January 9, 2026 • 38 mins
Mike Armstrong and Paul Lane discuss Trump telling Fannie and Freddie to buy $200B of mortgage debt. Why would he do that? GM takes $6B hit tied to EVs as demand sinks. Meta unveils sweeping nuclear-power plan to fuel its AI ambitions. Tech titans divided over whether to pay billionaire tax or flee California. Paul LaMonica (Barron's) joins the show to chat about Wealthfront's IPO.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is the Financial
Exchange with Mike Armstrong and Paul Lane, your exclusive look
at business and financial news affecting your day, your city,
(00:43):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting DAVFK dot Boston and making a donation today.
(01:03):
This is the Financial Exchange with Mike Armstrong, and Paul Lane.
Speaker 2 (01:11):
Good morning, Happy jobs Friday.
Speaker 3 (01:13):
Here from the Financial Exchange, we've got markets in positive
territory shifting into a higher gear.
Speaker 2 (01:18):
Here.
Speaker 3 (01:18):
SMP's up closing in on half percent, an ASDAC up
over half percent. Right now, it's Mike, Paul and Tucker
with you, and our top story of the day is
the jobs report that was released at nine thirty eight
thirty sorry am this morning, generally being received pretty positively.
Four point four percent unemployment rate, fifty thousand jobs created.
(01:42):
A few revisions made to previous reports as well, one
that made the November jobs picture not look quite as
weak with a revision down on the unemployment rate, another
making the October job situation look worse than it was,
with one hundred and seventy six hundred seventy three three
thousand jobs eliminated in the month of October. Investors seemed
(02:06):
to be taking this as a encouraging sign for the
labor market, one that will likely pause FED action on
interest rates at the next meeting later this month.
Speaker 2 (02:17):
Wage growth was fine.
Speaker 3 (02:20):
I'm just trying to think of any other big highlights
from this job's report, but I think that just about
summarizes it. The unemployment rate, which the FED and its
chairperson Drome Powell has themselves claimed to be the most
important thing from this report went down and that broke
the trend line and I think can be seen as
(02:41):
a positive story here, and it once again raises this
question is which direction is the labor market truly heading?
Because last year, sorry, two years ago, it showed signs
of flashing warning signs that you saw the unemployment rate
increase at a pretty quick pace, and we were left
there wondering, Hey, is this a sign of something new.
Speaker 2 (03:03):
Or is this a normalization?
Speaker 3 (03:06):
Lo and behold, it was a pretty clear normalization that
we got in twenty twenty four, twenty twenty five, we
saw similar warning signs, especially in the second half of
last year, when the job creation pace dramatically slowed the
unemployment rate continued to tick up. This would be the
first indication that once again we are seeing further normalization
(03:26):
rather than free fall. Yes, need some confirmation, but I
think that's what this report and a few of the
reports that we got over this week have indicated thus far.
Speaker 2 (03:36):
Anything else to add on jobs, Paul.
Speaker 4 (03:38):
No, I think you hit all the main points there.
Speaker 3 (03:40):
There were some rumors that perhaps the Supreme Court would
release their ruling on tariffs today. That has been clarified
that will not be happening, but literally could be any
day here.
Speaker 2 (03:51):
So we will see when we.
Speaker 3 (03:53):
Get an announcement from them on the lawsuits against the
Trump administration and their imposed tariffs. And overnight you had
a pretty big other move from the White House when
it comes to interest rates. So again clarifying how interest
rates typically float and work. The Federal Reserve generally uses
(04:15):
the Fed Fund's target rate as one of the tools
they use to affect the economy in different ways. And
they have this dual mandate of inflation and unemployment, and
they target it based on a number of their tools,
but the biggest one being the interest rates setting policy right,
and then also the statements that they make. Overnight, what
(04:35):
the President did was continue his talk of home affordability.
Earlier this week, he proposed banning large corporations from buying
single family homes. Today telling Fanny and Freddie Fanny May
and Freddie May to Freddie Mac to go and buy
two hundred billion dollars worth of mortgage debts. So let's
lay it out simply here. Why would you, as president
(04:58):
want these agencies to go and do this, plain and simple.
Speaker 4 (05:02):
If they are to buy more bonds, that eats up
the available inventory and should drive down interest rates for
the mortgages out the mortgage mortgage interest rates down, there
by affecting some of the supply side of things.
Speaker 3 (05:20):
So we have some recent experience with this. Back in
the early stages of COVID, the Federal Reserve embarked on.
Speaker 2 (05:27):
A bond buying program. Every month, they were buying tens
of billions.
Speaker 4 (05:31):
For fifty billions something in that.
Speaker 3 (05:34):
Yeah, and they're doing it every month, and they were
doing it on a schedule, and they were buying both
treasuries as well as government agency no hold on mortgage bonds,
I believe is what they were buying is mortgage backed
securities and treasure curds in order to artificially hold those
longer term yields down during an economic crisis. Generally, something
(05:55):
that is not, at least from what I can recall,
ever been commit by the White House to go and
do this and runs. I wouldn't say directly in contradiction
to what the FED is doing right now, but you know,
the Fed is talking about a pause in some of
their policies, and this is another government agency going out
there and trying to keep artificially interest rates lower.
Speaker 2 (06:18):
Now.
Speaker 3 (06:19):
I don't know how much success they're going to have
in this, to be clear, when we talk about two
hundred billion dollars, it is undoubtedly a large sum of money.
They have the cash on hand to be able to
do this. It's about two percent of the market.
Speaker 2 (06:32):
Yep. Unlike the Federal Reserve, the you.
