October 20, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss the warning signs lurking beneath this record market. Where does this market stack up to the late 90's and late 2010's? AWS outage impacts hundreds of companies. Trump's demands for resumed trade talks with China. What is the killer combo slamming the auto industry?
Mark as Played
Transcript
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
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is the Financial
Exchange with Chuck Zada and Mike Armstrong, Your exclusive look
at business and financial news affecting your day, your city,
(00:42):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting dav five K Boston and making a
donation today. This is the Financial Exchange with Chuck Zada,
(01:06):
and Mike Armstraw.
Speaker 2 (01:09):
Another new week here on the Financial Exchange was Chuck,
Mike and Tucker with You, And last week was one
of those weeks where an awful lot of movement from
day to day, an awful lot of movement within each day,
but ultimately not really much that actually happened in markets
(01:32):
when you look at, you know, kind of the broader
trends that we monitor. It was, you know, a case of, hey,
you saw markets, you know, up one and a half
percent during a day and then closing flat or down
one and a half percent during a day and closing
flat or Friday the case was, hey, you know, futures
when I woke up, I mean, gosh, I saw futures
(01:54):
S and P futures down ninety points.
Speaker 3 (01:56):
We ended up closing up thirty.
Speaker 2 (01:57):
So it's a two percent inter day Swingultimately not much movement.
It was less than a half percent move on the
S and P five hundred and so I think we
come into this week, Mike still looking just for more
information so that markets can try to, you know, more
conclusively find out which direction they want to move in.
Speaker 3 (02:16):
And we're going to get a little bit more data
this week.
Speaker 2 (02:18):
Last week the movements were happening on you know a
bunch of different reports surrounding you know, potential events and
things like that. This week we are going to get
existing home sales data on Thursday, So that's nice just
because again not a government report comes from. I believe
that's National Association of Realtors is where that data set
comes from. So that's nice that the realtors are still working.
(02:41):
Always good to see. And then Friday, collegey willkers it's
it's the white whale itself.
Speaker 3 (02:49):
We get the CPI report for September.
Speaker 2 (02:51):
The only reason why is because this is instrumental in
setting the cost of living adjustment for Social Security and
other programs for next year. And so the BLS said, hey, yeah,
we'll recall the staffers that handle that stuff and we
will get that September CPI report. So a couple data
points that we get there. And also earning season really
kicks into high gear the last week and a half.
Speaker 3 (03:13):
Banks.
Speaker 2 (03:14):
But this week we got Netflix, ge Aerospace, Coca Cola,
Philip Morris raytheon Tesla IBM. I put it on the
list just because they still exist but not instrumental in
moving markets at this point. Blackstone gonna be interested to
hear what they say about private credit these days, Intel, Honeywell, Union, Pacific, Procter,
(03:37):
and Gamble. So you got earnings really kicking into gear
this week, and so I think this will be kind
of an informative week and potentially a week of change
where we start to maybe get a sign of Hey,
is there a clear direction that this market starts to
take or is it just more chop?
Speaker 4 (03:53):
Yeah?
Speaker 5 (03:53):
I mean, look, two Fridays ago was the day that
we saw market sell off by three percent. To your point,
we've almost made up all of those losses, even with
the chopping market of last week. I struggle to put
my finger on exactly. You know, obviously what caused markets
to sell off on Friday, or at least the big
news at end of the day was increased tensions with
(04:16):
China between President Hu Jumping and President Trump. Those have
somewhat been alleviated. We have not seen much alleviated in
terms of concerns about private credit and where that might
be leaching into. And to a point that I think
you made it. You know, last week, chuck was just
seemed like a market that was going to get nervous
about something. It was just a question of what the
story was going to be. And so you know, we've
(04:39):
seen some improvement on the China US narrative at least,
but I'm not sure that's what's actually going to drive markets.
Speaker 3 (04:47):
Next.
Speaker 4 (04:47):
We've got the earnings that potentially can do that.
Speaker 3 (04:50):
So you've got that going on.
Speaker 2 (04:51):
Also this week, Kevin Hassett, the White House head of
the Council of Economic Advisors, that he expects that the
government's shutdown may end up ending sometime this week. Whether
it actually does or not, I'll read his quote just
because again I think it's informative. Now there's a shot
(05:13):
this week that things will come together, the moderate Democrats
will move forward and get us an open government, at
which point we can negotiate whatever policies they want to
negotiate with regular order. Whether this is posturing or if
he actually believes that this is going to have, you know,
some possibility, I think is an open question. What I
can tell you is that betting markets, the online ones
(05:36):
that follow this stuff are taking it somewhat seriously, and
that Hey, last night Calshi had the average the government
shutdown lasting forty four point four days. Today that estimate
is down to thirty eight days now this week, Mike.
Speaker 3 (05:53):
How long is a week?
Speaker 4 (05:55):
Seven days?
Speaker 3 (05:56):
What's today's date?
Speaker 4 (05:57):
October twentieth.
Speaker 2 (05:59):
End of the week is going to be the October
twenty seventh, which means and again, really that's a week
from now. So I'm even giving you know, the week
the benefit of the doubt. So thirty eight is still
more than twenty seven correct as far as I'm aware you,
As far as we know, we've not seen any math
to disprove that, and so betting markets are saying, yeah,
(06:19):
we could buy that there's maybe a chance that this
happens this week, but we're not buying it with one
hundred percent confidence, certainly.
Speaker 5 (06:27):
Right, last big item on the calendar for this week, Chuck,
that I can think of anyway. Tomorrow at Tucker eleven forty,
Andrew Ross Sorkin, co host of CNBC Squakbox and author
of a new book on the Great Depression nineteen twenty nine,
will be joining us on the program. Like I said,
I believe tomorrow at eleven forty Tucker, Yes, sake.
Speaker 3 (06:47):
Yes, love forty.
Speaker 2 (06:48):
So packed week, big week, so let's get into it.
Wall Street Journal has a piece the Warning Signs lurking
the surface of a record market. So a couple of
things when we talk about this. The first is, yes,
the headlines are designed to make you nervous. The second is,
(07:12):
I do think there are actually some things that are
worth being nervous about. But being nervous is different from
actually taking action and provided that you, you know, set
yourself up with a portfolio and risk tolerance that you
are comfortable with, and you're not bungee jumping and not
doing anything crazy. Regular market volatility is a feature of
markets and not a bug. And markets cannot hit all
(07:35):
new highs every single day. But the best predictor of
new all time highs is hitting former all time is
hitting you know, previous all time highs. And so I
think that when we look at this piece, what it
talks about is there's a few different things covered in it.
The first is you've seen a rotation in the last
week or so, even in the last month.
Speaker 3 (07:56):
Really from cyclical stocks towards more ones.
Speaker 2 (08:01):
Okay, well, is that really a warning sign or is
that markets reacting to potential concern by trying to get
ahead of it.
Speaker 5 (08:09):
Mike, yeah, I six to one a half dozen. The
other right, I mean it all insinuates the same thing,
which is, in some areas the markets, investors are expressing
some degree of concern by voting with their wallet. And yeah,
some of those cyclical cyclical areas that might be subject
to defaults or problems and credit markets are being looked
(08:34):
at more critically right now.
Speaker 4 (08:36):
I think that I'm not sure that that is.
Speaker 5 (08:38):
A symptom of a overheated market or a symptom of
real news that's on the ground, given.
Speaker 4 (08:46):
What we're seeing in the auto industry.
Speaker 2 (08:48):
Yeah, and so I think the other piece that I
will talk about on this, like when we're looking at
it is ultimately, look, these things may or may not
actually mean anything about where the economy is going to go.
Case in point, So, like what this is talking about
is like, hey, regional banks are struggling the last month,
Crude oil struggling the last month. Home builders are sure,
(09:10):
but healthcare utilities in gold have been rocking and rolling
right yep. So you know, you look at this and
you say, okay, let's let's go back and you know
kind of see you know, some some historical examples and
and see if this actually means anything or if it's
just you know, kind of a bunch of hot air.
(09:31):
And the case that I want to look at is, Tucker,
can you fire up the time machine for us?
Speaker 1 (09:36):
Die?
Speaker 2 (09:37):
We got to get the Fox capacitor up to one
point one jigawats. I also, by the way, just love
how back to the future it's jigawats, but everywhere else
it's gigawatts, you know. But anyways, so we're back in
twenty twenty three. It's not hot, Tucker, It's it's still
pretty cold. It's the middle of March of twenty three,
(09:58):
and the S and P Regional Bank fall twenty six percent.
Speaker 3 (10:02):
Yeah, that's right. It's actually a hot March.
Speaker 2 (10:05):
And the S the S ANDB Regional Bank ETF falls
twenty six percent on fears that Silicon Valley Bank is
not going to be the only bank that blows up.
And it's true, it wasn't. There were a couple other
ones that had to be you know, purchased and sold
off and things like that Republic and what was the
other one? There was a New York one that was
all cryptoie.
