August 5, 2025 • 38 mins
Mike Armstrong and Marc Fandetti discuss Trump's decision to fire the BLS chief and how Wall Street views the move. Why does it matter that Trump fired the BLS chief? Is LA dooming itself if it enacts a $30 minimun wage? Selling Stocks in a Market Downturn Is a Big Mistake. 5 Strategies to ‘Panic Prudently.’ Is Musk the most important CEO in the world?
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Transcript
Episode Transcript
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Speaker 1 (00:00):
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(00:43):
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(01:06):
Mike Armstrong and Mark Vandetti.
Speaker 2 (01:13):
Good morning, Happy Tuesday, Welcome back to the Financial Exchange.
It is Mike, Mark and Tucker with you on a
Tuesday where the S and P five hundred is leading
the way down, off twenty eight points a little bit
more than four tens percent, but Nasdaq and Dow also
in negative territory. That's after a bit of a roller
coaster over the last couple of trading sessions. Friday, you
(01:34):
had markets off by more than one percent, Yesterday you
had them make up all of those losses. And today
we've got a lack of big new data and markets
taking a bit of a breather here, and you know,
they have been bouncing around kind of all over the place.
We opened in mixed territory and now pretty firmly in
negative territory. Later this week we will continue to hear
(01:57):
from a number of large companies regarding their earn. Already
this morning we heard from Caterpillar, among others, McDonald's as
well as Walt Disney and Uber. Will go tomorrow and
we'll have more throughout the course this week. But in
terms of big, heavy hitting earnings, a lot of those
came last week. The next one to go. I think
(02:17):
the only one I can think of that remains out
there would be in video, which is another few weeks
away here. So but what we will be hearing is
from a number of Again, this is why this stuff
remains interesting. While these companies like McDonald's, like Uber are
not the biggest market movers out there, they're all large employers.
(02:39):
They have, you know, thousands of employees across the country.
They interact with you and me every day and oftentimes
have notable and interesting things to say about the state
of the economy, even if they do not end up
moving markets a whole lot in one direction or another.
Our top story of the hour remains the Friday jobs report.
It was kind of the culmination of a week's worth
(03:00):
of heavy data. We got four earnings reports from Microsoft, Apple, Meta, Facebooks,
Pair and Company, as well as Amazon. Mixed on some
of those results. Microsoft and Meta were pretty solid. Amazon
and Apple were a little bit weaker, or at least
(03:21):
that was the overall interpretation. We got a slew of
jobs data, and I guess I'm going to try and
summarize first the jobs data before we get into the
president's reaction to it, which came Friday afternoon. So we
had a Joltz Report, which is the Job Opening's Labor
Turnover Survey. We had our weekly jobless claims data, and
(03:42):
then we had this Friday Jobs Report and the Friday
Jobs Report itself, we were expecting around one hundred thousand
jobs to get created. We expected the unemployment rate to
bump up to four point two percent from its previous
four point one percent. Everything that we got about the
month of July from this report was well within the
margin of error. When we talk about these because remember
(04:02):
what they are, they're surveys. They are not measuring the
number of people getting paid. They are not getting the
data from the Social Security Administration and reporting that. No,
they're going to businesses and they're going to household and
they're surveying them and they ask them how many people
did you hire, how many people did you fire, where
did you move wages, what industry do you employ in
et cetera. And so the report that we got for
(04:24):
July was fine. At least that was my interpretation. Mark,
would you have any different conclusion, You know, a creation
number of seventy thousand versus one hundred thousand compared to
the estamates it.
Speaker 3 (04:35):
Was well with the so called confidence interval, which is
a function of sample size and how confident you want
to be, is plus or minus. I think it's one
hundred and thirty, which means if the number were actually zero,
the truth if the reported number called a point estimate.
If you're interested, and we use the word statistic we
use the word estimate. Those aren't just synonyms for number
to a statistician, those numbers, which I am not. But
(04:57):
in economics you get a little bit of that obviously,
and the people can alculating these are economics people, not
statisticians necessarily. I think there might be a couple of
people with PhDs in math and math statistics. But anyway,
you learn to take it with a grain of salt.
You should really be reading the so called confidence interval
and not hyper focused on the point estimate. And that's
not our fault. Because the media reports seventy three thousand
(05:20):
something to that effect, right, new jobs created, We think,
oh god, that is such a precise number. And sometimes
sometimes economists with a sense of humor even give you
a decimal place. The unemployment rate is four point two percent,
that it holds under very specific now they don't revise that,
so that may not be the best example. But inflation
coming in at point zero three two.
Speaker 2 (05:41):
One, it's bloony. It's a survey.
Speaker 3 (05:43):
I wouldn't cut Mike. Let's not use the word. Calling
you a bolooney will stoke the sure concerns that this
data is just fudged based on whoever is in office.
I don't think the great unemployment numbers under Trump one
were blooney. I don't think the great unemployment numbers to
the extent that we had them under Clinton or pick
your president. I don't think any of them were bolooney.
(06:03):
These people are career researchers and they are dedicated to
getting go ahead.
Speaker 2 (06:10):
The blooney implies that they're made up.
Speaker 3 (06:11):
I know you were just being flipp I'm not criticizing.
Speaker 2 (06:13):
A numbers themselves are purely estimates.
Speaker 3 (06:16):
They're estimates. That's why you get a confidence interval, and
nobody hides the damn confidence interval. It's in the report.
You got to go to the footnotes. The media doesn't
know how to read these because they don't know what
one is. No offense, I mean, you need a background
in this stuf. It's not easy that's why you go
to school for four years. If you do graduate school,
it's additional two. If you get your PhD, it's an
additional five to seven, depending on how long you can
milk that. So take it with a grain of salt.
(06:37):
But it's not entirely made up. Suggestions to the contrary
are not helpful.
Speaker 2 (06:41):
So it was not the July jobs report that President
Trump found issue with. What he found issue with was
the revisions to the May and June jobs reports, because
those two combined showed an economy that in the spring
looked a lot different than what we previously understood from
those same jobs reports. Effectively, we went from one hundred
plus thousand jobs created per month in those two months
(07:03):
to down to about twenty five thousand jobs created. That
would indicate something that is a fair bit weaker than
was previously understood. But I would also say lined up
fairly concisely with some other data points that we were seeing.
For instance, in May and June, we saw an uptick
in the number of jobless claims people filing for unemployment,
(07:25):
and it didn't show up in these other surveys. But
then we got these revisions, and you say, oh, okay,
that actually lines up fairly well. It also contributed to
now the Federal Reserve, or at least those who make
bets on what the Federal Reserve is going to do,
thinking that, hey, a rate cut is more likely. In
all this time period, nothing about those revisions, to me,
(07:45):
by the way, indicated that we are currently in a recession.
I think anybody saying that and looking at those revisions
and saying, look out, the president has navigated us into
recession now because the Bureau of Labor City six reported
twenty five thousand jobs created, I think that's an overstate.
Speaker 3 (08:01):
I will say that slow downs and payroll growth do
tend to precede recession. So we went from a couple
of hundred thousand jobs two years ago on average to
one hundred and change a little less than that last
year on average, and this year. I don't even know
what the six month average is forgive me, but if
it's eighty thousand, I'd be surprised. Sure, so the economy
could be slowing. The pattern is consistent with that, yep,
But the unemployment rate is still low, and GDP growth
(08:23):
was strong, and the stock market is roaring, right. I
just cherry picked a few indicators. Yeah, they're pretty representative.
Speaker 2 (08:29):
And look, there are other indications, like during the Biden
administration that also indicator recession. We talked a lot about
the SAM rule.
Speaker 3 (08:36):
We effectively at a recession in twenty twenty two. GD
contracted payroll growth contracted, six month inflation adjusted spending was negative.
It wasn't necessarily his fault, just like any slow down
now sure isn't necessarily the Trump administrations not, even though
you might blame tariffs, and there is an adjustment to
tariffs that's to be expected.
Speaker 1 (08:53):
Good.
Speaker 2 (08:54):
So what the president did was accused the chief of
the BLS of effect of fudging the numbers last year.
I don't know that he made accusations of doing so
this year, but said that during the presidential run between
he and Kamala Harris, they were fudging the numbers to
make the economy look better. I have to say that
(09:14):
I'll remain open and if he's going to go down
that route and has evidence to present that that is
the case, which I am very skeptical of, then we
should hear about it and that person should be prosecuted.