Speaker 3 (06:36):
Know, these government agencies can't just print money and continue
this bond buying program and perpetuity. So might it bring
down mortgage rates a little bit in the short term? Yeah,
I think very clearly that is the intent here is, Hey,
if you add buyers to this market, then you know,
naturally the interest rate should come down just by supply
and demand. How much will it because you know today
(07:00):
you're seeing yields pop up a little bit, you know,
a slight increase in.
Speaker 2 (07:05):
Some of those.
Speaker 3 (07:05):
And so I think some open questions on how successful
this will be. But the theme here is pretty consistent.
The President wants to make home affordability.
Speaker 4 (07:16):
A big focus for twenty twenty six, a.
Speaker 2 (07:18):
Big focus for twenty twenty six.
Speaker 3 (07:19):
I think undoubtedly that is the message to take away
here other you know, just things that are noticeable with this.
It has been a goal of the president's to spin
these out of the government. These agencies have been under
much more direct government control since the Great Financial Crisis
and no weight. And the idea here was, Hey, maybe
(07:42):
we can ipo these things sometime in the future and
make these so that they are not so beholden to
government policy future governments. The idea was, yeah, maybe we
can move forward with an initial public offering of Fanny
and Freddy.
Speaker 2 (07:58):
That's taking a very big back seat with action like this.
Speaker 4 (08:01):
Certainly, certainly you would you would not think to be
embarking on this road of taking them public if you
wanted them to buy two hundred billion dollars of more.
Speaker 3 (08:09):
Absolutely, So, you know that is I think what comes
to mind with all this. There's a very clear intent.
So when you read that Trump, you know, President Trump
directing Fanny and Friday to buy two hundred billion dollars
worth mortgage debt. What's that mean? Plain and simple, trying
to bring down mortgage rates. Yep, some companies, by the way,
moving in response to this. Publicly traded companies are moving
(08:30):
up on this news. You do have you know some
mortgage lenders specifically moving pretty big on this rocket companies
loan depot rose rose in early trading.
Speaker 2 (08:40):
I don't know where they are now. And the yield
on the ten year Treasury currently.
Speaker 3 (08:43):
Down to four point one six percent, So again, mortgage
rates take a little while to update.
Speaker 2 (08:49):
I think that they do end up probably.
Speaker 3 (08:51):
Coming down on this, but how substantially and what and
in what time frame is a very big question. And okay,
so let's say we get mortgage rates down to five
point eight percent on this, it will make things more affordable, right,
I don't know that it changes the aer around home affordability.
(09:12):
I don't know where that threshold is, but I don't
think it's a five eight or five.
Speaker 4 (09:15):
Nine, No, you have I forget what the recent numbers
on it, but let's call at least it seems like
more than half of the country is still sitting with
those really desirable four percent or lower mortgages from yester
year of twenty nineteen, twenty twenty and that sort of era.
So getting it down to five eight, while that's an
improvement and perhaps would create some more transaction activity on
(09:37):
the buy side of things that decline is not enough
to do it. It may spark activity, but it's not
going to be the solution. What is brought up here
in another piece at a barons, which I think is
a good way to look at it, and we've mentioned
this on the show before. To me, the easiest way
to attack this issue would be in terms of legislation
and regulation. That would be while I recognize is that
(10:00):
many housing decisions are done at the local level, if
there could be policy changes that encourage further development of
housing or lower some of the parameters that are you know,
put together for putting mortgages in place, that would be
a good step to try and get some increase on
(10:21):
the inventory side of things.
Speaker 3 (10:23):
Yeah, but quite honestly, I don't think it's likely to happen, right.
Speaker 2 (10:27):
I mean to be plain here.
Speaker 3 (10:29):
The idea of the federal government stepping on the toes
of state and local governments and saying, hey, we are
going to now.
Speaker 2 (10:36):
Control your zoning or control you.
Speaker 3 (10:38):
Know, or incentivize different zoning to build more homes I
find unlikely. And so you're seeing these executive actions, you're
seeing things like you know, populist ideas like banning corporations
from buying homes. I'm not sure that there's much else
to be done here right Like, we are sitting at
a point now. I want to make this clear because
(11:00):
it doesn't feel real to those of us listening in
the Midwest or northeast of the United States. But in
November of twenty twenty five, there were how do I
phrase this, nearly ninety four percent as many homes for
sale as there were in November of twenty nineteen. I
know they are not as affordable as they were in
(11:21):
November of twenty nineteen, but that is going to come.
The affordability problem is going to fix itself over a
period of time, and the more mechanisms you toss in
there to try and fix it faster are going to
have downstream impacts that we haven't quite thought of yet.
If you artificially try and keep interest rates lower right now,
are they going to need to snap back higher a
(11:42):
few years from now because of inflation. If you try
and put into place a corporate ban on buying homes,
what are you going to do the next time there's
a crisis and you need those corporate buyers to bail
you out. I think there are just so many downstream
effects here. The real sustainable path for me is if
you want to do something on housing, then, like Paul said,
(12:04):
have an intelligent debate about what that means and what
it means for what communities look like. But that is
not something that we seem to be willing to do
on the federal level. So instead, I think that's gonna
have to be done locality by locality.
Speaker 4 (12:16):
You gotta do something to boost the the try and
boost the inventory that's been that's a problem that dates
back what sixteen years of under development.
Speaker 2 (12:25):
Yes, so.
Speaker 4 (12:27):
To me, like you think about the Northeast, even if
we get back to higher inventory levels, it's still going
to be expensive to buy around here because there's so
few options available and there's gonna be a lot of competition.
I just don't know how you try.
Speaker 3 (12:39):
To go back to it. You don't because that's what
people want, right. They don't want dense housing develops and
the developments in the Northeast, and there's environmental and all
sorts of reasons behind that. But that is the reality.
