):
Typically doesn't have any kids to send a school, No,
it does. No baby data centers running around the kindergarten.
Speaker 4 (04:53):
At the stage, as far as it is pretty well
isolated in terms of a commercial tax that you're generating
from a building compare to other businesses, I doubt you need.
Speaker 2 (05:02):
A whole bunch of new police officers or firefighters to
deal with a new data center. You might need more
firefighters or more capacity there, but generally speaking, you know,
for every square footage of a home that goes up,
you might need more school staff, more firefighters, police officers.
You do not need that same infrastructure when it comes
to a data center.
Speaker 4 (05:23):
The downside of them, as much as it's an easy
way to get tax dollars into municipality, is that not
a lot of jobs that come with it. Yes, the
construction and the building of the data center is a
labor intensive effort that would bring a lot of jobs
to the area. But once the data center is up
and running, it is not staff nearly as largely as
(05:43):
some other businesses out there. And the biggest concern on
voters' minds out there is the utility costs associated with it.
These data centers, they consume a lot of water and
they consume a lot of electricity. Right now, there's about
four thousand data centers across the US, with mentioned three
thousand more on the way, and we know that the
big hyperscalers that Mike and I talk about in this
(06:05):
program a lot are spending upwards of seven hundred and
fifty billion dollars of CAPEX over the course the next
three to five years to continue to invest in this
type of technology. What is so important with these data
centers is as much as there are concerns from residents
on pressure on utility costs, we know how antiquated the
grid system here is in the US. Hooking up to
(06:27):
it is a lengthy process. But if you want to
compete in this space, which for national security purposes, I
think we can all agree that this technology is coming
whether you want to want it or not, and to
keep pace with China that has very few of these
problems in the sense that they can just erect a
data center wherever they want and just tell everyone to
(06:48):
pound sand.
Speaker 5 (06:50):
We need to make.
Speaker 4 (06:50):
Sure that there is appropriate measures put in place that
the residents of these communities are not footing the bill
for the enhanced consumption of water in electricity impacting their
utility bills, finding a system to track that more rigidly
so that these hyper scalers are footing the bill for
these costs. To me, is far more important than just
creating this idea. Wait a minute, we're gonna pause and
(07:13):
stop the innovation and just not allow these things.
Speaker 5 (07:16):
To be built.
Speaker 3 (07:17):
That's the way I'd rather see them tackle the problem,
and in fact.
Speaker 2 (07:21):
What I think is likely to happen is ultimately this
is going to be controlled at the very local level,
right like zoning rules and whether or not a data
center gets built is high heavily controlled by that local municipality.
What's not controlled, though, what's at much more of a
regional level, are things like water availability and electricity costs,
(07:42):
right like if I live in need them and detum
approves a two hundred thousand square foot data center. I'm
guessing that my electricity electricity utility costs are still going up.
The heck, they could build it in Maine and I
might still face a higher like a utility rate, and
I still might you know, maybe a liberal along the
(08:04):
Colorado River, which is you know, notoriously in drought right now,
and it's going to absorb a bunch of the water there.
There are downstream impacts, literal downstream impacts there that.
Speaker 3 (08:15):
The local town isn't going to deal with.
Speaker 2 (08:16):
Frankly, given all of the property tax benefits that you're
probably going to get from a data center being built
in your town, I'd be all on board because I
know that I'm going to feel the effects of higher
electricity costs and higher water scarcity, and I might as
well get.
Speaker 3 (08:33):
Some benefit from it in the short term.
Speaker 2 (08:35):
I think that this is going to be this battle
that happens between towns because I think that these companies
are going to be on a pr push. They're going
to come to towns and say, look, this is how much
we will pay you in property taxes. This is how
much we will give in these incentives to lower all
of your other residents property tax bills, and I don't
(08:56):
think as much planning is going to be done on
the water and electricity side of things to really formally
understand what those costs look like. And that is the
big piece of it. You know, It's not the savings
that you might get from property taxes. It is the
infrastructure cost that is going to be there for two
decades that needs to be built out and is largely I.
Speaker 3 (09:15):
Think being ignored right now. Yeah, I'll tell you what.
This reminds me of another argument too.
Speaker 2 (09:22):
Remember when all the Amazon warehouses were being built and
those got rejected left right, I would I'd take a
data center over an Amazon warehouse.
Speaker 3 (09:30):
Any day of the week.
Speaker 2 (09:32):
Why I don't have the traffic of giant trucks rumbling
through the area all hours of the day.
Speaker 3 (09:38):
I think you the Amazon warehouses are much bigger, by
the way.
Speaker 2 (09:41):
The warehouses are about a million square fe six hundred
thousand to a million square feet. The typical data center
is around two hundred thousand. Some of the really big
ones can be can be bigger, but the average hyper
scale data center around two hundred thousand square feet.
Speaker 4 (09:54):
I had heard that they're pretty sizable but I think
you might be underestimating some of the noise that they
generate and the water effects around surrounding areas.
Speaker 2 (10:06):
Yeah, yeah, again, this is I would love to believe
that this is going to be a well thought out
exercise where regions come together to figure out how they're
going to supply electricity and force these companies to reuse
water and you know, be.
Speaker 3 (10:22):
Intelligent about it. Instead.
Speaker 2 (10:24):
I think what we're going to ultimately get to is
the same type of thing that we had with companies
bidding for the Amazon Q two, where it's just like,
all right, which one is going to give me the
best tax incentive, Let's race to get it approved, because
there's a whole bunch of benefits you get by being
the first mover as a town and not a well
(10:44):
the drawbacks are that you piss off a bunch of
your residents, so you probably put it over, you know,
on the next town's border, just like you do with
your town.
Speaker 3 (10:50):
Dump. I don't know if everybody else is, at least in.
Speaker 2 (10:53):
My the towns that I've lived in, the dump for
your town is always right on the border of the
next town that you hate and your rivals with, so
I assume you're going to do the same thing with
the data center and make them deal with all the
noise and light pollution.
Speaker 3 (11:05):
But that stuff is real.
Speaker 2 (11:06):
You go take a look at some of the videos
from places like Virginia and Texas where a lot of
this stuff has been built. Residents are not happy about
the light pollution, the noise, all of these different factors.
And my bet would be there's not going to be
a ton of forethought and planning going into this.
Speaker 4 (11:23):
No money's going to talk. They've got some pretty deep
pockets on those hyper skills. They'll find a way to
get it done. With the almighty dollar usually does.
Speaker 2 (11:30):
Let's take a quick break when we come back, talking
a little bit about the semiconductor space with Apple's new plans.
Speaker 3 (11:36):
That's next on The Financial Exchange.
Speaker 1 (11:38):
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(11:59):
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Speaker 6 (12:07):
For trivia here in the Financial Exchange, and yesterday game
Stop announced a proposal to buy eBay for fifty six
billion dollars. Game Stop is the world's largest video game retailer.
eBay is the world's largest online auction style marketplace. So
our trivia question today, which company eBay or game Stop
(12:29):
was founded first? Once again, which company eBay or game
Stop was founded first? Be the fourth person today to
text us at six one seven three six two thirteen
eighty five with the correct answer along with the keyword trivia,
and you win a Financial.
Speaker 5 (12:46):
Exchange Show T shirt.
Speaker 6 (12:47):
Once again, the fourth correct response to textus to the
number six one seven three six two thirteen eighty five
with the correct answer along with the keyword trivia, will
win that T shirt. See complete contest rules on National
exchine Show dot com.
Speaker 2 (13:01):
Gotta love a good trivia contest where you got a
fifty to fifty shot of winning, Yeah, man, or at
least being correct doesn't mean you're gonna win, but like
those odds. We were talking about vehicles in the UH
in one of the previous segments, and specifically Ford in
their you know quote secret plan to develop a thirty
thousand dollars electric truck, which my bold prediction never gonna happen.