Why I think it is incredibly unlikely is because the
person who he fired does not do everything. At the
Bureau of Labor Statistics, there are over two thousand employees
(09:37):
there who are in charge of gathering the data, compiling it,
putting together the statistics. And I just tend to think
that it is very difficult to have a conspiracy within
the BLS where they are making up of datason.
Speaker 3 (09:51):
Let's not even go He doesn't think they were really fudged.
Speaker 2 (09:53):
He was just that's what he said, So I need
to take it.
Speaker 3 (09:58):
President went to Wharton, he knows better. He did it
for theatrical and political purposes.
Speaker 1 (10:03):
It was.
Speaker 3 (10:03):
It was a mistake. But if it results in more
transparency about the errors in these and there is transparency,
it's not only anybody's hiding it. I'll just go back
to my original point and say, these are statistics, which
by definition means we don't know the true number. It's
like taking any average. You know, there's why dispersion around it.
We pay there's a there's a teachable it's a teachable
moment here. Again, I think that the political response was
(10:26):
probably a mistake because now it undermines confidence in any
federal data. Well, maybe they're just fudging it. I wish
the President hadn't done that. There is a teachable element
to this, though, and it is don't take these statistics
as gospel or as scientific fact. They aren't.
Speaker 2 (10:41):
Here's how this feels. Here's how this reads to me
and reminds me of In August of twenty twenty three, uh,
the Some Department of the Chinese Communist Party released an
employment report that indicated twenty five percent youth unemployment. Imediately,
the Chinese Communist Party came out and said, we are
(11:02):
no longer reporting data on youth unemployment. And when you
have a moment like this, and you know, everybody looked
at that and said, okay, yeah, par for the course.
Here goes China just fudging the numbers again and hiding
data we know.
Speaker 3 (11:14):
We know they do, because we have reams of alternative
data that contradict them already.
Speaker 2 (11:19):
And the problem that for China in that regard is
nobody would trust their currency to conduct trade in No
one conducts, no one trusts their data about their economy,
and it hampers investment in that country. It's been okay
for China, they have found other ways to develop as
a society, but certainly nobody is going to trust that
government as a useful independent source of data. We didn't
(11:42):
do that here in the United States. I'm not saying
that President Trump's firing of the BLS is akin to
what the Chinese did back in August of twenty twenty three,
but it is the type of reaction that you see
from It's not the type of reaction usually see from
the United States. We are very much have built a
reputation on producing reliable, independent data from agencies like this,
(12:04):
and serious people who study it don't think that there's
any chance of manipulation by the chick.
Speaker 3 (12:10):
Can we pick up on this?
Speaker 1 (12:11):
Sure? Is it?
Speaker 2 (12:12):
Let's take a quick break. When we come back, we're
gonna have trivia next on the Financial Exchange.
Speaker 1 (12:16):
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Speaker 4 (13:00):
It's time for trivia here in the Financial Exchange and
on this day a year ago, Google lost is an
important US anti trust case involving its search engine. With
the judge finding quote, Google is a monopolist and it
has acted as one to maintain its monopoly. A breakup
of the company hasn't happened yet, but it is still
on the table. So trivia question today, what is the
(13:23):
largest monopoly breakup in US history?
Speaker 2 (13:26):
Once again?
Speaker 4 (13:26):
What is the largest monopoly breakup in US history? Be
the sixth person today to text us at six one
seven three six two thirteen eighty five with the correct answer,
and you win a Financial Exchange Show T shirt.
Speaker 2 (13:40):
Once again.
Speaker 4 (13:41):
The six correct response to text us 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 dot com.
Speaker 2 (13:53):
I take issue with the question, Okay, the largest could
mete a lot of things that we're talking about the
fatas CEO. Are we talking about the most employees, biggest
market cap? What's our definition? Here of largest breakout. I oh, man,
I'll take it up with Ben when he comes back.
Speaker 3 (14:11):
I didn't write whatever.
Speaker 2 (14:15):
I don't think it means fat as CEO. But you know,
the other ones could be serious contenders. Mark, we were
talking about the firing of the head of the Balerau
of Labor Statistics. I think we want to bring it
home though. Why Why does it matter that the president?
The President has removed several Biden and other appointees from
(14:36):
their positions since the beginning of this year. We have
not made a big deal of many of them. We've
barely discussed several of them other than the context of
will it be legally allowed? Why are we making a
big deal of this one? Why are investment bankers, economists
and folks from frankly, both sides of the aisle in
(14:56):
that markets and economic circle making a big deal of
this one?
Speaker 3 (15:00):
It calls into question potentially because we don't know what
the implications of the change in leadership there will be.
It calls into question the reliability of economic data which
are used to price assets. If you don't know what
the inflation rate is, which BLS I think is struck
pointed out yesterday also calculates, and the Jolts survey, by
the way, and the weekly unemployment numbers.
Speaker 2 (15:21):
So your cost of living adjustment on Social Security is
determined by what the.
Speaker 3 (15:26):
More importantly for invent maybe not more importantly forgive me,
because that may be the most important thing, the most
important statistic to a lot of listeners. But if you
buy treasure inflation protected securities, they're indexed using CPI, which
BLS calculates. Look, it would take a lot to fudge
those numbers, and I don't think the President wants the
numbers fudged. I think he was gently. Look, he's acting
(15:47):
like a CEO. Sure, if your CFO comes out and
undermines you by revising past whatever profits, you might be
irate enough to take action just for so. He's behaving
like a private sector dictator, and I think he would
like that term. I don't mean dictator critically, I mean
someone who can with a snap of her fingers. Yeah,
(16:10):
a CEO can do that. I think he's acting like
a CEO. Maybe had had more time. He did it
like two and a half hours after their report game out.
I'm laughing because you know he was poed and he said,
would you this woman can't get that. I don't mean
that's chauvinistic, but you know what I mean. This person
can't even get the numbers right. Look at the size
of these revisions. If somebody had just taken him out
for a walk and said, look, mister President, these revisions
(16:32):
are actually pretty typical. Here's why responses come in late.
There's a perfectly rational reason for this. It's within the
error estimates, which you're published in the footnotes. You know,
take the escalate.
Speaker 2 (16:44):
Yeah, I think there are some reasonable reasons to be critical,
Like the response rates on these surveys.
Speaker 3 (16:50):
Have plum that's appalling lately, so you're gonna get bigger
revisions that And that's a real criticism of this bureau
Labor statistics would be you need to find ways to
get these.
Speaker 2 (17:01):
Well, you don't think they are. I'm sure they are,
But that's my point is there is reason to be
critical of the revisions. The reason that I'm critical of
the visions is they wouldn't have happened if the response
rate was higher, So figure out how to improve that.
But in the absence of that, where this is where
we are, and I'm with you, I don't think it
(17:22):
does anything immediately. The question is if you start to
lose the confidence in the long term reliability of US
government published statistics, which this doesn't do, it weakens the
reputation of the United States as the best place to invest.
Speaker 3 (17:43):
You can't make reliable estimates of the future value of
security without estimates of without pricing in things like inflation
and the state of the economy. We don't know what
the result of this is going to be. It is
a little bit shocking. I was shaken by it. I've
never seen a president remove somebody because they thought that
the data that came out two and a half hours
before was unfavorable. So I was shocked by it. I'm
(18:03):
not trying to minimize it, but I've had a few
days to think about it. I saw the market's reaction yesterday.
Clearly the market is in a well, let's wait and
see what this means for the reliability the integrity of
US economic data. Maybe you'll appoint someone who's respected universally,
and maybe they'll implement some useful changes. The thing is,
I don't have an idea because it's not my sub field.
(18:25):
I don't have an idea what those changes are.
Speaker 2 (18:28):
Uh. New York Times ass minimum wage in LA could
rise to thirty dollars an hour just enough for too much?
I guess we'll have to wait to find out, But
mighty think what happen would be too much? Well, they
did minimum wage of twenty five bucks an hour for
fast food and.
Speaker 3 (18:44):
You didn't have massive unemployment interestingly right.
Speaker 2 (18:46):
No, but you did have fewer people working in fast food.
Pretty substantial.
Speaker 3 (18:51):
You would expect that though labor gets more expensive, you
substitute capital.
Speaker 2 (18:54):
For ascisely, what would happen? And so should you raise
the minimum wage in California's thirty bucks an hour, I,
as a c would hire fewer people, relocate more people
outside of California, and automate more would be my god.
Speaker 3 (19:06):
It's interesting. There is a point beyond which people are
going to start to substitute away from labor. It just
depends on the local market.
