July 8, 2025 • 38 mins
Chuck Zodda and Marc Fandetti discuss markets not taking Trump's tariff threats seriously anymore. 'Big beautiful bill' may help some seniors on Social Security. But it doesn't eliminate taxes on benefits. Bad policy keeps getting in the way of economic progress. Which workers will AI hurt the most? Amazon turns prime day into prime week.
Mark as Played
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Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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(01:06):
and Mark VANDETI.
Speaker 2 (01:10):
Chuck, Mark and Tucker with you here.
Speaker 3 (01:12):
And market's fairly quiet today, actually very quiet today, not
much movement at all. The DOAO is off ninety points
right now, less than a quarter percent. The SP five
hundred is up one point, not one percent, but one point.
The Nasdaq is up twenty four points, about an eighth
of a percent. So major US stock indices not moving
(01:32):
a ton. Yesterday we had a very modest down day,
stocks down anywhere from about three quarters to one percent,
depending on the index you we're looking at this after
the Trump administration sent out letters to fourteen different countries Japan, Korea,
South Africa, Kazakhstan, Laois, Malaysia, miandmar Tunisia, Bosnia, Indonesia, Bangladesh, Serbia, Cambodia,
(01:54):
and Thailand, indicating that they would begin paying teriff rates
of between twenty five and forty percent.
Speaker 2 (02:01):
As of August first.
Speaker 3 (02:04):
Just a few minutes ago, the President sent out a
post on truth social that I will now quote for
you as per letters sent to various countries yesterday, in
addition to letters that will be sent today, tomorrow, and
for the next short period of time. So market does
sound like more are coming. Tariffs will start being paid
on August first, twenty twenty five. There has been no
change to this date, and there will be no change.
In other words, all money will be duehen payable starting
(02:26):
August first, twenty twenty five. No extensions will be granted.
Thank you for your attention to this matter. Yesterday afternoon,
around six pm, the President had said in a spoken
interview that that date was you know, potentially movable and
not final. But it does sound like this is a
more final thing here. But market's not really moving on this.
(02:46):
And this gets it two things which are a to
this point, even with you know, previous tariff announcements, they
have oftentimes represented the peak of the tariff rate and
then they have subsequently come down or been walked back.
The second piece is that even with the tariffs that
have been put in place to this point, the economic
data has not shifted a ton yet. And so I
(03:08):
think markets are also kind of taking away and see
approach where they're starting to focus more on the economic
data and on earnings as opposed to reacting so heavily
to each announcement, just because quite honestly, reacting to each
announcement has not really been a worthwhile strategy for this year.
Speaker 2 (03:26):
By and large, No.
Speaker 4 (03:28):
I think that's the logical explanation of markets reaction. They're
not taking these threats seriously because every threat that has
been made since Liberation Day and before has been walked back,
so the economic damage could be limited. It engenders, It
inserts uncertainty into agents thinking. You talked in the last
(03:49):
hour eloquently about someone you know who's been forced to
rethink processes right, and effectively everything's up in the air.
I try to liken it to because I can't relate
to purchasing managers being vexed by this. I tried to
relate it to the government changing the marginal tax rate
every month and then dinging you if you didn't withhold enough,
(04:10):
or to your locality changing the speed limit once a week.
You wouldn't know how fast to drive, or in the
previous analogy, how much to have withheld from your paycheck.
At some point, either people are going to get out
of the business that they're in because they can't profitably
run it if everything's changing all the time, or they're
just going to ignore it and accept increased earnings volatility.
And this is I think the key point for equity markets,
(04:32):
earnings will be more volatile that you translated into more
volatile stock prices. More volatile stock prices have a lower
average average. By that, I mean change day over day
or month over month, So it's probably not good for
capital markets, Chuck, and the returns investors are expecting to
meet whatever their goals happened to be.
Speaker 3 (04:52):
In addition to what we're seeing in equity markets, day
bonds continuing their recent selloff from the last week or so,
Tenure treasury back up above four point four percent sent
today to four point four to one nine, up two
point four basis points.
Speaker 2 (05:04):
Oil hanging out in the.
Speaker 3 (05:05):
High sixty still up fourteen cents a barrel on West
Texas Intermediate to sixty eight oh seven. The TRIPAA national
average for gas prices also moving up six tens of
aercent to three fourteen and nine tenths, so kind of
back into that three ten to three twenty range after
the brief period above it following the conflict between.
Speaker 2 (05:24):
Israel and Iran.
Speaker 3 (05:26):
And then we've got gold today down thirty seven seventy
announced to thirty three oh five and ten cents, and
so gold another one that's just kind of been hanging out.
Like if you look at where gold prices have been,
it feels an awful lot like what we've been seeing
from oil, where it's just kind of coiling up here
right now, and there's going to be a move at
(05:46):
some point. Which direction, I don't know, but gold's basically
been sitting between thirty two hundred and thirty four hundred
for the last two months now, just kind of in
a pretty narrow like five to six percent trading range,
and you get the sense there's another coming in the
second half of the year because gold doesn't usually just
sit still for very long. It tends to move, oftentimes
fairly explosively in one direction or another. But it's been
(06:10):
pretty calm for the last couple of weeks after running
up significantly in the first few months of the year.
I want to talk about this piece from CNBC. Let's
Tayle the Big Beautiful Bill may help some seniors on
Social Security, but it does not eliminate taxes on benefits.
And basically the big thing is that because of the
(06:31):
way that rules are in place around how reconciliation bills
are allowed to be passed, one of which is pretty
much don't touch social Security. You're not allowed to touch
social Security through a reconciliation bill. The bill that passed
last week cannot actually just go and say, hey, we're
(06:52):
removing all taxes on Social Security benefits. So instead the
workaround is that there is an additional deduction four senior
citizens of up to six thousand dollars for people aged
sixty five and over. So this is also where things
start to get a little more complicated, because it's not
(07:13):
just a straight six thousand dollars benefit. Taxpayers with up
to seventy five thousand in modified adjusted gross income or
one hundred and fifty thousand if filing jointly receive the
full deduction. But then above that it starts to phase out.
And so there is a window in there where it
can effectively you know, you could say it's reducing your
(07:35):
Social Security tax to zero. It's really just you know,
reducing more income tax payments down. You know, whether it's
from Social Security or from other earned income, it doesn't
really matter. You don't have to have Social Security income
in order to claim this. But it's something where basically
the estimates, and this is according to the Urbans Brooking
(07:57):
Tax Policy Center says the people that are going to
benefit from this, They generally have between fifty and two
hundred thousand dollars in annual income. Below that you're typically
not paying tax on Social Security anyways, and above that
you would be hit by the phase outs.
Speaker 2 (08:13):
Your thoughts mark.
Speaker 4 (08:14):
My thoughts on all of these handouts to placate specific
interest groups, and I don't mean to diminish seniors as
an interest group. If I were collecting Social Security, and
someday hopefully I'll get there, I would want to pay
fewer taxes on it too.
Speaker 2 (08:29):
I get that.
Speaker 4 (08:30):
I just wouldn't expect much in terms of a macroeconomic bang.
By that, I mean an increase to consumption certainly, not
an increase in the trend rate of growth is Some
of the proponents of these changes are claiming my whole
for most of my life, and I'm in my early fifties,
so for most of my life. The tax code was
(08:50):
made simpler starting in nineteen eighty six. Flatter, simpler, close
the loopholes, make it easier for people to comply, reduce
the gimmicks and handouts. They just convolute things and make
more work for accountants. No disrespect to accountants.
Speaker 2 (09:07):
You can disrespect the accountants.
Speaker 4 (09:09):
But what they do, okay, Chuck, thank you. What they
do is what an economist would call rent seeking. They're
not adding to the pie, they're not growing it. And
a lot of us rent seek. And that's two words.
Rent seeking. I don't mean rent is in the rent
you pay, although it's derived from the way that term
used to be used. I mean it encourages people to
lobby or take action or position themselves to get a
(09:32):
bigger slice of a static or even shrinking pie, rather
than undertake activity that grows the pie. My whole life,
politicians really in both parties talked about ways to grow
the pie. It's sad to me that we've abandoned that
growth mentality where and both parties have abandoned it. They
want to close us off to the world. Just a
question of how to implement tariffs and how high they'll be.