Speaker 5 (10:25):
Yeah, signature, that signature, it sounds right, Chuck, I think.
Speaker 3 (10:29):
That might be it.
Speaker 2 (10:29):
Yeah, So everyone was nervous that're like, oh, this is
gonna be like a whole thing for regional banks, and
it was for like three of them, but it really.
Speaker 3 (10:38):
Wasn't for anyone else.
Speaker 5 (10:39):
It did require a fair bit of government or FED
intervention to get there though, totally.
Speaker 2 (10:44):
But is that what always happens in crises? Like, yeah,
it always bothers me when when it's kind of like
the people that root for the hurricane to like wipe
out an entire state, It's like people complain, They're like, oh, well,
the FED didn't let everyone fail. It's like no, because
like they didn't want you know, they didn't want till
that nine people right now.
Speaker 3 (11:05):
I'm sorry that they didn't want a giant run on banks.
Speaker 1 (11:08):
You know.
Speaker 2 (11:08):
It's it's like okay, like, yes, the hurricane didn't wipe
everything out, Sorry that everyone got to live or like
that a lot of people did. I just I can't
stand the people that root for doom. It's it's just
not sure healthy. So regional banking TA falls twenty six percent.
Utilities and I'm looking at March seventh through the end
of April, Okay, utilities up five and a half percent,
(11:31):
consumer staples up seven and a half, gold up nine
point six. Mike, did this mean that anything bad happened
in the stock market over the rest of twenty twenty three.
Speaker 5 (11:40):
No, it's actually pretty good. No, it was pretty good
to you because the crisis contained correct.
Speaker 2 (11:45):
So I think that when you look at you know,
signals like this and and and read a piece like this, yes,
this could mean something, but there's also examples where it
doesn't mean anything. And I think that, you know, the
human mind is conditioned to look for patterns and be
like uh zoomer staples and you know, healthcare and utilities
being bought in, regional banks being sold. Market knows something, well, No,
(12:07):
the market's trying to figure out what's going on, and
sometimes it's right, sometimes it's not.
Speaker 3 (12:15):
That's the deal.
Speaker 2 (12:16):
Quick break here. When we return, let's talk about how
the economy is actually doing. This was talking about how
the market's doing. Now let's talk about how the economy
is doing. We got a piece in Bloomberg Opinion the
glass half full. Economy has rarely looked so good. We'll
discuss when we return.
Speaker 1 (12:32):
Thanks to us six one, seven, three, six, two, thirteen
eighty five with your comments and questions about today's show,
and let us know what you think about the stories
we are covering. This is the Financial Exchange Radio Network.
Find daily interviews in full shows of the Financial Exchange
on our YouTube page. Subscribe to our page and get
caught up on anything and everything you might have missed.
(12:54):
This is the Financial Exchange Radio Network.
Speaker 6 (13:00):
This year's DAV five k is sold out, but you
can still help our great American heroes. The race is Saturday,
November eighth, a Castle Island, and you can visit DAV
five k dot Boston to make a donation of any
amount to support our troops.
Speaker 3 (13:16):
Your gifts help.
Speaker 6 (13:17):
Fund free rides to medical appointments for veterans and the
nation's first Davy ladhousing initiative providing homes for single veterans
and veteran families. Go to DAV five k dot Boston
and make your donation today.
Speaker 3 (13:32):
Mike, we get a.
Speaker 2 (13:32):
Piece in the Bloomingberg glass half full. Economy has rarely
looked so good, Mike.
Speaker 3 (13:37):
How full? What's the fullest in economy's glass? Has ever been?
Speaker 4 (13:42):
Ninety nine? Maybe?
Speaker 5 (13:45):
Maybe what percentage? Like the point that I guess I'll
make in twenty twenty one, I would say it was
spilling over.
Speaker 3 (13:53):
It was overfull.
Speaker 2 (13:55):
Okay, yeah, so so we do have situations where that
can happen. Aside that, like I would make the case
that like the fullest in economy gets is like eighty
percent full.
Speaker 4 (14:07):
I don't even really know what that means.
Speaker 2 (14:09):
There's always something wrong, as the point I'm trying to make, Okay,
like there's ever an economy where everything's right, even though whe.
Speaker 3 (14:14):
Where it's overflowing. Sure like that that's not right.
Speaker 2 (14:17):
It's like okay, now, h hold, never spilled milk, you know,
like it's a it's a problem. So you know again
it's it's in the twenty tens. Oh, these interest rates
are too low. No one can save any money. In
the twenty twenties. Interest rates are too high. No one
can borrow any money, like okay, pick one, like it
can't Like there's no mythical perfect interest rate. So what
(14:38):
is the case that's being made by this piece about
where the economy sits today?
Speaker 5 (14:42):
Spending is pretty good there, you know, we are growing
the economy at a more reasonable pace. There doesn't seem
to be a real threat of inflation at this point
in time. And so while again I think the main
thing you can point to as problems under the surface,
would the state of about half of the consumers in
this country not being able to afford a whole lot.
(15:04):
But when you look at broad snapshots of what we
can actually measure when it comes to economic growth productivity,
things look reasonable, not overly heated, and like they could,
I guess, represent a relatively sustainable, growing economy that was
(15:25):
jumbled there for a minute there, I guess I'm struggling
to come up with why people might consider this to
be perfect.
Speaker 3 (15:31):
Do you buy that as the case right now?
Speaker 5 (15:37):
I do, while acknowledging the threats from a lot of
debt having been issued over the last few years and
still existing trade threats that I think that are out there, and.
Speaker 2 (15:48):
We still have inflation, you know, kind of not. I
don't think that we can say inflation is conclusively not
a problem.
Speaker 4 (15:55):
I agreed.
Speaker 5 (15:57):
I mean, the biggest threat that I can see to
the overall economy and is just a very very expensive
stock market and a lot of speculation in other markets
that are marginally attached to the stock markets, such as
crypto commodities and you know, anything tangentially attached to our
(16:17):
official intelligence.
Speaker 2 (16:19):
And look, I think that when we talk about where
the economy sits right now.
Speaker 3 (16:24):
Again, there's always stuff that's wrong. So, like, I don't
think that you.
Speaker 2 (16:28):
Can just be like, oh like that, can you really
like quantify is there more or less wrong aside from
you know, if there's actually a recession? Well no, Like
if you were to sit down and be like, compare
this economy to twenty sixteen, you'd be like, like, can
you quantitatively be like one is better or worse?
Speaker 5 (16:50):
You have to be willing to choose a series of
data points ahead of time to compare them. I mean,
we've talked about things like the misery index. I think
that's as good a measurement as many There's you basically
add together the unemployment rate plus the inflation rate, and
there's your misery index. So are we higher or lower
on that than we were in twenty sixteen?
Speaker 3 (17:10):
Probably about the same, I would think.
Speaker 5 (17:12):
So four point three plus three seven point three percent.
Twenty sixteen inflation was probably closer to two, but in
unemployment was higher. Like, yeah, I think there's a lot
of things that you can say our comparison points, but
it's tough to say if this economy is definitively better
or worse than a previous period of time.
Speaker 2 (17:33):
What I think you can say this economy is very dynamic,
it's very resilient, but there are questions that still need
to be answered. There are always questions that need to
be answered, and so as such, like, I don't think
you can look at what we're seeing right now and
you know, say that it's inherently there's nothing that points
to it being like inherently worse than you know prior times.
(17:55):
There's certainly I think if you're talking best economies, this
is not late nineties or late twenty tens. Agreed, you know,
it's it's not twenty eighteen right now, and it's not
nineteen ninety eight. But those are pretty high benchmarks because
in my opinion, the twenty seventeen twenty eighteen economy and
(18:16):
ninety six through ninety nine are the the cream of
the crop.
Speaker 5 (18:21):
So if we're making these comparisons to twenty twenty three
for a moment, here we were just were about the
banks and some potential concerns with debt. What are the
differences between that and now right we're not seeing a
great question, We're not seeing a bank run at all.
Speaker 2 (18:34):
Here are the differences. Unemployment is starting from a more
normalized place than the absolutely red hot labor market that
we had in twenty one and twenty two. Yep, so
we're start starting from a different place there. Consumer spending
as well. Consumers are more tapped out now than they
were back in twenty three, So that's a difference. Companies
(18:55):
when we talk about, you know, how they're you know,
talking about hiring and things like that, you do find
that they're talking differently now.
Speaker 4 (19:02):
Yeah, also more tapped out, correct.
Speaker 2 (19:05):
You know, the layoffs that we saw in twenty three
were from a period where companies admitted they hired too much.
Now it's companies saying they don't want to hire anymore,
and so I think there's some differences. Another big one housing,
Housing is in a much weaker spot now than two
years ago. But that's, you know, kind of that that
(19:26):
was the point of raising interest rates to a certain extent.