Quick break when we come back a little bit trivia
next on the Financial Exchange.
Speaker 1 (12:56):
Miss any of the show. Catch up and your convenience
by visiting Financial Exchange Show dot com and clicking the
on demand icon where you'll find all of our interviews
in full showers. This is your home for the latest
business and financial news in New England and around the country.
This is the Financial Exchange Radio Network. Here the Financial
(13:18):
Exchange every day from eleven to noon non Serious XM's
Business Radio Channel one thirty two. Keep it here for
the latest business and financial news and the trends on
Wall Street. The Financial Exchange is now life on Serious
XM's Business Radio Channel one thirty two. This is the
Financial Exchange Radio Network.
Speaker 5 (13:45):
This segment of The Financial Exchange is brought to you
by the US Virgin Islands Department of Tourism. Experience America's
Caribbean and fall naturally and rhythm with the heartbeat of
the islands while enjoying credible beaches, world class cuisine and
unforgettable sunsets. The weather is perfect all year rounds ahead
to visit USBI dot com and book your trip to
Saint Croix, Saint Thomas or Saint John. Enjoy one or
(14:07):
all three and enjoy the vacation of a lifetime. The
USBI is America's Caribbean paradise, playing your winter escape. Now
visit USVII dot com. That's visit USVII dot com. Time
for trivia here on the Financial Exchange and on this day.
Back in nineteen sixty nine, the first test flight of
the Concord supersonic jet took place. Concord jets were capable
(14:30):
of flying at MAK two or twice the speed of
sound and crossing the Atlantic in under four hours. So
trivia question today, what year did the Concord supersonic jets retire?
Once again, what year did the Concord supersonic jets retire?
Be the third person today to Texas at six one
(14:52):
seven three six two thirteen eighty five with the correct
answer along with the keyword trivia, and you want a
Financial Exchange Show T sure once again the third correct
response to textas to the number six one seven three
six two thirteen eighty five with the correct answer along
with the key word trivia, We'll win that T shirt.
See complete contest rules at Financial exchine Show dot com.
Speaker 3 (15:15):
Uh General motors taking a six billion dollar hit tied
to electric vehicles, continuing to see demand for these things
just fall off a cliff. I some interesting context here.
I just spent the last two weeks shopping for an EV.
We decided on one that is not a general motors vehicle.
(15:35):
But looking at we did look at Chevy's, we looked
at Hyundai's, and we bought a Ford. There were a
lot of incentives to get these things off the lot.
Let me just let me just put it that way.
Sure the calls, got a few follow up calls, and
we're talking, you know, on the Hundai especially, I was
looking at potentially fifteen thousand off of MSRP to take
(15:57):
a previous model year. I think it might have been
even a twenty two twenty four model a year that
was new. We're talking about fairly steep discounts. And when
you see stories like this you can guess why. But
GM taking a six billion dollar charge on its EV business.
That follows a charge that Ford took on their EV business.
Basically seeing these sales creater since the expiration of the
(16:19):
EV tax credit of seventy five hundred bucks that was
in place until September of last year. I don't know
that there's much else to be said about this. Again,
we ended up buying an EV for our household. We
have two gas powered vehicles. We need three vehicles just
based on hauling our kids.
Speaker 2 (16:36):
All over New England.
Speaker 3 (16:38):
So we ended up buying an EV for our third
car that's primarily going to be a commuter. Very happy
with it. I've enjoyed driving other evs before. I think
I'll be happy with this one. But generally speaking, these
companies have all poured a lot of money into these
EV businesses and are very rapidly finding that without the
incentives in place, pretty big mismatch between their supply and
(17:03):
demand from consumers.
Speaker 4 (17:04):
Yeah, not too much more to add. You did hit
a lot of the major points. It's only six percent
of GM sales are EV's and if you look at
where gas prices sit today, it's hard when you're under
three three dollars a gallon to really make a huge
push for for evs. And then you talk about all
the policy changes too. It's just it's a tougher spot
(17:24):
for them right now.
Speaker 2 (17:25):
But continues to surprise me.
Speaker 3 (17:27):
They all kind of copied Tesla, and so in my mind,
the reason that things like Chevy supercrus or GM Supercrews
and Ship and fort Blue Crews exist is because Tesla
did it first, and they felt they needed to match that,
and so most of these car companies are primarily putting
those really cool pieces of technology exclusively into their electric vehicles,
(17:49):
and I just don't get it.
Speaker 2 (17:50):
To me, that is a huge selling point in a car.
Speaker 3 (17:52):
I know I'm in kind of rare company with this stuff,
but I don't really understand why they put it in there,
And the only context I have is that they feel
like they need to compete with Tesla's, or at least
they did feel like they needed to compete with Tesla's,
when in fact, I think the self driving car technology
is pretty darn cool and something that a lot of
people buying all sorts of different commuter cars.
Speaker 2 (18:15):
Would really like. That.
Speaker 3 (18:16):
That's where it's helpful as commuting. It's not like it's
really going to help you on your drive to the
grocery store. But if you're driving a long haul, thirty
forty mile commute with stop and go traffic into Boston
every day, man, that technology is pretty useful. Sure, it
really does make a difference, at least from my experience,
(18:36):
in not having to constantly monitor the road in such
an exhausting fashion as you need to when you're driving,
for instance, anywhere on ninety five from Maine to Florida.
So yeah, GM and many others kind of reshaping that
business and we will see what comes next in the
vehicle market.
Speaker 2 (18:55):
I still think that Toyota really has a leg.
Speaker 3 (18:59):
Up on all these guys with the investments that they
have made into their hybrid vehicle space.