(13:25):
But they are revamping a lot of their manufacturing lines
and bringing in new people to try and figure out, like,
how could we feasibly do this again with aluminum prices up,
with all of the battery tech being so expensive. Now,
I'm just I'm not willing to buy that anybody's rolling
out for the long term a long term truck. Somebody
texted into the show again, you can do the same
(13:47):
at six one seven three six two thirteen eighty five quote.
They might roll out the thirty thousand truck for a
little while, but it won't last long. They won't be
cost effective enough to continue producing after a short period
of time. Yeah, maybe I don't even think you get
there on the MSRP. I don't think any of these
things ever get sold at thirty thousand, because I just
don't think it's going to work. But I suppose possibly
(14:09):
that's going to be the case. One other phenomena that
I don't know if anybody else has noticed, but I've
been I've seen three of these in Connecticut when I
was down there recently, and then I saw another one
on I ninety in.
Speaker 3 (14:25):
Massachusetts the other day.
Speaker 2 (14:27):
Are these really tiny trucks that I didn't even know
what the name of them are, but they're apparently called
K trucks k Ei, these Japanese mini trucks there again, Yeah,
it looks like small cab and and then a flatbed.
Speaker 6 (14:41):
It looks like a small box truck but without the box.
Speaker 3 (14:43):
Yes, a bed, just a really small box truck with
a bed.
Speaker 2 (14:47):
And again I've never seen one of these on US
roads before, and I was kind of curious, like, where
are these coming from? And it is, of course a
weird loophole. So, due to a twenty five year import
rule exemption, these tiny trucks that were made in the
nineties are now being imported and registered as classic cars
(15:09):
because they're over twenty five years old. They're built in
the nineties. These things are then allowed to be exempted
from all sorts of safety and emission standards that are
present on new cars that get imported because again they're
being imported as a classic car. And so these things
get made by Honda, Suzuki and other you know Japanese
(15:33):
companies that produce these things. But I suspect we're going
to see a few more of them, and I'm just
all about it.
Speaker 3 (15:39):
I mean, I've been.
Speaker 2 (15:40):
Pretty vocal in my criticism of people with giant ninety
thousand dollars F series pickup trucks that you know, use
them once a year to go get mulch of the dump.
Speaker 3 (15:51):
Or something like that.
Speaker 2 (15:52):
And this can do all of those things and more
at a price point of usually between five and ten
thousand dollars. And you know, I don't know how many
of these things are, but again I've seen three of
them past like month and a half and had not
seen any of them ever before.
Speaker 5 (16:07):
Yeah.
Speaker 4 (16:07):
According to japan Used Motor Vehicle Export Association, there's been
more than thirty thousand export to the.
Speaker 5 (16:14):
US in the last five years.
Speaker 4 (16:15):
So just like actually something this is from a wm
R dot com article that I'm setting here from back
over the coursa last summer. But it does seem like
you're seeing more of these now. And so these have
the hand cranked windows to roll down.
Speaker 3 (16:31):
By first Mazda.
Speaker 4 (16:32):
It's old school across the board here that it seems
like they are that would be problematic for yours truly.
Speaker 2 (16:40):
Yeah, So if you're wondering why you're starting to see
these tiny Japanese trucks.
Speaker 3 (16:45):
On the road.
Speaker 2 (16:45):
The answer is that they are. They're classics now, so
you can get away with it. And what a practical solution.
I don't need a thirty thousand dollars FORTYV because I
can get a seven thousand dollars Honda Acti or Suzuki.
Speaker 3 (16:57):
Carrie love it.
Speaker 2 (17:00):
Exploring on shoring chip production by using Intel and Samsung
to build some of their main device components here in
the United States. And I'll tell you, I think this
is the perfectly logical situation to what we are seeing
in Iran right now. When you think about the two
main areas that you know, geopolitical experts have forever been
(17:23):
concerned about having a blockade of the first one is
the Straight of Horror Mouz and the second one is
the Taiwan Straight or the Chinese And I.
Speaker 4 (17:34):
Put it a reverse order in terms of economic impact,
because the economic impact on Taiwan or any issues in
terms of manufacturing disruption, there would be a cataclysmic situation
for the global economy. It is so much more critical
not to say the Straight of Horn moves isn't. We're
finding out that it clearly is. But it is so
much more critical to all the stock market growth that
(17:58):
we've seen from the for these products. And so Apple
is rightfully scrutinizing their supply chain, realizing that Taiwan Semiconductor,
which is the close to end all be all in
terms of a semiconductor manufacturer that does the most sophisticated
manufacturing of these processors that Apple has here as well
(18:20):
as the chips that in Nvidia designs, they are the
manufacturers behind it. And because of the shortage of memory
of all sorts of other semiconductor resources out there, Apple
is scrutinizing their own global supply chain that even them
being the biggest customer, one of the biggest customers that
Timeland Semiconductor has, it's probably now been eclipsed by Nvidia.
(18:40):
They're scrutinizing their business supply chain, saying that we need
other places to go to. Again, even though Intel is
I just can't even figure out Intel. They just continue
to be on this parabolic roar of any kind of
good news. Is they're literally just looking at Intel, and
Intel stock is up fourteen percent today. They haven't put
any orders down or anything like that. They're just potentially
interviewing and polmarily looking at Intel and Samsung to develop
(19:03):
these processors, and and Intel just can't be stopped and
is up another fourteen percent.
Speaker 2 (19:09):
By the way, while twenty percent of the world's oil
flows through the Strait of Hormuz, sixty percent of all
semiconductors come from Taiwan, and ninety percent of the most
advanced semis.
Speaker 5 (19:19):
That's what I was thinking of the ninety percent.
Speaker 2 (19:20):
Yeah, yeah, So you want to build a data center,
ninety percent of your.
Speaker 3 (19:23):
Supplies come from Taiwan.
Speaker 2 (19:24):
Currently, quick break, Wall Street Watch is coming right right
up where that's.
Speaker 1 (19:28):
Next, bringing the latest financial news straight to your radio
every day. It's the Financial Exchange on the Financial Exchange
Radio network. I know full wool Street Watch tracking the stocks,
(19:53):
the data, and the headlines driving markets so far today
right here on the Financial Exchange Radio network.
Speaker 6 (20:01):
Ball markets are rebounding today after yesterday's sell off amid
the fragile ceasefire between the US and around with oil
pulling back today right now, the Dow is up over
half a percent, or two hundred and fifty five points,
SMP five hundred up about three quarters of a percent,
Nasdaq up nine tenths of a percent or two hundred
and thirty one points, Rusted two thousand is up over
(20:22):
one and a half percent, Tenure Treasure Reeled is down
three basis points at four point four to one two percent,
and Oil down four percent today, trading right around one
hundred two dollars a barrel. According to Bloomberg, Apple has
held exploratory discussions with intell and Samsung about producing main
processors for its devices in the US as a secondary
(20:45):
option behind excuse me beyond, longtime partner Taiwan Semiconductor. Intel
stock rallying again today, up another fourteen percent, while Apple
is up about one percent. Meanwhile, Pallenteer stock falling over
five percent, despite the data analytics company posting a record
quarterly revenue and profit for its previous quarter. Elsewhere, Beer
(21:06):
Giant Aarnheuser Busch InBev booked its first sales volume growth
in three years, Shares in the budweiser maker up by
nine percent, pinterest jumping nearly eleven percent. After the image
sharing platform be quarterly estimates and posted a second quarter
guidance that came in above forecast. Coinbase announced the company
will cut about fourteen percent of its workforce, sending shares
(21:29):
down by two percent, and after today's clothes, AMD will
report its quarterly earnings. I'm Tucker Silvan. That is Wall
Street Watch. And in the previous segment we asked you
the trivia question which company, eBay or game Stop was
founded first. Well, that would be game Stop, which was
founded in nineteen eighty four in Texas. eBay was founded
(21:50):
in nineteen ninety five in California. And Jeremy from Vinyard, Naven,
Mass is our winner today taking home a Financial Exchange
Show t shirt and we play trivia every day here
on the Financial Exchange See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (22:06):
Paul want to talk about the great wealth transfer that
gets described over and over again, especially in our industry
of managing money, and just some details on it because
certainly you know there is a lot of concentration and
I know firsthand Paul that neither your experience nor my
(22:27):
experience has to do with managing money for multi billionaires
or billionaires at all. But when you talk to your
clients who are wealthy by definition, what is their average
attitude towards inheritance and giving money away while living? Like,
(22:49):
how do they view it all? Because I have a view,
but I don't want it to taint your own experience
in terms of what I'm seeing from people, what do
they say and what do they do. Yeah, so it
can very pretty significant. Only some couples that you meet
with will be under the pretense of, hey, I want
to do gifting that makes an impact while my children
will significantly benefit from it while they're starting their young family,
(23:11):
while they're enduring higher costs from childcare or whatever.