Speaker 2 (19:12):
Yep. So good luck with Los Angeles minimum wage at
thirty dollars if they do to choose to go forward
with that. Let's take a quick break here on the
financial exchange when we come up. When we come back,
full market recap with Wall Street Watches.
Speaker 1 (19:26):
Next, bringing the latest financial news straight to your radio
every day it's the Financial Exchange on the Financial Exchange
(19:48):
Radio Network. Time now for Wall Street. Watch a complete
look at what's moving market so far today right here
on the Financial Exchange Radio Network.
Speaker 4 (20:00):
It's a slightly pulling back after yesterday's strong rally as
investors react to a new batch of second quarter earnings
posted this morning. At the moment, the Dow is off
nearly three tenths of one percent or one hundred and
eighteen points, SMP five hundreds down four tenths of one
percent or twenty seven points, and the NASZAC is down
(20:21):
about half a percent or one hundred and two points.
Of Rusted two thousand is dipping by only a tenth
of a percent. Ten yere treasure reeled is flat at
four point one nine to four percent. In crude oil
down about one and a half percent, lower training its
sixty five dollars in thirty three cents. A barrel Ai
(20:41):
software company Pallenteer, seeing its stock surge nearly seven percent
after it reported revenue above one billion dollars for the
first time in its history, well above street expectations. Pallenteer
reported fifty three percent growth in earnings from US government
contracts for the previous quarter. Management also ras its annual
(21:01):
revenue outlook. Meanwhile, shares in telehealth company Hymns and Hers
falling six percent now after its quarterly revenue missed expectations.
The company had a challenging breakup with Novo Nordisk back
in June related to the platform sales of copycat weight
loss drugs. Elsewhere, Pfizer reported better than expected quarterly results
and lifted its annual profit guidance. The drugmaker said its
(21:24):
guidance absorbs the impact of the currently imposed teriffs from China,
Canada and Mexico, as well as potential price chart changes
this year. Pfizer up by four percent. Caterpillar posted mixed
quarterly results and said it expects incremental teriffs to knock
one point three to one point five billion dollars off
its bottom line for the year. Shares are pulling back modestly.
(21:47):
YOUM Brand excuse me, YOUM Brands is dropping about four
percent after the restaurant company reported quarterly earnings in revenue
that missed analysts expectations. As Pizza Hut and KFC reported
US same store sales declines and after Today's Clothes we'll
see earnings from AMD tomorrow morning ahead of the open, Novo, Nordisk, McDonald's, Disney,
(22:10):
Uber and Shopify will all report their earnings. I'm Tucker
Silva and that is Wall Street Watch. And in the
previous segment, we asked you the trivia question, what is
the largest monopoly breakup in US history? That would be
AT and T. Frank from Manchester, New Hampshire is our
winner today taking on the Financial Exchange showed T shirt.
(22:31):
Congrats to Frank and we played trivia every day here
in the Financial Exchange. See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (22:39):
Young Brands is a terrible parent company name. The only
thing that indicates the work in the food sector. You
know what he used to be, PEPSI something I don't know.
Speaker 3 (22:48):
Try Coon.
Speaker 2 (22:49):
Try Coon was the owner of KFC, Pizza, Hutt and
Taco Bell.
Speaker 3 (22:52):
Those three companies.
Speaker 2 (22:54):
Yeah, that's worse. Okay, try Con is worse than Young Brands,
but they're both bad. Give me some indication of what
you do, all right, I.
Speaker 4 (23:01):
Just call it Kintaco Bell like everybody does.
Speaker 2 (23:03):
Yeah, yeah, okay, I didn't. I didn't think of that.
That's a that's a great that's a great one because
Pizza Hut is not relevant anymore in that brand. It's
it's not KFC and Taco Bell. So can Taco bell
I like it?
Speaker 3 (23:14):
Or heart disease?
Speaker 2 (23:16):
Yeah, yeah, that's a little bit on the nose, but.
Speaker 3 (23:19):
Yeah, SUREFC is top five for me. But there is a.
Speaker 2 (23:25):
Peace in barons today. It's actually an interview with a
financial advisor, Jonathan Schenkman, and he shares some strategies that
he uses when people clients specifically panic, and I'll tell
you you know, none of this was groundbreaking for anyone
that works in this industry, but I do think it's
kind of educational to understand how financial advisors guide people
(23:47):
through because it is a big part of the job
in educating people on what is normal and abnormal in
markets and what to expect and then navigating when things
get hairy through that difficult period of time. And so
he has I think it's five different tips that he
uses with clients when they say, sell everything and put
(24:08):
it in cash because I'm terrified, and that can happen
in many different times. Anyone that has worked in this
business has dealt with it before. But five strategies that
I think would be useful whether you're an advisor or
just someone managing your own money, would be one pause
dollar cost averaging. So dollar cost averaging would be when
you're putting new money in that way, you're not selling,
(24:30):
you know, you're not sticking with your plan of continuing
to invest new money. And that's the whole point of
dollar cost averaging is buying more shares when markets are down.
But I'm with him. I would rather see somebody pause
that when times get tough, then sell all their stocks
and go to cash. Stop reinvesting dividends and income payments.
So many people will reinvest all the dividends they get paid,
(24:52):
and so you could pause that and have that paid
to cash instead. If all that fails, rebalancing to a
more conservative allocation. So that would be the Okay, I'm
not going all to cash, but I'm going some to cash.
Speaker 4 (25:04):
Uh.
Speaker 2 (25:04):
If that doesn't work, then divest proportionately. If you own
a combination of stocks, bonds, and commodities, then sell all
of them equally. And then I think the best advice
that he has on all of this is just sleep
on it, give it a day. Think about this before
you make a potentially life changing decision with your investment allocation.
Speaker 3 (25:22):
Can we go back to the first point. Yeah, that
seems very wrong headed to me, isn't the whole point
of my equities?
Speaker 2 (25:28):
Yes?
Speaker 3 (25:29):
And I know you said this, would you lead with that?
Speaker 2 (25:32):
If no, I would go in the opposite direction. Actually, yeah,
first thing, sleep on it. But if well, well, but
let's think about that. If somebody tells you you're you're
managing their money or or you're managing somebody your your
own money, and you're saying I want you to sell
everything and put it in cash, yes, I would rather
(25:53):
see you pause the dollar cost averaging than do that.
If it's between those two, I'm taking that. Yeah.
Speaker 3 (26:00):
But if they didn't know they could do the former
and they said, good idea, let's do both. Just yeah,
I mean you already said it perfectly. The whole point
of buying equities on a program consistently over decades is
to take advantage of soe those downturns.
Speaker 2 (26:13):
Yeah, that's the entire point of it. You don't want
to be dollar cost averaging into a market when when things.
Speaker 3 (26:18):
Seems really wrongheaded to me to lead with that anyway.
Speaker 2 (26:21):
Here would be my overall takeaway of why a financial
advisor or investment advisor should exist in the first place.
It shouldn't be to come to the rescue when things
are falling apart and you're demanding that everything get changed.
It should be assessing that up front. It should be
knowing you as an individual so well that they appropriately
(26:41):
ahead of time address what is going to be a
concern when the markets do fall apart because of I mean,
who the heck knows. Nobody saw COVID coming, but you know, like,
oh yeah, the person that I really didn't want got elected,
so I'm selling my stocks. The job of a financial advisor,
in my view, yes, should be to coach that person
when things are going wrong, but more importantly, to assess
(27:04):
all of this upfront with you and understand what you
are going to be willing to tolerate when it does
all fall apart, because anybody who's been doing this long
enough knows it's going to fall apart at some point,
and make that assessment upfront. If you have ever been
tempted by this, and by tempted by this, I mean
when the exact wrong thing happens at the wrong time
(27:24):
and you feel like you're losing everything, the temptation button
to hit the sell button and go and execute that.
If you've ever felt like nobody has put that initial
work upfront to understand what your tolerance and expectations are,
please give the folks at are I'm Strong Advisory Group
a call. Yes, there are moments where people have that
(27:45):
panic button and it is definitely the job of a
financial advisor to assess that. But more importantly it's to
work with you upfront before you start investing in a
you know who knows portfolio of God knows what what
you're going to be comfortable doing down on the road
when it does fall apart. If you have questions like that,
please give the folks at Armstrong a call. The numbers
(28:05):
eight hundred three nine three for zero zero one again
Armstrong Advisor Group Free consultation eight hundred three nine three
for zero zero one.