Speaker 2 (19:06):
They are pretty far beyond everybody else.
Speaker 3 (19:10):
Pricing isn't all that out of whack, and I think
the other guys have some catchup to do to.
Speaker 4 (19:15):
In the discipline that they showed when in the twenty
twenties everyone wanted to talk evs.
Speaker 3 (19:20):
Everyone wanted to be Tesla, and Toyota said no, thank you.
Quick Break, Wall Street Watches next.
Speaker 1 (19:42):
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 (20:01):
Markets are in positive territory after the December jobs report
revealed fifty thousand jobs were added in December, softer than
forecasts of seventy three thousand. The unemployment rate fell to
four point four percent, better than estimates of four point
five percent. Right now, the Dow is up about four
tenths of a percent or one hundred and fifty one points.
(20:25):
Sm P five hundred also up four tenths of a
percent or thirty points. NASDAC up six tenths of one
percent of one hundred and forty three points higher. Russell
two thousand is up nearly one percent now, Tenure Treasure
reeled down one basis point of four point one seven
three percent, and crude oil up nearly three percent now,
trading fifty nine dollars in thirty eight cents a barrel.
(20:47):
Intel shares are rallying six percent after President Trump said
yesterday he finished a great meeting with CEO lip Boutan.
The US government took a ten percent stake in Intel
through an eight and a half billion dollar back in August. Meanwhile,
nuclear power companies, including Vista and Ochlow, are both rallying
(21:07):
over twelve percent after Meta announced agreements with the companies
in addition to terror Power as part of Meta's efforts
to secure necessary resources for its AI ambitions. MetaStock is
up modestly, and General Motors were revealed it would record
a seven point one billion dollar loss for the final
quarter of twenty twenty five, primarily from its investments in
(21:31):
electric vehicles. Last month, competitor Ford said it expected to
take nineteen point five billion dollars in charges, mostly tied
to its EV business. GM shares it down nearly three percent.
I'm Tucker Silvan. That is Wall Street watching. In the
previous segment, we asked you the triviute question, what year
did the Concord supersonic jets retire? That will be two
(21:55):
thousand and three. Timothy from Shrewsbury, Masis is our winner today,
taking home a Financial sit Show t shirt. Congrats to Timothy,
and we play trivia every day here in the Financial
looks Change. See complete contest rules at Financial Exchange Show
dot com.
Speaker 2 (22:08):
Well, Tucker is still a little bit of the thunder here.
Speaker 3 (22:10):
I do still want to talk about Vistra and Vistracorp
and Oaklow, so not household names. Vistra is a current
operator of retail electricity a few nuclear power plants.
Speaker 2 (22:22):
Oaklow is more of a startup.
Speaker 3 (22:23):
They are a designer of small modular nuclear reactors based
in California.
Speaker 2 (22:28):
Startup in twenty thirteen.
Speaker 3 (22:29):
Bill Gates back no Gae, Bill Gates back terror Power. Sorry,
but these two companies are moving up big today, thirteen
percent on Oaklow, twelve point four percent on Vistra. This
is a fairly significant deal. And we've talked a lot
about the.
Speaker 2 (22:46):
Energy requirements needed here.
Speaker 3 (22:49):
It is if we talk about a bottleneck or constraint
for the USAI industry, it's not so much the semiconductors. Yeah,
we talked about RAM price in every storage price is
going up. But the energy electricity problem seems to be
a growing one for this industry. And when you talk
(23:11):
to the experts in this space who are saying, hey,
we want to construct data centers, the number one answer
they're getting is yeah, but are you going to be
able to hook up to the power grid? And so
now you have Meta putting big, big dollars into this,
enough to drive these stock prices up.
Speaker 2 (23:26):
Again.
Speaker 3 (23:27):
This is we talked about hypothetical a lot, but this
is real. These stock prices are moving twelve or thirteen
percent on this newly announced deal for them.
Speaker 4 (23:37):
Again, the stock prices are moving. There has been any money.
Speaker 3 (23:39):
Made yet, but there is not the Two things that
I think are interesting about this one what's this going
to continue to do to consumer electricity prices? You are
competing I know not you directly, but you are competing
for electricity with Facebook. Now they got deeper pockets than you.
(24:00):
This is this is a finite resource right now. Right
I don't mean yes, you can create more electricity, We
can build more nuclear power plants. But in the immediate term,
electricity is a finite resource that we do not have
a lot of capability to dramatically scale up. It is
going to increase prices regionally, nationally, et cetera. More and
more communities pushing back against this. The other big question
(24:23):
that I have is if you buy that we are
in an AI arms race with China. There's one big
competitive advantage that the United States has, chip design. We
build and design far more efficient chips that we do
not allow to be sold at least on mass to China.
They get funneled in there, they get stolen and moved
(24:45):
across borders illegally. But by and large China Chinese companies
do not have the ability to go buy a ton
of Nvidia, Blackwell chips, Google, Facebook, Amazon, all doom. China
has one big competit of advantage over the United States.
Way more electricity, way more electricity, way more capacity for
new electricity and the ability to just tell their citizens,
(25:09):
you know, hey, we're building a dam here, you're out
of here.
Speaker 2 (25:13):
Seal later.
Speaker 3 (25:14):
We don't do that in the United States, thank god.
But that is the competitive advantage, and I don't think
that well. I am certainly not qualified to tell you
which advantage is more important to the development of the
next new, profitable AI tool that the whole world is
going to want to make. But if you buy that
this is an arms race, that's what you're up against
(25:35):
is better designs chips. Here in the United States, maybe
we've got some creative competitive advantage that has been proven
over the years in the US compared to China. China
has a giant competitive advantage when it comes to generating electricity,
and so they might have far less efficient semiconductors and
you know, data centers that run these models. I'm not
(25:56):
sure how much that matters when you can construct a
new nuclear power plant in China in something like eighteen.