Speaker 5 (23:16):
The case may be.
Speaker 4 (23:16):
But I've met with others who are concerned that by
gifting too much, they make it too easy on their kids,
and they want to make sure that they're there as
a backstop, but also not going to enable their kids
to spend freely and not at least have to kind
of work for it like they feel they did as
my clients. And so everyone does have a differing view
(23:40):
on it. But the one thing that is quite common
is that there is a tremendous amount of focus with
clients on how do I do this appropriately. There's a
lot of strategy that goes into it. But I don't
know if I have one common refrain. It does seem
like everyone differs.
Speaker 2 (23:54):
If you think it differs, But I will say that
the most common one that I hear is.
Speaker 3 (24:00):
I save this money.
Speaker 5 (24:01):
M hm.
Speaker 3 (24:02):
I raised my children. There's you know, they are.
Speaker 2 (24:06):
Doing well, they are successful, they went to college, they
don't have a tremendous amount of debt.
Speaker 3 (24:12):
If they get something, great, But I will get.
Speaker 5 (24:14):
What they get money.
Speaker 4 (24:14):
Sorry, I should have addressed that. I just focused on
for the people who do care about it, the breakdown.
But yeah, you're right, the biggest pie of that distribution
is in the camp of they get what they get.
Speaker 2 (24:24):
Yeah, okay, So I agree with you there, and to
that end, it kind of plays into this journal article
of hey, that wealth transfer won't be happening anytime soon.
There are some key stats about longevity that I think
people fail to realize because they focus too much on
average life expectancy. And average life expectancy in the United
(24:47):
States today is around uh okay, so we're at average
of seventy nine years. But that's at birth. And so
the piece that people fail to realize is that when
you take a sixty five year old married couple and
look at life expectancy on that side of things, it
is far different.
Speaker 3 (25:07):
Than when you're talking about a newborn.
Speaker 2 (25:09):
So when you take a sixty five year old married
couple that's already made it there and has the benefit
of being married and therefore extends their life expectancy. You're
talking about a woman on average living to eighty seven
years old and a man living to eighty four.
Speaker 5 (25:22):
Really okay, In.
Speaker 2 (25:23):
Fact, there is a forty percent chance that a sixty
five year old woman will make it to ninety and
a thirty percent chance that a man will make it
to ninety at sixty five. When you then take the couple,
because if we're talking about the inheritance piece of it,
we're talking about when's the second one down right, When
you take a couple and extend that out, you're talking
about a fifty to fifty shot that at least one
(25:45):
of them makes it to age ninety, twenty five percent
chance that at least one makes it to ninety five,
and still like five to seven percent chance that at
least one makes it to one hundred years old. So
a few things about that one. I agree the wealth transfer,
it ain't happening anytime soon because most people think about
it the way that I just described. I've helped my
(26:07):
kids if they really need help down the road, I
might be willing to do so, but otherwise they're going
to get this money when I'm dead.
Speaker 3 (26:13):
Two.
Speaker 2 (26:15):
The piece that I think a lot of folks fail
to understand is that that generation is on average, horribly
unprepared for the dramatic costs of long term care. The
vast majority of them don't have long term care insurance.
(26:36):
The vast majority of them. If again, if you have
fifty percent of married couples at least one of them
living till age ninety, guess what, You're probably going to
need some care. In that case, they are underestimating how
much it costs, and they are not doing a very
good job, in my personal opinion, of explaining their wants
to their kids. And by once, I mean this, this
(27:00):
is the type of care that I want provided. This
is the type of care I don't want provided. If all,
if I don't recognize you, this is what I want
to have it. That stuff is not written down somewhere,
and nobody likes talking about it because.
Speaker 4 (27:13):
It's not seriously handled either. How many jokes have we
heard about, you know, wak.
Speaker 3 (27:17):
Off into the woods. I'm gonna take that sailboat trip.
Speaker 2 (27:20):
Like as horrifying as that sounds Yeah, that's the usual
response that I get from people. And so that's the
other piece of this that I think is underappreciated. Yes,
there is ninety four trillion dollars sitting in baby boomer's
bank accounts and investment accounts and net worth. I don't
know how much of that is going to be spent
on long term care, but I don't think it's an
(27:41):
insignificant sum. If you have questions about how to deal
with your financial legacy, maybe you're in that baby boomer
or older generation and trying to sort through how to
leave the assets to your loved ones. Maybe you're in
that younger generation and you're trying to figure out how
to broach the subject with your family and figure out
(28:04):
what the plan should be. Believe it or not, this
is a huge component of what a financial advisor does,
and what the financial advisors at Armstrong Advisory Group do
on a day to day basis is talk to our
clients about their legacy plans, about their long term care plans,
and about what it's going to mean to leave money
behind and involve the families in those conversations. If you
(28:26):
would like to have conversations along those lines, and could
use the expertise of somebody who understands the tax ramifications
and estate plan and ratifications of doing so. Give Armstrong
Advisor Group a call the numbers eight hundred three nine
three for zero zero one. You can check us out
online or book time for us to call you back
at Armstrong Advisory dot com. But that phone number once
(28:47):
again eight hundred three nine three for zero zero one.
Speaker 1 (28:51):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.
Speaker 2 (29:07):
By the way, one other plug that I'll just make
on this subject. As is the case, most people look
at it as hey, you know, if they get something great,
but you know, not really my key focus for the
group that does do some gifting, I have to tell
you I see mistakes all the darn time. I gave
away my home. I gave away my lowest cost basis
(29:30):
stock because it's been this family heirloom that you know
I has, you know, built up on generation I want
to leave it to the next generation. There are so
many complicated tax scenarios that fall into when you are
giving that money away that get genuinely underappreciated that you know,
you want to know why the billionaires have plans in
(29:52):
place that maintain well from melted generations, because they know
these rules and take advantage of them. And we see
mistakes being made by folks in their sixties, seventies and eighties.
That again, if you're getting a gift, if you're getting
an inheritance, who am I to look a gift horse
in the mouth, But there are better ways to do
it than to just give an asset away, and so
(30:13):
be very careful about that if you are planning something,
and if you're not gifting, there can be downsides too, right,
I mean, especially with retirement accounts and not taking withdrawals
out of those, you can end up leaving your kids
in a much higher tax bracket than you would have
been in. But that's where some intelligent planning comes in
and understanding all the rules is critically important.
Speaker 5 (30:32):
No debt.
Speaker 2 (30:33):
Let's take a quick break. When we come back. A
bit of stack roulette is next on the financial.
Speaker 1 (30:37):
Exchange from Markets to money, to business and financial news.
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Speaker 6 (31:20):
Remember, you can watch the show live every day on
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Speaker 3 (31:42):
Paul, time for stack Roulette. What do you have for
us today?
Speaker 4 (31:46):
Mike, It's time to cover some AI stuff. We've got
a piece here in the Wall Street Journal that asks
chat tpt to manage a stock portfolio, and they have
the results of how they did so. Basically, what they
did is they asked chat gpt to act as a
financial advisor during key moments within the markets, and what
they found here was that the results were a little
(32:10):
bit mixed and there were some pitfalls with their experience.
