December 5, 2025 • 39 mins
Chuck Zodda and Mike Armstrong have major bones to pick with the release of the delayed CPE report and those that claimed today would be make of break for markets. Is 2% inflation still the right level to have? What will Netflix do with Warner Bros. movie studio and how do they handle HBO? Studios are already pushing back on Netflix’s purchase of Warner Brothers. What you need to know when doing your portfolio year-end review.
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Episode Transcript
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Speaker 1 (00:00):
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(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:09):
Friday here on the Financial Exchange, Chuck, Mike and talker
with you, And just a few minutes ago, at ten
am Eastern Time, we received the PCE, the Personal Consumption
Expenditures data for the month of September. Now, Mike, I
got a couple bones to.
Speaker 3 (01:29):
Pick here, I bet you do.
Speaker 4 (01:31):
Well.
Speaker 2 (01:31):
It's it's really just one to be honest. So the BLS,
not the BOS. So this is a PC comes from
the Census Bureau rights deal. Well, yeah, Census Burero. Sorry,
so the Census Bureau needed some time to get you know,
spooled back up for the release of the PCE data. Mike,
what time does the PCE data normally come out on
(01:52):
the last Friday of every month. It's not ten am,
eight thirty am.
Speaker 4 (01:59):
Why there need the X It always it's always an
extra hour and a half.
Speaker 2 (02:04):
What they need the extra hour and a half for?
Like the the date is already two months out of date.
Speaker 3 (02:10):
Are you guys sure that it comes out of a thirty.
Speaker 4 (02:12):
Michael positive, I know that the BLS data does. Michael
didn't look at this guy, Michael, I am doubt ye.
Speaker 2 (02:20):
Against buddy Buddy boy allow me to. Just as an example,
I'm gonna go forward. I'm pulling up my calendar for
the end of this month, and where are you just
even scheduled yet? Hang on, let me see if they
even have it on the calendar yet. December December fifth, Oh,
here we go, December twel I know that's uh the see,
everything's weird because they don't have the normal schedule. No,
(02:45):
this is GDP report. That's not gonna do it. But yeah,
it's it's a thirty. Okay again enough I will get
it every single month. It's a thirty. So like, what
do you need the extra hour and a half for?
Like what did you have to like run it over
to the White House or something that you have to
run it to the Treasury? Do you have to run
it to the Fed leg what's going on? Guys? You know?
(03:08):
Can you just get me the report at eight thirty?
But I digress. The good News report came in exactly
as expected, which is nice for something that didn't matter anyways,
because it's two months out of date. Core PC point
two percent for the month, headline point three percent for
the month, which means that we now have both core
and headline PCE at two point eight percent for the
(03:29):
last twelve months through September. Again not really going to
influence policy in any way, shape or form, simply because
this is old data. Also included in this report is
personal income and personal spending, which we don't really need
because we've already gotten retail sales data. Not retail sales data,
but retail earnings. For Q three, of which September is
(03:50):
part of, they were fine, personal income up point four
percent for the month, personal spending up point three So overall,
you look at this and look, if i'm grading it out,
I say, okay, it's a solid B. I'd like that
headline number to be zero point two percent rather than
point three, But everything else being equal, it's fine. It's
not gonna matter. And yeah, that's what I got on it. Yeah.
Speaker 4 (04:15):
So, as Barons said, this is clearly the most important
day in markets of the year, I don't.
Speaker 2 (04:22):
Know if it is. And p rose a whole ten
points after the release.
Speaker 4 (04:25):
Maybe they meant for the rest of the year, even then,
I have a tough time. No, they didn't say that.
They said for the entire year. This was always going
to be just a confirmation report that only mattered if
it was amazingly bad or amazingly good, and it was neither.
It was just fine, and repeated the same information that
(04:47):
we already know, which is inflation remains somewhat uncomfortably high,
but not so high that the FED is all that
willing to do much about it.
Speaker 2 (04:57):
Which I will say, this does set us up nicely
for next week, because next week we got some fun stuff.
We get jolts for the first time in I don't
know when's the last jolts that we got. It was
the August one, so that must have been in early September.
It was late September. It was September thirtieth that we
got it, yea. So we get jolts for the first
(05:17):
time in a couple months. Coming out on Tuesday is
at ten am. Jolts.
Speaker 4 (05:22):
Is that job openings report, So you remember, you know,
telling us telling you that there were two job open
top two, oh my goodness, two job openings for every
person looking for.
Speaker 3 (05:32):
Work back in twenty twenty one. That's where we get
that data point from.
Speaker 2 (05:37):
So next week we've got that. On Tuesday, Wednesday, we've
got a FED meeting with a summary of economic projections.
So that's going to be fun to work through. I
will raise one interesting question for you, Mike, does the
summary of economic projections matter? Given that we are going
to have a new FED chair next year who may
(05:59):
try to influenced the Open Market Committee differently than Jay Powell?
Has interesting thought exercise, Hey, does the fedce projections for
interest rates and things matter? If you may see some
turnover there. Thursday, we're gonna be getting jobless claims, as
we always do on Thursdays, and then we're back into
(06:20):
the Fed speaker schedule with three of them scheduled for
Friday morning.
Speaker 3 (06:24):
Fun.
Speaker 2 (06:26):
So next week will be a fun one. But yeah,
this inflation report, I've got really nothing else on it,
quite honestly. Is there anything else you want to touch
on here?
Speaker 1 (06:36):
No?
Speaker 4 (06:37):
Again, this was a outdated report that I hate saying
that things don't matter on this program that we cover
because it doesn't matter. It only mattered if it was
really bad or really good, and it was just kind
of the same basic old fine that's indicating. Yeah, inflation's
running close to three percent and a lot of people
(06:58):
are uncomfortable with that.
Speaker 2 (07:00):
Let's now turn speaking of inflation, this piece from the
Financial Times there's a black hole where central banks theory
of inflation should be. Michael, what is the black hole?
Speaker 4 (07:12):
The black hole that they are describing, I guess is
whether or not we are trying to target back down
to two percent and whether that target truly matters in
today's age and today's age. Is that your view of
what they're trying to describe here, Yes, and.
Speaker 2 (07:28):
I think two things can be true at the same time.
It's a conversation worth having. It's probably not a conversation
worth having just after you've come off the highest inflation
in forty years.
Speaker 4 (07:40):
So you mean readjusting your targeted inflation level? Yes, yeah,
you lose all credibility if you go and do that.
Speaker 2 (07:47):
I think you know exactly the time to discuss an
appropriate level of inflation is when you've already been at
what most people would consider to be an appropriate level
of inflation for an extended period of time. It is
not appropriate to discuss this at a time when hey,
(08:09):
like again, like you just look at the year over
your numbers, and that's that's all I'm doing here. I'm
not doing anything fancy. I'm not like trying to, you know,
make whatever happen. But two years ago, two and a
half really, Like, beginning of twenty three, headline inflation was
still at six percent? Are we really okay with two
and a half years after that? Being like, Hey, what's
(08:30):
the appropriate level of inflation that central banks should allow?
Speaker 3 (08:34):
No, you go back, I'm not.
Speaker 2 (08:35):
I'm not quite there. Now, there is a valid discussion.
Mark Fandady's talked about this a lot. Is two percent
like the right level to have? Thank you? Mark? Oh yes,
say right back at you. Uh? Is two percent the
right level to have?
Speaker 1 (08:53):
Like?
Speaker 2 (08:53):
How do you know what? You know? What level you
should be targeting? I think that's a reasonable question to
ask because there is a wide disagreement amongst economists who basically,
like the consensus that you get to is yeah, low
single digits of inflation is fine, but low single digits
can mean one, two, three, four, Like again, like, there's
(09:15):
there's a range that you get to there, and I
think that ultimately it's one of those where, in my
personal opinion, which doesn't really count for much, I'd like
to see central banks eventually, not now, because you need
the credibility now get rid of specific inflation targeting goals, which,
(09:39):
by the way, the FED only put in place in
the last decade. Like the FED never had a two
percent mandate before the mid twenty tens.