Speaker 4 (26:02):
Months, right, Yeah, it is. That is what is at
stake in one of the biggest arms race that we'll
be focusing on over the next few years. It is
really significant.
Speaker 3 (26:14):
I want to talk to folks about the brand new
guide from the Armstrong Advisory Group. We put one together
this month on what we deem to be the most
frequent questions we get from clients, especially those that are
heading towards retirement, and they're all about Social Security and Medicare.
These are two programs that apply to almost every working
American once they get to that key age, and this
(26:37):
guid is all about how to apply for the programs.
What sort of documentation you're going to need if you
are divorced, if you have if you are a widower
or a widow, what sort of documentation are you going
to need when you apply for Social Security? When you
apply for Medicare? What are these specific ages that you
need to be focused on? When do you need to apply?
How does part A work if you are still working?
(27:00):
These are all very frequent questions that Paul gets that
I get on a weekly basis. We put together a
guide for you to try and answer some of them.
The name of the guide how to apply for Social
Security and Medicare. It's our new guide for January twenty
twenty six. It's free. You can get it by calling
us at eight hundred three nine three for zero zero one. Again,
(27:21):
our brand new guide on social Security and Medicare. You
can request it online at Armstrong Advisory dot com or
you can call us at eight hundred three nine three
for zero zero one.
Speaker 1 (27:32):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong Guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 4 (27:47):
Had to help my mother in law rull into Medicare party,
I should just give her the guide.
Speaker 3 (27:50):
Yeah, would have saved the time missed opportunity there, Paul,
I'm sure she would have loved that. No, no, Ma,
no help for you, take this thing figured out on
your own.
Speaker 4 (27:58):
Just kidding.
Speaker 2 (28:00):
Uh may not?
Speaker 4 (28:03):
I or at least that she helps a lot with
the kids.
Speaker 3 (28:06):
So yeah, that's the trade that's actually a reasonable trade off.
The state of California is. If you thought that the
millionaires tax in Massachusetts about the billionaires, wait until you
hear about the billionaire at tax in California. So very
early stages here, but honestly, I'm not sure there's a
good reason to believe this wouldn't pass. They are talking
(28:27):
about a five percent one time wealth tax in California
on anyone worth more than a billion dollars who is
a resident.
Speaker 4 (28:37):
I believe there are two hundred and twenty some odd
billionaires in California. I thought I had read it's.
Speaker 2 (28:43):
A lot of dough. Yeah, that would be coming in here.
Speaker 3 (28:47):
The questions that I had initially, I was thinking about constitutionality.
I don't think there's anything there. I know, I know
that's been raised before. But Paul, you have a car,
you pay an excise tax.
Speaker 4 (28:57):
I'm a billionaire, you're a billionaire.
Speaker 3 (29:03):
We all own You pay an xise tax that's not
based on your income, based on your property.
Speaker 2 (29:09):
This isn't all that different. Now.
Speaker 3 (29:11):
Would they be able to say, hey, you own a
home in Texas and we're counting that as part of
your wealth and assessing your tax on it.
Speaker 2 (29:17):
I doubt it. Massa Chuse has tried to try.
Speaker 3 (29:19):
I think mass Choos has tried something similar with their
estate tax and they got that kicked out.
Speaker 2 (29:24):
So I doubt they'd be able to do something like that.
But if you are.
Speaker 3 (29:29):
Jensen Wong and you live in California, own multiple homes
and own, you know, sixty percent of a company headquartered
in California. I don't know that there's a constitutional issue here.
I think there's a massive wealth flight issue that California
is going to face with this, because I'm sure there
are a number well no, I'm not. I'm sure there
(29:50):
are a number of billionaires who have already announced they
are going to leave the state out of concern that
this might pass.
Speaker 4 (29:56):
Oh you have to if you're in their shoes.
Speaker 3 (29:58):
I mean you're talking about billions of dolls, billionaires.
Speaker 4 (30:01):
I bet you have other properties that you could easily
make your private residence pretty quickly.
Speaker 2 (30:05):
Yeah.
Speaker 3 (30:05):
I mean we talked about this with the millionaire's tax,
and I was kind of theorizing, like, Okay, you know,
how much do you have to be worth to just
say I'm going to move to Portsmouth, New Hampshire and
avoid this and just take my helicopter to Boston every day.
If you're a billionaire, it's not even a question like
you already owned the home in Florida. You just got
to change a few records over So we'll be it'll
(30:25):
be interesting to see if this actually goes anywhere, and
how dramatic the effect would be. The governor has actually
expressed concerns about this. He's not in favor of the
billionaire's tax. It seems they are just in the signature
stage of setting this up. But this would be, I mean,
this would easily be the most significant tax on the
(30:47):
ultra wealthy that we've seen at any.
Speaker 2 (30:49):
State level by far, definitely by far, and.
Speaker 3 (30:53):
Would really reshape the conversation there. Let's take quick break.
Paul Lamonica is waiting for us next from Baron's. We'll
be right back.
Speaker 1 (31:00):
The Financial Exchange streams live on YouTube. Subscribe to our
page and stay up to date on breaking business news
all morning. Long Face is the Financial Exchange Radio Network.
The Financial Exchange is now available every day from eleven
to noon non Serious XM's Business Radio Channel one thirty two.
Stay informed about the latest from Wall Street, fiscal policy,
(31:22):
and breaking business news every day. The Financial Exchange is
life on Serious XM's Business Radio Channel one thirty two.