Speaker 2 (32:13):
They compared the AI agent to a teaching teachers of
teachers who smokes too much weed. Yeah, exactly, so it's
not exactly a glowing review.
Speaker 4 (32:25):
No, it's not so the teaching assistant that has the
requisite knowledge to answer your questions, but from time to
time may have hit the the bong too hard or
hit the joint too hard and sort of would slip
from normal fiduciary advice. Basically, some of the pitfalls that
they ran into. While it did demonstrate knowledge about subjects
and creating an asset allocation tailored to what this reporter
(32:49):
wanted in terms of managing a hypothetical million dollar portfolio,
it did find that it made some simple arithmetic errors
and left too much in cash within the portfolio.
Speaker 5 (32:59):
It also suggested the.
Speaker 4 (33:00):
Use of options as a hedging mechanism, something that is
complicated and even an advisor will tell you it's not
easily done within portfolios, and when it would suggest certain investments.
It found that and chatchipt has a propensity to do
this that. For example, it mentioned the use of triple
leverage EPT ETFs, which anything that is leverage and perhaps
(33:24):
and in addition triple leverage has significant risks that come
with it. All of us know that as advisors. But
it found that chat CIPT, while explaining some of the pitfalls,
would sort of almost try in provide some solutions or
provide some potential uses of triple leverage ETFs to this
particular reporter.
Speaker 5 (33:43):
Going through the exercise.
Speaker 4 (33:44):
And CHATTPD has this sort of bias in a sense
in when you can use it, it kind of can
feed you the information that you're looking for if you
have an inclination that you want to look at triple
at leverage exactly exactly.
Speaker 3 (33:57):
So again it's I'm gonna tell you the truth. It's
gonna tell you want to hear it, right, which some
advisors will do too, by the way, that's that's true.
Speaker 5 (34:04):
Yeah.
Speaker 4 (34:05):
It did end the article by saying that it should
have had chat Gibt in thinking mode rather than auto.
I guess that amounts to a difference between a high
school level thinker and.
Speaker 5 (34:14):
A PHDL PhD level thinker.
Speaker 4 (34:16):
But the bottom line being that it wasn't ready for
primetime yet.
Speaker 5 (34:21):
Is the takeaway from that?
Speaker 3 (34:22):
I got to be honest reporter.
Speaker 2 (34:23):
Maybe I'm wrong, I've been wrong plenty, but I don't
see that as the use case for AI.
Speaker 5 (34:31):
What I profoil management.
Speaker 3 (34:32):
No, any of.
Speaker 2 (34:33):
These things, whether it is you know, an AI agent
that is going to diagnose my illness, or file my taxes,
or design a landscape from my backyard, or provide me
financial advice, I don't think any of those are going
to be solid use cases of artificial intelligence that people
(34:56):
want to use in the near future. I think instead,
what it's going to be is this, you know, chat
GPT financial Advisor will make you the financial advisor far
more efficient at delivering good advice to your people, to
your clients. It'll make the CPAs faster and able to
handle more clients, and able to input taxes and submit
(35:19):
them more efficiently. It will make doctors able to diagnose
things more easily without having to do manual research. And
it will make lawyers better at drafting legal documents. But
I don't think anybody's going to say, yeah, I want
to use AI to draft my will, because I don't
think anybody's going to trust it in the short term,
and I'm not sure you should. Right the lawyer is
(35:39):
going to have the knowledge and background to be able
to look at something that AI drafts and say, well,
that's screwed up. It clearly hallucinated there. Then the financial
advisor is going to look at and say, well, it
clearly doesn't understand the complexity of options trading. And the
doctor's going to say, will it clearly ignored the reality
of this patient scenario. And if you don't have that
requisite background, notedge, I think people are going to harm
(36:03):
themselves and shy away from it.
Speaker 4 (36:05):
I agree with you, It depends where I would potentially
disagree with you is how long you dictate near term
because right now AI has clearly pivoted, and we were
just talking about off air a piece that Anthropic released
on the Financial Advisor World. Enterprise is the focus right now,
and in terms of the way Anthropic has been able
to grow their revenue, which I believe is going at
(36:25):
a trailing twelve forward projective of forty billion dollars from
what was six or seven billion. Is on the enterprise side,
they've been able to provide solutions for businesses and the
consumer side isn't there yet. So i'd agree with you
in the near term you're going to see far more
usage by businesses, But I wouldn't agree that you're not
going to get there where the landscaping scenario that you
(36:48):
painted out couldn't be a use case in the future
for do it your Selzer's to adopt the technology.
Speaker 3 (36:54):
I think it's going to take a generation.
Speaker 5 (36:56):
A generation.
Speaker 2 (36:57):
I think it's going to take a generation of new
young kids to grow up with this technology well enough
to trust it to do things themselves. I think that
is literally going to be the adoption cycle like we
I mean, for example, how many eighty year olds do
you know that are comfortable with online banking?
Speaker 5 (37:15):
Very few.
Speaker 2 (37:16):
I don't think it's that different from that. I think
that there are going to be generations of people who say, no,
if I want tax advice, I want to talk to somebody,
oh sure, And if i want legal advice, I want
to talk to the lawyer. I'm not going to go
draft it myself, and I'm not going to trust some
AI platform, And so I do think it's going to
take more than the technology might be capable of handling
(37:41):
more of this stuff within the next five years. I
have no doubt, but people's willingness to trust it, I
think is going to be the bigger barrier.
Speaker 4 (37:50):
Barrier our kids will come up through it and trust it,
where we'll have the skepticism that they might not.
Speaker 3 (37:55):
Yeah, we'll see.
Speaker 2 (37:57):
I mean again, I've been wrong about plenty of these things,
But to me, it's about making trained professionals more efficient
who can then to lower a lower price.
Speaker 3 (38:04):
Point to people rather than do it yourself. Quick break
for the next twenty two hours.
Speaker 2 (38:10):
We'll be right back at tomorrow market strongly in positive
territory with the NAZAC leading the way up. We'll have
a full recap for you tomorrow. Have a great risk
of day
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
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the hosts. Do not reflect the opinions of Armstrong Advisory
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(00:20):
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(01:06):
and Paul.
Speaker 2 (01:07):
Lane, Good morning, Welcome back to the Financial Exchange. It's Mike,
Paul and Tucker with you on a Tuesday where we've
got markets in rebound mode. S and P five hundred
up fifty eight points, eight tenths of a percent, NASDAK
up almost a full percentage point, and the Dow Jones
Industrial Average up about three quarters of eight percent. This
is after yesterday's fog of war news, strikes on multiple
(01:30):
ships in the Straight of Horn, moves, big tension, and
strikes between Iran and the UAE. In spite of all that,
the US still claiming that the ceasefire remains intact and
no new escalation after we sunk I think seven ships,
seven Iranian ships yesterday. That's been enough to allow oil
(01:52):
prices to pull back a little bit from the presbice.
We still are above one hundred bucks a barrel, but
prices are down about four and a half percent this morning.
And yeah, again, I think the big positive news is
this very well could have blown up to a new
level here where US was striking at new assets in Iran,
(02:13):
but it hasn't. To this point, I don't think anything's
done on that front, and clearly the most important piece
about whether or not ships are moving through the strait
remain status quo. They aren't, and nothing to me indicates
that this is in any way over. But it hasn't
further escalated from where we were yesterday. I guess is
the good news.
Speaker 3 (02:33):
We got jolts out this morning at ten am.
Speaker 2 (02:36):
That's the job Openings Labor Turnover Survey, basically indicating that
the state of hiring and the state of firing in
the country has not changed much. I suspect when we
get the Labor Market report on Friday of this week,
which will be measuring unemployment rate pace of hiring in
the month of April, I don't expect that we're going
to see a big spike or decrease in the unemployment rate.