(09:54):
I think we'd be in the same tariff situation, maybe
with a little less drama if we had a Democrat president.
I think this out of think it matters who's running things, Chuck.
We've shifted from a growth to a bunker mentality. That
to me is sad. It means slower growth and by
that I mean in the last century growth growth about
three percent. In this century, I'm talking real GDP, not
(10:15):
per head, but just GDP, and reale means after inflation.
This century growth has grown two percent for a lot
of different reasons. But if you don't think that matters,
let this soak in. We'd be forty percent richer had
we grown at the pace of the last century. It's
nobody's fault. It's just the way certain things have fallen out.
Productivity slowed, been hit by a couple of big recessions.
(10:37):
But the compounding power of economic growth, even small differences,
is dramatic over longer periods of time. So it will
be a little bit poorer than we otherwise would have
been in the long runs as a result of all
these distortions trade and tax distortions that we're imposing on
the economy.
Speaker 2 (10:53):
Yeah.
Speaker 3 (10:53):
The piece that is interesting here is you look at
the twenty seventeen Tax Cuts and Jobs Act, and the
big thing that that did was it simplified and streamed
on the tax code for.
Speaker 2 (11:04):
A ton of fops.
Speaker 3 (11:06):
That's right, it was a huge simplification of the tax code.
The interesting thing is that this bill, again I'm I'm
not passing like a judgment on whether the overall thing
is good, bad, or ugly. But this bill is a
significant complication of the tax code. I mean the things
that are going in. So you get this six thousand
dollars extra deduction if you are over age sixty five,
(11:28):
but that's only available for four years twenty twenty five
through twenty eight. Will they extend it, Probably because generally
that's how things go, the salt deduction goes up. That's
not really a complication, it's just a changing of it.
So I guess that's not a thing. Here's another one
that I thought was just interesting, like interesting, is basically
again something that is going to result in, you know,
(11:49):
CPA is having to do more work. It limits the
value of itemized deductions to thirty five cents on the
dollar for taxpayers in the top brackets. So the top
tax bracket's thirty seven percent. But if you itemizing deductions,
you're itemizing only gets you a thirty five percent deduction,
not thirty seven Okay, So like it's basically getting like
(12:10):
a ninety three percent itemization.
Speaker 4 (12:13):
Chuck, can I pass judgment on it? I know you
you you're more reserved than I am. Sure it's stupid.
We shouldn't be doing it. We should be, as you said,
simplifying the code, or maybe as I said, and I'm
putting it in your mouth, but simplifying the code, reducing
costs of compliance. That's how you change the trend in
economic growth.
Speaker 3 (12:32):
Other things in here and again like it just opens
up opportunities for you know, abuse, twenty five thousand dollars
in tip income is deductible for individuals and traditionally and
customarily tipped industries. But the deduction then phases out at
a ten percent rate when AGI exceeds one hundred and
fifty thousand dollars.
Speaker 4 (12:49):
Oh, well, that clears it up.
Speaker 3 (12:52):
You know, temporarily making auto loan interest deductible for vehicles
with final assembly in the US for taxiers to twenty
through twenty eight. So we're gonna have people policing whether
the car was made enough in the US now to
qualify for the deduction. Like, this is the stuff that like,
technically it creates work, but is it useful work.
Speaker 4 (13:13):
It's not trend changing work. It's rent seeking. It doesn't
induce a generative behavior. It induces people to position to
benefit from policy, right.
Speaker 3 (13:25):
The one I always like to go back to is
in theory. Look, you could have everyone employed if you
paid people to dig holes. If half the people dig
holes all day and half the people filled them in,
does it produce anything useful? Not really, And I'm not
saying that there's like not something that's potentially useful here.
And to a certain extent, I even look like the
auto loan thing was kind of interesting to me on
(13:46):
one level because Mark, were you a fan of the.
Speaker 2 (13:49):
Cash for conquers plan?
Speaker 4 (13:50):
Hated it?
Speaker 2 (13:51):
Hated it?
Speaker 4 (13:53):
So I we talking about that on the other side
because I don't want to just leave it at that
and without an explanation.
Speaker 2 (13:58):
But okay, they're a bigger issue. But okay, let's take
a quick break.
Speaker 3 (14:01):
When we come back, we've got talker, We've got trivia, right, yeah, okay,
let's do some trivia and then we're talking about loans
for clunkers after this.
Speaker 1 (14:11):
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Speaker 2 (14:49):
All right.
Speaker 5 (14:50):
Time for trivia here on the Financial Exchange. And yesterday
it was announced that Knagra Brands sold Chef boy rdta
hometown food Company for six one hundred million dollars. Chef
Boyard was created by chef and restaurant owner Hector Borard
at his restaurant in nineteen twenty eight. So trivia question today,
what city was Chef Boyard founded in? Once again, what
(15:14):
city was Chef boyar D founded in? Be the fifth
person today to Texas at six one seven three six
two thirteen eighty five with the correct answer, and you'll
win a Financial Exchange Show T shirt. Once again, the
fifth correct response to textus to the number six one
seven three six two thirteen eighty five will win that
T shirt. See complete contest rules at Financial Exchange Show
(15:36):
dot com.
Speaker 2 (15:37):
Mark segment.
Speaker 3 (15:39):
We were talking about the provision in the new tax
bill that makes autolone interest deductible if you're itemizing up
to ten thousand dollars a year on vehicles made in
the United States.
Speaker 2 (15:53):
And I mentioned, just off handling, did you like cash
for Congress? And you said no?
Speaker 3 (15:56):
And I want to dig in on that for a second,
because I want to get to you know again, just
like thoughts onlike.
Speaker 2 (16:02):
When we talk about making yes.
Speaker 1 (16:04):
Yes.
Speaker 3 (16:05):
You and I talked back when the Inflation Reduction Act passed,
and we had many conversations on the show where we said, look, ultimately,
if you want to build electric vehicles, that's fine. Do
we want the government subsidizing seventy five hundred dollars per vehicle?
Is this a need given the limited fiscal resources that
(16:25):
we have. And we ultimately said no, just because of
a multitude of different reasons. There could be better technologies
that maybe we're preempting. There could be other things we
could spend that money on, lots of different reasons. We
said no, we don't like that ev credit there because
it didn't make sense in the context of the overall
economic approach.
Speaker 2 (16:47):
Cash for clunkers. Talk to me about why you didn't.
Speaker 4 (16:49):
Like it's not worth getting off on too much of
a tangent about that. If you brought up a more
interesting question. But we destroyed a lot of wealth. What
was it a million cars or something that we just
shirk off the streets that pushed the price of used
cars was one of the arguments at the time, and
there was some evidence for that. It was not that
it was a second or third best way to your
(17:09):
to the point you just made of actually helping the environment.
And I'll segue I don't want to get sidetracked on
policy from twenty years ago, which you'll.
Speaker 2 (17:17):
Know it's fine, never again, but oh, let's do that.
Speaker 4 (17:20):
It does relate to the to recent Green New Deal
type policies, which are also second best. From an economist
I think point of view, they'd say, just tax carbon.
If you make gas more expensive, people will substitute away,
choosing other technologies based on their own preferences. Don't put
(17:40):
all your eggs in the EV basket. Look at what's
happening to the EV basket. It's it's now all freed
and is arguably not where you want to be. If
you invested a lot of money in a charger or something,
or had plans to those plans, hopes for that have
been dashed. So if the if the political climate could change,
(18:02):
and it effectively nullifies all the investments that were made
over the past few years, that was money wasted. So
there are a first best the larger point here, I
don't want to get bogged down in the specifics. There's
a larger point, which is there are first and second
best solutions to problems typically, and you always have to ask,
is this the best, most efficient or least cost in
(18:24):
exchange for your in a bang for your buck sense
way to achieve whatever it is you're trying to achieve.
Speaker 3 (18:31):
The other piece is, Okay, let's say that you've got
this thing in place now where you can deduct you know,
some interest on your car loan.
Speaker 2 (18:39):
If you buy an.
Speaker 3 (18:39):
American made car now, Mark, does that make it cheaper
to build a car in the US.
Speaker 4 (18:45):
Does increasing the demand for American made cars?
Speaker 2 (18:48):
Yes?
Speaker 4 (18:48):
And I sound like I sound like they're sarcasm, but
I'm thinking out loud here. No, I think all else equal.