Speaker 4 (09:49):
They also have redefined, already redefined that inflation target they
have in twenty twenty they said, no, we're not targeting
two percent exactly, We're targeting an average of two percent.
Speaker 2 (09:59):
And then this here with their framework revision, they said, well,
we might, you know, want to modify how we look
at that, and maybe that's not the best way to
do it either. So I think what it what it
comes back to for me is if there is a
two percent target and you never hit it, then is
it really a two percent target? The answer is no, right, yep,
(10:22):
you know that. That's like me being like, hey, you
know what, i'd like to be five eight, I ain't
gonna hit it like I'm I'm I'm just not. It's
it's I'm I'm locked in at five foot seven. So
I think ultimately, a goal and a target has to
be achievable in order for it to mean something. And
(10:45):
given that we have never hit two percent for you know,
a full decade, and given that some of the things
that even allowed us to get into the low twos
are reversing in terms of you know, globalization and things
like that. I don't know if keeping that two percent
target specifically is reasonable or if you know, we just
move back to you know, the FED wants to keep
you know, inflation in a low range for maximum price stability,
(11:08):
and they audiyatah, kind of lean that way. Anything else
that you want to add, Mike.
Speaker 4 (11:13):
No, let's move on from the current talk about the
Fed and move on to some more exciting stuff.
Speaker 2 (11:20):
Yeah, we got a fun one to discuss here, quick break.
Then Netflix and Warner Brothers trying to get together in
a merger. A lot of juice on this one. Will
discuss when we return.
Speaker 1 (11:31):
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Speaker 2 (12:11):
Right, So this one's got a lot of This one
might take more than a segment to get through because
there's a lot of juice in this one. So overnight
Netflix and Warner Brothers Discovery agreeing to a seventy two
billion dollar cash and stock deal. Total value the deal
(12:32):
against seventy two billion dollars. There's some debt out there,
so enterprise values about eighty two point seven billion dollars.
First of all, this is something where we've been seeing,
you know, reports of bidding on Warner brother Discovery by
I think the three main suitors, Mike, if I'm familiar
with it. You've got Netflix who appears to have won
(12:53):
at least at this point, Comcast and Paramount.
Speaker 4 (12:57):
Correct YEP, wanted to merge it with NBC and build
this new entire network that the CEO. This is the
surprising part to me, is like that deal would have
put the CEO of of Warner Brothers in charge of
NBC in this newly created network, and yet they're going
for the Netflix deal.
Speaker 2 (13:18):
So there's a few different things that I want to discuss.
The first, not first, but like, just in no particular order,
what this would mean for you know, Warner Brothers, Discovery
programming and studios and and you know video and movies
and things like that.
Speaker 4 (13:33):
Because remember they you know, beyond HBO which everyone's talking about,
they own what CNN, t N T all all the time,
all of the all of the Turner Broaditoria broadcasting stuff,
which is a lot of network television.
Speaker 2 (13:48):
So I think that when you look at you know,
a like, what what could happen to that? That's one piece.
The second is how like we do do we think
it is that this deal and up going through? Because
I think that's a major piece here. And the third
thing that I also want to do is just and
I'm gonna kick things off with this, the freaking history
(14:11):
of this company at this point is just insane, Okay, like.
Speaker 4 (14:14):
It it really is, Go ahead and start there because
that is useful context.
Speaker 2 (14:18):
So remember so when you look at where this has
come from, Time Warner was formed through the merger of
Time and Warner Brothers back in the early nineteen nineties,
and basically you had them you know, merged together, and
at that point, like the big thing on on the
Warner side, you had the studios, you had the broadcasting,
(14:39):
and you at HBO, Like those were kind of the
three pieces there. Time Warner then decides, obviously go to
go through the AOL Time Warner merger, which I think
we all remember fondly, you know, like just just again,
like the the biggest bust of a merger in history,
one hundred and eight billion do it's just like absolutely nuts,
(15:02):
uh And then you see, you know, okay, that finally
gets you know, cleared out and you end up with
this slimming down and you know everything, and then AT
and T comes along and says, hey, we're gonna buy
you for one hundred and eight billion dollars as well. Okay,
like and we talked about it at the time. We're like, guys,
this is this is a horrible fit. You've got. You've
(15:24):
got a bunch of telecom people that are gonna try
to run a movie studio in HBO that doesn't seem well.
And they go through like sixty four different names for
HBO during the ownership, and finally after like two and
a half years, they're like, no, we we didn't mean
to do this. We can can can we take it back? No,
we can't take it back. Okay, we got we gotta
spin this off because this is not a good fit
(15:44):
for us, and we're sorry that we ever tried to
do this. So AT and T says, hey, kick all
the Warner stuff back out, but in doing so, it
goes through this whole mess of a thing that ends
up finally basically ending up with Warner having to merge
with Discovery in order to make an entity that anyone
actually wanted to own in that format. So now you've
(16:05):
got Warner Brothers Discovery out there, and pretty much, you know,
Warner Brothers Discovery is like, yeah, you know, we've kind
of been having some trouble operating, you know, on our own,
and a year ago they say we might try to
you know, sell ourselves and spin off the linear television,
which we've talked about like why companies are doing that.
(16:27):
And so the thing that's kind of wild to me
is that Warner's just had this run for the last
thirty forty almost forty years now, thirty five years, where
it's just gone through failed merger after failed merger after
failed merger, and somehow HBO has kept kicking along despite that.
(16:48):
It's basically the only thing that's been working there. And
you know, you've got the the intellectual property beyond that
is you know, there's so interesting things there. I mean,
they've got the DC comic stuff that no one's really
been able to do anything with Batman and Superman. They've
got Harry Potter, which I don't know what anyone really
(17:10):
does with it now. It had a good run series characters.
Speaker 4 (17:13):
Yeah, HBO has been producing a brand new, entire new
series of shows.
Speaker 2 (17:18):
You how much time stuff. You've got Game of Thrones,
which was a big hit. Lately, the you know, spin
offs of that have been you know, mixed, and then
they got all like the cartoons and all that stuff. Sure,
but so like you look at this and to me,
the big the two big questions are what would Netflix
do with the movie studio in terms of theatrical releases?
(17:39):
And do they let HBO just be HBO or do
they try to bring it into the rest of Netflix's
streaming realm.
Speaker 4 (17:46):
Your thoughts, huge questions So on the movie studio piece, right, Like,
they did not have a Hollywood movie studio, and I've
listened to other people described this as whether you want
it or not. Netflix felt as though they had to
go and do this. They've got a lot in Hollywood
now which farbia from me, I don't fully understand why
that's that important, but seemed hugely important to them, and
(18:09):
so they felt they needed to buy it. But yeah,
what do they do with that? I mean, Netflix doesn't
release movies like every other movie.
Speaker 2 (18:18):
Studio, and they've said as part of this, one of
the things that could be coming is a compression of
the theatrical window, which means, hey, how much time does
a movie have as an exclusive in theater as opposed
to being able to be released onto Netflix or HBO
or However they would decide.
Speaker 4 (18:37):
To do it right, and they weren't really big enough
as themselves to move the rest of the industry in
that direction, they suddenly would be right if they want
to say with this acquisition that hey, we're now going
to really apply the pressure to movie theaters, which already
are sucking wind. But if we really want to apply
the pressure, they can afford to do so now with
this acquisition.
Speaker 2 (18:58):
So I think ultimately then we get to the question
that is the biggest one out there, which is will
this deal actually be allowed to come to fruition If
it were estimates that it would close somewhere in the
next twelve to eighteen months, so probably end of twenty six,
(19:19):
maybe first half of twenty seven is what we're looking at.