Quick break here, when we come back, we got Wall
Street Watch, and then we're talking about while why your
Alexa wasn't working this morning?
Speaker 1 (19:38):
Like us on Facebook and follow us on Twitter at
TFFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time Now for Wall
Street Watch, A complete book and what's moving market so
far today right here on the Financial Exchange Radio Network.
Speaker 6 (19:57):
Investors turning the page to a new week ahead of
a new batch of third quarter earnings. Wall Street's also
rating for a significant inflation reading on Friday, ahead of
the Fed's October meeting next week. Right now, the Dow
is up seven tenths of one percent, or three hundred
and eighteen points. Hire SMP five hundreds up nearly nine
(20:20):
tenths of one percent or fifty eight points higher, Nasdaq
up one point two percent or two hundred and seventy
nine points higher. We're else in two thousand also up
one point two percent ten, You're treasurreeled down one basis
point at three point nine nine to five percent day,
and crude oil down one percent today, trading just below
fifty seven dollars a barrel. A widespread out is linked
(20:42):
to Amazon's web services has impacted several companies early this morning,
including Amazon, Snapchat, Disney Plus, Reddit, Coinbase, and Robinhood. Airline
websites including Delta and United were also among those impacted. However,
many sites are now showing signs of recovery. On Stock
by the way is up over one percent. Meanwhile, Cleveland
(21:03):
Cliff stock is jumping sixteen percent after the steel company
beat third quarter expectations. The company also issued capital expenditures
guidance of around five hundred and twenty five million dollars
for the year, less than a prior forecast of six
hundred million dollars. Elsewhere, shares in Cooper Companies climbing over
(21:24):
four percent after Reuters reported that activist investor Jana Partners
has built a stake in the medical device maker. Bank
of America upgraded AMD's price target to three hundred dollars
per share from two hundred and fifty dollars per share.
AMD stock is rising three percent and taking a look
at the earnings calendar for this week. Tomorrow, we'll see
(21:46):
GE Aerospace, Coca Cola, Philip Morris, and RTX report in
the morning, followed by Netflix after the bell. Wednesday, we'll
see Thermo, Fisher, AT and T ahead of the opening bell,
fall by Tesla, SAP and IBM after the close. Thursday,
we'll see results from T Mobile, Intel, Union Pacific, and Honeywell.
(22:07):
And on Friday, we'll see Procter and Gamble and Sonify
report their third quarter results. I'm Tucker Silvan. That is
Wall Street Watch Mike Sos.
Speaker 2 (22:18):
Tucker mentioned Amazon Web Services AWS.
Speaker 3 (22:21):
Or as I like to call it OZ.
Speaker 2 (22:24):
They have reported an outage as of early this morning.
They have indicated that they are trying to make a recovery.
I've personally now actually seen a resurgence in a couple
of these AWS issues over the last hour, and so
I've also seen a couple of reports come out that
(22:44):
says that they are still having some problems, so they're
not fully back up to speed.
Speaker 3 (22:51):
And so a couple questions on this.
Speaker 5 (22:54):
Should they get rid of their president and instead name
a wizard of OZ?
Speaker 4 (23:00):
Was that your question?
Speaker 5 (23:01):
Uh?
Speaker 3 (23:02):
That that would be fun? I would enjoy that.
Speaker 2 (23:04):
My question was going to be, has anyone seen Tim
Cook and is he just you know, running around northern
Virginia pulling you know, cables out of a w WES
you know, like him? Him and Bill Gates is running
around in ski mask pulling out you know, Ethernet cords.
I think it could be fun, like you do, you
could do a nice little buddy comedy that way.
Speaker 5 (23:25):
I think, yeah, yeah, Microsoft, it's actually really them and
Google would be the other one that would be interested
in seeing this one single.
Speaker 2 (23:32):
Yeah, I guess Tim Cook wouldn't really care, but uh,
who's uh suer per Chai? Yeah yeah, him and him
and Bill could run around and you know that'd be
a It wouldn't be as entertaining as Tim Cook. I
don't think.
Speaker 4 (23:44):
I'm still running.
Speaker 2 (23:47):
I like the idea of Tim Cook and Bill Gates
trying to be funny, but like it'll be unintentional comedy.
Speaker 5 (23:55):
So these services, you know, Amazon Web Service dominates. According
to Synergy Group, Amazon Web Service currently has a thirty
percent market share of global cloud infrastructure, Microsoft Deserve with
twenty percent, and then Google Cloud with about twelve percent
market share.
Speaker 4 (24:11):
And so yeah, when Amazon and we don't know what.
Speaker 5 (24:14):
Caused this, by the way, right, no, could be a
fat finger in the code. We've seen that takedown things
as complicated as this before. It could be a hack
attack on these services. We aren't really certain. I'm sure
we will get some data on it over the course
of the next few weeks. But when somebody with thirty
percent market share in basically hosting a third of the
(24:38):
websites out there goes down, it leads to some noticeable problems.
Speaker 2 (24:42):
And look, the fact of the matter is that if
there is good evidence out there that if Amazon Web
Service has ever had any kind of extended outage, I'm not.
Speaker 3 (24:57):
Really sure how well we do here.
Speaker 5 (24:59):
Micro Well, go take a look over in the UK
right now and just a much smaller example of this,
land Rover had a hack to their systems.
Speaker 4 (25:09):
Is it fair to call it that? A cyber attack
on their systems?
Speaker 5 (25:11):
That took that Absolutely, they were unable to produce cars
for a couple of months.
Speaker 4 (25:19):
I know it was over thirty days. Yeah, I was
going to say over a month.
Speaker 5 (25:23):
Like this stuff is a serious risk to the system,
and I think national security advisors and such are aware
of that. But I don't really see any great solutions,
right I mean, Amazon Web Services still has a one
third market share in hosting all of these sites.
Speaker 2 (25:40):
There are plenty of solutions, but none that anyone wants
to pay for.
Speaker 4 (25:44):
Yeah, I'm sure they'd be quite costing in terms of.
Speaker 2 (25:46):
Again, the solution to every problem is basically redundancy.
Speaker 3 (25:51):
And the fact is.
Speaker 2 (25:53):
That we've you know, trained, our are our best and
brightest to be like, no, you have to be as
lean and mean as possible, which means no redundancy. Either
in terms of personnel or in terms of systems. And
go back a couple of years ago. You remember the
Colonial pipeline when that got hacked. Couldn't get the oil
to flow from one end to the other. You know,
(26:14):
you can't just like push it through with a giant plunger.
Speaker 3 (26:17):
You know.
Speaker 4 (26:18):
Well, I guess here's the question that I have, though, Chuck.
Speaker 5 (26:20):
So big company sites got taken down, like Facebook, Snapchat,
Amazon was temporarily available, coinbased robin Hood, Venmo experienced some disruptions.
I don't see Bank of America on this list. I
don't see Fidelity or Schwab on this list. And I'm
you know, maybe it's just luck of the draw, right,
that's oftentimes the case.
Speaker 3 (26:38):
Well, maybe they're just not on the list because you
can only write so many names.
Speaker 5 (26:41):
Again, we'll find out. But I'm actually wondering if large
important institutions are actually focusing on redundancy here, right, Like
did the Pentagon get taken down as part of this
or do they actually have the appropriate redundancies built in
to make sure that that doesn't happen. Do large finance
institutions have backup plans that allow them to continue to operate.
Speaker 3 (27:04):
I hope.
Speaker 4 (27:04):
So I don't.
Speaker 5 (27:04):
I don't know so, but I'm not seeing a list
of companies here that I would say are well known
for their well No, I've.
Speaker 2 (27:14):
Seen like there's been reports of sporadic like trading issues
getting into different platforms and stuff this morning.
Speaker 5 (27:22):
Okay, yeah, okay, you know, I'll pull some of them up.
Speaker 2 (27:26):
I don't have them offhand, but I can pull them up, yep.
So I don't think financial companies are the only ones
that are like, hey, we're gonna be redundant, you know,
like we've had financial trading platforms go down punting completely,
and so I get I'm not gonna I can't just
believe that they're the only ones that are smart enough
to you know, have redundancy, like I I don't.
Speaker 3 (27:51):
I don't know.
Speaker 2 (27:54):
But the other thing is, look, it can just be
complete lucky the draw yet. Do you remember a couple
of years ago when uh it was Southwest had that
big thing where like their planes were a.
Speaker 3 (28:04):
Mess for like a week.
Speaker 5 (28:05):
Yeah, because it wasn't because their planes, it was because
of their It was a nice storm in like Dallas.
Speaker 2 (28:10):
You know, Yeah, and they were like the whole thing
just got snarled there, and I said at the time, like, look,
this could happen to any airline. Is just where this,
you know, happened to be. We've seen it with other
ones where you know, Delta has it because Atlanta has
a nice storm, or you know, Chicago has something and
United is a mess for you know, three or four days,
and this could just be hey, yeah, maybe you didn't
(28:31):
hear about you know, Morgan Stanley or Fidelity because they
are on Google's cloud and not on Amazon, Like I
don't know who they use, but it just happened to
be that, Hey, Google's cloud is fine and Amazon's the
one that got hit, or you know you've got so
and so's on Microsoft.