If you're increasing the demand for something without taking measures
to expand the supply of it, the price should go up.
And your point is it may make cars on the
margin less not more affordable.
Speaker 2 (19:05):
Yeah, I kind of have.
Speaker 3 (19:07):
I'm seeing I'm seeing signs of the American healthcare and
education systems now in the auto you know industry.
Speaker 2 (19:13):
I'm like, oh, we're gonna do that. Not quite.
Speaker 3 (19:16):
It's it's different based on you know, how they work,
and there's obviously, you know, big differences in the specifics
of the industries. But I just I don't love the
idea that, hey, let's just throw money at it and
it'll make it more affordable. No, that's not usually how
it actually works. Quick Break here, Trivia Answer and Wall
Street Watch next.
Speaker 1 (19:40):
Bringing the latest financial news straight to your radio. Every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street Watch. A complete look at
what's moving markets so far today right here on the
Financial Exchange Radio Network.
Speaker 5 (20:00):
Following Monday's modest selloff, Marcus today are now in slightly
negative territory. Yesterday, President Trump sent letters to several nations
outlining terror freights they would pay if trade deals were
not agreed upon, and extended the deadline from July ninth
to August first. This morning, President Trump posted that no
extensions will be given to that August first deadline. Right now,
(20:24):
DAW is off by three tenths of one percent, or
one hundred and forty one points, SMP five hundred is
dipping by four points now five points, and the Nasdaq
is off by only two points. Russell two thousand is
up eight tenths of one percent, ten year treasure Real
up two basis points at four point four to one percent,
and crude oil is up about a third of a
(20:45):
percent higher today trading just above sixty eight dollars a barrel.
Several solar stocks, including sun Run and Phase Energy, and
First Solar, seeing losses after the White House said it
would enforce the halt to clean Electricity tax credit faster
than expected. Sun Run down by eleven percent, while both
in Phase Energy and First Solar are seeing losses of
(21:08):
three percent. Meanwhile, Amazon Prime Day has officially begun and
this year will extend to four days instead of two. However,
according to Momentum Commerce, which manages fifty brands in a
variety of product categories, said Prime sales fell almost fourteen
percent in the first four hours of the event compared
with the start of last year's sale. Amazon shares are
(21:30):
now down nearly two percent. Elsewhere, Meta is continuing their
aggressive AI recruitment for its super intelligence division, now hiring
a top AI researcher from Apple. Both Meta and Apple
stocks are flat Today. HSBC downgraded major banks JP, Morgan, Chase, Goldman, Sachson,
Bank of America ahead of their second quarter earnings next week.
(21:53):
Those stocks are down by about two percent, and Boeing
delivered sixty airplanes in June, the most December of twenty
twenty three. Boeing stock is down by one percent. I'm
Talkinger Silvan. That is Wall Street Watch and in the
previous segment we asked the trivia question what city was
Chef Boyard founded in? That would be Cleveland, Ohio. Eric
(22:16):
from Derry, New Hampshire is our winner today taking on
the Financial Exchange Show t shirt. Congrats to Eric and
we play trivia every day here in the Financial Exchange.
See complete contest rules at Financial Exchange Show dot com.
Speaker 3 (22:30):
Mark I want to talk about a couple pieces with
regards to artificial intelligence, One from the New York Times
which workers will AI hurt most, the young or the experienced?
Speaker 2 (22:41):
And one from the Wall Street Journal. CEO starts saying
the quiet part out loud. AI will wipe out jobs.
Speaker 3 (22:48):
And let's tackle the New York Times when first in
terms of which workers will AI hurt the most young
or experienced? I think is the wrong way to look
about this, look at this because it's basically saying like, Okay,
is this you know something where we're going to get
rid of the cheap workers or the ones with you know,
(23:10):
lots of institutional knowledge.
Speaker 2 (23:12):
And I think ultimately.
Speaker 3 (23:15):
It's going to be different in different industries depending on
where the real value lies. I know that's kind of
a cop out, but it's just how it usually is.
It's not usually one or the other. It's usually one
and the other. Your thoughts.
Speaker 4 (23:28):
I'll make a really bold prediction here. Yeah, this new
technology will reduce employment in some industries while increasing employment
resulting in other industries resulting in more jobs overall. Why
do I say that because that's been the result every
time a new technology has been introduced, from steam to
(23:49):
petroleum to electricity and all the little follow on technologies
that resulted from those. And you could pick your favorite example.
The light bulb put handle makers out of business eventually,
et cetera, but created far more jobs at utility companies,
et cetera. So Chuck, yeah, some people will be displaced.
(24:10):
Maybe I'll be displaced by AI. I have my doubts
there after seeing it perform in some areas that I
have an interest in. But eventually maybe Sorry, that was
the end of my thought.
Speaker 2 (24:22):
I thought, there's gonna be something, because.
Speaker 4 (24:24):
Normally you don't have a sentence with maybe maybe maybe
I am more replaceable than I thought.
Speaker 3 (24:30):
And this was our first demonstration of Mark FANDETTAI on
air live. So here's the thing that I always come
back to on this is, ultimately, to a certain extent,
we want jobs to be displaced by new technology because
it means that we're getting more efficient and actually seeing
(24:52):
gains in our real standard of living. As an example,
when we moved from you know, having to harve every
book into you know, stone tablets to the printing press.
I know there were some technologies in between, obviously, but
we didn't say, oh, those poor stone tablet makers you
know here, let's let's keep giving them jobs because we
(25:14):
need to keep them employed. No, Ultimately it was, hey,
we can make way more books, way more cheaply by
using this technology. To anyone in the construction industry, would
you do your job without power tools? Probably not, but
that effectively is something where we were able to do
(25:37):
two things. Number One, in the short term, probably didn't
need as many people working in construction, but number two,
the ones who you know were still there could build
way more stuff, way more cheaply, because it was much
faster to do. So, you know, no one sits there
and says, gee, you know what, I would prefer to
just use, you know, a nice little handsaw to do
(25:57):
everything as opposed to anything you know, using electricity. No, like,
give me the electricity, let me let me build faster.
So when it comes to AI displacing Mark me, Tucker
or anyone else, because I do think that this actually
the intersection of AI and robotics is now a place where,
in the next few years, for the first time ever,
I'm starting to feel that trades people are not entirely safe.
Speaker 4 (26:20):
That may be true, but they'll be repositioned and that's
like they will be a cold and clinical way to
describe somebody perhaps losing their their livelihood. There will be
something but to your point, that happens every day technology.
Speaker 3 (26:33):
Mark, Ultimately, we should all hope that all of our
jobs are because because this gets to the question of, look,
if one person can wake up each morning and press
one button and the whole world runs itself, don't we
actually have more freedom to actually do what we want,
even if what we're doing is still working, but just
on different things or for our own enjoyment as opposed
(26:55):
to whatever else. Yes, you want that easier life, No
one actually sits there like make my life harder, like
you don't want that. Do we have things societally that
we're going to have to reckon with as we navigate
what this could look like? Absolutely? Do I have any
evidence that we can do that successfully?
Speaker 1 (27:13):
Not?
Speaker 3 (27:13):
Really, That might be the hard part is navigating each
other more than navigating the robots and stuff like that.
But this is something based on what I'm starting to
see out there that I now think is a three
to five year thing, not a fifteen to twenty year thing.
So there's something coming here, and I don't think it's
gonna be the generative AI stuff that's actually the media's
(27:36):
piece of this, like generative AI writing haikus and giving
you know, pictures of cats writing dinosaurs.
Speaker 2 (27:44):
I don't think that's where the meat is on this.
Speaker 3 (27:47):
I think quite Honestly, robotics is going to be something
that is hugely transformative in the next decade. And I,
for one, welcome our new robot overlords. I just want
them to know that, you know, publicly a few times. Anyways,
this is all something that is really interesting over the
(28:08):
next five to ten years. But if you're thinking about
AI right now and hey, like, how does this work
with you know, my financial plan? The good news is
that the Armstrong Advisory Group has a guide this month
on this exact topic. It's titled AI and Your Financial
Plan and specifically talking about the AI tools that are
out there right now, budgeting ones, investment strategies, just understanding
(28:32):
how AI can fit into you know, the world of
finance and how it may or may not affect your
personal portfolio and your financial plan. The guide is titled
AI and Your Financial Plan and it's available by calling
eight hundred three nine three four zero zero one. A
(28:52):
lot of meat in here, a lot of things that
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Speaker 1 (29:13):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong Guide a specific financial, legal, or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 3 (29:29):
I want to talk a little bit about Prime Week
from Amazon, which used to be used to be Prime Day,
and it's now Prime Week. It's running today through third
through Friday of this week, so it literally is almost
the whole week. And I got this piece here from
the Wall Street Journal.