But will the deal actually be allowed to close. Let's
take a quick break and then we'll discuss that when
we return.
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Speaker 1 (20:19):
For all you've done. Time now for Wall Street. Watch
a complete look at what's moving markets so far today
right here on the Financial Exchange Radio Network.
Speaker 5 (20:30):
Market term positive territory to close out the week as
traders react to a core PCE index for the month
of September that came in line with forecasts. Outside of
the inflation reading, the big news comes from the media world,
where Netflix has agreed to a deal to buy Warner Brothers.
Right now, the Dow is up four tenths of a
percent or two hundred and four points. Highre SMP five
(20:52):
hundred and up over half a percent, NASDAC up nearly
three quarters of a percent or one hundred and seventy
one points. R US two thousand is edging higher. Tenure
treasure yield up one basis point at four point one
point one eight percent, and crude oil up one percent higher,
trading just above sixty dollars a barrel. As we discuss,
(21:12):
Netflix struck a seventy two billion dollar deal for Warner Brothers,
beating out bids for from Comcast in paramount. With the deal,
Netflix will add Warner's TV movie libraries, as well as
HBO and HBO Max shows. The deal is expected to
close in twelve to eighteen months, pending regulatory approval. Netflix
(21:33):
shares are now up over one percent after seeing losses
in pre market trading, while Warner Brothers is up three percent. Meanwhile,
digital document signing company DocuSign lifted its annual sales outlook
after quarterly results beat expectations driven by subscription growth. However,
the stock is dropping six percent as some analysts believe
the company's guidance may be conservative. Elsewhere, shares in Victoria's
(21:56):
Secret surging seventeen percent after the launder and apparel company
posted a narrower than expected quarterly loss in a nine
percent increase in net sales. The company also raised its
full year outlook, saying it's will positioned for a successful
holiday season. All to Beauty raised its full year sales outlook,
sending shares on the personal care care retailer up sixteen
(22:19):
percent and shares in Hewlett Packard Enterprise dipping after the
server in cloud software company logged lower than expected revenue
as customers hit delay in developing their AI products. I'm
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(22:39):
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Speaker 2 (22:56):
All right, so we're discussing the Netflix Warner Brothers Discovery
merger and at let's see nine twenty six am this morning,
CNBC pushed through an alert with this headline, Trump administration
views Netflix and Warner Brothers deals with quote heavy skepticism.
(23:16):
Senior official says, uh, and obviously you've got you know,
Paramount lawyers are already saying. And basically what this boils
down to is Paramount really wants to buy Warner Brothers Discovery.
Speaker 3 (23:29):
Yes.
Speaker 2 (23:29):
Uh. And the Paramount is it the the CEO or
what's the what's the what's what? David Ellison is, that's
the CEO? Yeah, with Paramount. So David Ellison is Larry
Ellison's son. Larry Elson runs Oracle and has a really
good relationship with the Trump White House. And so, you know,
(23:53):
one of the thoughts on this while this bidding was
going on was kind of, hey, like, Paramount probably has
to be seen as the front runner because it would
be just you know, again, it just fits when you
look at the ease of kind of navigating the regulatory landscape.
So Paramount is basically already pushing back on this. The
(24:13):
Wall Street Journal reporting that They've already filed a letter
to lawyers from Warner Brothers Discovery saying, quote, acquiring Warner's
streaming and studio assets will entrenched and extent Netflix's global
dominance in a matter not allowed by domestic or foreign
competition laws. So this gets at the real question, which
is is there an anti trust case to be made
(24:36):
against Netflix being able to buy Warner Brothers Discovery or
will it be able to go through?
Speaker 4 (24:45):
So the second piece to this all too, is is
Paramount's antitrust side any better than Netflix's. That's the second
side of that question that you really have to answer
as well.
Speaker 2 (24:57):
So the place that I get to is the one
company that I think can definitively say it's not in
a better position from an anti trust perspective is Comcast.
Comcast again already owns literally like the distribution of cable channels,
already has movie studios, already has its own, you know,
(25:18):
intellectual property. It's got the whole thing. And it's revenue
is one hundred and twenty three billion dollars. In every respect,
it's a bigger company than the other two. Netflix does
about forty three billion dollars in revenue. They again don't
really do anything on the movie side, but they've got,
you know, a significant market share on the streaming side.
(25:38):
But the question is, like how big is that market share?
And like, what are you actually comparing Netflix to Netflix?
Is going to make the comparison. Hey, our biggest competitors
are not just other streaming companies. It's YouTube, it's TikTok,
it's video games. Because these are things that they've said
all along, by the way.
Speaker 4 (25:56):
And I buy that this is competition for I it's
genuinely by that. The real competition definitely is Disney and
Hulu and Hbo Max that they are buying Apple. These
are prime video. I forgot to mention, they're right up
there in terms of subscribers. But go look at what
(26:20):
your kids and grandkids are watching easily as much eyeball
time as going towards YouTube and TikTok and other social
media video streaming sites as these dedicated ones. And so
I don't know, I mean, I don't claim to fully
understand the direction that anti trust goes and whether or
not this actually goes in front of a court or
(26:41):
you know, the administ you know, the White House can
really pressure this away. But I compared to other deals
that have gone through. Have a really tough time saying
that this is a monopolistic concern of mine.
Speaker 2 (26:56):
You know, Paramount Skydance does about twenty eight billion in
revenue compared to Netflix at forty three, so it's about
two thirds of the size. But already has movie studios,
already has you know, streaming, already has cable channels. So
you look at and you're like, okay, like there's you know,
there's all this stuff that already exists there where which.
Speaker 4 (27:13):
One do you think more jobs get eliminated by? I
know that's not the anti trust. I think that honestly,
Paramount buying you end up killing more jobs than if
you have Netflix buying.
Speaker 2 (27:25):
Because of the if they take a hatchet to the studio.
Speaker 3 (27:28):
I think Paramount would Yeah, why wouldn't.
Speaker 2 (27:30):
You Maybe you want to produce just more movies? I
I I don't know. I mean, if you have the
dollars and the IP, wouldn't you want to produce all those?
Like if if let's say Paramount buys this, and like
you think about the intellectual property that's there, is Paramount
going to say, hey, we're just not gonna make Harry
Potter movies anymore.
Speaker 4 (27:51):
No, I think they definitely do, and they just kill
half the writers. But I guess here's the not literally yes,
don't literally killing here. Here's here's the place that I
get to though, Like Paramount already has its own stuff
that it's producing. Yep, if your existing writers are already
busy doing that, don't you need the new writers in
(28:15):
order to produce the additional content?
Speaker 3 (28:17):
Well?
Speaker 2 (28:18):
Or are we just gonna AI ourselves AI the living
hell out of this? Well, then screw this like that.
No one should produce content. It's gonna suck.
Speaker 4 (28:26):
So in either case, what I come back to, I
don't know whether or not this deal gets accepted. I
don't know that the White if the White House, you know,
exerts enough pressure to have Netflix abandon the deal. I
personally have zero concerns about this from an antitrust perspective.
Speaker 3 (28:41):
None.
Speaker 4 (28:43):
I do not think this is a big enough deal
to be concerned about. HBO, Max and Discovery, from what
I saw, had something like one hundred and twenty million subscribers.
Netflix is at three hundred million. Amazon's got two hundred million.
I know that's because they're prime members. Disney has one
hundred and twenty eight plus million, and then YouTube, I
mean paid's YouTube premium has one hundred and twenty five million.
(29:05):
Forget about just the ones that go to it without paying.
I have no concerns about this, especially given that they
are rolling off the network TV and not participating in
that that's going to go get acquired by somebody else.
I'd have more concerns about that side. From a competition perspective, It's.