Speaker 3 (28:48):
Deserve could be lucky, yes, you know, like it's you
just don't know on this stuff.
Speaker 2 (28:54):
So but I have seen reports of issues getting into
Brokera over the course of the morning as well. So
I don't think it's as squeaky clean. I think it's
more just hey, you can list like you know, a
dozen names in any report like yeah, here, like this
is the one from CNBC.
Speaker 3 (29:15):
Robin Hood's on the list. Who else is there but Chuck?
Speaker 5 (29:19):
That's kind of my point is that Robin Hood's on
the list, and Fidelity and Schuab or not, and you
know Bank of America and Morgan Stanley aren't on the list.
That's precisely My point is when I look at this
list of companies, I don't think of them as mature,
giant institutions that are critical to Again, people would disagree
(29:40):
here because Delta Airlines is on the list, But I'm
looking at Epic Games, Fortnite, Lift Max, McDonald's like, none
of these.
Speaker 2 (29:47):
To me are pretty mature again, mature company global like
Phone Systems United. But if Eisen But.
Speaker 5 (29:53):
If I'm looking at as you know, as CEO of
that company and my app goes down for it, I
guess I'm devastated. The app goes down for a day,
even at McDonald's. But my point is that there are
big institutions that I don't see on this list that
I'm curious about.
Speaker 2 (30:08):
Yeah, yep, just take a quick break. When we return,
Let's talk China.
Speaker 1 (30:14):
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Like us on YouTube and get
caught up on anything and everything you might have missed.
This is the Financial Exchange Radio Network. Miss any of
the show. Catch up at your convenience by visiting Financial
Exchange Show dot com and clicking the on demand icon,
where you'll find all of our interviews and full shows.
(30:37):
This is your home for the latest business and financial
news in New England and around the country. This is
the Financial Exchange Radio Network.
Speaker 3 (30:51):
Peace and Bloomberg.
Speaker 2 (30:52):
President Trump wass top demands on China before trade talks resume.
Speaker 3 (30:57):
Three key things laid out.
Speaker 2 (30:59):
Number one, stop playing games with rare earth's Number two,
crack down on FENTNL exports and fentanyl precursor exports. Number three,
start buying our soybeans again. Your thoughts, Michael, Yeah, I'm
trying to.
Speaker 5 (31:14):
In my mind, I was thinking through like what would
each party come away from negotiations. I'm not talking about
just these ones, but over the course of the next
twelve months with as a win. And it does not
seem like it's dramatic change to trade policy. To your point, yeah,
buy some of our stuff. I think the Chinese would
be quite content if the official tariff rate ended up
(31:36):
somewhere in the twenty to thirty percent range. And I
think we would be quite content if we had the
flow of rare earths continuing into the United States. Is
there really much anything else that I think, is it,
like in a best case scenario in your mind? Shock,
Is there anything else that gets agreed to as part
of this.
Speaker 2 (31:54):
No, And I'm pretty unconvinced that gets agreed to. I
was talking about this last week and this is again
I come back to China over and over and like,
China's at the precipice of things getting kind of gnarly demographically,
Like they're already there to a certain extent. Yes, but
you can make a real case in my opinion, that
(32:17):
the convergence of hey, G's getting older and wants to
do some stuff before he dies, China's getting older and
is going to lose some of the advantage that they
have had historically as a result of that. And you
couple that with the fact that the US and everyone
else now recognizes, Gee, we can't just rely on China
(32:38):
to produce rare earths and all this other stuff because
if they decide that they're going to not cooperate, were
you know, up poop creek and that doesn't smell very good.
And so I think that when when you look at this,
it's something where I'm more convinced than ever that China
(32:59):
wants to try to use the next five years or
so to really push to cement the position that G
wants it to be in.
Speaker 3 (33:06):
And here's my question is, which is what what do
you mean?
Speaker 5 (33:10):
What is that position that G wants China to be in.
I think, you know, they would love more territory, they
would love more control over Taiwan. I'm just not sure
what that position actually looks like that he is hoping to.
Speaker 3 (33:22):
I think he wants control over Taiwan.
Speaker 2 (33:25):
And I think he wants the Chinese form of government
to be recognized as like the pre eminent form throughout
the world, because he sees himself as trying to pick
up the mantle for the defeat of communism in the
mid twentieth century. And these are things that you can
get from like his speeches and books and not that
(33:47):
he like, you know, sits down and writes like his memoirs.
That's not really you know, G, but you know, from
his speeches and writings and stuff like that, that's that's
kind of what I think is important to him.
Speaker 5 (33:57):
And so in my mind, the relationship just kind of
so along here because we both realize that we're reliant
on each other. Yeah, they want to run out the
clock on us. We need their rare earths, they need
some things from us, largely our consumer and so you
just have these two countries that are kind of relatively
dependent on each other but are generally uncomfortable with each other.
(34:18):
And in a worst case, that really blows up, like
it did over the course of this year. But in
a best case, I think it just kind of limps
along as the status quo, which is not great for farmers.
It's not really great for the pace at which we
need to develop some of these rare earth things. But
I don't see how it dramatically improves.
Speaker 6 (34:34):
Yeah, Cushing and Dolan want to help you avoid costly
mistakes when it comes to gifting assets to your children.
They're brand new guide called Making the Most of Gifting
Assets shares crucial strategies to help you protect your legacy
and your family. Many people think gifting is always a
good thing, but if it's done the wrong way, it
(34:55):
can create real headaches. Even well intentioned gifts can cause
complication if your children are dealing with financial pressure or
legal issues like a divorce. The guide also explains how
a major gift like a home or vacation property could
come with hidden tax consequences that may impact your entire
estate plan. Before you make any big moves, arm yourself
(35:19):
with the facts in this brand new guide from Cushing
and Dolan once Again, it's called making the most of
Gifting Assets. You can get it by calling eight six
six eight four eight five six nine nine to get
your copy once again eight six six eight four eight
five six nine to nine, or you can request it
from their website legal exchange show dot com.
Speaker 1 (35:42):
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Armstrong do not endorse each other and are
not affiliated.
Speaker 2 (35:53):
Mike, we got continued problems in the auto sector, and
it's it's coming in a wide varray of different wide
array of different places. Number one piece in the Wall
Street Journal. First Ford now Jeep automakers hit by a
lack of parts, apparently in a Michigan factory for Jeep.
They have had to stop producing vehicles last week and
(36:17):
won't resume production till early next month because they have
a shortage of aluminum four to stop production at three
plants for the same reason. And so you've got a
bunch of people sitting there saying, Okay, I'm collecting unemployment
for the short term.
Speaker 3 (36:31):
Next one, low.
Speaker 2 (36:32):
Income Americans are missing car payments. This is something we've
talked about, subprime defaults on auto loans creeping up, and
this one on Friday I sent your way primaal end.
Do we have any idea who they actually are before
this piece was written.
Speaker 5 (36:48):
Mike did not know of them on Thursday of last week,
knew about them on Friday.
Speaker 2 (36:52):
Basically, they are a company that provides financing to dealerships
that cater to subprime borrowers. Creditors of them are talking
about whether or not they want to push the company
to file for bankruptcy because they haven't gotten paid for months.
Something reeks in the auto sector, Michael, and it like
it's this is not a one off here, like this
(37:14):
is now like three, four or five things that we're
getting to in a month. There is something stinky in autos.
Speaker 4 (37:20):
Yeah, at least we know what it is.
Speaker 3 (37:22):
Right. It's too much debts, too much debt.
Speaker 5 (37:24):
Too much debt on the part of consumers, too much
debt on the part of the companies that are involved
in the manufacturing and lending in the industry.
Speaker 4 (37:31):
So there's too much debt generally.
Speaker 5 (37:33):
And then there are still all sorts of supply chain snaffoos,
part of which are caused by tariffs, part of which
are just random chance. I mean, the New York aluminum
factory going down has now brought down two automakers and
their ability to produce.
Speaker 2 (37:48):
So what do you do when you have too much debt, Michael,
You go and rob a bunch of royal jewels from
the louver.
Speaker 5 (37:53):
Yes, yes, so you're completely stories orchestrated by automakers.
Speaker 2 (37:58):
No, probably not dead. But the wild story broad daylight.
It was nine to thirty am yesterday and apparently a
bunch of jewels were stolen from the louver in broad
daylight by a bunch of people that went in and
took them.
Speaker 3 (38:14):
Wild stuff. Let's take a quick break here. When we
come back, we had hour two coming up in a
bit
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is the Financial
Exchange with Chuck Zada and Mike Armstrong, Your exclusive look
at business and financial news affecting your day, your city,
(00:42):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting dav five K Boston and making a
donation today. This is the Financial Exchange with Chuck Zada,
(01:06):
and Mike Armstraw.