Speaker 2 (29:49):
Quote from it.
Speaker 3 (29:50):
The sale, which kicks off Tuesday, is expected to bring
in a record twelve point nine billion in the US,
a fifty three percent from last year, according to research
firm E Marketer. So it's you know, longer. And then
they also have all these other sales and this and
that that they're doing now. But here's the thing that
we have at least early on, and again I know
that it is early on at this point, so we'll
(30:12):
have to see where this goes. But according to early data.
Right now, Prime Day sales are apparently down fourteen percent
so far to start the day discuss.
Speaker 5 (30:26):
I chalk that up to just people realizing it's four
days and they're not rushing. I think it's as simple
as that, because I'm not like, I'm gonna be keeping
an eye out for stuff. But I know it's only
it's now four days instead of two. So I'm not
like sprinting to get it done.
Speaker 1 (30:42):
Uh huh.
Speaker 5 (30:43):
I think it's as simple as that. Maybe I'm wrong.
Speaker 2 (30:45):
I don't know, Tucker.
Speaker 3 (30:47):
I've I know you've tended to focus on Prime Day
more than I have. What what kinds of things are
you looking for? And where do you see deals out
there that you might be interested in? This are the
things where you're seeing them?
Speaker 5 (30:59):
Yeah, I mean in the past, I have purchased a vacuum,
a Shark vacuum, which is a tremendous vacuum.
Speaker 2 (31:05):
They're fantastic. They're fantastic, But I saved like fifty bucks.
Speaker 5 (31:09):
I mean, I always had my eye out on anything
kitchen related, love the cook and.
Speaker 2 (31:14):
Everything like that.
Speaker 5 (31:15):
I'm seeing if there might be an air compressor available
because I discovered I needed one over the weekend when
I was trying to blow up this sprinkler thing for
the kids, and we had like a car thing car
was in the backyard. It was a whole thing. So
I am in the market for an air compressor.
Speaker 2 (31:32):
Picturing you're just trying to blow it up. You know.
Speaker 5 (31:34):
We literally had to put the car in the backyard
to do this because we only had the one that
hooked up to the car, not one to an outlet,
so it was a whole oy.
Speaker 4 (31:43):
Do make converters, you know?
Speaker 2 (31:45):
We couldn't.
Speaker 5 (31:45):
We didn't have one.
Speaker 4 (31:47):
Amazon sells them, that's why.
Speaker 5 (31:50):
Yeah, so I have not seen anything. But I mean,
I mean, wirecutters are fantastic source for looking at the
best possible deals out there.
Speaker 3 (31:59):
I've said before, but looking at I'm just on Amazon
looking at vacuum prices right now. I don't understand how
vacuum repair people stay in business because it's literally cheaper
to buy a new vacuum today than to like ship
your old one off to fix it.
Speaker 5 (32:16):
Well, I mean, if you look at the show Breaking Bad,
you can understand why.
Speaker 3 (32:19):
Well, yes, yes, but there's only you know, so many
of those services that can exist in anyone location. You know,
In any case, let's take a quick break. When we
come back, we'll do a little bit of stack roulettes.
Speaker 1 (32:33):
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Speaker 5 (33:12):
This segment of the Financial Exchange brought to you in
part by the US Virgin Islands Department of Tourism. Three
stunning islands, Saint Croix, Saint Thomas, and Saint John all
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Speaker 4 (33:39):
What do you got for me for stack roule at Chuck,
I know how much you love private credit as an
asset classes an investment.
Speaker 2 (33:45):
Ah right, it's like your favorite.
Speaker 4 (33:47):
I thought i'd give you something to maybe grind your
gears good. And there's an article in the Financial Times
was not among today's top stories about innovations in the
vehicles that allow vehicles like an TF or a mutual
funds just a wrapper that allow investors. It could be
a high net worth investor, it could be an every
day schmuck like me, that allow you to buy things
(34:08):
like private assets non publicly traded equity ownership that is,
and credit loans that is that historically have only been
available to sophisticated pension funds. And I guess the caveat here,
this is a much broader and more interesting topic which
is going to scratch the surface. The caveat here is
whenever an investment manager says we're trying to democratize something,
(34:33):
I think our house view on the phrase we're going
to democratize this or that, Chuck is sort of run
for the hills because they're actually trying to fleece you. Yes,
and we're trying to unload this on unload that's what
that's that's the verb I was going to use. They're
trying to unload something on you. They couldn't unload on
something more sophisticated. Nothing inherently wrong, right, Chuck with with
private equity, some great companies that are owned privately, Dollar General,
(34:55):
Staples of Petco and other so nothing inherently wrong with it.
Or private credit, which is just the flip side that
they make loans generally to private equity companies that in
turn infuse it into some of the companies and others,
some of those that I mentioned and others. So nothing
inherently wrong with it, but usually for very sophisticated investors,
(35:16):
not at all convinced. This is something that you make
an appearance, for example, in four oh one K plans.
But something I suspect we'll be talking a lot more about.
Speaker 2 (35:23):
Yeah, it's it's something where.
Speaker 3 (35:27):
My dislike for just the term private credit, even before
we get to what it actually is, stems from the
fact that a it doesn't really mean anything. I mean,
private credit can be anything from like hey, I'm lending
a company ten million dollars so it can run its
operations to I lent someone money based on the value of.
Speaker 2 (35:46):
Their art collection.
Speaker 3 (35:48):
Like, those are both technically private credit, and you will
see both of those in different private credit vehicles. So
a like just being like, oh, I got some of
my money in private credit is no different from being like, well,
I've got some of my money in stock, Well, what
is it?
Speaker 2 (36:01):
Is it? Campbell?
Speaker 3 (36:02):
Super is in Nvidia? You know, because those are kind
of different things. So that bothers me a little bit
to begin with. This is before we even get to
that whole idea of democratization, which anytime that I hear
that again, I think, okay, what are you trying to
unload on someone? Because hey, private credit companies, private equity companies,
they've made a lot of money working with you know,
high net worth people, very small numbers of them, for
(36:24):
a long period of time. Why are they all of
a sudden trying to work with the person with five
hundred dollars. It's not out of the kindness of their heart.
It's not because they're like, well, we want to give
you the great returns. Well, no, there's only so many
great returns to go around. Not everyone can get the
same payout. It doesn't work like that. There's a distribution
(36:45):
of you know, companies that are good at it, companies
that are bad at it. And if you're the small guy,
where do you typically end up Not usually with like
the best ones, because someone else can pay more for
that kind of quality. It's no different from any other product,
quite honestly. So whenever I hear the word democratize, immediately
(37:05):
I start going, Okay, like, what bags are they trying
to unload?
Speaker 2 (37:10):
Yeah?
Speaker 4 (37:10):
Absolutely, your antenna should go up. Very different than public markets.
We can all participate in those. The other one very
very different.
Speaker 3 (37:16):
The other thing to be careful of though, and this
is something that you're starting to see more of as well,
because I think there were a couple ETF approvals on
This is publicly available securities that hold private ones. So
think an ETF that holds you know, private credit instruments.
And the problem here is not the liquidity of the
public market instrument, but the underlying So if you're like,
(37:39):
what do you actually own and when can you actually
sell it? These are things that like you need to
be aware of because yes, you might be able to
sell the ETF, but depending on the liquidity of the
underlying what kind of pricing do you actually get if you're,
you know, trying to liquidate. You don't know until these
things go through different stressful situations in markets, it can
(37:59):
get really complicated. So all I would say on any
of this be really really, really really careful when you
start talking about private instruments. It's not a never touch them,
but it's a know what you're doing and why you're
doing it. Markets remain mostly flat thus far. We are
done for the day, but the good news we'll be
(38:20):
back on tomorrow and hopefully our show will be a
little bit better than today.
Speaker 2 (38:23):
We'll see you then,
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
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(00:20):
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(01:06):
and Mark VANDETI.