Speaker 2 (29:24):
Tough for me to say I have no antitrust concerns
because I mean, quite honestly, in a perfect world, I
wouldn't want any of these mergers to go through. Sure,
like if you just look at it just from a
dollar value perspective, which is not like the perfect way
to look at this, I know, but like, let's just
just just hear me out for a second. The nineteen
(29:45):
nineties saw two mergers that would have been that are
bigger from a dollar value perspective. The two thousands saw
four mergers that were bigger from a dollar value perspective,
not an inflation justin terms, but I'm just talking like
nominally even in inflation adjusted, you know, it's it's bigger.
In the two thousands, they were seven that were bigger
(30:07):
than in the nineties there were you know, a dozen
or so, But like you also look at some of
these ones that fall into that category, and you say,
should we have been comfortable with these deals happening?
Speaker 1 (30:20):
Like?
Speaker 2 (30:20):
Do do we like as an example, that in twenty nineteen,
United Technologies was allowed to buy raytheon I dope because
now there's far less competition for government contracts, which means,
you know, let's less problems with bidding. Do we like
that in twenty fifteen ab InBev was allowed to buy
sab Miller. I don't know, like it makes it harder
(30:42):
to compete in the beer space. Do we like that?
You know in I don't know, like do we like
here's a recent one twenty twenty two. Do we like
that Microsoft was able to buy Activision Blizzard and now
they're starting to do the exact things from an availability
and price standpoint that every anti trust person said, what
(31:02):
happen as a result of that deal?
Speaker 4 (31:04):
Let me take my words back then, I do have
concerns about it from a competition perspective, and I, if
I were able to judge these things, would prefer that
none of this gets rolled up in the context of
all the deals that you meant just mentioned that we're
perfectly allowable and we didn't have any administration shut down
(31:27):
or the court system shut down.
Speaker 3 (31:29):
I don't see how you can judge this one any differently.
Speaker 2 (31:32):
Which I think is fair, which is given all of
the other deals that have been allowed to go through.
It's kind of a tough put to look at this
one and be like, Hey, Netflix, Warner brother Discovery is
the straw that breaks the camel's back, right with it.
It's kind of a tough putt. Let's take a quick
break when we return. What do we want to talk
(31:53):
about when we come back. Let's see, Yeah, let's talk
about retirement, kind of year end portfolio review.
Speaker 1 (32:03):
After this text, does six one seven, three, six, two
one three eight five with your comments and questions about
today's show. This is the Financial Exchange Radio Network. The
Financial Exchange streams live on YouTube. Subscribe to our page
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Speaker 5 (32:27):
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Speaker 2 (33:00):
Mike, we get a piece in Barns. Retirerees, it's time
for your year end portfolio review. Here's what to do.
Speaker 3 (33:06):
I do so first things first, if you're actually talking
about a year.
Speaker 4 (33:10):
End portfolio review, the main thing to just make sure
you've done is the stuff that has to be done
by December thirty.
Speaker 3 (33:17):
First, make sure you do it the required.
Speaker 4 (33:18):
Minimum distributions, the tax loss harvesting, if you're going to
try and do so like those are items that actually
must be done by December thirty.
Speaker 2 (33:27):
First.
Speaker 4 (33:27):
If you're in good shape there, then I think you
can move on to the things in this article which
are genuinely helpful.
Speaker 3 (33:33):
And I've got a few to add to the lists.
Speaker 4 (33:35):
So one they you know, especially for retirees, I think
this is incredibly important consolidation. And I don't just mean
this when it comes to investment accounts. I mean this
when it comes to all financials. Right, if you have
bank accounts at three different banks, really ask yourself why
we really really drive down there, because it's going to
(33:55):
become more and more difficult to handle that plus the
four oh one ks plus five everything else down the road.
And even if you are perfect at it, just accept
the fact that if you're heading towards retirement, there's going
to come a day where you won't be able to
handle it and you're gonna need somebody else to try
and pick it all up. And that's a lot more
difficult when it's in nineteen different places. I'm not telling
(34:16):
you to trust any one individual with all of your money.
I am saying that simplify things as you get older
and throughout life is a pretty good general advice that
you can take because, well, Chuck, I'm sure you've seen
it too, but the time I've spent with loved you know,
client's children, trying to map out all the stuff it's.
Speaker 3 (34:39):
It can be really messy. We talked about this one yesterday.
Speaker 4 (34:42):
Diversify and actually diversify, which is more difficult to do
now than previously harder.
Speaker 2 (34:49):
With the S and P is concentrated as it is,
You've got you know, a number of stocks, five or
six of them that make up five percent or north
in the S and P five hundred. You're not necessarily
a diversified as you think you are. If you just
own the S and P five hundred. It doesn't mean
that it's inherently, you know, good or bad. It just means,
from a diversification perspective, you've got more concentration risk in
(35:12):
the S and P five hundred than any other time
in its history.
Speaker 4 (35:16):
Morning Star points out usefully, if you had a sixty
forty portfolio a decade ago, given where stocks have run,
you're now sitting in an eighty twenty portfolio. So that
stallication and maybe rebalancing, Yeah, you know, those are pretty
basic but important ones. They have a whole section about
bonds being back, you know, compared to previous times. I
(35:37):
won't debate that interest rates are higher than twenty twenty.
I will just say that it's not clear to me
that there won't be problems in the bond market, especially
in some corners of it.
Speaker 3 (35:48):
So It's not.
Speaker 4 (35:49):
Exactly a fool proof idea to say, oh yeah, all
bonds are back, as this article, you know, pretty boldly
poses in one of their subsections managing your Taxes. We
talked a bit about that other ones. There was a
piece that a client sent me Wednesday, Tuesday or Wednesday.
(36:10):
It was a piece about boomer candy, which we've talked
about a few times. Here's what I'm just gonna say
about investment products. Generally, you've seen the SMP now return
twenty percent, more than twenty percent per year for the
last three years trailing. When that happens, there's a lot
of different things. There are a lot of different schemes
that start popping up of ways to make money, and
(36:33):
some of them are completely untested. There's also a lot
of fomo fear of missing out that I think starts
to take place. And I would just very simply state,
when you're being sold in new investment product, make sure
that you understand what it is and how it's actually
going to benefit you, because a lot of the ones
that I've seen recently benefit one group, and that's the
(36:54):
people selling them. In any case, it's important to do
year end planning for your overall financial strategy. It's even
more important if you're on the cusp of retirement. If
you are sitting there and thinking that this stuff might
apply to you. Armstrong Advisory has a roadmap to help
you along that path. The numbers eight hundred three nine
(37:15):
three for zero zero one. This is what Chuck and
myself do with the rest of our day after doing
the financial exchange, and we would love to help you
out too. The number again, eight hundred three nine three
for zero zero one, or you can check us out
at Armstrong Advisory dot com.
Speaker 1 (37:30):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.
Speaker 2 (37:45):
Wall Street Journal with the headline two types of shoppers
are powering holiday spending, the wealthy and deal hunters. Mike,
is that ever different?
Speaker 4 (37:52):
I was gonna say what I wrote down is like
as opposed to broke college bros and people that love
overpaying for products.
Speaker 2 (38:00):
What are you?
Speaker 4 (38:00):
What are you talking about? Who's had not been funded
by this group of individuals.
Speaker 2 (38:05):
It's it's just I'm really struggling with this mic. Yeah,
I'm really starting to struggle with it. Yeah.
Speaker 4 (38:12):
Usually when I go to the mall, it's all seven
year olds who are emptying their piggyback who usually do
all the holiday shopping.
Speaker 2 (38:19):
You know, like I don't know. Yes, the people who
typically are shopping are people who either have money and
aren't concerned about price, or people.
Speaker 4 (38:30):
Who the dogs, all of our pets are power. No,
it's always the wealthy and or people that want to deal.
It's always been the case, has been for a hundred years.
It's not going to change.