Speaker 2 (01:09):
Another new week here on the Financial Exchange was Chuck,
Mike and Tucker with You, And last week was one
of those weeks where an awful lot of movement from
day to day, an awful lot of movement within each day,
but ultimately not really much that actually happened in markets
(01:32):
when you look at, you know, kind of the broader
trends that we monitor. It was, you know, a case of, hey,
you saw markets, you know, up one and a half
percent during a day and then closing flat or down
one and a half percent during a day and closing
flat or Friday the case was, hey, you know, futures
when I woke up, I mean, gosh, I saw futures
(01:54):
S and P futures down ninety points.
Speaker 3 (01:56):
We ended up closing up thirty.
Speaker 2 (01:57):
So it's a two percent inter day Swingultimately not much movement.
It was less than a half percent move on the
S and P five hundred and so I think we
come into this week, Mike still looking just for more
information so that markets can try to, you know, more
conclusively find out which direction they want to move in.
Speaker 3 (02:16):
And we're going to get a little bit more data
this week.
Speaker 2 (02:18):
Last week the movements were happening on you know a
bunch of different reports surrounding you know, potential events and
things like that. This week we are going to get
existing home sales data on Thursday, So that's nice just
because again not a government report comes from. I believe
that's National Association of Realtors is where that data set
comes from. So that's nice that the realtors are still working.
(02:41):
Always good to see. And then Friday, collegey willkers it's
it's the white whale itself.
Speaker 3 (02:49):
We get the CPI report for September.
Speaker 2 (02:51):
The only reason why is because this is instrumental in
setting the cost of living adjustment for Social Security and
other programs for next year. And so the BLS said, hey, yeah,
we'll recall the staffers that handle that stuff and we
will get that September CPI report. So a couple data
points that we get there. And also earning season really
kicks into high gear the last week and a half.
Speaker 3 (03:13):
Banks.
Speaker 2 (03:14):
But this week we got Netflix, ge Aerospace, Coca Cola,
Philip Morris raytheon Tesla IBM. I put it on the
list just because they still exist but not instrumental in
moving markets at this point. Blackstone gonna be interested to
hear what they say about private credit these days, Intel, Honeywell, Union, Pacific, Procter,
(03:37):
and Gamble. So you got earnings really kicking into gear
this week, and so I think this will be kind
of an informative week and potentially a week of change
where we start to maybe get a sign of Hey,
is there a clear direction that this market starts to
take or is it just more chop?
Speaker 4 (03:53):
Yeah?
Speaker 5 (03:53):
I mean, look, two Fridays ago was the day that
we saw market sell off by three percent. To your point,
we've almost made up all of those losses, even with
the chopping market of last week. I struggle to put
my finger on exactly. You know, obviously what caused markets
to sell off on Friday, or at least the big
news at end of the day was increased tensions with
(04:16):
China between President Hu Jumping and President Trump. Those have
somewhat been alleviated. We have not seen much alleviated in
terms of concerns about private credit and where that might
be leaching into. And to a point that I think
you made it. You know, last week, chuck was just
seemed like a market that was going to get nervous
about something. It was just a question of what the
story was going to be. And so you know, we've
(04:39):
seen some improvement on the China US narrative at least,
but I'm not sure that's what's actually going to drive markets.
Speaker 3 (04:47):
Next.
Speaker 4 (04:47):
We've got the earnings that potentially can do that.
Speaker 3 (04:50):
So you've got that going on.
Speaker 2 (04:51):
Also this week, Kevin Hassett, the White House head of
the Council of Economic Advisors, that he expects that the
government's shutdown may end up ending sometime this week. Whether
it actually does or not, I'll read his quote just
because again I think it's informative. Now there's a shot
(05:13):
this week that things will come together, the moderate Democrats
will move forward and get us an open government, at
which point we can negotiate whatever policies they want to
negotiate with regular order. Whether this is posturing or if
he actually believes that this is going to have, you know,
some possibility, I think is an open question. What I
can tell you is that betting markets, the online ones
(05:36):
that follow this stuff are taking it somewhat seriously, and
that Hey, last night Calshi had the average the government
shutdown lasting forty four point four days. Today that estimate
is down to thirty eight days now this week, Mike.
Speaker 3 (05:53):
How long is a week?
Speaker 4 (05:55):
Seven days?
Speaker 3 (05:56):
What's today's date?
Speaker 4 (05:57):
October twentieth.
Speaker 2 (05:59):
End of the week is going to be the October
twenty seventh, which means and again, really that's a week
from now. So I'm even giving you know, the week
the benefit of the doubt. So thirty eight is still
more than twenty seven correct as far as I'm aware you,
As far as we know, we've not seen any math
to disprove that, and so betting markets are saying, yeah,
(06:19):
we could buy that there's maybe a chance that this
happens this week, but we're not buying it with one
hundred percent confidence, certainly.
Speaker 5 (06:27):
Right, last big item on the calendar for this week, Chuck,
that I can think of anyway. Tomorrow at Tucker eleven forty,
Andrew Ross Sorkin, co host of CNBC Squakbox and author
of a new book on the Great Depression nineteen twenty nine,
will be joining us on the program. Like I said,
I believe tomorrow at eleven forty Tucker, Yes, sake.
Speaker 3 (06:47):
Yes, love forty.
Speaker 2 (06:48):
So packed week, big week, so let's get into it.
Wall Street Journal has a piece the Warning Signs lurking
the surface of a record market. So a couple of
things when we talk about this. The first is, yes,
the headlines are designed to make you nervous. The second is,
(07:12):
I do think there are actually some things that are
worth being nervous about. But being nervous is different from
actually taking action and provided that you, you know, set
yourself up with a portfolio and risk tolerance that you
are comfortable with, and you're not bungee jumping and not
doing anything crazy. Regular market volatility is a feature of
markets and not a bug. And markets cannot hit all
(07:35):
new highs every single day. But the best predictor of
new all time highs is hitting former all time is
hitting you know, previous all time highs. And so I
think that when we look at this piece, what it
talks about is there's a few different things covered in it.
The first is you've seen a rotation in the last
week or so, even in the last month.
Speaker 3 (07:56):
Really from cyclical stocks towards more ones.
Speaker 2 (08:01):
Okay, well, is that really a warning sign or is
that markets reacting to potential concern by trying to get
ahead of it.
Speaker 5 (08:09):
Mike, yeah, I six to one a half dozen. The
other right, I mean it all insinuates the same thing,
which is, in some areas the markets, investors are expressing
some degree of concern by voting with their wallet. And yeah,
some of those cyclical cyclical areas that might be subject
to defaults or problems and credit markets are being looked
(08:34):
at more critically right now.
Speaker 4 (08:36):
I think that I'm not sure that that is.
Speaker 5 (08:38):
A symptom of a overheated market or a symptom of
real news that's on the ground, given.
Speaker 4 (08:46):
What we're seeing in the auto industry.
Speaker 2 (08:48):
Yeah, and so I think the other piece that I
will talk about on this, like when we're looking at
it is ultimately, look, these things may or may not
actually mean anything about where the economy is going to go.
Case in point, So, like what this is talking about
is like, hey, regional banks are struggling the last month,
Crude oil struggling the last month. Home builders are sure,
(09:10):
but healthcare utilities in gold have been rocking and rolling
right yep. So you know, you look at this and
you say, okay, let's let's go back and you know
kind of see you know, some some historical examples and
and see if this actually means anything or if it's
just you know, kind of a bunch of hot air.
(09:31):
And the case that I want to look at is, Tucker,
can you fire up the time machine for us?
Speaker 1 (09:36):
Die?
Speaker 2 (09:37):
We got to get the Fox capacitor up to one
point one jigawats. I also, by the way, just love
how back to the future it's jigawats, but everywhere else
it's gigawatts, you know. But anyways, so we're back in
twenty twenty three. It's not hot, Tucker, It's it's still
pretty cold. It's the middle of March of twenty three,
(09:58):
and the S and P Regional Bank fall twenty six percent.
Speaker 3 (10:02):
Yeah, that's right. It's actually a hot March.
Speaker 2 (10:05):
And the S the S ANDB Regional Bank ETF falls
twenty six percent on fears that Silicon Valley Bank is
not going to be the only bank that blows up.
And it's true, it wasn't. There were a couple other
ones that had to be you know, purchased and sold
off and things like that Republic and what was the
other one? There was a New York one that was
all cryptoie.
Speaker 5 (10:25):
Yeah, signature, that signature, it sounds right, Chuck, I think.
Speaker 3 (10:29):
That might be it.
Speaker 2 (10:29):
Yeah, So everyone was nervous that're like, oh, this is
gonna be like a whole thing for regional banks, and
it was for like three of them, but it really.
Speaker 3 (10:38):
Wasn't for anyone else.