Speaker 1 (28:15):
The proceeding was paid for by Armstrong Advisory Group, a
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Speaker 2 (28:30):
Well it happened again, I got a call from somebody
I know last week that they came home and their
spouse was on the computer and on the phone with
a Microsoft tech support person who, by the time they
got home and checked on this situation, had already given
out social Security number data, birth home address, and was
(28:51):
on the verge of giving out bank account to details
and investment account to details to a person who unsurprisingly
was not a Microsoft tech support person, and they had
hacked their computer given them a number two dial saying
that they were tech support and there were a number
of viruses detected on their you know PC, and that
the thing was compromised. Fortunately, it doesn't look like they
(29:14):
got access to funds or anything like that. But according
to the Pew Research Center, seventy three percent of adults
have experienced some kind of online scam or attack. Now,
the most common one is one that I think most
of us have dealt with. They say only forty eight
percent of people have dealt with this. But it's online
hackers gaining access to a credit or debit card information
(29:35):
and making fraudulent chars. I don't know if it was
online hackers for me, but has anyone not had a
fraudulent charge on their credit card before. To me, that's
like everyone debit someone debit. You ever have a fake
charge on your credit card? I mean, yeah, that seems
like everybody to me. But other areas of you know, fraud.
(29:57):
Thirty six percent of respondents had bought an item online
that turned out was counterfeit or never arrived and they
couldn't get a refund. Twenty nine percent of people had
personal online account that was taken over access without permission.
Twenty four percent said a scam email, text, messenger call
led them to give away personal information, ten percent said
(30:17):
ransomware blocked use of their computer until they paid money,
and seven percent gave money online to a fake investment opportunity.
Any of those numbers are far too high. Any of
them are far far too high. Unfortunately, this is nothing new.
I'm also you know, while I'm tempted to say, hey,
(30:40):
family members of older Americans, you need to help them out.
And that was the case that I dealt with recently,
is the older person who was starting to deal with
the cases of dementia and you know, that type of
thing was going on. Unfortunately, according to this research, that's
not the ex In fact, three quarters of adults under thirty,
(31:03):
as well as those thirty to forty nine, fifty to
sixty four, all of them reporting three quarters or more
of them reporting having fallen for this type of scam
or attack on them. And so yes, I think the
most vulnerable are the ones that we need to focus
on here because they're also the most likely to fall
for the worst parts of these attacks and give out
(31:24):
the really, really bad information. But yeah, I mean, you've
got thirty year olds, You've got twenty year olds falling
for these things. I think it's different types of scams
that they fall for, but they are falling for them.
And I don't know what advice to give other than
to be hyper vigilant and aware of these. And if
you're not familiar with the type of scams that I've
(31:45):
described in any of these, then look them up and
understand them, because they happen every single day to very
smart people. That's my approach to all of this is
just assume that I am dumb enough to fall for
one of these, because anybody is apparently dumb enough to
fall for these. They can be very far.
Speaker 3 (32:04):
A link in an email, go into your account the
way you would if you were initiated or maybe that
is call the institution as if you were initiating the contact.
Yeah right, it's just as a rule, don't click a link.
Speaker 2 (32:15):
Yeah, there's just so many. If it says.
Speaker 3 (32:17):
Fidelity or Schwab or whatever, don't don't.
Speaker 2 (32:20):
And folks that are listening now that are working for
an employer, they know this, right because there is such
a trained on it.
Speaker 1 (32:26):
Right.
Speaker 3 (32:26):
You spend a lot of money as an employer training us,
and we're still screw up.
Speaker 2 (32:29):
But you know, think about that person that's been out
of the workforce for a decade, forget about it, even
if they're even if they're only sixty six years old,
they're retired. Really, it doesn't matter.
Speaker 3 (32:39):
It's it's it's a turkey shit.
Speaker 2 (32:40):
It changes so rapidly that I might believe.
Speaker 3 (32:45):
We are trained, Mike, and we fall for it. Here
it worked. Now I think the phishing challenge, so called
fishing show, they're getting increasingly unfair. Like now, even reporting
one can you could fall for it by opening it up.
So my our strategy now many of it here at work,
I'm informing you on the air, is just to ignore
these emails completely. Don't report them, don't open an email,
(33:06):
go into somebody's office if you got an email from
them that is not in the usual format or has
an unusual request in and talk about it face to face.
And the same is true of your relationship with a
bank or other institution.
Speaker 2 (33:19):
Let's take a quick break here on the Financial Exchange.
When we come back, Stack Roulette.
Speaker 1 (33:24):
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Speaker 4 (34:04):
This segment of The Financial Exchange brought to you in
part by the US Virgin Islands Department of Tourism. Three
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Speaker 2 (34:32):
It is time now for some stack roulette, Mark, what
do you have for ye?
Speaker 3 (34:36):
Tesla's struggles in Europe in particular, continue, Mike, and I
hope I'm not repeating a story that was reported earlier,
because this comes from the Financial Times and it's several
hours stale. But anyway, I'm too far into it. Sales
of Teslas, which are all obviously electric, plummeting sixty percent
according to the Financial Times in the UK, which I
(34:57):
assume is you know, England, Scotland and all those other
m hm former countries that England is subjugated and brutalized
over the centuries.
Speaker 2 (35:07):
Has that relevant to electric vehicle cars?
Speaker 3 (35:09):
It isn't, Mike. I just felt the need to add
some color to the story for those in our audience
who might appreciate it.
Speaker 2 (35:15):
You know, it seems like the appropriate thing for the
board to do here. Then give give you.
Speaker 3 (35:22):
Nine square With plummeting sales somewhat tarnished, perhaps slowly recovering reputation,
or maybe not I don't have a good read on that. Idrish,
what was your reaction to that award?
Speaker 2 (35:33):
Uh is in need for better government?
Speaker 3 (35:36):
Is it scream and need for better governance? Governance?
Speaker 1 (35:38):
Excuse me?
Speaker 2 (35:39):
I think it was probably a necessary uh, a necessary
evil in their view, which is, yeah, sales are not
going terribly well. But imagine how badly sales would be
going if we had all the current headwinds and Elon
must decided not to work here anymore. That that would
be my guess as to why they were twenty nine
(36:00):
billion dollars in grants at the same time that the
stock is down nineteen percent a year of to date's
He's just.
Speaker 3 (36:07):
The indispensable man. They don't have a choice, I mean
without him.
Speaker 2 (36:10):
When you think Tesla, you think Elon Moscow. Yeah. I
don't think there's any single company. I'm racking my brain.
Is there any single company you can think of where
the CEO is so inextribly tied.
Speaker 3 (36:20):
To Armstrong Advisory Group?
Speaker 2 (36:22):
Yeah? Now you can replace me with Meta Armstrong. There's
a ton of us.
Speaker 3 (36:25):
That's a good Meta.
Speaker 1 (36:28):
Uh.
Speaker 3 (36:28):
You know one yesterday I never met before.
Speaker 2 (36:30):
Yes, I work with you.
Speaker 3 (36:31):
Got thank you?
Speaker 2 (36:32):
The zuck I suppose you.
Speaker 3 (36:34):
Think, sure, okay, Zuck is jeez.
Speaker 2 (36:40):
All right, I'm not. Yes, When I think of Facebook
and Meta, I do think of Mark Zuckerberg, But I
think the shareholders would be more tolerant of a change
of CEO there than they would be a Tesla disagree.
Speaker 3 (36:54):
Okay, okay, yeah, no, it is that that that's a
great question. Bill Gates was not as closely as he
was associated with Office. We knew that he wasn't the
sole architect, even though he was a coder and a
visionary in many ways.
Speaker 2 (37:08):
In I mean Jobs and Apple, I think was yeah,
but we knew he was.
Speaker 3 (37:11):
He was a sales guy now and he wasn't. He
wasn't a tech, he wasn't indispensable. Well, I shouldn't say that. Yeah,
it's hard to These things are not easily defined.
Speaker 2 (37:20):
I can't. I will say that I can't think of
any current there were concerns. I can't think of any
currently that are more strategically important to the company than
Elon Musk seems to be to Tesla. I agree, Mark Tucker.
The only one that I think is even close is
the Zuck with Facebook and and Meta in particular. But yeah,
to me, it doesn't rise there, Jamie Diamond at JP Morgan. No,
(37:44):
there's nobody else in my view that quite rises to
that level. That's all the time that we have for
today's edition. To the financial exchange markets remaining in negative territory,
although diversifying out a little bit here the NASDAC now
off six tenths of a place point one hundred and
twenty eight points, S and P down half a percent,
and the Dow Jones Industrial Average AWFU one hundred and
(38:06):
seven points, or one quarter of one percent. We'll be
back out of tomorrow, folks, have a great rest of
your day.