Speaker 2 (38:44):
Let's take a quick break here and when we return,
we got our two coming up. Paul Monica joins us
then as well, just 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):
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Armstrong and Money Matters Radio do not compensate each other
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(00:42):
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(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:09):
Friday here on the Financial Exchange, Chuck, Mike and talker
with you, And just a few minutes ago, at ten
am Eastern Time, we received the PCE, the Personal Consumption
Expenditures data for the month of September. Now, Mike, I
got a couple bones to.
Speaker 3 (01:29):
Pick here, I bet you do.
Speaker 4 (01:31):
Well.
Speaker 2 (01:31):
It's it's really just one to be honest. So the BLS,
not the BOS. So this is a PC comes from
the Census Bureau rights deal. Well, yeah, Census Burero. Sorry,
so the Census Bureau needed some time to get you know,
spooled back up for the release of the PCE data. Mike,
what time does the PCE data normally come out on
(01:52):
the last Friday of every month. It's not ten am,
eight thirty am.
Speaker 4 (01:59):
Why there need the X It always it's always an
extra hour and a half.
Speaker 2 (02:04):
What they need the extra hour and a half for?
Like the the date is already two months out of date.
Speaker 3 (02:10):
Are you guys sure that it comes out of a thirty.
Speaker 4 (02:12):
Michael positive, I know that the BLS data does. Michael
didn't look at this guy, Michael, I am doubt ye.
Speaker 2 (02:20):
Against buddy Buddy boy allow me to. Just as an example,
I'm gonna go forward. I'm pulling up my calendar for
the end of this month, and where are you just
even scheduled yet? Hang on, let me see if they
even have it on the calendar yet. December December fifth, Oh,
here we go, December twel I know that's uh the see,
everything's weird because they don't have the normal schedule. No,
(02:45):
this is GDP report. That's not gonna do it. But yeah,
it's it's a thirty. Okay again enough I will get
it every single month. It's a thirty. So like, what
do you need the extra hour and a half for?
Like what did you have to like run it over
to the White House or something that you have to
run it to the Treasury? Do you have to run
it to the Fed leg what's going on? Guys? You know?
(03:08):
Can you just get me the report at eight thirty?
But I digress. The good News report came in exactly
as expected, which is nice for something that didn't matter anyways,
because it's two months out of date. Core PC point
two percent for the month, headline point three percent for
the month, which means that we now have both core
and headline PCE at two point eight percent for the
(03:29):
last twelve months through September. Again not really going to
influence policy in any way, shape or form, simply because
this is old data. Also included in this report is
personal income and personal spending, which we don't really need
because we've already gotten retail sales data. Not retail sales data,
but retail earnings. For Q three, of which September is
(03:50):
part of, they were fine, personal income up point four
percent for the month, personal spending up point three So overall,
you look at this and look, if i'm grading it out,
I say, okay, it's a solid B. I'd like that
headline number to be zero point two percent rather than
point three, But everything else being equal, it's fine. It's
not gonna matter. And yeah, that's what I got on it. Yeah.
Speaker 4 (04:15):
So, as Barons said, this is clearly the most important
day in markets of the year, I don't.
Speaker 2 (04:22):
Know if it is. And p rose a whole ten
points after the release.
Speaker 4 (04:25):
Maybe they meant for the rest of the year, even then,
I have a tough time. No, they didn't say that.
They said for the entire year. This was always going
to be just a confirmation report that only mattered if
it was amazingly bad or amazingly good, and it was neither.
It was just fine, and repeated the same information that
(04:47):
we already know, which is inflation remains somewhat uncomfortably high,
but not so high that the FED is all that
willing to do much about it.
Speaker 2 (04:57):
Which I will say, this does set us up nicely
for next week, because next week we got some fun stuff.
We get jolts for the first time in I don't
know when's the last jolts that we got. It was
the August one, so that must have been in early September.
It was late September. It was September thirtieth that we
got it, yea. So we get jolts for the first
(05:17):
time in a couple months. Coming out on Tuesday is
at ten am. Jolts.
Speaker 4 (05:22):
Is that job openings report, So you remember, you know,
telling us telling you that there were two job open
top two, oh my goodness, two job openings for every
person looking for.
Speaker 3 (05:32):
Work back in twenty twenty one. That's where we get
that data point from.
Speaker 2 (05:37):
So next week we've got that. On Tuesday, Wednesday, we've
got a FED meeting with a summary of economic projections.
So that's going to be fun to work through. I
will raise one interesting question for you, Mike, does the
summary of economic projections matter? Given that we are going
to have a new FED chair next year who may
(05:59):
try to influenced the Open Market Committee differently than Jay Powell?
Has interesting thought exercise, Hey, does the fedce projections for
interest rates and things matter? If you may see some
turnover there. Thursday, we're gonna be getting jobless claims, as
we always do on Thursdays, and then we're back into
(06:20):
the Fed speaker schedule with three of them scheduled for
Friday morning.
Speaker 3 (06:24):
Fun.
Speaker 2 (06:26):
So next week will be a fun one. But yeah,
this inflation report, I've got really nothing else on it,
quite honestly. Is there anything else you want to touch
on here?
Speaker 1 (06:36):
No?
Speaker 4 (06:37):
Again, this was a outdated report that I hate saying
that things don't matter on this program that we cover
because it doesn't matter. It only mattered if it was
really bad or really good, and it was just kind
of the same basic old fine that's indicating. Yeah, inflation's
running close to three percent and a lot of people
(06:58):
are uncomfortable with that.
Speaker 2 (07:00):
Let's now turn speaking of inflation, this piece from the
Financial Times there's a black hole where central banks theory
of inflation should be. Michael, what is the black hole?
Speaker 4 (07:12):
The black hole that they are describing, I guess is
whether or not we are trying to target back down
to two percent and whether that target truly matters in
today's age and today's age. Is that your view of
what they're trying to describe here, Yes, and.
Speaker 2 (07:28):
I think two things can be true at the same time.
It's a conversation worth having. It's probably not a conversation
worth having just after you've come off the highest inflation
in forty years.
Speaker 4 (07:40):
So you mean readjusting your targeted inflation level? Yes, yeah,
you lose all credibility if you go and do that.
Speaker 2 (07:47):
I think you know exactly the time to discuss an
appropriate level of inflation is when you've already been at
what most people would consider to be an appropriate level
of inflation for an extended period of time. It is
not appropriate to discuss this at a time when hey,
(08:09):
like again, like you just look at the year over
your numbers, and that's that's all I'm doing here. I'm
not doing anything fancy. I'm not like trying to, you know,
make whatever happen. But two years ago, two and a
half really, Like, beginning of twenty three, headline inflation was
still at six percent? Are we really okay with two
and a half years after that? Being like, Hey, what's
(08:30):
the appropriate level of inflation that central banks should allow?
Speaker 3 (08:34):
No, you go back, I'm not.
Speaker 2 (08:35):
I'm not quite there. Now, there is a valid discussion.
Mark Fandady's talked about this a lot. Is two percent
like the right level to have? Thank you? Mark? Oh yes,
say right back at you. Uh? Is two percent the
right level to have?
Speaker 1 (08:53):
Like?
Speaker 2 (08:53):
How do you know what? You know? What level you
should be targeting? I think that's a reasonable question to
ask because there is a wide disagreement amongst economists who basically,
like the consensus that you get to is yeah, low
single digits of inflation is fine, but low single digits
can mean one, two, three, four, Like again, like, there's
(09:15):
there's a range that you get to there, and I
think that ultimately it's one of those where, in my
personal opinion, which doesn't really count for much, I'd like
to see central banks eventually, not now, because you need
the credibility now get rid of specific inflation targeting goals, which,
(09:39):
by the way, the FED only put in place in
the last decade. Like the FED never had a two
percent mandate before the mid twenty tens.
Speaker 4 (09:49):
They also have redefined, already redefined that inflation target they
have in twenty twenty they said, no, we're not targeting
two percent exactly, We're targeting an average of two percent.