Speaker 5 (10:39):
It did require a fair bit of government or FED
intervention to get there though, totally.
Speaker 2 (10:44):
But is that what always happens in crises? Like, yeah,
it always bothers me when when it's kind of like
the people that root for the hurricane to like wipe
out an entire state, It's like people complain, They're like, oh, well,
the FED didn't let everyone fail. It's like no, because
like they didn't want you know, they didn't want till
that nine people right now.
Speaker 3 (11:05):
I'm sorry that they didn't want a giant run on banks.
Speaker 1 (11:08):
You know.
Speaker 2 (11:08):
It's it's like okay, like, yes, the hurricane didn't wipe
everything out, Sorry that everyone got to live or like
that a lot of people did. I just I can't
stand the people that root for doom. It's it's just
not sure healthy. So regional banking TA falls twenty six percent.
Utilities and I'm looking at March seventh through the end
of April, Okay, utilities up five and a half percent,
(11:31):
consumer staples up seven and a half, gold up nine
point six. Mike, did this mean that anything bad happened
in the stock market over the rest of twenty twenty three.
Speaker 5 (11:40):
No, it's actually pretty good. No, it was pretty good
to you because the crisis contained correct.
Speaker 2 (11:45):
So I think that when you look at you know,
signals like this and and and read a piece like this, yes,
this could mean something, but there's also examples where it
doesn't mean anything. And I think that, you know, the
human mind is conditioned to look for patterns and be
like uh zoomer staples and you know, healthcare and utilities
being bought in, regional banks being sold. Market knows something, well, No,
(12:07):
the market's trying to figure out what's going on, and
sometimes it's right, sometimes it's not.
Speaker 3 (12:15):
That's the deal.
Speaker 2 (12:16):
Quick break here. When we return, let's talk about how
the economy is actually doing. This was talking about how
the market's doing. Now let's talk about how the economy
is doing. We got a piece in Bloomberg Opinion the
glass half full. Economy has rarely looked so good. We'll
discuss when we return.
Speaker 1 (12:32):
Thanks to us six one, seven, three, six, two, thirteen
eighty five with your comments and questions about today's show,
and let us know what you think about the stories
we are covering. This is the Financial Exchange Radio Network.
Find daily interviews in full shows of the Financial Exchange
on our YouTube page. Subscribe to our page and get
caught up on anything and everything you might have missed.
(12:54):
This is the Financial Exchange Radio Network.
Speaker 6 (13:00):
This year's DAV five k is sold out, but you
can still help our great American heroes. The race is Saturday,
November eighth, a Castle Island, and you can visit DAV
five k dot Boston to make a donation of any
amount to support our troops.
Speaker 3 (13:16):
Your gifts help.
Speaker 6 (13:17):
Fund free rides to medical appointments for veterans and the
nation's first Davy ladhousing initiative providing homes for single veterans
and veteran families. Go to DAV five k dot Boston
and make your donation today.
Speaker 3 (13:32):
Mike, we get a.
Speaker 2 (13:32):
Piece in the Bloomingberg glass half full. Economy has rarely
looked so good, Mike.
Speaker 3 (13:37):
How full? What's the fullest in economy's glass? Has ever been?
Speaker 4 (13:42):
Ninety nine? Maybe?
Speaker 5 (13:45):
Maybe what percentage? Like the point that I guess I'll
make in twenty twenty one, I would say it was
spilling over.
Speaker 3 (13:53):
It was overfull.
Speaker 2 (13:55):
Okay, yeah, so so we do have situations where that
can happen. Aside that, like I would make the case
that like the fullest in economy gets is like eighty
percent full.
Speaker 4 (14:07):
I don't even really know what that means.
Speaker 2 (14:09):
There's always something wrong, as the point I'm trying to make, Okay,
like there's ever an economy where everything's right, even though whe.
Speaker 3 (14:14):
Where it's overflowing. Sure like that that's not right.
Speaker 2 (14:17):
It's like okay, now, h hold, never spilled milk, you know,
like it's a it's a problem. So you know again
it's it's in the twenty tens. Oh, these interest rates
are too low. No one can save any money. In
the twenty twenties. Interest rates are too high. No one
can borrow any money, like okay, pick one, like it
can't Like there's no mythical perfect interest rate. So what
(14:38):
is the case that's being made by this piece about
where the economy sits today?
Speaker 5 (14:42):
Spending is pretty good there, you know, we are growing
the economy at a more reasonable pace. There doesn't seem
to be a real threat of inflation at this point
in time. And so while again I think the main
thing you can point to as problems under the surface,
would the state of about half of the consumers in
this country not being able to afford a whole lot.
(15:04):
But when you look at broad snapshots of what we
can actually measure when it comes to economic growth productivity,
things look reasonable, not overly heated, and like they could,
I guess, represent a relatively sustainable, growing economy that was
(15:25):
jumbled there for a minute there, I guess I'm struggling
to come up with why people might consider this to
be perfect.
Speaker 3 (15:31):
Do you buy that as the case right now?
Speaker 5 (15:37):
I do, while acknowledging the threats from a lot of
debt having been issued over the last few years and
still existing trade threats that I think that are out there, and.
Speaker 2 (15:48):
We still have inflation, you know, kind of not. I
don't think that we can say inflation is conclusively not
a problem.
Speaker 4 (15:55):
I agreed.
Speaker 5 (15:57):
I mean, the biggest threat that I can see to
the overall economy and is just a very very expensive
stock market and a lot of speculation in other markets
that are marginally attached to the stock markets, such as
crypto commodities and you know, anything tangentially attached to our
(16:17):
official intelligence.
Speaker 2 (16:19):
And look, I think that when we talk about where
the economy sits right now.
Speaker 3 (16:24):
Again, there's always stuff that's wrong. So, like, I don't
think that you.
Speaker 2 (16:28):
Can just be like, oh like that, can you really
like quantify is there more or less wrong aside from
you know, if there's actually a recession? Well no, Like
if you were to sit down and be like, compare
this economy to twenty sixteen, you'd be like, like, can
you quantitatively be like one is better or worse?
Speaker 5 (16:50):
You have to be willing to choose a series of
data points ahead of time to compare them. I mean,
we've talked about things like the misery index. I think
that's as good a measurement as many There's you basically
add together the unemployment rate plus the inflation rate, and
there's your misery index. So are we higher or lower
on that than we were in twenty sixteen?
Speaker 3 (17:10):
Probably about the same, I would think.
Speaker 5 (17:12):
So four point three plus three seven point three percent.
Twenty sixteen inflation was probably closer to two, but in
unemployment was higher. Like, yeah, I think there's a lot
of things that you can say our comparison points, but
it's tough to say if this economy is definitively better
or worse than a previous period of time.
Speaker 2 (17:33):
What I think you can say this economy is very dynamic,
it's very resilient, but there are questions that still need
to be answered. There are always questions that need to
be answered, and so as such, like, I don't think
you can look at what we're seeing right now and
you know, say that it's inherently there's nothing that points
to it being like inherently worse than you know prior times.
(17:55):
There's certainly I think if you're talking best economies, this
is not late nineties or late twenty tens. Agreed, you know,
it's it's not twenty eighteen right now, and it's not
nineteen ninety eight. But those are pretty high benchmarks because
in my opinion, the twenty seventeen twenty eighteen economy and
(18:16):
ninety six through ninety nine are the the cream of
the crop.
Speaker 5 (18:21):
So if we're making these comparisons to twenty twenty three
for a moment, here we were just were about the
banks and some potential concerns with debt. What are the
differences between that and now right we're not seeing a
great question, We're not seeing a bank run at all.
Speaker 2 (18:34):
Here are the differences. Unemployment is starting from a more
normalized place than the absolutely red hot labor market that
we had in twenty one and twenty two. Yep, so
we're start starting from a different place there. Consumer spending
as well. Consumers are more tapped out now than they
were back in twenty three, So that's a difference. Companies
(18:55):
when we talk about, you know, how they're you know,
talking about hiring and things like that, you do find
that they're talking differently now.
Speaker 4 (19:02):
Yeah, also more tapped out, correct.
Speaker 2 (19:05):
You know, the layoffs that we saw in twenty three
were from a period where companies admitted they hired too much.
Now it's companies saying they don't want to hire anymore,
and so I think there's some differences. Another big one housing,
Housing is in a much weaker spot now than two
years ago. But that's, you know, kind of that that
(19:26):
was the point of raising interest rates to a certain extent.
Quick break here, when we come back, we got Wall
Street Watch, and then we're talking about while why your
Alexa wasn't working this morning?
Speaker 1 (19:38):
Like us on Facebook and follow us on Twitter at
TFFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time Now for Wall
Street Watch, A complete book and what's moving market so
far today right here on the Financial Exchange Radio Network.