This is the Financial Exchange Radio Network, Ladies and gentlemen.
Speaker 6 (31:35):
The weekend, as promised, we are joined by Paul Amnica
from Barons to talk a little bit about a recent
company's IPO.
Speaker 4 (31:51):
Paul, thanks so much for joining us.
Speaker 7 (31:53):
Yeah, thank you very much, appreciate it, Paul.
Speaker 4 (31:55):
Obviously, this year is rumored twenty twenty six to be
a huge year for IPOs. Rumor has it, you could
see SpaceX, Data, Bricks and some other anthropics, some really
large company IPOs. But we're covering here a recent IPO
of a company called weal Front that was a little
bit more lackluster than some of these other big names
(32:16):
would anticipate their performance being on the public market. Entry,
give us a little bit of background, Paul, first about
well Front, you know who they are and what they do,
and then just give us some context on their recent
public offering.
Speaker 7 (32:27):
Yeah, definitely. I mean obviously, wealth Front much smaller company
than the ones you name that are rumored to be
twenty twenty six IPO candidates. Your wealth Front is, you know,
a wealth management firm. I think a lot of people
might recognize it for their quote unquote robo advisor type
(32:47):
product you know, using you know AI you know to
you know help you know, come up with portfolios for investors,
you know, in public, like in December at about fourteen
dollars a share, and you know, the stock has declined
(33:10):
since then, even though we've had you know, this rally
in the broader market. But what's really interesting and perhaps
maybe concerning, is that you know, had several investment bankers,
you know, Wall Street firms you'll launch coverage of the
stock this week, and while there are some fairly bullish ones,
the analystic Goldman Sachs, you know, has a price target
(33:34):
of you know, just fourteen fifty a share, which is
below you know where the you know, the price was
trading just a few days ago of you know, so
I and he has a you know, kind of a
neutral rating on it. You know. His concern is that
one of the products that is popular is this high
(33:55):
yield savings you know product, and that might be something
that with bond yields coming down, the possibility of more
fed rate cuts, you know, that might be something that
investors aren't as interested in at a time where you know,
you know, they could be looking for yield elsewhere.
Speaker 4 (34:15):
Yeah, Paul, it seems like part of their calling card
is the the money market interest rate that they're able
to offer, and that's hyper competitive. I mean, it's hard
to really it seems like differentiate yourself that much there.
You mentioned the robo advisor piece, which is something that
isn't necessarily a new concept, but you did mention here
in this piece something regarding a new mortgage offering. What
(34:36):
does that entail and could that add any legs to
the stock?
Speaker 7 (34:41):
Yeah, that's going to be something that I think is
interesting because you know, wealth Front you know, has a
lot of what analysts refer to as kind of a
younger digitally native millennial gen Z demographic. These are you know,
the types of people that might be finally in uh
(35:02):
you know, a prime age of potentially looking for a
house and then obviously the mortgage that goes with that.
So that's why some analysts have you know, buy and
outperform ratings on the stock because there is the hope
that the you know, the offering uh you know mortgages
is a you know, very nascent part of the business
(35:25):
that could grow pretty rapidly. So uh, you know, that's
potentially an area for wealth Front to uh, you know,
increase its customer base and you know, I think that
it goes out saying would probably be you know, a stickier,
higher margin type of business than you know what you're
(35:45):
seeing with these uh you know, uh, the the cash
you know yield uh type products and even uh you know,
I think the hope is that if you lock in
some customers to uh you know, have a mortgage, that
they may all so want to use some of their
extra income on the side to be investing in stocks
(36:06):
and ETFs.
Speaker 4 (36:07):
Sure take up more wall chair. That's Paul Monica from
Baron's talking to us about Well Front. Paul, thank you
so much for your time, and have a fantastic weekend.
Speaker 7 (36:15):
Thanks lots and you guys appreciate it.
Speaker 3 (36:18):
CS wraps up today the Consumer Electronics Show and Wirecutter's
got a summary for us on the good, the bad,
and the ugly.
Speaker 2 (36:25):
There.
Speaker 3 (36:25):
They said, there are a ton of robots, so many
dancing robots. There was a robot that could fold laundry
pretty poorly, deal cards very slowly, played table tennis for
some reason, and do mixed martial arts the top of
the list that they put out there. CS debuted a
company that is putting out a BlackBerry like smartphone Clicks
(36:48):
Communicator going to be running on Android. Looks just like
a BlackBerry and has a physical keyboard. Don't know what
the market looks like. They highlighted a stair climbing robot, vacuum.
Speaker 4 (36:57):
Stair climbing robo of it.
Speaker 3 (36:59):
Okay, pretty cool, vacuum those stairs well, I mean, if
I wanted to vacuum my downstairs and down stairs, now
I can buy one robot instead of take six take
it currently, take that six roombas that I currently. The
other highlight that I put in here, which was big
headline disappointment in the in the reality, it's a robot
(37:23):
lawnmower with lasers.
Speaker 2 (37:25):
And immediately my blade went to know.
Speaker 3 (37:28):
My mind immediately went to Austin Powers with you know,
little robots with lasers on their heads, but instead you
just have a robot that runs on lidar.
Speaker 2 (37:37):
So lasers to detect stuff that's in your lawn that
are going to mow it laser.
Speaker 3 (37:43):
Other than that, I didn't see much that they highlighted
that got me all that excited.
Speaker 2 (37:47):
I mean, I think the.
Speaker 3 (37:48):
Idea of the robot lawnmower is pretty cool, but we've
already had it for a few years, so not all
that new. And they did highlight that, hey, while the
ten thousand dollars full laundry robot is pretty clunky and.