Speaker 2 (01:10):
Chuck, Mark and Tucker with you here.
Speaker 3 (01:12):
And market's fairly quiet today, actually very quiet today, not
much movement at all. The DOAO is off ninety points
right now, less than a quarter percent. The SP five
hundred is up one point, not one percent, but one point.
The Nasdaq is up twenty four points, about an eighth
of a percent. So major US stock indices not moving
(01:32):
a ton. Yesterday we had a very modest down day,
stocks down anywhere from about three quarters to one percent,
depending on the index you we're looking at this after
the Trump administration sent out letters to fourteen different countries Japan, Korea,
South Africa, Kazakhstan, Laois, Malaysia, miandmar Tunisia, Bosnia, Indonesia, Bangladesh, Serbia, Cambodia,
(01:54):
and Thailand, indicating that they would begin paying teriff rates
of between twenty five and forty percent.
Speaker 2 (02:01):
As of August first.
Speaker 3 (02:04):
Just a few minutes ago, the President sent out a
post on truth social that I will now quote for
you as per letters sent to various countries yesterday, in
addition to letters that will be sent today, tomorrow, and
for the next short period of time. So market does
sound like more are coming. Tariffs will start being paid
on August first, twenty twenty five. There has been no
change to this date, and there will be no change.
In other words, all money will be duehen payable starting
(02:26):
August first, twenty twenty five. No extensions will be granted.
Thank you for your attention to this matter. Yesterday afternoon,
around six pm, the President had said in a spoken
interview that that date was you know, potentially movable and
not final. But it does sound like this is a
more final thing here. But market's not really moving on this.
(02:46):
And this gets it two things which are a to
this point, even with you know, previous tariff announcements, they
have oftentimes represented the peak of the tariff rate and
then they have subsequently come down or been walked back.
The second piece is that even with the tariffs that
have been put in place to this point, the economic
data has not shifted a ton yet. And so I
(03:08):
think markets are also kind of taking away and see
approach where they're starting to focus more on the economic
data and on earnings as opposed to reacting so heavily
to each announcement, just because quite honestly, reacting to each
announcement has not really been a worthwhile strategy for this year.
Speaker 2 (03:26):
By and large, No.
Speaker 4 (03:28):
I think that's the logical explanation of markets reaction. They're
not taking these threats seriously because every threat that has
been made since Liberation Day and before has been walked back,
so the economic damage could be limited. It engenders, It
inserts uncertainty into agents thinking. You talked in the last
(03:49):
hour eloquently about someone you know who's been forced to
rethink processes right, and effectively everything's up in the air.
I try to liken it to because I can't relate
to purchasing managers being vexed by this. I tried to
relate it to the government changing the marginal tax rate
every month and then dinging you if you didn't withhold enough,
(04:10):
or to your locality changing the speed limit once a week.
You wouldn't know how fast to drive, or in the
previous analogy, how much to have withheld from your paycheck.
At some point, either people are going to get out
of the business that they're in because they can't profitably
run it if everything's changing all the time, or they're
just going to ignore it and accept increased earnings volatility.
And this is I think the key point for equity markets,
(04:32):
earnings will be more volatile that you translated into more
volatile stock prices. More volatile stock prices have a lower
average average. By that, I mean change day over day
or month over month, So it's probably not good for
capital markets, Chuck, and the returns investors are expecting to
meet whatever their goals happened to be.
Speaker 3 (04:52):
In addition to what we're seeing in equity markets, day
bonds continuing their recent selloff from the last week or so,
Tenure treasury back up above four point four percent sent
today to four point four to one nine, up two
point four basis points.
Speaker 2 (05:04):
Oil hanging out in the.
Speaker 3 (05:05):
High sixty still up fourteen cents a barrel on West
Texas Intermediate to sixty eight oh seven. The TRIPAA national
average for gas prices also moving up six tens of
aercent to three fourteen and nine tenths, so kind of
back into that three ten to three twenty range after
the brief period above it following the conflict between.
Speaker 2 (05:24):
Israel and Iran.
Speaker 3 (05:26):
And then we've got gold today down thirty seven seventy
announced to thirty three oh five and ten cents, and
so gold another one that's just kind of been hanging out.
Like if you look at where gold prices have been,
it feels an awful lot like what we've been seeing
from oil, where it's just kind of coiling up here
right now, and there's going to be a move at
(05:46):
some point. Which direction, I don't know, but gold's basically
been sitting between thirty two hundred and thirty four hundred
for the last two months now, just kind of in
a pretty narrow like five to six percent trading range,
and you get the sense there's another coming in the
second half of the year because gold doesn't usually just
sit still for very long. It tends to move, oftentimes
fairly explosively in one direction or another. But it's been
(06:10):
pretty calm for the last couple of weeks after running
up significantly in the first few months of the year.
I want to talk about this piece from CNBC. Let's
Tayle the Big Beautiful Bill may help some seniors on
Social Security, but it does not eliminate taxes on benefits.
And basically the big thing is that because of the
(06:31):
way that rules are in place around how reconciliation bills
are allowed to be passed, one of which is pretty
much don't touch social Security. You're not allowed to touch
social Security through a reconciliation bill. The bill that passed
last week cannot actually just go and say, hey, we're
(06:52):
removing all taxes on Social Security benefits. So instead the
workaround is that there is an additional deduction four senior
citizens of up to six thousand dollars for people aged
sixty five and over. So this is also where things
start to get a little more complicated, because it's not
(07:13):
just a straight six thousand dollars benefit. Taxpayers with up
to seventy five thousand in modified adjusted gross income or
one hundred and fifty thousand if filing jointly receive the
full deduction. But then above that it starts to phase out.
And so there is a window in there where it
can effectively you know, you could say it's reducing your
(07:35):
Social Security tax to zero. It's really just you know,
reducing more income tax payments down. You know, whether it's
from Social Security or from other earned income, it doesn't
really matter. You don't have to have Social Security income
in order to claim this. But it's something where basically
the estimates, and this is according to the Urbans Brooking
(07:57):
Tax Policy Center says the people that are going to
benefit from this, They generally have between fifty and two
hundred thousand dollars in annual income. Below that you're typically
not paying tax on Social Security anyways, and above that
you would be hit by the phase outs.
Speaker 2 (08:13):
Your thoughts mark.
Speaker 4 (08:14):
My thoughts on all of these handouts to placate specific
interest groups, and I don't mean to diminish seniors as
an interest group. If I were collecting Social Security, and
someday hopefully I'll get there, I would want to pay
fewer taxes on it too.
Speaker 2 (08:29):
I get that.
Speaker 4 (08:30):
I just wouldn't expect much in terms of a macroeconomic bang.
By that, I mean an increase to consumption certainly, not
an increase in the trend rate of growth is Some
of the proponents of these changes are claiming my whole
for most of my life, and I'm in my early fifties,
so for most of my life. The tax code was
(08:50):
made simpler starting in nineteen eighty six. Flatter, simpler, close
the loopholes, make it easier for people to comply, reduce
the gimmicks and handouts. They just convolute things and make
more work for accountants. No disrespect to accountants.
Speaker 2 (09:07):
You can disrespect the accountants.
Speaker 4 (09:09):
But what they do, okay, Chuck, thank you. What they
do is what an economist would call rent seeking. They're
not adding to the pie, they're not growing it. And
a lot of us rent seek. And that's two words.
Rent seeking. I don't mean rent is in the rent
you pay, although it's derived from the way that term
used to be used. I mean it encourages people to
lobby or take action or position themselves to get a
(09:32):
bigger slice of a static or even shrinking pie, rather
than undertake activity that grows the pie. My whole life,
politicians really in both parties talked about ways to grow
the pie. It's sad to me that we've abandoned that
growth mentality where and both parties have abandoned it. They
want to close us off to the world. Just a
question of how to implement tariffs and how high they'll be.
(09:54):
I think we'd be in the same tariff situation, maybe
with a little less drama if we had a Democrat president.
I think this out of think it matters who's running things, Chuck.
We've shifted from a growth to a bunker mentality. That
to me is sad. It means slower growth and by
that I mean in the last century growth growth about
three percent. In this century, I'm talking real GDP, not
(10:15):
per head, but just GDP, and reale means after inflation.