Speaker 2 (09:59):
And then this here with their framework revision, they said, well,
we might, you know, want to modify how we look
at that, and maybe that's not the best way to
do it either. So I think what it what it
comes back to for me is if there is a
two percent target and you never hit it, then is
it really a two percent target? The answer is no, right, yep,
(10:22):
you know that. That's like me being like, hey, you
know what, i'd like to be five eight, I ain't
gonna hit it like I'm I'm I'm just not. It's
it's I'm I'm locked in at five foot seven. So
I think ultimately, a goal and a target has to
be achievable in order for it to mean something. And
(10:45):
given that we have never hit two percent for you know,
a full decade, and given that some of the things
that even allowed us to get into the low twos
are reversing in terms of you know, globalization and things
like that. I don't know if keeping that two percent
target specifically is reasonable or if you know, we just
move back to you know, the FED wants to keep
you know, inflation in a low range for maximum price stability,
(11:08):
and they audiyatah, kind of lean that way. Anything else
that you want to add, Mike.
Speaker 4 (11:13):
No, let's move on from the current talk about the
Fed and move on to some more exciting stuff.
Speaker 2 (11:20):
Yeah, we got a fun one to discuss here, quick break.
Then Netflix and Warner Brothers trying to get together in
a merger. A lot of juice on this one. Will
discuss when we return.
Speaker 1 (11:31):
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Speaker 2 (12:11):
Right, So this one's got a lot of This one
might take more than a segment to get through because
there's a lot of juice in this one. So overnight
Netflix and Warner Brothers Discovery agreeing to a seventy two
billion dollar cash and stock deal. Total value the deal
(12:32):
against seventy two billion dollars. There's some debt out there,
so enterprise values about eighty two point seven billion dollars.
First of all, this is something where we've been seeing,
you know, reports of bidding on Warner brother Discovery by
I think the three main suitors, Mike, if I'm familiar
with it. You've got Netflix who appears to have won
(12:53):
at least at this point, Comcast and Paramount.
Speaker 4 (12:57):
Correct YEP, wanted to merge it with NBC and build
this new entire network that the CEO. This is the
surprising part to me, is like that deal would have
put the CEO of of Warner Brothers in charge of
NBC in this newly created network, and yet they're going
for the Netflix deal.
Speaker 2 (13:18):
So there's a few different things that I want to discuss.
The first, not first, but like, just in no particular order,
what this would mean for you know, Warner Brothers, Discovery
programming and studios and and you know video and movies
and things like that.
Speaker 4 (13:33):
Because remember they you know, beyond HBO which everyone's talking about,
they own what CNN, t N T all all the time,
all of the all of the Turner Broaditoria broadcasting stuff,
which is a lot of network television.
Speaker 2 (13:48):
So I think that when you look at you know,
a like, what what could happen to that? That's one piece.
The second is how like we do do we think
it is that this deal and up going through? Because
I think that's a major piece here. And the third
thing that I also want to do is just and
I'm gonna kick things off with this, the freaking history
(14:11):
of this company at this point is just insane, Okay, like.
Speaker 4 (14:14):
It it really is, Go ahead and start there because
that is useful context.
Speaker 2 (14:18):
So remember so when you look at where this has
come from, Time Warner was formed through the merger of
Time and Warner Brothers back in the early nineteen nineties,
and basically you had them you know, merged together, and
at that point, like the big thing on on the
Warner side, you had the studios, you had the broadcasting,
(14:39):
and you at HBO, Like those were kind of the
three pieces there. Time Warner then decides, obviously go to
go through the AOL Time Warner merger, which I think
we all remember fondly, you know, like just just again,
like the the biggest bust of a merger in history,
one hundred and eight billion do it's just like absolutely nuts,
(15:02):
uh And then you see, you know, okay, that finally
gets you know, cleared out and you end up with
this slimming down and you know everything, and then AT
and T comes along and says, hey, we're gonna buy
you for one hundred and eight billion dollars as well. Okay,
like and we talked about it at the time. We're like, guys,
this is this is a horrible fit. You've got. You've
(15:24):
got a bunch of telecom people that are gonna try
to run a movie studio in HBO that doesn't seem well.
And they go through like sixty four different names for
HBO during the ownership, and finally after like two and
a half years, they're like, no, we we didn't mean
to do this. We can can can we take it back? No,
we can't take it back. Okay, we got we gotta
spin this off because this is not a good fit
(15:44):
for us, and we're sorry that we ever tried to
do this. So AT and T says, hey, kick all
the Warner stuff back out, but in doing so, it
goes through this whole mess of a thing that ends
up finally basically ending up with Warner having to merge
with Discovery in order to make an entity that anyone
actually wanted to own in that format. So now you've
(16:05):
got Warner Brothers Discovery out there, and pretty much, you know,
Warner Brothers Discovery is like, yeah, you know, we've kind
of been having some trouble operating, you know, on our own,
and a year ago they say we might try to
you know, sell ourselves and spin off the linear television,
which we've talked about like why companies are doing that.
(16:27):
And so the thing that's kind of wild to me
is that Warner's just had this run for the last
thirty forty almost forty years now, thirty five years, where
it's just gone through failed merger after failed merger after
failed merger, and somehow HBO has kept kicking along despite that.
(16:48):
It's basically the only thing that's been working there. And
you know, you've got the the intellectual property beyond that
is you know, there's so interesting things there. I mean,
they've got the DC comic stuff that no one's really
been able to do anything with Batman and Superman. They've
got Harry Potter, which I don't know what anyone really
(17:10):
does with it now. It had a good run series characters.
Speaker 4 (17:13):
Yeah, HBO has been producing a brand new, entire new
series of shows.
Speaker 2 (17:18):
You how much time stuff. You've got Game of Thrones,
which was a big hit. Lately, the you know, spin
offs of that have been you know, mixed, and then
they got all like the cartoons and all that stuff. Sure,
but so like you look at this and to me,
the big the two big questions are what would Netflix
do with the movie studio in terms of theatrical releases?
(17:39):
And do they let HBO just be HBO or do
they try to bring it into the rest of Netflix's
streaming realm.
Speaker 4 (17:46):
Your thoughts, huge questions So on the movie studio piece, right, Like,
they did not have a Hollywood movie studio, and I've
listened to other people described this as whether you want
it or not. Netflix felt as though they had to
go and do this. They've got a lot in Hollywood
now which farbia from me, I don't fully understand why
that's that important, but seemed hugely important to them, and
(18:09):
so they felt they needed to buy it. But yeah,
what do they do with that? I mean, Netflix doesn't
release movies like every other movie.
Speaker 2 (18:18):
Studio, and they've said as part of this, one of
the things that could be coming is a compression of
the theatrical window, which means, hey, how much time does
a movie have as an exclusive in theater as opposed
to being able to be released onto Netflix or HBO
or However they would decide.
Speaker 4 (18:37):
To do it right, and they weren't really big enough
as themselves to move the rest of the industry in
that direction, they suddenly would be right if they want
to say with this acquisition that hey, we're now going
to really apply the pressure to movie theaters, which already
are sucking wind. But if we really want to apply
the pressure, they can afford to do so now with
this acquisition.
Speaker 2 (18:58):
So I think ultimately then we get to the question
that is the biggest one out there, which is will
this deal actually be allowed to come to fruition If
it were estimates that it would close somewhere in the
next twelve to eighteen months, so probably end of twenty six,
(19:19):
maybe first half of twenty seven is what we're looking at.
But will the deal actually be allowed to close. Let's
take a quick break and then we'll discuss that when
we return.
Speaker 1 (19:41):
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Speaker 1 (20:19):
For all you've done. Time now for Wall Street. Watch
a complete look at what's moving markets so far today
right here on the Financial Exchange Radio Network.