Speaker 6 (19:57):
Investors turning the page to a new week ahead of
a new batch of third quarter earnings. Wall Street's also
rating for a significant inflation reading on Friday, ahead of
the Fed's October meeting next week. Right now, the Dow
is up seven tenths of one percent, or three hundred
and eighteen points. Hire SMP five hundreds up nearly nine
(20:20):
tenths of one percent or fifty eight points higher, Nasdaq
up one point two percent or two hundred and seventy
nine points higher. We're else in two thousand also up
one point two percent ten, You're treasurreeled down one basis
point at three point nine nine to five percent day,
and crude oil down one percent today, trading just below
fifty seven dollars a barrel. A widespread out is linked
(20:42):
to Amazon's web services has impacted several companies early this morning,
including Amazon, Snapchat, Disney Plus, Reddit, Coinbase, and Robinhood. Airline
websites including Delta and United were also among those impacted. However,
many sites are now showing signs of recovery. On Stock
by the way is up over one percent. Meanwhile, Cleveland
(21:03):
Cliff stock is jumping sixteen percent after the steel company
beat third quarter expectations. The company also issued capital expenditures
guidance of around five hundred and twenty five million dollars
for the year, less than a prior forecast of six
hundred million dollars. Elsewhere, shares in Cooper Companies climbing over
(21:24):
four percent after Reuters reported that activist investor Jana Partners
has built a stake in the medical device maker. Bank
of America upgraded AMD's price target to three hundred dollars
per share from two hundred and fifty dollars per share.
AMD stock is rising three percent and taking a look
at the earnings calendar for this week. Tomorrow, we'll see
(21:46):
GE Aerospace, Coca Cola, Philip Morris, and RTX report in
the morning, followed by Netflix after the bell. Wednesday, we'll
see Thermo, Fisher, AT and T ahead of the opening bell,
fall by Tesla, SAP and IBM after the close. Thursday,
we'll see results from T Mobile, Intel, Union Pacific, and Honeywell.
(22:07):
And on Friday, we'll see Procter and Gamble and Sonify
report their third quarter results. I'm Tucker Silvan. That is
Wall Street Watch Mike Sos.
Speaker 2 (22:18):
Tucker mentioned Amazon Web Services AWS.
Speaker 3 (22:21):
Or as I like to call it OZ.
Speaker 2 (22:24):
They have reported an outage as of early this morning.
They have indicated that they are trying to make a recovery.
I've personally now actually seen a resurgence in a couple
of these AWS issues over the last hour, and so
I've also seen a couple of reports come out that
(22:44):
says that they are still having some problems, so they're
not fully back up to speed.
Speaker 3 (22:51):
And so a couple questions on this.
Speaker 5 (22:54):
Should they get rid of their president and instead name
a wizard of OZ?
Speaker 4 (23:00):
Was that your question?
Speaker 5 (23:01):
Uh?
Speaker 3 (23:02):
That that would be fun? I would enjoy that.
Speaker 2 (23:04):
My question was going to be, has anyone seen Tim
Cook and is he just you know, running around northern
Virginia pulling you know, cables out of a w WES
you know, like him? Him and Bill Gates is running
around in ski mask pulling out you know, Ethernet cords.
I think it could be fun, like you do, you
could do a nice little buddy comedy that way.
Speaker 5 (23:25):
I think, yeah, yeah, Microsoft, it's actually really them and
Google would be the other one that would be interested
in seeing this one single.
Speaker 2 (23:32):
Yeah, I guess Tim Cook wouldn't really care, but uh,
who's uh suer per Chai? Yeah yeah, him and him
and Bill could run around and you know that'd be
a It wouldn't be as entertaining as Tim Cook. I
don't think.
Speaker 4 (23:44):
I'm still running.
Speaker 2 (23:47):
I like the idea of Tim Cook and Bill Gates
trying to be funny, but like it'll be unintentional comedy.
Speaker 5 (23:55):
So these services, you know, Amazon Web Service dominates. According
to Synergy Group, Amazon Web Service currently has a thirty
percent market share of global cloud infrastructure, Microsoft Deserve with
twenty percent, and then Google Cloud with about twelve percent
market share.
Speaker 4 (24:11):
And so yeah, when Amazon and we don't know what.
Speaker 5 (24:14):
Caused this, by the way, right, no, could be a
fat finger in the code. We've seen that takedown things
as complicated as this before. It could be a hack
attack on these services. We aren't really certain. I'm sure
we will get some data on it over the course
of the next few weeks. But when somebody with thirty
percent market share in basically hosting a third of the
(24:38):
websites out there goes down, it leads to some noticeable problems.
Speaker 2 (24:42):
And look, the fact of the matter is that if
there is good evidence out there that if Amazon Web
Service has ever had any kind of extended outage, I'm not.
Speaker 3 (24:57):
Really sure how well we do here.
Speaker 5 (24:59):
Micro Well, go take a look over in the UK
right now and just a much smaller example of this,
land Rover had a hack to their systems.
Speaker 4 (25:09):
Is it fair to call it that? A cyber attack
on their systems?
Speaker 5 (25:11):
That took that Absolutely, they were unable to produce cars
for a couple of months.
Speaker 4 (25:19):
I know it was over thirty days. Yeah, I was
going to say over a month.
Speaker 5 (25:23):
Like this stuff is a serious risk to the system,
and I think national security advisors and such are aware
of that. But I don't really see any great solutions,
right I mean, Amazon Web Services still has a one
third market share in hosting all of these sites.
Speaker 2 (25:40):
There are plenty of solutions, but none that anyone wants
to pay for.
Speaker 4 (25:44):
Yeah, I'm sure they'd be quite costing in terms of.
Speaker 2 (25:46):
Again, the solution to every problem is basically redundancy.
Speaker 3 (25:51):
And the fact is.
Speaker 2 (25:53):
That we've you know, trained, our are our best and
brightest to be like, no, you have to be as
lean and mean as possible, which means no redundancy. Either
in terms of personnel or in terms of systems. And
go back a couple of years ago. You remember the
Colonial pipeline when that got hacked. Couldn't get the oil
to flow from one end to the other. You know,
(26:14):
you can't just like push it through with a giant plunger.
Speaker 3 (26:17):
You know.
Speaker 4 (26:18):
Well, I guess here's the question that I have, though, Chuck.
Speaker 5 (26:20):
So big company sites got taken down, like Facebook, Snapchat,
Amazon was temporarily available, coinbased robin Hood, Venmo experienced some disruptions.
I don't see Bank of America on this list. I
don't see Fidelity or Schwab on this list. And I'm
you know, maybe it's just luck of the draw, right,
that's oftentimes the case.
Speaker 3 (26:38):
Well, maybe they're just not on the list because you
can only write so many names.
Speaker 5 (26:41):
Again, we'll find out. But I'm actually wondering if large
important institutions are actually focusing on redundancy here, right, Like
did the Pentagon get taken down as part of this
or do they actually have the appropriate redundancies built in
to make sure that that doesn't happen. Do large finance
institutions have backup plans that allow them to continue to operate.
Speaker 3 (27:04):
I hope.
Speaker 4 (27:04):
So I don't.
Speaker 5 (27:04):
I don't know so, but I'm not seeing a list
of companies here that I would say are well known
for their well No, I've.
Speaker 2 (27:14):
Seen like there's been reports of sporadic like trading issues
getting into different platforms and stuff this morning.
Speaker 5 (27:22):
Okay, yeah, okay, you know, I'll pull some of them up.
Speaker 2 (27:26):
I don't have them offhand, but I can pull them up, yep.
So I don't think financial companies are the only ones
that are like, hey, we're gonna be redundant, you know,
like we've had financial trading platforms go down punting completely,
and so I get I'm not gonna I can't just
believe that they're the only ones that are smart enough
to you know, have redundancy, like I I don't.
Speaker 3 (27:51):
I don't know.
Speaker 2 (27:54):
But the other thing is, look, it can just be
complete lucky the draw yet. Do you remember a couple
of years ago when uh it was Southwest had that
big thing where like their planes were a.
Speaker 3 (28:04):
Mess for like a week.
Speaker 5 (28:05):
Yeah, because it wasn't because their planes, it was because
of their It was a nice storm in like Dallas.
Speaker 2 (28:10):
You know, Yeah, and they were like the whole thing
just got snarled there, and I said at the time, like, look,
this could happen to any airline. Is just where this,
you know, happened to be. We've seen it with other
ones where you know, Delta has it because Atlanta has
a nice storm, or you know, Chicago has something and
United is a mess for you know, three or four days,
and this could just be hey, yeah, maybe you didn't
(28:31):
hear about you know, Morgan Stanley or Fidelity because they
are on Google's cloud and not on Amazon, Like I
don't know who they use, but it just happened to
be that, Hey, Google's cloud is fine and Amazon's the
one that got hit, or you know you've got so
and so's on Microsoft.
Speaker 3 (28:48):
Deserve could be lucky, yes, you know, like it's you
just don't know on this stuff.