(02:57):
I think this moment in time is going to remain
all about inflation for the FED in terms of its
dual mandate, and they won't really have much of an
employment situation to be worried about at this point in time.
Anything else catching your eyes, Paul, in terms of markets
or any other factors out there.
Speaker 4 (03:13):
We're about to jump into it a little bit. But
the Nasdaq and the semiconductor companies continue to rise quite significantly.
That's something that certainly has stood out and has been
the case for the last month or so.
Speaker 2 (03:24):
Yeah, I guess one other point to mention. We saw
yield spiking yesterday, especially on that thirty year treasury rate
on the news out of Iran, and today we are
seeing that reflected in mortgage rates, with the Mortgage News
daily average thirty year sitting at six point five six percent.
Now that is up from its pre Iran war high
of five point nine to nine percent, So sorry, pre
(03:47):
Iran war low of five point nine nine percent. So
we will see where things go on the interest rate
and oil market front, and obviously is the main item
that all of us are monitoring. But with recent earnings
and everything else, eyes are turning back to the semiconductor space,
and with a recent vote in the state of Maine
and then following a veto from the governor, there a
(04:08):
lot of eyes on data center construction and how local
municipalities are dealing with it. We've got a piece from
the Bloomberg editorial board. Data centers are not the enemy,
they are the future. And this is something that I
think local municipalities are going to be dealing with for
the next several years weighing the benefits and costs of
(04:31):
allowing this type of construction in their area.
Speaker 4 (04:33):
You had to sort of set the stage here, what
are the positives on having data centers come to your
state municipality. The positive is it's a pretty easy way
to learn tax dollars that don't come with one much
consumption associated with a data center.
Speaker 2 (04:47):
Typically doesn't have any kids to send a school, No,
it does. No baby data centers running around the kindergarten.
Speaker 4 (04:53):
At the stage, as far as it is pretty well
isolated in terms of a commercial tax that you're generating
from a building compare to other businesses, I doubt you need.
Speaker 2 (05:02):
A whole bunch of new police officers or firefighters to
deal with a new data center. You might need more
firefighters or more capacity there, but generally speaking, you know,
for every square footage of a home that goes up,
you might need more school staff, more firefighters, police officers.
You do not need that same infrastructure when it comes
to a data center.
Speaker 4 (05:23):
The downside of them, as much as it's an easy
way to get tax dollars into municipality, is that not
a lot of jobs that come with it. Yes, the
construction and the building of the data center is a
labor intensive effort that would bring a lot of jobs
to the area. But once the data center is up
and running, it is not staff nearly as largely as
(05:43):
some other businesses out there. And the biggest concern on
voters' minds out there is the utility costs associated with it.
These data centers, they consume a lot of water and
they consume a lot of electricity. Right now, there's about
four thousand data centers across the US, with mentioned three
thousand more on the way, and we know that the
big hyperscalers that Mike and I talk about in this
(06:05):
program a lot are spending upwards of seven hundred and
fifty billion dollars of CAPEX over the course the next
three to five years to continue to invest in this
type of technology. What is so important with these data
centers is as much as there are concerns from residents
on pressure on utility costs, we know how antiquated the
grid system here is in the US. Hooking up to
(06:27):
it is a lengthy process. But if you want to
compete in this space, which for national security purposes, I
think we can all agree that this technology is coming
whether you want to want it or not, and to
keep pace with China that has very few of these
problems in the sense that they can just erect a
data center wherever they want and just tell everyone to
(06:48):
pound sand.
Speaker 5 (06:50):
We need to make.
Speaker 4 (06:50):
Sure that there is appropriate measures put in place that
the residents of these communities are not footing the bill
for the enhanced consumption of water in electricity impacting their
utility bills, finding a system to track that more rigidly
so that these hyper scalers are footing the bill for
these costs. To me, is far more important than just
creating this idea. Wait a minute, we're gonna pause and
(07:13):
stop the innovation and just not allow these things.
Speaker 5 (07:16):
To be built.
Speaker 3 (07:17):
That's the way I'd rather see them tackle the problem,
and in fact.
Speaker 2 (07:21):
What I think is likely to happen is ultimately this
is going to be controlled at the very local level,
right like zoning rules and whether or not a data
center gets built is high heavily controlled by that local municipality.
What's not controlled, though, what's at much more of a
regional level, are things like water availability and electricity costs,
(07:42):
right like if I live in need them and detum
approves a two hundred thousand square foot data center. I'm
guessing that my electricity electricity utility costs are still going up.
The heck, they could build it in Maine and I
might still face a higher like a utility rate, and
I still might you know, maybe a liberal along the
(08:04):
Colorado River, which is you know, notoriously in drought right now,
and it's going to absorb a bunch of the water there.
There are downstream impacts, literal downstream impacts there that.
Speaker 3 (08:15):
The local town isn't going to deal with.
Speaker 2 (08:16):
Frankly, given all of the property tax benefits that you're
probably going to get from a data center being built
in your town, I'd be all on board because I
know that I'm going to feel the effects of higher
electricity costs and higher water scarcity, and I might as
well get.
Speaker 3 (08:33):
Some benefit from it in the short term.
Speaker 2 (08:35):
I think that this is going to be this battle
that happens between towns because I think that these companies
are going to be on a pr push. They're going
to come to towns and say, look, this is how much
we will pay you in property taxes. This is how
much we will give in these incentives to lower all
of your other residents property tax bills, and I don't
(08:56):
think as much planning is going to be done on
the water and electricity side of things to really formally
understand what those costs look like. And that is the
big piece of it. You know, It's not the savings
that you might get from property taxes. It is the
infrastructure cost that is going to be there for two
decades that needs to be built out and is largely I.
Speaker 3 (09:15):
Think being ignored right now. Yeah, I'll tell you what.
This reminds me of another argument too.
Speaker 2 (09:22):
Remember when all the Amazon warehouses were being built and
those got rejected left right, I would I'd take a
data center over an Amazon warehouse.
Speaker 3 (09:30):
Any day of the week.
Speaker 2 (09:32):
Why I don't have the traffic of giant trucks rumbling
through the area all hours of the day.
Speaker 3 (09:38):
I think you the Amazon warehouses are much bigger, by
the way.
Speaker 2 (09:41):
The warehouses are about a million square fe six hundred
thousand to a million square feet. The typical data center
is around two hundred thousand. Some of the really big
ones can be can be bigger, but the average hyper
scale data center around two hundred thousand square feet.
Speaker 4 (09:54):
I had heard that they're pretty sizable but I think
you might be underestimating some of the noise that they
generate and the water effects around surrounding areas.
Speaker 2 (10:06):
Yeah, yeah, again, this is I would love to believe
that this is going to be a well thought out
exercise where regions come together to figure out how they're
going to supply electricity and force these companies to reuse
water and you know, be.
Speaker 3 (10:22):
Intelligent about it. Instead.
Speaker 2 (10:24):
I think what we're going to ultimately get to is
the same type of thing that we had with companies
bidding for the Amazon Q two, where it's just like,
all right, which one is going to give me the
best tax incentive, Let's race to get it approved, because
there's a whole bunch of benefits you get by being
the first mover as a town and not a well
(10:44):
the drawbacks are that you piss off a bunch of
your residents, so you probably put it over, you know,
on the next town's border, just like you do with
your town.
Speaker 3 (10:50):
Dump. I don't know if everybody else is, at least in.
Speaker 2 (10:53):
My the towns that I've lived in, the dump for
your town is always right on the border of the
next town that you hate and your rivals with, so
I assume you're going to do the same thing with
the data center and make them deal with all the
noise and light pollution.
Speaker 3 (11:05):
But that stuff is real.
Speaker 2 (11:06):
You go take a look at some of the videos
from places like Virginia and Texas where a lot of
this stuff has been built. Residents are not happy about
the light pollution, the noise, all of these different factors.
And my bet would be there's not going to be
a ton of forethought and planning going into this.