Speaker 5 (20:30):
Market term positive territory to close out the week as
traders react to a core PCE index for the month
of September that came in line with forecasts. Outside of
the inflation reading, the big news comes from the media world,
where Netflix has agreed to a deal to buy Warner Brothers.
Right now, the Dow is up four tenths of a
percent or two hundred and four points. Highre SMP five
(20:52):
hundred and up over half a percent, NASDAC up nearly
three quarters of a percent or one hundred and seventy
one points. R US two thousand is edging higher. Tenure
treasure yield up one basis point at four point one
point one eight percent, and crude oil up one percent higher,
trading just above sixty dollars a barrel. As we discuss,
(21:12):
Netflix struck a seventy two billion dollar deal for Warner Brothers,
beating out bids for from Comcast in paramount. With the deal,
Netflix will add Warner's TV movie libraries, as well as
HBO and HBO Max shows. The deal is expected to
close in twelve to eighteen months, pending regulatory approval. Netflix
(21:33):
shares are now up over one percent after seeing losses
in pre market trading, while Warner Brothers is up three percent. Meanwhile,
digital document signing company DocuSign lifted its annual sales outlook
after quarterly results beat expectations driven by subscription growth. However,
the stock is dropping six percent as some analysts believe
the company's guidance may be conservative. Elsewhere, shares in Victoria's
(21:56):
Secret surging seventeen percent after the launder and apparel company
posted a narrower than expected quarterly loss in a nine
percent increase in net sales. The company also raised its
full year outlook, saying it's will positioned for a successful
holiday season. All to Beauty raised its full year sales outlook,
sending shares on the personal care care retailer up sixteen
(22:19):
percent and shares in Hewlett Packard Enterprise dipping after the
server in cloud software company logged lower than expected revenue
as customers hit delay in developing their AI products. I'm
Tucker Silva and that is welst You're watch and remember
you can watch the show live every day on our
(22:39):
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content is also archived, so if you want to see
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Speaker 2 (22:47):
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Speaker 2 (22:56):
All right, so we're discussing the Netflix Warner Brothers Discovery
merger and at let's see nine twenty six am this morning,
CNBC pushed through an alert with this headline, Trump administration
views Netflix and Warner Brothers deals with quote heavy skepticism.
(23:16):
Senior official says, uh, and obviously you've got you know,
Paramount lawyers are already saying. And basically what this boils
down to is Paramount really wants to buy Warner Brothers Discovery.
Speaker 3 (23:29):
Yes.
Speaker 2 (23:29):
Uh. And the Paramount is it the the CEO or
what's the what's the what's what? David Ellison is, that's
the CEO? Yeah, with Paramount. So David Ellison is Larry
Ellison's son. Larry Elson runs Oracle and has a really
good relationship with the Trump White House. And so, you know,
(23:53):
one of the thoughts on this while this bidding was
going on was kind of, hey, like, Paramount probably has
to be seen as the front runner because it would
be just you know, again, it just fits when you
look at the ease of kind of navigating the regulatory landscape.
So Paramount is basically already pushing back on this. The
(24:13):
Wall Street Journal reporting that They've already filed a letter
to lawyers from Warner Brothers Discovery saying, quote, acquiring Warner's
streaming and studio assets will entrenched and extent Netflix's global
dominance in a matter not allowed by domestic or foreign
competition laws. So this gets at the real question, which
is is there an anti trust case to be made
(24:36):
against Netflix being able to buy Warner Brothers Discovery or
will it be able to go through?
Speaker 4 (24:45):
So the second piece to this all too, is is
Paramount's antitrust side any better than Netflix's. That's the second
side of that question that you really have to answer
as well.
Speaker 2 (24:57):
So the place that I get to is the one
company that I think can definitively say it's not in
a better position from an anti trust perspective is Comcast.
Comcast again already owns literally like the distribution of cable channels,
already has movie studios, already has its own, you know,
(25:18):
intellectual property. It's got the whole thing. And it's revenue
is one hundred and twenty three billion dollars. In every respect,
it's a bigger company than the other two. Netflix does
about forty three billion dollars in revenue. They again don't
really do anything on the movie side, but they've got,
you know, a significant market share on the streaming side.
(25:38):
But the question is, like how big is that market share?
And like, what are you actually comparing Netflix to Netflix?
Is going to make the comparison. Hey, our biggest competitors
are not just other streaming companies. It's YouTube, it's TikTok,
it's video games. Because these are things that they've said
all along, by the way.
Speaker 4 (25:56):
And I buy that this is competition for I it's
genuinely by that. The real competition definitely is Disney and
Hulu and Hbo Max that they are buying Apple. These
are prime video. I forgot to mention, they're right up
there in terms of subscribers. But go look at what
(26:20):
your kids and grandkids are watching easily as much eyeball
time as going towards YouTube and TikTok and other social
media video streaming sites as these dedicated ones. And so
I don't know, I mean, I don't claim to fully
understand the direction that anti trust goes and whether or
not this actually goes in front of a court or
(26:41):
you know, the administ you know, the White House can
really pressure this away. But I compared to other deals
that have gone through. Have a really tough time saying
that this is a monopolistic concern of mine.
Speaker 2 (26:56):
You know, Paramount Skydance does about twenty eight billion in
revenue compared to Netflix at forty three, so it's about
two thirds of the size. But already has movie studios,
already has you know, streaming, already has cable channels. So
you look at and you're like, okay, like there's you know,
there's all this stuff that already exists there where which.
Speaker 4 (27:13):
One do you think more jobs get eliminated by? I
know that's not the anti trust. I think that honestly,
Paramount buying you end up killing more jobs than if
you have Netflix buying.
Speaker 2 (27:25):
Because of the if they take a hatchet to the studio.
Speaker 3 (27:28):
I think Paramount would Yeah, why wouldn't.
Speaker 2 (27:30):
You Maybe you want to produce just more movies? I
I I don't know. I mean, if you have the
dollars and the IP, wouldn't you want to produce all those?
Like if if let's say Paramount buys this, and like
you think about the intellectual property that's there, is Paramount
going to say, hey, we're just not gonna make Harry
Potter movies anymore.
Speaker 4 (27:51):
No, I think they definitely do, and they just kill
half the writers. But I guess here's the not literally yes,
don't literally killing here. Here's here's the place that I
get to though, Like Paramount already has its own stuff
that it's producing. Yep, if your existing writers are already
busy doing that, don't you need the new writers in
(28:15):
order to produce the additional content?
Speaker 3 (28:17):
Well?
Speaker 2 (28:18):
Or are we just gonna AI ourselves AI the living
hell out of this? Well, then screw this like that.
No one should produce content. It's gonna suck.
Speaker 4 (28:26):
So in either case, what I come back to, I
don't know whether or not this deal gets accepted. I
don't know that the White if the White House, you know,
exerts enough pressure to have Netflix abandon the deal. I
personally have zero concerns about this from an antitrust perspective.
Speaker 3 (28:41):
None.
Speaker 4 (28:43):
I do not think this is a big enough deal
to be concerned about. HBO, Max and Discovery, from what
I saw, had something like one hundred and twenty million subscribers.
Netflix is at three hundred million. Amazon's got two hundred million.
I know that's because they're prime members. Disney has one
hundred and twenty eight plus million, and then YouTube, I
mean paid's YouTube premium has one hundred and twenty five million.
(29:05):
Forget about just the ones that go to it without paying.
I have no concerns about this, especially given that they
are rolling off the network TV and not participating in
that that's going to go get acquired by somebody else.
I'd have more concerns about that side. From a competition perspective, It's.