This century growth has grown two percent for a lot
of different reasons. But if you don't think that matters,
let this soak in. We'd be forty percent richer had
we grown at the pace of the last century. It's
nobody's fault. It's just the way certain things have fallen out.
Productivity slowed, been hit by a couple of big recessions.
(10:37):
But the compounding power of economic growth, even small differences,
is dramatic over longer periods of time. So it will
be a little bit poorer than we otherwise would have
been in the long runs as a result of all
these distortions trade and tax distortions that we're imposing on
the economy.
Speaker 2 (10:53):
Yeah.
Speaker 3 (10:53):
The piece that is interesting here is you look at
the twenty seventeen Tax Cuts and Jobs Act, and the
big thing that that did was it simplified and streamed
on the tax code for.
Speaker 2 (11:04):
A ton of fops.
Speaker 3 (11:06):
That's right, it was a huge simplification of the tax code.
The interesting thing is that this bill, again I'm I'm
not passing like a judgment on whether the overall thing
is good, bad, or ugly. But this bill is a
significant complication of the tax code. I mean the things
that are going in. So you get this six thousand
dollars extra deduction if you are over age sixty five,
(11:28):
but that's only available for four years twenty twenty five
through twenty eight. Will they extend it, Probably because generally
that's how things go, the salt deduction goes up. That's
not really a complication, it's just a changing of it.
So I guess that's not a thing. Here's another one
that I thought was just interesting, like interesting, is basically
again something that is going to result in, you know,
(11:49):
CPA is having to do more work. It limits the
value of itemized deductions to thirty five cents on the
dollar for taxpayers in the top brackets. So the top
tax bracket's thirty seven percent. But if you itemizing deductions,
you're itemizing only gets you a thirty five percent deduction,
not thirty seven Okay, So like it's basically getting like
(12:10):
a ninety three percent itemization.
Speaker 4 (12:13):
Chuck, can I pass judgment on it? I know you
you you're more reserved than I am. Sure it's stupid.
We shouldn't be doing it. We should be, as you said,
simplifying the code, or maybe as I said, and I'm
putting it in your mouth, but simplifying the code, reducing
costs of compliance. That's how you change the trend in
economic growth.
Speaker 3 (12:32):
Other things in here and again like it just opens
up opportunities for you know, abuse, twenty five thousand dollars
in tip income is deductible for individuals and traditionally and
customarily tipped industries. But the deduction then phases out at
a ten percent rate when AGI exceeds one hundred and
fifty thousand dollars.
Speaker 4 (12:49):
Oh, well, that clears it up.
Speaker 3 (12:52):
You know, temporarily making auto loan interest deductible for vehicles
with final assembly in the US for taxiers to twenty
through twenty eight. So we're gonna have people policing whether
the car was made enough in the US now to
qualify for the deduction. Like, this is the stuff that like,
technically it creates work, but is it useful work.
Speaker 4 (13:13):
It's not trend changing work. It's rent seeking. It doesn't
induce a generative behavior. It induces people to position to
benefit from policy, right.
Speaker 3 (13:25):
The one I always like to go back to is
in theory. Look, you could have everyone employed if you
paid people to dig holes. If half the people dig
holes all day and half the people filled them in,
does it produce anything useful? Not really, And I'm not
saying that there's like not something that's potentially useful here.
And to a certain extent, I even look like the
auto loan thing was kind of interesting to me on
(13:46):
one level because Mark, were you a fan of the.
Speaker 2 (13:49):
Cash for conquers plan?
Speaker 4 (13:50):
Hated it?
Speaker 2 (13:51):
Hated it?
Speaker 4 (13:53):
So I we talking about that on the other side
because I don't want to just leave it at that
and without an explanation.
Speaker 2 (13:58):
But okay, they're a bigger issue. But okay, let's take
a quick break.
Speaker 3 (14:01):
When we come back, we've got talker, We've got trivia, right, yeah, okay,
let's do some trivia and then we're talking about loans
for clunkers after this.
Speaker 1 (14:11):
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(14:34):
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Speaker 2 (14:49):
All right.
Speaker 5 (14:50):
Time for trivia here on the Financial Exchange. And yesterday
it was announced that Knagra Brands sold Chef boy rdta
hometown food Company for six one hundred million dollars. Chef
Boyard was created by chef and restaurant owner Hector Borard
at his restaurant in nineteen twenty eight. So trivia question today,
what city was Chef Boyard founded in? Once again, what
(15:14):
city was Chef boyar D founded in? Be the fifth
person today to Texas at six one seven three six
two thirteen eighty five with the correct answer, and you'll
win a Financial Exchange Show T shirt. Once again, the
fifth correct response to textus to the number six one
seven three six two thirteen eighty five will win that
T shirt. See complete contest rules at Financial Exchange Show
(15:36):
dot com.
Speaker 2 (15:37):
Mark segment.
Speaker 3 (15:39):
We were talking about the provision in the new tax
bill that makes autolone interest deductible if you're itemizing up
to ten thousand dollars a year on vehicles made in
the United States.
Speaker 2 (15:53):
And I mentioned, just off handling, did you like cash
for Congress? And you said no?
Speaker 3 (15:56):
And I want to dig in on that for a second,
because I want to get to you know again, just
like thoughts onlike.
Speaker 2 (16:02):
When we talk about making yes.
Speaker 1 (16:04):
Yes.
Speaker 3 (16:05):
You and I talked back when the Inflation Reduction Act passed,
and we had many conversations on the show where we said, look, ultimately,
if you want to build electric vehicles, that's fine. Do
we want the government subsidizing seventy five hundred dollars per vehicle?
Is this a need given the limited fiscal resources that
(16:25):
we have. And we ultimately said no, just because of
a multitude of different reasons. There could be better technologies
that maybe we're preempting. There could be other things we
could spend that money on, lots of different reasons. We
said no, we don't like that ev credit there because
it didn't make sense in the context of the overall
economic approach.
Speaker 2 (16:47):
Cash for clunkers. Talk to me about why you didn't.
Speaker 4 (16:49):
Like it's not worth getting off on too much of
a tangent about that. If you brought up a more
interesting question. But we destroyed a lot of wealth. What
was it a million cars or something that we just
shirk off the streets that pushed the price of used
cars was one of the arguments at the time, and
there was some evidence for that. It was not that
it was a second or third best way to your
(17:09):
to the point you just made of actually helping the environment.
And I'll segue I don't want to get sidetracked on
policy from twenty years ago, which you'll.
Speaker 2 (17:17):
Know it's fine, never again, but oh, let's do that.
Speaker 4 (17:20):
It does relate to the to recent Green New Deal
type policies, which are also second best. From an economist
I think point of view, they'd say, just tax carbon.
If you make gas more expensive, people will substitute away,
choosing other technologies based on their own preferences. Don't put
(17:40):
all your eggs in the EV basket. Look at what's
happening to the EV basket. It's it's now all freed
and is arguably not where you want to be. If
you invested a lot of money in a charger or something,
or had plans to those plans, hopes for that have
been dashed. So if the if the political climate could change,
(18:02):
and it effectively nullifies all the investments that were made
over the past few years, that was money wasted. So
there are a first best the larger point here, I
don't want to get bogged down in the specifics. There's
a larger point, which is there are first and second
best solutions to problems typically, and you always have to ask,
is this the best, most efficient or least cost in
(18:24):
exchange for your in a bang for your buck sense
way to achieve whatever it is you're trying to achieve.
Speaker 3 (18:31):
The other piece is, Okay, let's say that you've got
this thing in place now where you can deduct you know,
some interest on your car loan.
Speaker 2 (18:39):
If you buy an.
Speaker 3 (18:39):
American made car now, Mark, does that make it cheaper
to build a car in the US.
Speaker 4 (18:45):
Does increasing the demand for American made cars?
Speaker 2 (18:48):
Yes?
Speaker 4 (18:48):
And I sound like I sound like they're sarcasm, but
I'm thinking out loud here. No, I think all else equal.
If you're increasing the demand for something without taking measures
to expand the supply of it, the price should go up.
And your point is it may make cars on the
margin less not more affordable.
Speaker 2 (19:05):
Yeah, I kind of have.
Speaker 3 (19:07):
I'm seeing I'm seeing signs of the American healthcare and
education systems now in the auto you know industry.
Speaker 2 (19:13):
I'm like, oh, we're gonna do that. Not quite.