Speaker 4 (11:23):
No money's going to talk. They've got some pretty deep
pockets on those hyper skills. They'll find a way to
get it done. With the almighty dollar usually does.
Speaker 2 (11:30):
Let's take a quick break when we come back, talking
a little bit about the semiconductor space with Apple's new plans.
Speaker 3 (11:36):
That's next on The Financial Exchange.
Speaker 1 (11:38):
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(11:59):
fine Nancial Exchange Radio network, all right, time.
Speaker 6 (12:07):
For trivia here in the Financial Exchange, and yesterday game
Stop announced a proposal to buy eBay for fifty six
billion dollars. Game Stop is the world's largest video game retailer.
eBay is the world's largest online auction style marketplace. So
our trivia question today, which company eBay or game Stop
(12:29):
was founded first? Once again, which company eBay or game
Stop was founded first? Be the fourth person today to
text us at six one seven three six two thirteen
eighty five with the correct answer along with the keyword trivia,
and you win a Financial.
Speaker 5 (12:46):
Exchange Show T shirt.
Speaker 6 (12:47):
Once again, the fourth correct response to textus to the
number six one seven three six two thirteen eighty five
with the correct answer along with the keyword trivia, will
win that T shirt. See complete contest rules on National
exchine Show dot com.
Speaker 2 (13:01):
Gotta love a good trivia contest where you got a
fifty to fifty shot of winning, Yeah, man, or at
least being correct doesn't mean you're gonna win, but like
those odds. We were talking about vehicles in the UH
in one of the previous segments, and specifically Ford in
their you know quote secret plan to develop a thirty
thousand dollars electric truck, which my bold prediction never gonna happen.
(13:25):
But they are revamping a lot of their manufacturing lines
and bringing in new people to try and figure out, like,
how could we feasibly do this again with aluminum prices up,
with all of the battery tech being so expensive. Now,
I'm just I'm not willing to buy that anybody's rolling
out for the long term a long term truck. Somebody
texted into the show again, you can do the same
(13:47):
at six one seven three six two thirteen eighty five quote.
They might roll out the thirty thousand truck for a
little while, but it won't last long. They won't be
cost effective enough to continue producing after a short period
of time. Yeah, maybe I don't even think you get
there on the MSRP. I don't think any of these
things ever get sold at thirty thousand, because I just
don't think it's going to work. But I suppose possibly
(14:09):
that's going to be the case. One other phenomena that
I don't know if anybody else has noticed, but I've
been I've seen three of these in Connecticut when I
was down there recently, and then I saw another one
on I ninety in.
Speaker 3 (14:25):
Massachusetts the other day.
Speaker 2 (14:27):
Are these really tiny trucks that I didn't even know
what the name of them are, but they're apparently called
K trucks k Ei, these Japanese mini trucks there again, Yeah,
it looks like small cab and and then a flatbed.
Speaker 6 (14:41):
It looks like a small box truck but without the box.
Speaker 3 (14:43):
Yes, a bed, just a really small box truck with
a bed.
Speaker 2 (14:47):
And again I've never seen one of these on US
roads before, and I was kind of curious, like, where
are these coming from? And it is, of course a
weird loophole. So, due to a twenty five year import
rule exemption, these tiny trucks that were made in the
nineties are now being imported and registered as classic cars
(15:09):
because they're over twenty five years old. They're built in
the nineties. These things are then allowed to be exempted
from all sorts of safety and emission standards that are
present on new cars that get imported because again they're
being imported as a classic car. And so these things
get made by Honda, Suzuki and other you know Japanese
(15:33):
companies that produce these things. But I suspect we're going
to see a few more of them, and I'm just
all about it.
Speaker 3 (15:39):
I mean, I've been.
Speaker 2 (15:40):
Pretty vocal in my criticism of people with giant ninety
thousand dollars F series pickup trucks that you know, use
them once a year to go get mulch of the dump.
Speaker 3 (15:51):
Or something like that.
Speaker 2 (15:52):
And this can do all of those things and more
at a price point of usually between five and ten
thousand dollars. And you know, I don't know how many
of these things are, but again I've seen three of
them past like month and a half and had not
seen any of them ever before.
Speaker 5 (16:07):
Yeah.
Speaker 4 (16:07):
According to japan Used Motor Vehicle Export Association, there's been
more than thirty thousand export to the.
Speaker 5 (16:14):
US in the last five years.
Speaker 4 (16:15):
So just like actually something this is from a wm
R dot com article that I'm setting here from back
over the coursa last summer. But it does seem like
you're seeing more of these now. And so these have
the hand cranked windows to roll down.
Speaker 3 (16:31):
By first Mazda.
Speaker 4 (16:32):
It's old school across the board here that it seems
like they are that would be problematic for yours truly.
Speaker 2 (16:40):
Yeah, So if you're wondering why you're starting to see
these tiny Japanese trucks.
Speaker 3 (16:45):
On the road.
Speaker 2 (16:45):
The answer is that they are. They're classics now, so
you can get away with it. And what a practical solution.
I don't need a thirty thousand dollars FORTYV because I
can get a seven thousand dollars Honda Acti or Suzuki.
Speaker 3 (16:57):
Carrie love it.
Speaker 2 (17:00):
Exploring on shoring chip production by using Intel and Samsung
to build some of their main device components here in
the United States. And I'll tell you, I think this
is the perfectly logical situation to what we are seeing
in Iran right now. When you think about the two
main areas that you know, geopolitical experts have forever been
(17:23):
concerned about having a blockade of the first one is
the Straight of Horror Mouz and the second one is
the Taiwan Straight or the Chinese And I.
Speaker 4 (17:34):
Put it a reverse order in terms of economic impact,
because the economic impact on Taiwan or any issues in
terms of manufacturing disruption, there would be a cataclysmic situation
for the global economy. It is so much more critical
not to say the Straight of Horn moves isn't. We're
finding out that it clearly is. But it is so
much more critical to all the stock market growth that
(17:58):
we've seen from the for these products. And so Apple
is rightfully scrutinizing their supply chain, realizing that Taiwan Semiconductor,
which is the close to end all be all in
terms of a semiconductor manufacturer that does the most sophisticated
manufacturing of these processors that Apple has here as well
(18:20):
as the chips that in Nvidia designs, they are the
manufacturers behind it. And because of the shortage of memory
of all sorts of other semiconductor resources out there, Apple
is scrutinizing their own global supply chain that even them
being the biggest customer, one of the biggest customers that
Timeland Semiconductor has, it's probably now been eclipsed by Nvidia.
(18:40):
They're scrutinizing their business supply chain, saying that we need
other places to go to. Again, even though Intel is
I just can't even figure out Intel. They just continue
to be on this parabolic roar of any kind of
good news. Is they're literally just looking at Intel, and
Intel stock is up fourteen percent today. They haven't put
any orders down or anything like that. They're just potentially
interviewing and polmarily looking at Intel and Samsung to develop
(19:03):
these processors, and and Intel just can't be stopped and
is up another fourteen percent.
Speaker 2 (19:09):
By the way, while twenty percent of the world's oil
flows through the Strait of Hormuz, sixty percent of all
semiconductors come from Taiwan, and ninety percent of the most
advanced semis.
Speaker 5 (19:19):
That's what I was thinking of the ninety percent.
Speaker 2 (19:20):
Yeah, yeah, So you want to build a data center,
ninety percent of your.
Speaker 3 (19:23):
Supplies come from Taiwan.
Speaker 2 (19:24):
Currently, quick break, Wall Street Watch is coming right right
up where that's.
Speaker 1 (19:28):
Next, bringing the latest financial news straight to your radio
every day. It's the Financial Exchange on the Financial Exchange
Radio network. I know full wool Street Watch tracking the stocks,
(19:53):
the data, and the headlines driving markets so far today
right here on the Financial Exchange Radio network.