Speaker 2 (38:02):
Slow, that if they've figured out how to get this.
Speaker 3 (38:05):
Far, you know a few years from now, maybe we'll
all have a laundry folding robot taking care.
Speaker 2 (38:10):
Of things for us.
Speaker 3 (38:11):
My wife would love that markets are up more than
half a percent as we close out the show today
on a Jobs Friday, we'll be back on It at
It on Monday.
Speaker 2 (38:20):
Have a great weekend, everybody,
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is the Financial
Exchange with Mike Armstrong and Paul Lane, your exclusive look
at business and financial news affecting your day, your city,
(00:43):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting DAVFK dot Boston and making a donation today.
(01:03):
This is the Financial Exchange with Mike Armstrong, and Paul Lane.
Speaker 2 (01:11):
Good morning, Happy jobs Friday.
Speaker 3 (01:13):
Here from the Financial Exchange, we've got markets in positive
territory shifting into a higher gear.
Speaker 2 (01:18):
Here.
Speaker 3 (01:18):
SMP's up closing in on half percent, an ASDAC up
over half percent. Right now, it's Mike, Paul and Tucker
with you, and our top story of the day is
the jobs report that was released at nine thirty eight
thirty sorry am this morning, generally being received pretty positively.
Four point four percent unemployment rate, fifty thousand jobs created.
(01:42):
A few revisions made to previous reports as well, one
that made the November jobs picture not look quite as
weak with a revision down on the unemployment rate, another
making the October job situation look worse than it was,
with one hundred and seventy six hundred seventy three three
thousand jobs eliminated in the month of October. Investors seemed
(02:06):
to be taking this as a encouraging sign for the
labor market, one that will likely pause FED action on
interest rates at the next meeting later this month.
Speaker 2 (02:17):
Wage growth was fine.
Speaker 3 (02:20):
I'm just trying to think of any other big highlights
from this job's report, but I think that just about
summarizes it. The unemployment rate, which the FED and its
chairperson Drome Powell has themselves claimed to be the most
important thing from this report went down and that broke
the trend line and I think can be seen as
(02:41):
a positive story here, and it once again raises this
question is which direction is the labor market truly heading?
Because last year, sorry, two years ago, it showed signs
of flashing warning signs that you saw the unemployment rate
increase at a pretty quick pace, and we were left
there wondering, Hey, is this a sign of something new.
Speaker 2 (03:03):
Or is this a normalization?
Speaker 3 (03:06):
Lo and behold, it was a pretty clear normalization that
we got in twenty twenty four, twenty twenty five, we
saw similar warning signs, especially in the second half of
last year, when the job creation pace dramatically slowed the
unemployment rate continued to tick up. This would be the
first indication that once again we are seeing further normalization
(03:26):
rather than free fall. Yes, need some confirmation, but I
think that's what this report and a few of the
reports that we got over this week have indicated thus far.
Speaker 2 (03:36):
Anything else to add on jobs, Paul.
Speaker 4 (03:38):
No, I think you hit all the main points there.
Speaker 3 (03:40):
There were some rumors that perhaps the Supreme Court would
release their ruling on tariffs today. That has been clarified
that will not be happening, but literally could be any
day here.
Speaker 2 (03:51):
So we will see when we.
Speaker 3 (03:53):
Get an announcement from them on the lawsuits against the
Trump administration and their imposed tariffs. And overnight you had
a pretty big other move from the White House when
it comes to interest rates. So again clarifying how interest
rates typically float and work. The Federal Reserve generally uses
(04:15):
the Fed Fund's target rate as one of the tools
they use to affect the economy in different ways. And
they have this dual mandate of inflation and unemployment, and
they target it based on a number of their tools,
but the biggest one being the interest rates setting policy right,
and then also the statements that they make. Overnight, what
(04:35):
the President did was continue his talk of home affordability.
Earlier this week, he proposed banning large corporations from buying
single family homes. Today telling Fanny and Freddie Fanny May
and Freddie May to Freddie Mac to go and buy
two hundred billion dollars worth of mortgage debts. So let's
lay it out simply here. Why would you, as president
(04:58):
want these agencies to go and do this, plain and simple.
Speaker 4 (05:02):
If they are to buy more bonds, that eats up
the available inventory and should drive down interest rates for
the mortgages out the mortgage mortgage interest rates down, there
by affecting some of the supply side of things.
Speaker 3 (05:20):
So we have some recent experience with this. Back in
the early stages of COVID, the Federal Reserve embarked on.
Speaker 2 (05:27):
A bond buying program. Every month, they were buying tens
of billions.
Speaker 4 (05:31):
For fifty billions something in that.
Speaker 3 (05:34):
Yeah, and they're doing it every month, and they were
doing it on a schedule, and they were buying both
treasuries as well as government agency no hold on mortgage bonds,
I believe is what they were buying is mortgage backed
securities and treasure curds in order to artificially hold those
longer term yields down during an economic crisis. Generally, something
(05:55):
that is not, at least from what I can recall,
ever been commit by the White House to go and
do this and runs. I wouldn't say directly in contradiction
to what the FED is doing right now, but you know,
the Fed is talking about a pause in some of
their policies, and this is another government agency going out
there and trying to keep artificially interest rates lower.
Speaker 2 (06:18):
Now.
Speaker 3 (06:19):
I don't know how much success they're going to have
in this, to be clear, when we talk about two
hundred billion dollars, it is undoubtedly a large sum of money.
They have the cash on hand to be able to
do this. It's about two percent of the market.
Speaker 2 (06:32):
Yep. Unlike the Federal Reserve, the you.