Speaker 3 (19:16):
It's it's different based on you know, how they work,
and there's obviously, you know, big differences in the specifics
of the industries. But I just I don't love the
idea that, hey, let's just throw money at it and
it'll make it more affordable. No, that's not usually how
it actually works. Quick Break here, Trivia Answer and Wall
Street Watch next.
Speaker 1 (19:40):
Bringing the latest financial news straight to your radio. Every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street Watch. A complete look at
what's moving markets so far today right here on the
Financial Exchange Radio Network.
Speaker 5 (20:00):
Following Monday's modest selloff, Marcus today are now in slightly
negative territory. Yesterday, President Trump sent letters to several nations
outlining terror freights they would pay if trade deals were
not agreed upon, and extended the deadline from July ninth
to August first. This morning, President Trump posted that no
extensions will be given to that August first deadline. Right now,
(20:24):
DAW is off by three tenths of one percent, or
one hundred and forty one points, SMP five hundred is
dipping by four points now five points, and the Nasdaq
is off by only two points. Russell two thousand is
up eight tenths of one percent, ten year treasure Real
up two basis points at four point four to one percent,
and crude oil is up about a third of a
(20:45):
percent higher today trading just above sixty eight dollars a barrel.
Several solar stocks, including sun Run and Phase Energy, and
First Solar, seeing losses after the White House said it
would enforce the halt to clean Electricity tax credit faster
than expected. Sun Run down by eleven percent, while both
in Phase Energy and First Solar are seeing losses of
(21:08):
three percent. Meanwhile, Amazon Prime Day has officially begun and
this year will extend to four days instead of two. However,
according to Momentum Commerce, which manages fifty brands in a
variety of product categories, said Prime sales fell almost fourteen
percent in the first four hours of the event compared
with the start of last year's sale. Amazon shares are
(21:30):
now down nearly two percent. Elsewhere, Meta is continuing their
aggressive AI recruitment for its super intelligence division, now hiring
a top AI researcher from Apple. Both Meta and Apple
stocks are flat Today. HSBC downgraded major banks JP, Morgan, Chase, Goldman, Sachson,
Bank of America ahead of their second quarter earnings next week.
(21:53):
Those stocks are down by about two percent, and Boeing
delivered sixty airplanes in June, the most December of twenty
twenty three. Boeing stock is down by one percent. I'm
Talkinger Silvan. That is Wall Street Watch and in the
previous segment we asked the trivia question what city was
Chef Boyard founded in? That would be Cleveland, Ohio. Eric
(22:16):
from Derry, New Hampshire is our winner today taking on
the Financial Exchange Show t shirt. Congrats to Eric and
we play trivia every day here in the Financial Exchange.
See complete contest rules at Financial Exchange Show dot com.
Speaker 3 (22:30):
Mark I want to talk about a couple pieces with
regards to artificial intelligence, One from the New York Times
which workers will AI hurt most, the young or the experienced?
Speaker 2 (22:41):
And one from the Wall Street Journal. CEO starts saying
the quiet part out loud. AI will wipe out jobs.
Speaker 3 (22:48):
And let's tackle the New York Times when first in
terms of which workers will AI hurt the most young
or experienced? I think is the wrong way to look
about this, look at this because it's basically saying like, Okay,
is this you know something where we're going to get
rid of the cheap workers or the ones with you know,
(23:10):
lots of institutional knowledge.
Speaker 2 (23:12):
And I think ultimately.
Speaker 3 (23:15):
It's going to be different in different industries depending on
where the real value lies. I know that's kind of
a cop out, but it's just how it usually is.
It's not usually one or the other. It's usually one
and the other. Your thoughts.
Speaker 4 (23:28):
I'll make a really bold prediction here. Yeah, this new
technology will reduce employment in some industries while increasing employment
resulting in other industries resulting in more jobs overall. Why
do I say that because that's been the result every
time a new technology has been introduced, from steam to
(23:49):
petroleum to electricity and all the little follow on technologies
that resulted from those. And you could pick your favorite example.
The light bulb put handle makers out of business eventually,
et cetera, but created far more jobs at utility companies,
et cetera. So Chuck, yeah, some people will be displaced.
(24:10):
Maybe I'll be displaced by AI. I have my doubts
there after seeing it perform in some areas that I
have an interest in. But eventually maybe Sorry, that was
the end of my thought.
Speaker 2 (24:22):
I thought, there's gonna be something, because.
Speaker 4 (24:24):
Normally you don't have a sentence with maybe maybe maybe
I am more replaceable than I thought.
Speaker 3 (24:30):
And this was our first demonstration of Mark FANDETTAI on
air live. So here's the thing that I always come
back to on this is, ultimately, to a certain extent,
we want jobs to be displaced by new technology because
it means that we're getting more efficient and actually seeing
(24:52):
gains in our real standard of living. As an example,
when we moved from you know, having to harve every
book into you know, stone tablets to the printing press.
I know there were some technologies in between, obviously, but
we didn't say, oh, those poor stone tablet makers you
know here, let's let's keep giving them jobs because we
(25:14):
need to keep them employed. No, Ultimately it was, hey,
we can make way more books, way more cheaply by
using this technology. To anyone in the construction industry, would
you do your job without power tools? Probably not, but
that effectively is something where we were able to do
(25:37):
two things. Number One, in the short term, probably didn't
need as many people working in construction, but number two,
the ones who you know were still there could build
way more stuff, way more cheaply, because it was much
faster to do. So, you know, no one sits there
and says, gee, you know what, I would prefer to
just use, you know, a nice little handsaw to do
(25:57):
everything as opposed to anything you know, using electricity. No, like,
give me the electricity, let me let me build faster.
So when it comes to AI displacing Mark me, Tucker
or anyone else, because I do think that this actually
the intersection of AI and robotics is now a place where,
in the next few years, for the first time ever,
I'm starting to feel that trades people are not entirely safe.
Speaker 4 (26:20):
That may be true, but they'll be repositioned and that's
like they will be a cold and clinical way to
describe somebody perhaps losing their their livelihood. There will be
something but to your point, that happens every day technology.
Speaker 3 (26:33):
Mark, Ultimately, we should all hope that all of our
jobs are because because this gets to the question of, look,
if one person can wake up each morning and press
one button and the whole world runs itself, don't we
actually have more freedom to actually do what we want,
even if what we're doing is still working, but just
on different things or for our own enjoyment as opposed
(26:55):
to whatever else. Yes, you want that easier life, No
one actually sits there like make my life harder, like
you don't want that. Do we have things societally that
we're going to have to reckon with as we navigate
what this could look like? Absolutely? Do I have any
evidence that we can do that successfully?
Speaker 1 (27:13):
Not?
Speaker 3 (27:13):
Really, That might be the hard part is navigating each
other more than navigating the robots and stuff like that.
But this is something based on what I'm starting to
see out there that I now think is a three
to five year thing, not a fifteen to twenty year thing.
So there's something coming here, and I don't think it's
gonna be the generative AI stuff that's actually the media's
(27:36):
piece of this, like generative AI writing haikus and giving
you know, pictures of cats writing dinosaurs.
Speaker 2 (27:44):
I don't think that's where the meat is on this.
Speaker 3 (27:47):
I think quite Honestly, robotics is going to be something
that is hugely transformative in the next decade. And I,
for one, welcome our new robot overlords. I just want
them to know that, you know, publicly a few times. Anyways,
this is all something that is really interesting over the
(28:08):
next five to ten years. But if you're thinking about
AI right now and hey, like, how does this work
with you know, my financial plan? The good news is
that the Armstrong Advisory Group has a guide this month
on this exact topic. It's titled AI and Your Financial
Plan and specifically talking about the AI tools that are
out there right now, budgeting ones, investment strategies, just understanding
(28:32):
how AI can fit into you know, the world of
finance and how it may or may not affect your
personal portfolio and your financial plan. The guide is titled
AI and Your Financial Plan and it's available by calling
eight hundred three nine three four zero zero one. A
(28:52):
lot of meat in here, a lot of things that
you can think about as far as you know, Hey,
are there places where AI can help and maybe what
are some of the risks of using AI I with
my financial plan? Because it's not always perfect. Again, the
guide is titled AI in your financial plan, and you
can request it by calling eight hundred three nine three
for zero zero one.