Speaker 2 (29:24):
Tough for me to say I have no antitrust concerns
because I mean, quite honestly, in a perfect world, I
wouldn't want any of these mergers to go through. Sure,
like if you just look at it just from a
dollar value perspective, which is not like the perfect way
to look at this, I know, but like, let's just
just just hear me out for a second. The nineteen
(29:45):
nineties saw two mergers that would have been that are
bigger from a dollar value perspective. The two thousands saw
four mergers that were bigger from a dollar value perspective,
not an inflation justin terms, but I'm just talking like
nominally even in inflation adjusted, you know, it's it's bigger.
In the two thousands, they were seven that were bigger
(30:07):
than in the nineties there were you know, a dozen
or so, But like you also look at some of
these ones that fall into that category, and you say,
should we have been comfortable with these deals happening?
Speaker 1 (30:20):
Like?
Speaker 2 (30:20):
Do do we like as an example, that in twenty nineteen,
United Technologies was allowed to buy raytheon I dope because
now there's far less competition for government contracts, which means,
you know, let's less problems with bidding. Do we like
that in twenty fifteen ab InBev was allowed to buy
sab Miller. I don't know, like it makes it harder
(30:42):
to compete in the beer space. Do we like that?
You know in I don't know, like do we like
here's a recent one twenty twenty two. Do we like
that Microsoft was able to buy Activision Blizzard and now
they're starting to do the exact things from an availability
and price standpoint that every anti trust person said, what
(31:02):
happen as a result of that deal?
Speaker 4 (31:04):
Let me take my words back then, I do have
concerns about it from a competition perspective, and I, if
I were able to judge these things, would prefer that
none of this gets rolled up in the context of
all the deals that you meant just mentioned that we're
perfectly allowable and we didn't have any administration shut down
(31:27):
or the court system shut down.
Speaker 3 (31:29):
I don't see how you can judge this one any differently.
Speaker 2 (31:32):
Which I think is fair, which is given all of
the other deals that have been allowed to go through.
It's kind of a tough put to look at this
one and be like, Hey, Netflix, Warner brother Discovery is
the straw that breaks the camel's back, right with it.
It's kind of a tough putt. Let's take a quick
break when we return. What do we want to talk
(31:53):
about when we come back. Let's see, Yeah, let's talk
about retirement, kind of year end portfolio review.
Speaker 1 (32:03):
After this text, does six one seven, three, six, two
one three eight five with your comments and questions about
today's show. This is the Financial Exchange Radio Network. The
Financial Exchange streams live on YouTube. Subscribe to our page
and stay up to date on breaking business news All morning.
Long Face is the Financial Exchange Radio Network.
Speaker 5 (32:27):
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Speaker 2 (33:00):
Mike, we get a piece in Barns. Retirerees, it's time
for your year end portfolio review. Here's what to do.
Speaker 3 (33:06):
I do so first things first, if you're actually talking
about a year.
Speaker 4 (33:10):
End portfolio review, the main thing to just make sure
you've done is the stuff that has to be done
by December thirty.
Speaker 3 (33:17):
First, make sure you do it the required.
Speaker 4 (33:18):
Minimum distributions, the tax loss harvesting, if you're going to
try and do so like those are items that actually
must be done by December thirty.
Speaker 2 (33:27):
First.
Speaker 4 (33:27):
If you're in good shape there, then I think you
can move on to the things in this article which
are genuinely helpful.
Speaker 3 (33:33):
And I've got a few to add to the lists.
Speaker 4 (33:35):
So one they you know, especially for retirees, I think
this is incredibly important consolidation. And I don't just mean
this when it comes to investment accounts. I mean this
when it comes to all financials. Right, if you have
bank accounts at three different banks, really ask yourself why
we really really drive down there, because it's going to
(33:55):
become more and more difficult to handle that plus the
four oh one ks plus five everything else down the road.
And even if you are perfect at it, just accept
the fact that if you're heading towards retirement, there's going
to come a day where you won't be able to
handle it and you're gonna need somebody else to try
and pick it all up. And that's a lot more
difficult when it's in nineteen different places. I'm not telling
(34:16):
you to trust any one individual with all of your money.
I am saying that simplify things as you get older
and throughout life is a pretty good general advice that
you can take because, well, Chuck, I'm sure you've seen
it too, but the time I've spent with loved you know,
client's children, trying to map out all the stuff it's.
Speaker 3 (34:39):
It can be really messy. We talked about this one yesterday.
Speaker 4 (34:42):
Diversify and actually diversify, which is more difficult to do
now than previously harder.
Speaker 2 (34:49):
With the S and P is concentrated as it is,
You've got you know, a number of stocks, five or
six of them that make up five percent or north
in the S and P five hundred. You're not necessarily
a diversified as you think you are. If you just
own the S and P five hundred. It doesn't mean
that it's inherently, you know, good or bad. It just means,
from a diversification perspective, you've got more concentration risk in
(35:12):
the S and P five hundred than any other time
in its history.
Speaker 4 (35:16):
Morning Star points out usefully, if you had a sixty
forty portfolio a decade ago, given where stocks have run,
you're now sitting in an eighty twenty portfolio. So that
stallication and maybe rebalancing, Yeah, you know, those are pretty
basic but important ones. They have a whole section about
bonds being back, you know, compared to previous times. I
(35:37):
won't debate that interest rates are higher than twenty twenty.
I will just say that it's not clear to me
that there won't be problems in the bond market, especially
in some corners of it.
Speaker 3 (35:48):
So It's not.
Speaker 4 (35:49):
Exactly a fool proof idea to say, oh yeah, all
bonds are back, as this article, you know, pretty boldly
poses in one of their subsections managing your Taxes. We
talked a bit about that other ones. There was a
piece that a client sent me Wednesday, Tuesday or Wednesday.
(36:10):
It was a piece about boomer candy, which we've talked
about a few times. Here's what I'm just gonna say
about investment products. Generally, you've seen the SMP now return
twenty percent, more than twenty percent per year for the
last three years trailing. When that happens, there's a lot
of different things. There are a lot of different schemes
that start popping up of ways to make money, and
(36:33):
some of them are completely untested. There's also a lot
of fomo fear of missing out that I think starts
to take place. And I would just very simply state,
when you're being sold in new investment product, make sure
that you understand what it is and how it's actually
going to benefit you, because a lot of the ones
that I've seen recently benefit one group, and that's the
(36:54):
people selling them. In any case, it's important to do
year end planning for your overall financial strategy. It's even
more important if you're on the cusp of retirement. If
you are sitting there and thinking that this stuff might
apply to you. Armstrong Advisory has a roadmap to help
you along that path. The numbers eight hundred three nine
(37:15):
three for zero zero one. This is what Chuck and
myself do with the rest of our day after doing
the financial exchange, and we would love to help you
out too. The number again, eight hundred three nine three
for zero zero one, or you can check us out
at Armstrong Advisory dot com.
Speaker 1 (37:30):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.
Speaker 2 (37:45):
Wall Street Journal with the headline two types of shoppers
are powering holiday spending, the wealthy and deal hunters. Mike,
is that ever different?
Speaker 4 (37:52):
I was gonna say what I wrote down is like
as opposed to broke college bros and people that love
overpaying for products.
Speaker 2 (38:00):
What are you?
Speaker 4 (38:00):
What are you talking about? Who's had not been funded
by this group of individuals.
Speaker 2 (38:05):
It's it's just I'm really struggling with this mic. Yeah,
I'm really starting to struggle with it. Yeah.
Speaker 4 (38:12):
Usually when I go to the mall, it's all seven
year olds who are emptying their piggyback who usually do
all the holiday shopping.
Speaker 2 (38:19):
You know, like I don't know. Yes, the people who
typically are shopping are people who either have money and
aren't concerned about price, or people.
Speaker 4 (38:30):
Who the dogs, all of our pets are power. No,
it's always the wealthy and or people that want to deal.
It's always been the case, has been for a hundred years.
It's not going to change.
Speaker 2 (38:44):
Let's take a quick break here and when we return,
we got our two coming up. Paul Monica joins us
then as well, just a bit
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