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(01:06):
Mike Armstrong and Mark Vandetti.
Speaker 2 (01:13):
Good morning, Happy Tuesday, Welcome back to the Financial Exchange.
It is Mike, Mark and Tucker with you on a
Tuesday where the S and P five hundred is leading
the way down, off twenty eight points a little bit
more than four tens percent, but Nasdaq and Dow also
in negative territory. That's after a bit of a roller
coaster over the last couple of trading sessions. Friday, you
(01:34):
had markets off by more than one percent, Yesterday you
had them make up all of those losses. And today
we've got a lack of big new data and markets
taking a bit of a breather here, and you know,
they have been bouncing around kind of all over the place.
We opened in mixed territory and now pretty firmly in
negative territory. Later this week we will continue to hear
(01:57):
from a number of large companies regarding their earn. Already
this morning we heard from Caterpillar, among others, McDonald's as
well as Walt Disney and Uber. Will go tomorrow and
we'll have more throughout the course this week. But in
terms of big, heavy hitting earnings, a lot of those
came last week. The next one to go. I think
(02:17):
the only one I can think of that remains out
there would be in video, which is another few weeks
away here. So but what we will be hearing is
from a number of Again, this is why this stuff
remains interesting. While these companies like McDonald's, like Uber are
not the biggest market movers out there, they're all large employers.
(02:39):
They have, you know, thousands of employees across the country.
They interact with you and me every day and oftentimes
have notable and interesting things to say about the state
of the economy, even if they do not end up
moving markets a whole lot in one direction or another.
Our top story of the hour remains the Friday jobs report.
It was kind of the culmination of a week's worth
(03:00):
of heavy data. We got four earnings reports from Microsoft, Apple, Meta, Facebooks,
Pair and Company, as well as Amazon. Mixed on some
of those results. Microsoft and Meta were pretty solid. Amazon
and Apple were a little bit weaker, or at least
(03:21):
that was the overall interpretation. We got a slew of
jobs data, and I guess I'm going to try and
summarize first the jobs data before we get into the
president's reaction to it, which came Friday afternoon. So we
had a Joltz Report, which is the Job Opening's Labor
Turnover Survey. We had our weekly jobless claims data, and
(03:42):
then we had this Friday Jobs Report and the Friday
Jobs Report itself, we were expecting around one hundred thousand
jobs to get created. We expected the unemployment rate to
bump up to four point two percent from its previous
four point one percent. Everything that we got about the
month of July from this report was well within the
margin of error. When we talk about these because remember
(04:02):
what they are, they're surveys. They are not measuring the
number of people getting paid. They are not getting the
data from the Social Security Administration and reporting that. No,
they're going to businesses and they're going to household and
they're surveying them and they ask them how many people
did you hire, how many people did you fire, where
did you move wages, what industry do you employ in
et cetera. And so the report that we got for
(04:24):
July was fine. At least that was my interpretation. Mark,
would you have any different conclusion, You know, a creation
number of seventy thousand versus one hundred thousand compared to
the estamates it.
Speaker 3 (04:35):
Was well with the so called confidence interval, which is
a function of sample size and how confident you want
to be, is plus or minus. I think it's one
hundred and thirty, which means if the number were actually zero,
the truth if the reported number called a point estimate.
If you're interested, and we use the word statistic we
use the word estimate. Those aren't just synonyms for number
to a statistician, those numbers, which I am not. But
(04:57):
in economics you get a little bit of that obviously,
and the people can alculating these are economics people, not
statisticians necessarily. I think there might be a couple of
people with PhDs in math and math statistics. But anyway,
you learn to take it with a grain of salt.
You should really be reading the so called confidence interval
and not hyper focused on the point estimate. And that's
not our fault. Because the media reports seventy three thousand
(05:20):
something to that effect, right, new jobs created, We think,
oh god, that is such a precise number. And sometimes
sometimes economists with a sense of humor even give you
a decimal place. The unemployment rate is four point two percent,
that it holds under very specific now they don't revise that,
so that may not be the best example. But inflation
coming in at point zero three two.
Speaker 2 (05:41):
One, it's bloony. It's a survey.
Speaker 3 (05:43):
I wouldn't cut Mike. Let's not use the word. Calling
you a bolooney will stoke the sure concerns that this
data is just fudged based on whoever is in office.
I don't think the great unemployment numbers under Trump one
were blooney. I don't think the great unemployment numbers to
the extent that we had them under Clinton or pick
your president. I don't think any of them were bolooney.
(06:03):
These people are career researchers and they are dedicated to
getting go ahead.
Speaker 2 (06:10):
The blooney implies that they're made up.
Speaker 3 (06:11):
I know you were just being flipp I'm not criticizing.
Speaker 2 (06:13):
A numbers themselves are purely estimates.
Speaker 3 (06:16):
They're estimates. That's why you get a confidence interval, and
nobody hides the damn confidence interval. It's in the report.
You got to go to the footnotes. The media doesn't
know how to read these because they don't know what
one is. No offense, I mean, you need a background
in this stuf. It's not easy that's why you go
to school for four years. If you do graduate school,
it's additional two. If you get your PhD, it's an
additional five to seven, depending on how long you can
milk that. So take it with a grain of salt.
(06:37):
But it's not entirely made up. Suggestions to the contrary
are not helpful.
Speaker 2 (06:41):
So it was not the July jobs report that President
Trump found issue with. What he found issue with was
the revisions to the May and June jobs reports, because
those two combined showed an economy that in the spring
looked a lot different than what we previously understood from
those same jobs reports. Effectively, we went from one hundred
plus thousand jobs created per month in those two months
(07:03):
to down to about twenty five thousand jobs created. That
would indicate something that is a fair bit weaker than
was previously understood. But I would also say lined up
fairly concisely with some other data points that we were seeing.
For instance, in May and June, we saw an uptick
in the number of jobless claims people filing for unemployment,
(07:25):
and it didn't show up in these other surveys. But
then we got these revisions, and you say, oh, okay,
that actually lines up fairly well. It also contributed to
now the Federal Reserve, or at least those who make
bets on what the Federal Reserve is going to do,
thinking that, hey, a rate cut is more likely. In
all this time period, nothing about those revisions, to me,
(07:45):
by the way, indicated that we are currently in a recession.
I think anybody saying that and looking at those revisions
and saying, look out, the president has navigated us into
recession now because the Bureau of Labor City six reported
twenty five thousand jobs created, I think that's an overstate.
Speaker 3 (08:01):
I will say that slow downs and payroll growth do
tend to precede recession. So we went from a couple
of hundred thousand jobs two years ago on average to
one hundred and change a little less than that last
year on average, and this year. I don't even know
what the six month average is forgive me, but if
it's eighty thousand, I'd be surprised. Sure, so the economy
could be slowing. The pattern is consistent with that, yep,
But the unemployment rate is still low, and GDP growth
(08:23):
was strong, and the stock market is roaring, right. I
just cherry picked a few indicators. Yeah, they're pretty representative.
Speaker 2 (08:29):
And look, there are other indications, like during the Biden
administration that also indicator recession. We talked a lot about
the SAM rule.
Speaker 3 (08:36):
We effectively at a recession in twenty twenty two. GD
contracted payroll growth contracted, six month inflation adjusted spending was negative.
It wasn't necessarily his fault, just like any slow down
now sure isn't necessarily the Trump administrations not, even though
you might blame tariffs, and there is an adjustment to
tariffs that's to be expected.
Speaker 1 (08:53):
Good.
Speaker 2 (08:54):
So what the president did was accused the chief of
the BLS of effect of fudging the numbers last year.
I don't know that he made accusations of doing so
this year, but said that during the presidential run between
he and Kamala Harris, they were fudging the numbers to
make the economy look better. I have to say that
(09:14):
I'll remain open and if he's going to go down
that route and has evidence to present that that is
the case, which I am very skeptical of, then we
should hear about it and that person should be prosecuted.
Why I think it is incredibly unlikely is because the
person who he fired does not do everything. At the
Bureau of Labor Statistics, there are over two thousand employees
(09:37):
there who are in charge of gathering the data, compiling it,
putting together the statistics. And I just tend to think
that it is very difficult to have a conspiracy within
the BLS where they are making up of datason.
Speaker 3 (09:51):
Let's not even go He doesn't think they were really fudged.
Speaker 2 (09:53):
He was just that's what he said, So I need
to take it.