Speaker 2 (28:54):
So but I have seen reports of issues getting into
Brokera over the course of the morning as well. So
I don't think it's as squeaky clean. I think it's
more just hey, you can list like you know, a
dozen names in any report like yeah, here, like this
is the one from CNBC.
Speaker 3 (29:15):
Robin Hood's on the list. Who else is there but Chuck?
Speaker 5 (29:19):
That's kind of my point is that Robin Hood's on
the list, and Fidelity and Schuab or not, and you
know Bank of America and Morgan Stanley aren't on the list.
That's precisely My point is when I look at this
list of companies, I don't think of them as mature,
giant institutions that are critical to Again, people would disagree
(29:40):
here because Delta Airlines is on the list, But I'm
looking at Epic Games, Fortnite, Lift Max, McDonald's like, none
of these.
Speaker 2 (29:47):
To me are pretty mature again, mature company global like
Phone Systems United. But if Eisen But.
Speaker 5 (29:53):
If I'm looking at as you know, as CEO of
that company and my app goes down for it, I
guess I'm devastated. The app goes down for a day,
even at McDonald's. But my point is that there are
big institutions that I don't see on this list that
I'm curious about.
Speaker 2 (30:08):
Yeah, yep, just take a quick break. When we return,
Let's talk China.
Speaker 1 (30:14):
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Like us on YouTube and get
caught up on anything and everything you might have missed.
This is the Financial Exchange Radio Network. Miss any of
the show. Catch up at your convenience by visiting Financial
Exchange Show dot com and clicking the on demand icon,
where you'll find all of our interviews and full shows.
(30:37):
This is your home for the latest business and financial
news in New England and around the country. This is
the Financial Exchange Radio Network.
Speaker 3 (30:51):
Peace and Bloomberg.
Speaker 2 (30:52):
President Trump wass top demands on China before trade talks resume.
Speaker 3 (30:57):
Three key things laid out.
Speaker 2 (30:59):
Number one, stop playing games with rare earth's Number two,
crack down on FENTNL exports and fentanyl precursor exports. Number three,
start buying our soybeans again. Your thoughts, Michael, Yeah, I'm
trying to.
Speaker 5 (31:14):
In my mind, I was thinking through like what would
each party come away from negotiations. I'm not talking about
just these ones, but over the course of the next
twelve months with as a win. And it does not
seem like it's dramatic change to trade policy. To your point, yeah,
buy some of our stuff. I think the Chinese would
be quite content if the official tariff rate ended up
(31:36):
somewhere in the twenty to thirty percent range. And I
think we would be quite content if we had the
flow of rare earths continuing into the United States. Is
there really much anything else that I think, is it,
like in a best case scenario in your mind? Shock,
Is there anything else that gets agreed to as part
of this.
Speaker 2 (31:54):
No, And I'm pretty unconvinced that gets agreed to. I
was talking about this last week and this is again
I come back to China over and over and like,
China's at the precipice of things getting kind of gnarly demographically,
Like they're already there to a certain extent. Yes, but
you can make a real case in my opinion, that
(32:17):
the convergence of hey, G's getting older and wants to
do some stuff before he dies, China's getting older and
is going to lose some of the advantage that they
have had historically as a result of that. And you
couple that with the fact that the US and everyone
else now recognizes, Gee, we can't just rely on China
(32:38):
to produce rare earths and all this other stuff because
if they decide that they're going to not cooperate, were
you know, up poop creek and that doesn't smell very good.
And so I think that when when you look at this,
it's something where I'm more convinced than ever that China
(32:59):
wants to try to use the next five years or
so to really push to cement the position that G
wants it to be in.
Speaker 3 (33:06):
And here's my question is, which is what what do
you mean?
Speaker 5 (33:10):
What is that position that G wants China to be in.
I think, you know, they would love more territory, they
would love more control over Taiwan. I'm just not sure
what that position actually looks like that he is hoping to.
Speaker 3 (33:22):
I think he wants control over Taiwan.
Speaker 2 (33:25):
And I think he wants the Chinese form of government
to be recognized as like the pre eminent form throughout
the world, because he sees himself as trying to pick
up the mantle for the defeat of communism in the
mid twentieth century. And these are things that you can
get from like his speeches and books and not that
(33:47):
he like, you know, sits down and writes like his memoirs.
That's not really you know, G, but you know, from
his speeches and writings and stuff like that, that's that's
kind of what I think is important to him.
Speaker 5 (33:57):
And so in my mind, the relationship just kind of
so along here because we both realize that we're reliant
on each other. Yeah, they want to run out the
clock on us. We need their rare earths, they need
some things from us, largely our consumer and so you
just have these two countries that are kind of relatively
dependent on each other but are generally uncomfortable with each other.
(34:18):
And in a worst case, that really blows up, like
it did over the course of this year. But in
a best case, I think it just kind of limps
along as the status quo, which is not great for farmers.
It's not really great for the pace at which we
need to develop some of these rare earth things. But
I don't see how it dramatically improves.
Speaker 6 (34:34):
Yeah, Cushing and Dolan want to help you avoid costly
mistakes when it comes to gifting assets to your children.
They're brand new guide called Making the Most of Gifting
Assets shares crucial strategies to help you protect your legacy
and your family. Many people think gifting is always a
good thing, but if it's done the wrong way, it
(34:55):
can create real headaches. Even well intentioned gifts can cause
complication if your children are dealing with financial pressure or
legal issues like a divorce. The guide also explains how
a major gift like a home or vacation property could
come with hidden tax consequences that may impact your entire
estate plan. Before you make any big moves, arm yourself
(35:19):
with the facts in this brand new guide from Cushing
and Dolan once Again, it's called making the most of
Gifting Assets. You can get it by calling eight six
six eight four eight five six nine nine to get
your copy once again eight six six eight four eight
five six nine to nine, or you can request it
from their website legal exchange show dot com.
Speaker 1 (35:42):
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Armstrong do not endorse each other and are
not affiliated.
Speaker 2 (35:53):
Mike, we got continued problems in the auto sector, and
it's it's coming in a wide varray of different wide
array of different places. Number one piece in the Wall
Street Journal. First Ford now Jeep automakers hit by a
lack of parts, apparently in a Michigan factory for Jeep.
They have had to stop producing vehicles last week and
(36:17):
won't resume production till early next month because they have
a shortage of aluminum four to stop production at three
plants for the same reason. And so you've got a
bunch of people sitting there saying, Okay, I'm collecting unemployment
for the short term.
Speaker 3 (36:31):
Next one, low.
Speaker 2 (36:32):
Income Americans are missing car payments. This is something we've
talked about, subprime defaults on auto loans creeping up, and
this one on Friday I sent your way primaal end.
Do we have any idea who they actually are before
this piece was written.
Speaker 5 (36:48):
Mike did not know of them on Thursday of last week,
knew about them on Friday.
Speaker 2 (36:52):
Basically, they are a company that provides financing to dealerships
that cater to subprime borrowers. Creditors of them are talking
about whether or not they want to push the company
to file for bankruptcy because they haven't gotten paid for months.
Something reeks in the auto sector, Michael, and it like
it's this is not a one off here, like this
(37:14):
is now like three, four or five things that we're
getting to in a month. There is something stinky in autos.
Speaker 4 (37:20):
Yeah, at least we know what it is.
Speaker 3 (37:22):
Right. It's too much debts, too much debt.
Speaker 5 (37:24):
Too much debt on the part of consumers, too much
debt on the part of the companies that are involved
in the manufacturing and lending in the industry.
Speaker 4 (37:31):
So there's too much debt generally.
Speaker 5 (37:33):
And then there are still all sorts of supply chain snaffoos,
part of which are caused by tariffs, part of which
are just random chance. I mean, the New York aluminum
factory going down has now brought down two automakers and
their ability to produce.
Speaker 2 (37:48):
So what do you do when you have too much debt, Michael,
You go and rob a bunch of royal jewels from
the louver.
Speaker 5 (37:53):
Yes, yes, so you're completely stories orchestrated by automakers.
Speaker 2 (37:58):
No, probably not dead. But the wild story broad daylight.
It was nine to thirty am yesterday and apparently a
bunch of jewels were stolen from the louver in broad
daylight by a bunch of people that went in and
took them.
Speaker 3 (38:14):
Wild stuff. Let's take a quick break here. When we
come back, we had hour two coming up in a
bit
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
CrimeLess: Hillbilly Heist
It’s 1996 in rural North Carolina, and an oddball crew makes history when they pull off America’s third largest cash heist. But it’s all downhill from there. Join host Johnny Knoxville as he unspools a wild and woolly tale about a group of regular ‘ol folks who risked it all for a chance at a better life. CrimeLess: Hillbilly Heist answers the question: what would you do with 17.3 million dollars? The answer includes diamond rings, mansions, velvet Elvis paintings, plus a run for the border, murder-for-hire-plots, and FBI busts.