Speaker 6 (20:01):
Ball markets are rebounding today after yesterday's sell off amid
the fragile ceasefire between the US and around with oil
pulling back today right now, the Dow is up over
half a percent, or two hundred and fifty five points,
SMP five hundred up about three quarters of a percent,
Nasdaq up nine tenths of a percent or two hundred
and thirty one points, Rusted two thousand is up over
(20:22):
one and a half percent, Tenure Treasure Reeled is down
three basis points at four point four to one two percent,
and Oil down four percent today, trading right around one
hundred two dollars a barrel. According to Bloomberg, Apple has
held exploratory discussions with intell and Samsung about producing main
processors for its devices in the US as a secondary
(20:45):
option behind excuse me beyond, longtime partner Taiwan Semiconductor. Intel
stock rallying again today, up another fourteen percent, while Apple
is up about one percent. Meanwhile, Pallenteer stock falling over
five percent, despite the data analytics company posting a record
quarterly revenue and profit for its previous quarter. Elsewhere, Beer
(21:06):
Giant Aarnheuser Busch InBev booked its first sales volume growth
in three years, Shares in the budweiser maker up by
nine percent, pinterest jumping nearly eleven percent. After the image
sharing platform be quarterly estimates and posted a second quarter
guidance that came in above forecast. Coinbase announced the company
will cut about fourteen percent of its workforce, sending shares
(21:29):
down by two percent, and after today's clothes, AMD will
report its quarterly earnings. I'm Tucker Silvan. That is Wall
Street Watch. And in the previous segment we asked you
the trivia question which company, eBay or game Stop was
founded first. Well, that would be game Stop, which was
founded in nineteen eighty four in Texas. eBay was founded
(21:50):
in nineteen ninety five in California. And Jeremy from Vinyard, Naven,
Mass is our winner today taking home a Financial Exchange
Show t shirt and we play trivia every day here
on the Financial Exchange See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (22:06):
Paul want to talk about the great wealth transfer that
gets described over and over again, especially in our industry
of managing money, and just some details on it because
certainly you know there is a lot of concentration and
I know firsthand Paul that neither your experience nor my
(22:27):
experience has to do with managing money for multi billionaires
or billionaires at all. But when you talk to your
clients who are wealthy by definition, what is their average
attitude towards inheritance and giving money away while living? Like,
(22:49):
how do they view it all? Because I have a view,
but I don't want it to taint your own experience
in terms of what I'm seeing from people, what do
they say and what do they do. Yeah, so it
can very pretty significant. Only some couples that you meet
with will be under the pretense of, hey, I want
to do gifting that makes an impact while my children
will significantly benefit from it while they're starting their young family,
(23:11):
while they're enduring higher costs from childcare or whatever.
Speaker 5 (23:16):
The case may be.
Speaker 4 (23:16):
But I've met with others who are concerned that by
gifting too much, they make it too easy on their kids,
and they want to make sure that they're there as
a backstop, but also not going to enable their kids
to spend freely and not at least have to kind
of work for it like they feel they did as
my clients. And so everyone does have a differing view
(23:40):
on it. But the one thing that is quite common
is that there is a tremendous amount of focus with
clients on how do I do this appropriately. There's a
lot of strategy that goes into it. But I don't
know if I have one common refrain. It does seem
like everyone differs.
Speaker 2 (23:54):
If you think it differs, But I will say that
the most common one that I hear is.
Speaker 3 (24:00):
I save this money.
Speaker 5 (24:01):
M hm.
Speaker 3 (24:02):
I raised my children. There's you know, they are.
Speaker 2 (24:06):
Doing well, they are successful, they went to college, they
don't have a tremendous amount of debt.
Speaker 3 (24:12):
If they get something, great, But I will get.
Speaker 5 (24:14):
What they get money.
Speaker 4 (24:14):
Sorry, I should have addressed that. I just focused on
for the people who do care about it, the breakdown.
But yeah, you're right, the biggest pie of that distribution
is in the camp of they get what they get.
Speaker 2 (24:24):
Yeah, okay, So I agree with you there, and to
that end, it kind of plays into this journal article
of hey, that wealth transfer won't be happening anytime soon.
There are some key stats about longevity that I think
people fail to realize because they focus too much on
average life expectancy. And average life expectancy in the United
(24:47):
States today is around uh okay, so we're at average
of seventy nine years. But that's at birth. And so
the piece that people fail to realize is that when
you take a sixty five year old married couple and
look at life expectancy on that side of things, it
is far different.
Speaker 3 (25:07):
Than when you're talking about a newborn.
Speaker 2 (25:09):
So when you take a sixty five year old married
couple that's already made it there and has the benefit
of being married and therefore extends their life expectancy. You're
talking about a woman on average living to eighty seven
years old and a man living to eighty four.
Speaker 5 (25:22):
Really okay, In.
Speaker 2 (25:23):
Fact, there is a forty percent chance that a sixty
five year old woman will make it to ninety and
a thirty percent chance that a man will make it
to ninety at sixty five. When you then take the couple,
because if we're talking about the inheritance piece of it,
we're talking about when's the second one down right, When
you take a couple and extend that out, you're talking
about a fifty to fifty shot that at least one
(25:45):
of them makes it to age ninety, twenty five percent
chance that at least one makes it to ninety five,
and still like five to seven percent chance that at
least one makes it to one hundred years old. So
a few things about that one. I agree the wealth transfer,
it ain't happening anytime soon because most people think about
it the way that I just described. I've helped my
(26:07):
kids if they really need help down the road, I
might be willing to do so, but otherwise they're going
to get this money when I'm dead.
Speaker 3 (26:13):
Two.
Speaker 2 (26:15):
The piece that I think a lot of folks fail
to understand is that that generation is on average, horribly
unprepared for the dramatic costs of long term care. The
vast majority of them don't have long term care insurance.
(26:36):
The vast majority of them. If again, if you have
fifty percent of married couples at least one of them
living till age ninety, guess what, You're probably going to
need some care. In that case, they are underestimating how
much it costs, and they are not doing a very
good job, in my personal opinion, of explaining their wants
to their kids. And by once, I mean this, this
(27:00):
is the type of care that I want provided. This
is the type of care I don't want provided. If all,
if I don't recognize you, this is what I want
to have it. That stuff is not written down somewhere,
and nobody likes talking about it because.
Speaker 4 (27:13):
It's not seriously handled either. How many jokes have we
heard about, you know, wak.
Speaker 3 (27:17):
Off into the woods. I'm gonna take that sailboat trip.
Speaker 2 (27:20):
Like as horrifying as that sounds Yeah, that's the usual
response that I get from people. And so that's the
other piece of this that I think is underappreciated. Yes,
there is ninety four trillion dollars sitting in baby boomer's
bank accounts and investment accounts and net worth. I don't
know how much of that is going to be spent
on long term care, but I don't think it's an
(27:41):
insignificant sum. If you have questions about how to deal
with your financial legacy, maybe you're in that baby boomer
or older generation and trying to sort through how to
leave the assets to your loved ones. Maybe you're in
that younger generation and you're trying to figure out how
to broach the subject with your family and figure out
(28:04):
what the plan should be. Believe it or not, this
is a huge component of what a financial advisor does,
and what the financial advisors at Armstrong Advisory Group do
on a day to day basis is talk to our
clients about their legacy plans, about their long term care plans,
and about what it's going to mean to leave money
behind and involve the families in those conversations. If you
(28:26):
would like to have conversations along those lines, and could
use the expertise of somebody who understands the tax ramifications
and estate plan and ratifications of doing so. Give Armstrong
Advisor Group a call the numbers eight hundred three nine
three for zero zero one. You can check us out
online or book time for us to call you back
at Armstrong Advisory dot com. But that phone number once
(28:47):
again eight hundred three nine three for zero zero one.
Speaker 1 (28:51):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.