Speaker 3 (09:58):
President went to Wharton, he knows better. He did it
for theatrical and political purposes.
Speaker 1 (10:03):
It was.
Speaker 3 (10:03):
It was a mistake. But if it results in more
transparency about the errors in these and there is transparency,
it's not only anybody's hiding it. I'll just go back
to my original point and say, these are statistics, which
by definition means we don't know the true number. It's
like taking any average. You know, there's why dispersion around it.
We pay there's a there's a teachable it's a teachable
moment here. Again, I think that the political response was
(10:26):
probably a mistake because now it undermines confidence in any
federal data. Well, maybe they're just fudging it. I wish
the President hadn't done that. There is a teachable element
to this, though, and it is don't take these statistics
as gospel or as scientific fact. They aren't.
Speaker 2 (10:41):
Here's how this feels. Here's how this reads to me
and reminds me of In August of twenty twenty three, uh,
the Some Department of the Chinese Communist Party released an
employment report that indicated twenty five percent youth unemployment. Imediately,
the Chinese Communist Party came out and said, we are
(11:02):
no longer reporting data on youth unemployment. And when you
have a moment like this, and you know, everybody looked
at that and said, okay, yeah, par for the course.
Here goes China just fudging the numbers again and hiding
data we know.
Speaker 3 (11:14):
We know they do, because we have reams of alternative
data that contradict them already.
Speaker 2 (11:19):
And the problem that for China in that regard is
nobody would trust their currency to conduct trade in No
one conducts, no one trusts their data about their economy,
and it hampers investment in that country. It's been okay
for China, they have found other ways to develop as
a society, but certainly nobody is going to trust that
government as a useful independent source of data. We didn't
(11:42):
do that here in the United States. I'm not saying
that President Trump's firing of the BLS is akin to
what the Chinese did back in August of twenty twenty three,
but it is the type of reaction that you see
from It's not the type of reaction usually see from
the United States. We are very much have built a
reputation on producing reliable, independent data from agencies like this,
(12:04):
and serious people who study it don't think that there's
any chance of manipulation by the chick.
Speaker 3 (12:10):
Can we pick up on this?
Speaker 1 (12:11):
Sure? Is it?
Speaker 2 (12:12):
Let's take a quick break. When we come back, we're
gonna have trivia next on the Financial Exchange.
Speaker 1 (12:16):
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(12:38):
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Speaker 4 (13:00):
It's time for trivia here in the Financial Exchange and
on this day a year ago, Google lost is an
important US anti trust case involving its search engine. With
the judge finding quote, Google is a monopolist and it
has acted as one to maintain its monopoly. A breakup
of the company hasn't happened yet, but it is still
on the table. So trivia question today, what is the
(13:23):
largest monopoly breakup in US history?
Speaker 2 (13:26):
Once again?
Speaker 4 (13:26):
What is the largest monopoly breakup in US history? Be
the sixth person today to text us at six one
seven three six two thirteen eighty five with the correct answer,
and you win a Financial Exchange Show T shirt.
Speaker 2 (13:40):
Once again.
Speaker 4 (13:41):
The six correct response to text us 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 dot com.
Speaker 2 (13:53):
I take issue with the question, Okay, the largest could
mete a lot of things that we're talking about the
fatas CEO. Are we talking about the most employees, biggest
market cap? What's our definition? Here of largest breakout. I oh, man,
I'll take it up with Ben when he comes back.
Speaker 3 (14:11):
I didn't write whatever.
Speaker 2 (14:15):
I don't think it means fat as CEO. But you know,
the other ones could be serious contenders. Mark, we were
talking about the firing of the head of the Balerau
of Labor Statistics. I think we want to bring it
home though. Why Why does it matter that the president?
The President has removed several Biden and other appointees from
(14:36):
their positions since the beginning of this year. We have
not made a big deal of many of them. We've
barely discussed several of them other than the context of
will it be legally allowed? Why are we making a
big deal of this one? Why are investment bankers, economists
and folks from frankly, both sides of the aisle in
(14:56):
that markets and economic circle making a big deal of
this one?
Speaker 3 (15:00):
It calls into question potentially because we don't know what
the implications of the change in leadership there will be.
It calls into question the reliability of economic data which
are used to price assets. If you don't know what
the inflation rate is, which BLS I think is struck
pointed out yesterday also calculates, and the Jolts survey, by
the way, and the weekly unemployment numbers.
Speaker 2 (15:21):
So your cost of living adjustment on Social Security is
determined by what the.
Speaker 3 (15:26):
More importantly for invent maybe not more importantly forgive me,
because that may be the most important thing, the most
important statistic to a lot of listeners. But if you
buy treasure inflation protected securities, they're indexed using CPI, which
BLS calculates. Look, it would take a lot to fudge
those numbers, and I don't think the President wants the
numbers fudged. I think he was gently. Look, he's acting
(15:47):
like a CEO. Sure, if your CFO comes out and
undermines you by revising past whatever profits, you might be
irate enough to take action just for so. He's behaving
like a private sector dictator, and I think he would
like that term. I don't mean dictator critically, I mean
someone who can with a snap of her fingers. Yeah,
(16:10):
a CEO can do that. I think he's acting like
a CEO. Maybe had had more time. He did it
like two and a half hours after their report game out.
I'm laughing because you know he was poed and he said,
would you this woman can't get that. I don't mean
that's chauvinistic, but you know what I mean. This person
can't even get the numbers right. Look at the size
of these revisions. If somebody had just taken him out
for a walk and said, look, mister President, these revisions
(16:32):
are actually pretty typical. Here's why responses come in late.
There's a perfectly rational reason for this. It's within the
error estimates, which you're published in the footnotes. You know,
take the escalate.
Speaker 2 (16:44):
Yeah, I think there are some reasonable reasons to be critical,
Like the response rates on these surveys.
Speaker 3 (16:50):
Have plum that's appalling lately, so you're gonna get bigger
revisions that And that's a real criticism of this bureau
Labor statistics would be you need to find ways to
get these.
Speaker 2 (17:01):
Well, you don't think they are. I'm sure they are,
But that's my point is there is reason to be
critical of the revisions. The reason that I'm critical of
the visions is they wouldn't have happened if the response
rate was higher, So figure out how to improve that.
But in the absence of that, where this is where
we are, and I'm with you, I don't think it
(17:22):
does anything immediately. The question is if you start to
lose the confidence in the long term reliability of US
government published statistics, which this doesn't do, it weakens the
reputation of the United States as the best place to invest.
Speaker 3 (17:43):
You can't make reliable estimates of the future value of
security without estimates of without pricing in things like inflation
and the state of the economy. We don't know what
the result of this is going to be. It is
a little bit shocking. I was shaken by it. I've
never seen a president remove somebody because they thought that
the data that came out two and a half hours
before was unfavorable. So I was shocked by it. I'm
(18:03):
not trying to minimize it, but I've had a few
days to think about it. I saw the market's reaction yesterday.
Clearly the market is in a well, let's wait and
see what this means for the reliability the integrity of
US economic data. Maybe you'll appoint someone who's respected universally,
and maybe they'll implement some useful changes. The thing is,
I don't have an idea because it's not my sub field.
(18:25):
I don't have an idea what those changes are.
Speaker 2 (18:28):
Uh. New York Times ass minimum wage in LA could
rise to thirty dollars an hour just enough for too much?
I guess we'll have to wait to find out, But
mighty think what happen would be too much? Well, they
did minimum wage of twenty five bucks an hour for
fast food and.
Speaker 3 (18:44):
You didn't have massive unemployment interestingly right.
Speaker 2 (18:46):
No, but you did have fewer people working in fast food.
Pretty substantial.
Speaker 3 (18:51):
You would expect that though labor gets more expensive, you
substitute capital.
Speaker 2 (18:54):
For ascisely, what would happen? And so should you raise
the minimum wage in California's thirty bucks an hour, I,
as a c would hire fewer people, relocate more people
outside of California, and automate more would be my god.
Speaker 3 (19:06):
It's interesting. There is a point beyond which people are
going to start to substitute away from labor. It just
depends on the local market.
Speaker 2 (19:12):
Yep. So good luck with Los Angeles minimum wage at
thirty dollars if they do to choose to go forward
with that. Let's take a quick break here on the
financial exchange when we come up. When we come back,
full market recap with Wall Street Watches.
Speaker 1 (19:26):
Next, bringing the latest financial news straight to your radio
every day it's the Financial Exchange on the Financial Exchange
(19:48):
Radio Network. Time now for Wall Street. Watch a complete
look at what's moving market so far today right here
on the Financial Exchange Radio Network.