Speaker 1 (29:13):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong Guide a specific financial, legal, or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 3 (29:29):
I want to talk a little bit about Prime Week
from Amazon, which used to be used to be Prime Day,
and it's now Prime Week. It's running today through third
through Friday of this week, so it literally is almost
the whole week. And I got this piece here from
the Wall Street Journal.
Speaker 2 (29:49):
Quote from it.
Speaker 3 (29:50):
The sale, which kicks off Tuesday, is expected to bring
in a record twelve point nine billion in the US,
a fifty three percent from last year, according to research
firm E Marketer. So it's you know, longer. And then
they also have all these other sales and this and
that that they're doing now. But here's the thing that
we have at least early on, and again I know
that it is early on at this point, so we'll
(30:12):
have to see where this goes. But according to early data.
Right now, Prime Day sales are apparently down fourteen percent
so far to start the day discuss.
Speaker 5 (30:26):
I chalk that up to just people realizing it's four
days and they're not rushing. I think it's as simple
as that, because I'm not like, I'm gonna be keeping
an eye out for stuff. But I know it's only
it's now four days instead of two. So I'm not
like sprinting to get it done.
Speaker 1 (30:42):
Uh huh.
Speaker 5 (30:43):
I think it's as simple as that. Maybe I'm wrong.
Speaker 2 (30:45):
I don't know, Tucker.
Speaker 3 (30:47):
I've I know you've tended to focus on Prime Day
more than I have. What what kinds of things are
you looking for? And where do you see deals out
there that you might be interested in? This are the
things where you're seeing them?
Speaker 5 (30:59):
Yeah, I mean in the past, I have purchased a vacuum,
a Shark vacuum, which is a tremendous vacuum.
Speaker 2 (31:05):
They're fantastic. They're fantastic, But I saved like fifty bucks.
Speaker 5 (31:09):
I mean, I always had my eye out on anything
kitchen related, love the cook and.
Speaker 2 (31:14):
Everything like that.
Speaker 5 (31:15):
I'm seeing if there might be an air compressor available
because I discovered I needed one over the weekend when
I was trying to blow up this sprinkler thing for
the kids, and we had like a car thing car
was in the backyard. It was a whole thing. So
I am in the market for an air compressor.
Speaker 2 (31:32):
Picturing you're just trying to blow it up. You know.
Speaker 5 (31:34):
We literally had to put the car in the backyard
to do this because we only had the one that
hooked up to the car, not one to an outlet,
so it was a whole oy.
Speaker 4 (31:43):
Do make converters, you know?
Speaker 2 (31:45):
We couldn't.
Speaker 5 (31:45):
We didn't have one.
Speaker 4 (31:47):
Amazon sells them, that's why.
Speaker 5 (31:50):
Yeah, so I have not seen anything. But I mean,
I mean, wirecutters are fantastic source for looking at the
best possible deals out there.
Speaker 3 (31:59):
I've said before, but looking at I'm just on Amazon
looking at vacuum prices right now. I don't understand how
vacuum repair people stay in business because it's literally cheaper
to buy a new vacuum today than to like ship
your old one off to fix it.
Speaker 5 (32:16):
Well, I mean, if you look at the show Breaking Bad,
you can understand why.
Speaker 3 (32:19):
Well, yes, yes, but there's only you know, so many
of those services that can exist in anyone location. You know,
In any case, let's take a quick break. When we
come back, we'll do a little bit of stack roulettes.
Speaker 1 (32:33):
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Subscribe to our page and get
caught up on anything and everything you might have missed.
This is the Financial Exchange Radio Network. Here the Financial
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(32:53):
the latest business and financial news and the trends on
Wall Street. The Financial Exchange is now life on Serious
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Financial Exchange Radio Network.
Speaker 5 (33:12):
This segment of the Financial Exchange brought to you in
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(33:34):
visit USVII dot com. That's visit USVII dot com Mark.
Speaker 4 (33:39):
What do you got for me for stack roule at Chuck,
I know how much you love private credit as an
asset classes an investment.
Speaker 2 (33:45):
Ah right, it's like your favorite.
Speaker 4 (33:47):
I thought i'd give you something to maybe grind your
gears good. And there's an article in the Financial Times
was not among today's top stories about innovations in the
vehicles that allow vehicles like an TF or a mutual
funds just a wrapper that allow investors. It could be
a high net worth investor, it could be an every
day schmuck like me, that allow you to buy things
(34:08):
like private assets non publicly traded equity ownership that is,
and credit loans that is that historically have only been
available to sophisticated pension funds. And I guess the caveat here,
this is a much broader and more interesting topic which
is going to scratch the surface. The caveat here is
whenever an investment manager says we're trying to democratize something,
(34:33):
I think our house view on the phrase we're going
to democratize this or that, Chuck is sort of run
for the hills because they're actually trying to fleece you. Yes,
and we're trying to unload this on unload that's what
that's that's the verb I was going to use. They're
trying to unload something on you. They couldn't unload on
something more sophisticated. Nothing inherently wrong, right, Chuck with with
private equity, some great companies that are owned privately, Dollar General,
(34:55):
Staples of Petco and other so nothing inherently wrong with it.
Or private credit, which is just the flip side that
they make loans generally to private equity companies that in
turn infuse it into some of the companies and others,
some of those that I mentioned and others. So nothing
inherently wrong with it, but usually for very sophisticated investors,
(35:16):
not at all convinced. This is something that you make
an appearance, for example, in four oh one K plans.
But something I suspect we'll be talking a lot more about.
Speaker 2 (35:23):
Yeah, it's it's something where.
Speaker 3 (35:27):
My dislike for just the term private credit, even before
we get to what it actually is, stems from the
fact that a it doesn't really mean anything. I mean,
private credit can be anything from like hey, I'm lending
a company ten million dollars so it can run its
operations to I lent someone money based on the value of.
Speaker 2 (35:46):
Their art collection.
Speaker 3 (35:48):
Like, those are both technically private credit, and you will
see both of those in different private credit vehicles. So
a like just being like, oh, I got some of
my money in private credit is no different from being like, well,
I've got some of my money in stock, Well, what
is it?
Speaker 2 (36:01):
Is it? Campbell?
Speaker 3 (36:02):
Super is in Nvidia? You know, because those are kind
of different things. So that bothers me a little bit
to begin with. This is before we even get to
that whole idea of democratization, which anytime that I hear
that again, I think, okay, what are you trying to
unload on someone? Because hey, private credit companies, private equity companies,
they've made a lot of money working with you know,
high net worth people, very small numbers of them, for
(36:24):
a long period of time. Why are they all of
a sudden trying to work with the person with five
hundred dollars. It's not out of the kindness of their heart.
It's not because they're like, well, we want to give
you the great returns. Well, no, there's only so many
great returns to go around. Not everyone can get the
same payout. It doesn't work like that. There's a distribution
(36:45):
of you know, companies that are good at it, companies
that are bad at it. And if you're the small guy,
where do you typically end up Not usually with like
the best ones, because someone else can pay more for
that kind of quality. It's no different from any other product,
quite honestly. So whenever I hear the word democratize, immediately
(37:05):
I start going, Okay, like, what bags are they trying
to unload?
Speaker 2 (37:10):
Yeah?
Speaker 4 (37:10):
Absolutely, your antenna should go up. Very different than public markets.
We can all participate in those. The other one very
very different.
Speaker 3 (37:16):
The other thing to be careful of though, and this
is something that you're starting to see more of as well,
because I think there were a couple ETF approvals on
This is publicly available securities that hold private ones. So
think an ETF that holds you know, private credit instruments.
And the problem here is not the liquidity of the
public market instrument, but the underlying So if you're like,
(37:39):
what do you actually own and when can you actually
sell it? These are things that like you need to
be aware of because yes, you might be able to
sell the ETF, but depending on the liquidity of the
underlying what kind of pricing do you actually get if you're,
you know, trying to liquidate. You don't know until these
things go through different stressful situations in markets, it can
(37:59):
get really complicated. So all I would say on any
of this be really really, really really careful when you
start talking about private instruments. It's not a never touch them,
but it's a know what you're doing and why you're
doing it. Markets remain mostly flat thus far. We are
done for the day, but the good news we'll be
(38:20):
back on tomorrow and hopefully our show will be a
little bit better than today.
Speaker 2 (38:23):
We'll see you then,
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