Speaker 2 (29:07):
By the way, one other plug that I'll just make
on this subject. As is the case, most people look
at it as hey, you know, if they get something great,
but you know, not really my key focus for the
group that does do some gifting, I have to tell
you I see mistakes all the darn time. I gave
away my home. I gave away my lowest cost basis
(29:30):
stock because it's been this family heirloom that you know
I has, you know, built up on generation I want
to leave it to the next generation. There are so
many complicated tax scenarios that fall into when you are
giving that money away that get genuinely underappreciated that you know,
you want to know why the billionaires have plans in
(29:52):
place that maintain well from melted generations, because they know
these rules and take advantage of them. And we see
mistakes being made by folks in their sixties, seventies and eighties.
That again, if you're getting a gift, if you're getting
an inheritance, who am I to look a gift horse
in the mouth, But there are better ways to do
it than to just give an asset away, and so
(30:13):
be very careful about that if you are planning something,
and if you're not gifting, there can be downsides too, right,
I mean, especially with retirement accounts and not taking withdrawals
out of those, you can end up leaving your kids
in a much higher tax bracket than you would have
been in. But that's where some intelligent planning comes in
and understanding all the rules is critically important.
Speaker 5 (30:32):
No debt.
Speaker 2 (30:33):
Let's take a quick break. When we come back. A
bit of stack roulette is next on the financial.
Speaker 1 (30:37):
Exchange from Markets to money, to business and financial news.
Watch The Financial Exchange every day on YouTube, hit that
subscribe button and keep up to date on the market
news you need to know. This is the Financial Exchange.
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(30:59):
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Speaker 6 (31:20):
Remember, you can watch the show live every day on
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(31:41):
hit that subscribe button.
Speaker 3 (31:42):
Paul, time for stack Roulette. What do you have for
us today?
Speaker 4 (31:46):
Mike, It's time to cover some AI stuff. We've got
a piece here in the Wall Street Journal that asks
chat tpt to manage a stock portfolio, and they have
the results of how they did so. Basically, what they
did is they asked chat gpt to act as a
financial advisor during key moments within the markets, and what
they found here was that the results were a little
(32:10):
bit mixed and there were some pitfalls with their experience.
Speaker 2 (32:13):
They compared the AI agent to a teaching teachers of
teachers who smokes too much weed. Yeah, exactly, so it's
not exactly a glowing review.
Speaker 4 (32:25):
No, it's not so the teaching assistant that has the
requisite knowledge to answer your questions, but from time to
time may have hit the the bong too hard or
hit the joint too hard and sort of would slip
from normal fiduciary advice. Basically, some of the pitfalls that
they ran into. While it did demonstrate knowledge about subjects
and creating an asset allocation tailored to what this reporter
(32:49):
wanted in terms of managing a hypothetical million dollar portfolio,
it did find that it made some simple arithmetic errors
and left too much in cash within the portfolio.
Speaker 5 (32:59):
It also suggested the.
Speaker 4 (33:00):
Use of options as a hedging mechanism, something that is
complicated and even an advisor will tell you it's not
easily done within portfolios, and when it would suggest certain investments.
It found that and chatchipt has a propensity to do
this that. For example, it mentioned the use of triple
leverage EPT ETFs, which anything that is leverage and perhaps
(33:24):
and in addition triple leverage has significant risks that come
with it. All of us know that as advisors. But
it found that chat CIPT, while explaining some of the pitfalls,
would sort of almost try in provide some solutions or
provide some potential uses of triple leverage ETFs to this
particular reporter.
Speaker 5 (33:43):
Going through the exercise.
Speaker 4 (33:44):
And CHATTPD has this sort of bias in a sense
in when you can use it, it kind of can
feed you the information that you're looking for if you
have an inclination that you want to look at triple
at leverage exactly exactly.
Speaker 3 (33:57):
So again it's I'm gonna tell you the truth. It's
gonna tell you want to hear it, right, which some
advisors will do too, by the way, that's that's true.
Speaker 5 (34:04):
Yeah.
Speaker 4 (34:05):
It did end the article by saying that it should
have had chat Gibt in thinking mode rather than auto.
I guess that amounts to a difference between a high
school level thinker and.
Speaker 5 (34:14):
A PHDL PhD level thinker.
Speaker 4 (34:16):
But the bottom line being that it wasn't ready for
primetime yet.
Speaker 5 (34:21):
Is the takeaway from that?
Speaker 3 (34:22):
I got to be honest reporter.
Speaker 2 (34:23):
Maybe I'm wrong, I've been wrong plenty, but I don't
see that as the use case for AI.
Speaker 5 (34:31):
What I profoil management.
Speaker 3 (34:32):
No, any of.
Speaker 2 (34:33):
These things, whether it is you know, an AI agent
that is going to diagnose my illness, or file my taxes,
or design a landscape from my backyard, or provide me
financial advice, I don't think any of those are going
to be solid use cases of artificial intelligence that people
(34:56):
want to use in the near future. I think instead,
what it's going to be is this, you know, chat
GPT financial Advisor will make you the financial advisor far
more efficient at delivering good advice to your people, to
your clients. It'll make the CPAs faster and able to
handle more clients, and able to input taxes and submit
(35:19):
them more efficiently. It will make doctors able to diagnose
things more easily without having to do manual research. And
it will make lawyers better at drafting legal documents. But
I don't think anybody's going to say, yeah, I want
to use AI to draft my will, because I don't
think anybody's going to trust it in the short term,
and I'm not sure you should. Right the lawyer is
(35:39):
going to have the knowledge and background to be able
to look at something that AI drafts and say, well,
that's screwed up. It clearly hallucinated there. Then the financial
advisor is going to look at and say, well, it
clearly doesn't understand the complexity of options trading. And the
doctor's going to say, will it clearly ignored the reality
of this patient scenario. And if you don't have that
requisite background, notedge, I think people are going to harm
(36:03):
themselves and shy away from it.
Speaker 4 (36:05):
I agree with you, It depends where I would potentially
disagree with you is how long you dictate near term
because right now AI has clearly pivoted, and we were
just talking about off air a piece that Anthropic released
on the Financial Advisor World. Enterprise is the focus right now,
and in terms of the way Anthropic has been able
to grow their revenue, which I believe is going at
(36:25):
a trailing twelve forward projective of forty billion dollars from
what was six or seven billion. Is on the enterprise side,
they've been able to provide solutions for businesses and the
consumer side isn't there yet. So i'd agree with you
in the near term you're going to see far more
usage by businesses, But I wouldn't agree that you're not
going to get there where the landscaping scenario that you
(36:48):
painted out couldn't be a use case in the future
for do it your Selzer's to adopt the technology.
Speaker 3 (36:54):
I think it's going to take a generation.
Speaker 5 (36:56):
A generation.
Speaker 2 (36:57):
I think it's going to take a generation of new
young kids to grow up with this technology well enough
to trust it to do things themselves. I think that
is literally going to be the adoption cycle like we
I mean, for example, how many eighty year olds do
you know that are comfortable with online banking?
Speaker 5 (37:15):
Very few.
Speaker 2 (37:16):
I don't think it's that different from that. I think
that there are going to be generations of people who say, no,
if I want tax advice, I want to talk to somebody,
oh sure, And if i want legal advice, I want
to talk to the lawyer. I'm not going to go
draft it myself, and I'm not going to trust some
AI platform, And so I do think it's going to
take more than the technology might be capable of handling
(37:41):
more of this stuff within the next five years. I
have no doubt, but people's willingness to trust it, I
think is going to be the bigger barrier.
Speaker 4 (37:50):
Barrier our kids will come up through it and trust it,
where we'll have the skepticism that they might not.
Speaker 3 (37:55):
Yeah, we'll see.
Speaker 2 (37:57):
I mean again, I've been wrong about plenty of these things,
But to me, it's about making trained professionals more efficient
who can then to lower a lower price.
Speaker 3 (38:04):
Point to people rather than do it yourself. Quick break
for the next twenty two hours.
Speaker 2 (38:10):
We'll be right back at tomorrow market strongly in positive
territory with the NAZAC leading the way up. We'll have
a full recap for you tomorrow. Have a great risk
of day
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