Speaker 4 (20:00):
It's a slightly pulling back after yesterday's strong rally as
investors react to a new batch of second quarter earnings
posted this morning. At the moment, the Dow is off
nearly three tenths of one percent or one hundred and
eighteen points, SMP five hundreds down four tenths of one
percent or twenty seven points, and the NASZAC is down
(20:21):
about half a percent or one hundred and two points.
Of Rusted two thousand is dipping by only a tenth
of a percent. Ten yere treasure reeled is flat at
four point one nine to four percent. In crude oil
down about one and a half percent, lower training its
sixty five dollars in thirty three cents. A barrel Ai
(20:41):
software company Pallenteer, seeing its stock surge nearly seven percent
after it reported revenue above one billion dollars for the
first time in its history, well above street expectations. Pallenteer
reported fifty three percent growth in earnings from US government
contracts for the previous quarter. Management also ras its annual
(21:01):
revenue outlook. Meanwhile, shares in telehealth company Hymns and Hers
falling six percent now after its quarterly revenue missed expectations.
The company had a challenging breakup with Novo Nordisk back
in June related to the platform sales of copycat weight
loss drugs. Elsewhere, Pfizer reported better than expected quarterly results
and lifted its annual profit guidance. The drugmaker said its
(21:24):
guidance absorbs the impact of the currently imposed teriffs from China,
Canada and Mexico, as well as potential price chart changes
this year. Pfizer up by four percent. Caterpillar posted mixed
quarterly results and said it expects incremental teriffs to knock
one point three to one point five billion dollars off
its bottom line for the year. Shares are pulling back modestly.
(21:47):
YOUM Brand excuse me, YOUM Brands is dropping about four
percent after the restaurant company reported quarterly earnings in revenue
that missed analysts expectations. As Pizza Hut and KFC reported
US same store sales declines and after Today's Clothes we'll
see earnings from AMD tomorrow morning ahead of the open, Novo, Nordisk, McDonald's, Disney,
(22:10):
Uber and Shopify will all report their earnings. I'm Tucker
Silva and that is Wall Street Watch. And in the
previous segment, we asked you the trivia question, what is
the largest monopoly breakup in US history? That would be
AT and T. Frank from Manchester, New Hampshire is our
winner today taking on the Financial Exchange showed T shirt.
(22:31):
Congrats to Frank and we played trivia every day here
in the Financial Exchange. See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (22:39):
Young Brands is a terrible parent company name. The only
thing that indicates the work in the food sector. You
know what he used to be, PEPSI something I don't know.
Speaker 3 (22:48):
Try Coon.
Speaker 2 (22:49):
Try Coon was the owner of KFC, Pizza, Hutt and
Taco Bell.
Speaker 3 (22:52):
Those three companies.
Speaker 2 (22:54):
Yeah, that's worse. Okay, try Con is worse than Young Brands,
but they're both bad. Give me some indication of what
you do, all right, I.
Speaker 4 (23:01):
Just call it Kintaco Bell like everybody does.
Speaker 2 (23:03):
Yeah, yeah, okay, I didn't. I didn't think of that.
That's a that's a great that's a great one because
Pizza Hut is not relevant anymore in that brand. It's
it's not KFC and Taco Bell. So can Taco bell
I like it?
Speaker 3 (23:14):
Or heart disease?
Speaker 2 (23:16):
Yeah, yeah, that's a little bit on the nose, but.
Speaker 3 (23:19):
Yeah, SUREFC is top five for me. But there is a.
Speaker 2 (23:25):
Peace in barons today. It's actually an interview with a
financial advisor, Jonathan Schenkman, and he shares some strategies that
he uses when people clients specifically panic, and I'll tell
you you know, none of this was groundbreaking for anyone
that works in this industry, but I do think it's
kind of educational to understand how financial advisors guide people
(23:47):
through because it is a big part of the job
in educating people on what is normal and abnormal in
markets and what to expect and then navigating when things
get hairy through that difficult period of time. And so
he has I think it's five different tips that he
uses with clients when they say, sell everything and put
(24:08):
it in cash because I'm terrified, and that can happen
in many different times. Anyone that has worked in this
business has dealt with it before. But five strategies that
I think would be useful whether you're an advisor or
just someone managing your own money, would be one pause
dollar cost averaging. So dollar cost averaging would be when
you're putting new money in that way, you're not selling,
(24:30):
you know, you're not sticking with your plan of continuing
to invest new money. And that's the whole point of
dollar cost averaging is buying more shares when markets are down.
But I'm with him. I would rather see somebody pause
that when times get tough, then sell all their stocks
and go to cash. Stop reinvesting dividends and income payments.
So many people will reinvest all the dividends they get paid,
(24:52):
and so you could pause that and have that paid
to cash instead. If all that fails, rebalancing to a
more conservative allocation. So that would be the Okay, I'm
not going all to cash, but I'm going some to cash.
Speaker 4 (25:04):
Uh.
Speaker 2 (25:04):
If that doesn't work, then divest proportionately. If you own
a combination of stocks, bonds, and commodities, then sell all
of them equally. And then I think the best advice
that he has on all of this is just sleep
on it, give it a day. Think about this before
you make a potentially life changing decision with your investment allocation.
Speaker 3 (25:22):
Can we go back to the first point. Yeah, that
seems very wrong headed to me, isn't the whole point
of my equities?
Speaker 2 (25:28):
Yes?
Speaker 3 (25:29):
And I know you said this, would you lead with that?
Speaker 2 (25:32):
If no, I would go in the opposite direction. Actually, yeah,
first thing, sleep on it. But if well, well, but
let's think about that. If somebody tells you you're you're
managing their money or or you're managing somebody your your
own money, and you're saying I want you to sell
everything and put it in cash, yes, I would rather
(25:53):
see you pause the dollar cost averaging than do that.
If it's between those two, I'm taking that. Yeah.
Speaker 3 (26:00):
But if they didn't know they could do the former
and they said, good idea, let's do both. Just yeah,
I mean you already said it perfectly. The whole point
of buying equities on a program consistently over decades is
to take advantage of soe those downturns.
Speaker 2 (26:13):
Yeah, that's the entire point of it. You don't want
to be dollar cost averaging into a market when when things.
Speaker 3 (26:18):
Seems really wrongheaded to me to lead with that anyway.
Speaker 2 (26:21):
Here would be my overall takeaway of why a financial
advisor or investment advisor should exist in the first place.
It shouldn't be to come to the rescue when things
are falling apart and you're demanding that everything get changed.
It should be assessing that up front. It should be
knowing you as an individual so well that they appropriately
(26:41):
ahead of time address what is going to be a
concern when the markets do fall apart because of I mean,
who the heck knows. Nobody saw COVID coming, but you know, like,
oh yeah, the person that I really didn't want got elected,
so I'm selling my stocks. The job of a financial advisor,
in my view, yes, should be to coach that person
when things are going wrong, but more importantly, to assess
(27:04):
all of this upfront with you and understand what you
are going to be willing to tolerate when it does
all fall apart, because anybody who's been doing this long
enough knows it's going to fall apart at some point,
and make that assessment upfront. If you have ever been
tempted by this, and by tempted by this, I mean
when the exact wrong thing happens at the wrong time
(27:24):
and you feel like you're losing everything, the temptation button
to hit the sell button and go and execute that.
If you've ever felt like nobody has put that initial
work upfront to understand what your tolerance and expectations are,
please give the folks at are I'm Strong Advisory Group
a call. Yes, there are moments where people have that
(27:45):
panic button and it is definitely the job of a
financial advisor to assess that. But more importantly it's to
work with you upfront before you start investing in a
you know who knows portfolio of God knows what what
you're going to be comfortable doing down on the road
when it does fall apart. If you have questions like that,
please give the folks at Armstrong a call. The numbers
(28:05):
eight hundred three nine three for zero zero one again
Armstrong Advisor Group Free consultation eight hundred three nine three
for zero zero one.
Speaker 1 (28:15):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (28:30):
Well it happened again, I got a call from somebody
I know last week that they came home and their
spouse was on the computer and on the phone with
a Microsoft tech support person who, by the time they
got home and checked on this situation, had already given
out social Security number data, birth home address, and was
(28:51):
on the verge of giving out bank account to details
and investment account to details to a person who unsurprisingly
was not a Microsoft tech support person, and they had
hacked their computer given them a number two dial saying
that they were tech support and there were a number
of viruses detected on their you know PC, and that
the thing was compromised. Fortunately, it doesn't look like they
(29:14):
got access to funds or anything like that. But according
to the Pew Research Center, seventy three percent of adults
have experienced some kind of online scam or attack. Now,
the most common one is one that I think most
of us have dealt with. They say only forty eight
percent of people have dealt with this. But it's online
hackers gaining access to a credit or debit card information
(29:35):
and making fraudulent chars. I don't know if it was
online hackers for me, but has anyone not had a
fraudulent charge on their credit card before. To me, that's
like everyone debit someone debit. You ever have a fake
charge on your credit card? I mean, yeah, that seems
like everybody to me. But other areas of you know, fraud.
(29:57):
Thirty six percent of respondents had bought an item online
that turned out was counterfeit or never arrived and they
couldn't get a refund. Twenty nine percent of people had
personal online account that was taken over access without permission.
Twenty four percent said a scam email, text, messenger call
led them to give away personal information, ten percent said
(30:17):
ransomware blocked use of their computer until they paid money,
and seven percent gave money online to a fake investment opportunity.
Any of those numbers are far too high. Any of
them are far far too high. Unfortunately, this is nothing new.
I'm also you know, while I'm tempted to say, hey,
(30:40):
family members of older Americans, you need to help them out.
And that was the case that I dealt with recently,
is the older person who was starting to deal with
the cases of dementia and you know, that type of
thing was going on. Unfortunately, according to this research, that's
not the ex In fact, three quarters of adults under thirty,
(31:03):
as well as those thirty to forty nine, fifty to
sixty four, all of them reporting three quarters or more
of them reporting having fallen for this type of scam
or attack on them. And so yes, I think the
most vulnerable are the ones that we need to focus
on here because they're also the most likely to fall
for the worst parts of these attacks and give out
(31:24):
the really, really bad information. But yeah, I mean, you've
got thirty year olds, You've got twenty year olds falling
for these things. I think it's different types of scams
that they fall for, but they are falling for them.
And I don't know what advice to give other than
to be hyper vigilant and aware of these. And if
you're not familiar with the type of scams that I've
(31:45):
described in any of these, then look them up and
understand them, because they happen every single day to very
smart people. That's my approach to all of this is
just assume that I am dumb enough to fall for
one of these, because anybody is apparently dumb enough to
fall for these. They can be very far.
Speaker 3 (32:04):
A link in an email, go into your account the
way you would if you were initiated or maybe that
is call the institution as if you were initiating the contact.
Yeah right, it's just as a rule, don't click a link.
Speaker 2 (32:15):
Yeah, there's just so many. If it says.
Speaker 3 (32:17):
Fidelity or Schwab or whatever, don't don't.
Speaker 2 (32:20):
And folks that are listening now that are working for
an employer, they know this, right because there is such
a trained on it.
Speaker 1 (32:26):
Right.
Speaker 3 (32:26):
You spend a lot of money as an employer training us,
and we're still screw up.
Speaker 2 (32:29):
But you know, think about that person that's been out
of the workforce for a decade, forget about it, even
if they're even if they're only sixty six years old,
they're retired. Really, it doesn't matter.
Speaker 3 (32:39):
It's it's it's a turkey shit.
Speaker 2 (32:40):
It changes so rapidly that I might believe.
Speaker 3 (32:45):
We are trained, Mike, and we fall for it. Here
it worked. Now I think the phishing challenge, so called
fishing show, they're getting increasingly unfair. Like now, even reporting
one can you could fall for it by opening it up.
So my our strategy now many of it here at work,
I'm informing you on the air, is just to ignore
these emails completely. Don't report them, don't open an email,
(33:06):
go into somebody's office if you got an email from
them that is not in the usual format or has
an unusual request in and talk about it face to face.
And the same is true of your relationship with a
bank or other institution.
Speaker 2 (33:19):
Let's take a quick break here on the Financial Exchange.
When we come back, Stack Roulette.
Speaker 1 (33:24):
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and iHeartRadio. Hit that subscribe button and leave us a
five star review. You're listening to the Financial Exchange Radio Network.
The Financial Exchange is now available every day from eleven
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Stay informed about the latest from Wall Street, fiscal policy
(33:47):
and breaking business news every day. The Financial Exchange is
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This is the Financial Exchange Radio Networks.
Speaker 4 (34:04):
This segment of The Financial Exchange brought to you in
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Speaker 2 (34:32):
It is time now for some stack roulette, Mark, what
do you have for ye?
Speaker 3 (34:36):
Tesla's struggles in Europe in particular, continue, Mike, and I
hope I'm not repeating a story that was reported earlier,
because this comes from the Financial Times and it's several
hours stale. But anyway, I'm too far into it. Sales
of Teslas, which are all obviously electric, plummeting sixty percent
according to the Financial Times in the UK, which I
(34:57):
assume is you know, England, Scotland and all those other
m hm former countries that England is subjugated and brutalized
over the centuries.
Speaker 2 (35:07):
Has that relevant to electric vehicle cars?
Speaker 3 (35:09):
It isn't, Mike. I just felt the need to add
some color to the story for those in our audience
who might appreciate it.
Speaker 2 (35:15):
You know, it seems like the appropriate thing for the
board to do here. Then give give you.
Speaker 3 (35:22):
Nine square With plummeting sales somewhat tarnished, perhaps slowly recovering reputation,
or maybe not I don't have a good read on that. Idrish,
what was your reaction to that award?
Speaker 2 (35:33):
Uh is in need for better government?
Speaker 3 (35:36):
Is it scream and need for better governance? Governance?
Speaker 1 (35:38):
Excuse me?
Speaker 2 (35:39):
I think it was probably a necessary uh, a necessary
evil in their view, which is, yeah, sales are not
going terribly well. But imagine how badly sales would be
going if we had all the current headwinds and Elon
must decided not to work here anymore. That that would
be my guess as to why they were twenty nine
(36:00):
billion dollars in grants at the same time that the
stock is down nineteen percent a year of to date's
He's just.
Speaker 3 (36:07):
The indispensable man. They don't have a choice, I mean
without him.
Speaker 2 (36:10):
When you think Tesla, you think Elon Moscow. Yeah. I
don't think there's any single company. I'm racking my brain.
Is there any single company you can think of where
the CEO is so inextribly tied.
Speaker 3 (36:20):
To Armstrong Advisory Group?
Speaker 2 (36:22):
Yeah? Now you can replace me with Meta Armstrong. There's
a ton of us.
Speaker 3 (36:25):
That's a good Meta.
Speaker 1 (36:28):
Uh.
Speaker 3 (36:28):
You know one yesterday I never met before.
Speaker 2 (36:30):
Yes, I work with you.
Speaker 3 (36:31):
Got thank you?
Speaker 2 (36:32):
The zuck I suppose you.
Speaker 3 (36:34):
Think, sure, okay, Zuck is jeez.
Speaker 2 (36:40):
All right, I'm not. Yes, When I think of Facebook
and Meta, I do think of Mark Zuckerberg, But I
think the shareholders would be more tolerant of a change
of CEO there than they would be a Tesla disagree.
Speaker 3 (36:54):
Okay, okay, yeah, no, it is that that that's a
great question. Bill Gates was not as closely as he
was associated with Office. We knew that he wasn't the
sole architect, even though he was a coder and a
visionary in many ways.
Speaker 2 (37:08):
In I mean Jobs and Apple, I think was yeah,
but we knew he was.
Speaker 3 (37:11):
He was a sales guy now and he wasn't. He
wasn't a tech, he wasn't indispensable. Well, I shouldn't say that. Yeah,
it's hard to These things are not easily defined.
Speaker 2 (37:20):
I can't. I will say that I can't think of
any current there were concerns. I can't think of any
currently that are more strategically important to the company than
Elon Musk seems to be to Tesla. I agree, Mark Tucker.
The only one that I think is even close is
the Zuck with Facebook and and Meta in particular. But yeah,
to me, it doesn't rise there, Jamie Diamond at JP Morgan. No,
(37:44):
there's nobody else in my view that quite rises to
that level. That's all the time that we have for
today's edition. To the financial exchange markets remaining in negative territory,
although diversifying out a little bit here the NASDAC now
off six tenths of a place point one hundred and
twenty eight points, S and P down half a percent,
and the Dow Jones Industrial Average AWFU one hundred and
(38:06):
seven points, or one quarter of one percent. We'll be
back out of tomorrow, folks, have a great rest of
your day.
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