Speaker 3 (06:36):
Know, these government agencies can't just print money and continue
this bond buying program and perpetuity. So might it bring
down mortgage rates a little bit in the short term? Yeah,
I think very clearly that is the intent here is, Hey,
if you add buyers to this market, then you know,
naturally the interest rate should come down just by supply
and demand. How much will it because you know today
(07:00):
you're seeing yields pop up a little bit, you know,
a slight increase in.
Speaker 2 (07:05):
Some of those.
Speaker 3 (07:05):
And so I think some open questions on how successful
this will be. But the theme here is pretty consistent.
The President wants to make home affordability.
Speaker 4 (07:16):
A big focus for twenty twenty six, a.
Speaker 2 (07:18):
Big focus for twenty twenty six.
Speaker 3 (07:19):
I think undoubtedly that is the message to take away
here other you know, just things that are noticeable with this.
It has been a goal of the president's to spin
these out of the government. These agencies have been under
much more direct government control since the Great Financial Crisis
and no weight. And the idea here was, Hey, maybe
(07:42):
we can ipo these things sometime in the future and
make these so that they are not so beholden to
government policy future governments. The idea was, yeah, maybe we
can move forward with an initial public offering of Fanny
and Freddy.
Speaker 2 (07:58):
That's taking a very big back seat with action like this.
Speaker 4 (08:01):
Certainly, certainly you would you would not think to be
embarking on this road of taking them public if you
wanted them to buy two hundred billion dollars of more.
Speaker 3 (08:09):
Absolutely, So, you know that is I think what comes
to mind with all this. There's a very clear intent.
So when you read that Trump, you know, President Trump
directing Fanny and Friday to buy two hundred billion dollars
worth mortgage debt. What's that mean? Plain and simple, trying
to bring down mortgage rates. Yep, some companies, by the way,
moving in response to this. Publicly traded companies are moving
(08:30):
up on this news. You do have you know some
mortgage lenders specifically moving pretty big on this rocket companies
loan depot rose rose in early trading.
Speaker 2 (08:40):
I don't know where they are now. And the yield
on the ten year Treasury currently.
Speaker 3 (08:43):
Down to four point one six percent, So again, mortgage
rates take a little while to update.
Speaker 2 (08:49):
I think that they do end up probably.
Speaker 3 (08:51):
Coming down on this, but how substantially and what and
in what time frame is a very big question. And okay,
so let's say we get mortgage rates down to five
point eight percent on this, it will make things more affordable, right,
I don't know that it changes the aer around home affordability.
(09:12):
I don't know where that threshold is, but I don't
think it's a five eight or five.
Speaker 4 (09:15):
Nine, No, you have I forget what the recent numbers
on it, but let's call at least it seems like
more than half of the country is still sitting with
those really desirable four percent or lower mortgages from yester
year of twenty nineteen, twenty twenty and that sort of era.
So getting it down to five eight, while that's an
improvement and perhaps would create some more transaction activity on
(09:37):
the buy side of things that decline is not enough
to do it. It may spark activity, but it's not
going to be the solution. What is brought up here
in another piece at a barons, which I think is
a good way to look at it, and we've mentioned
this on the show before. To me, the easiest way
to attack this issue would be in terms of legislation
and regulation. That would be while I recognize is that
(10:00):
many housing decisions are done at the local level, if
there could be policy changes that encourage further development of
housing or lower some of the parameters that are you know,
put together for putting mortgages in place, that would be
a good step to try and get some increase on
(10:21):
the inventory side of things.
Speaker 3 (10:23):
Yeah, but quite honestly, I don't think it's likely to happen, right.
Speaker 2 (10:27):
I mean to be plain here.
Speaker 3 (10:29):
The idea of the federal government stepping on the toes
of state and local governments and saying, hey, we are
going to now.
Speaker 2 (10:36):
Control your zoning or control you.
Speaker 3 (10:38):
Know, or incentivize different zoning to build more homes I
find unlikely. And so you're seeing these executive actions, you're
seeing things like you know, populist ideas like banning corporations
from buying homes. I'm not sure that there's much else
to be done here right Like, we are sitting at
a point now. I want to make this clear because
(11:00):
it doesn't feel real to those of us listening in
the Midwest or northeast of the United States. But in
November of twenty twenty five, there were how do I
phrase this, nearly ninety four percent as many homes for
sale as there were in November of twenty nineteen. I
know they are not as affordable as they were in
(11:21):
November of twenty nineteen, but that is going to come.
The affordability problem is going to fix itself over a
period of time, and the more mechanisms you toss in
there to try and fix it faster are going to
have downstream impacts that we haven't quite thought of yet.
If you artificially try and keep interest rates lower right now,
are they going to need to snap back higher a
(11:42):
few years from now because of inflation. If you try
and put into place a corporate ban on buying homes,
what are you going to do the next time there's
a crisis and you need those corporate buyers to bail
you out. I think there are just so many downstream
effects here. The real sustainable path for me is if
you want to do something on housing, then, like Paul said,
(12:04):
have an intelligent debate about what that means and what
it means for what communities look like. But that is
not something that we seem to be willing to do
on the federal level. So instead, I think that's gonna
have to be done locality by locality.
Speaker 4 (12:16):
You gotta do something to boost the the try and
boost the inventory that's been that's a problem that dates
back what sixteen years of under development.
Speaker 2 (12:25):
Yes, so.
Speaker 4 (12:27):
To me, like you think about the Northeast, even if
we get back to higher inventory levels, it's still going
to be expensive to buy around here because there's so
few options available and there's gonna be a lot of competition.
I just don't know how you try.
Speaker 3 (12:39):
To go back to it. You don't because that's what
people want, right. They don't want dense housing develops and
the developments in the Northeast, and there's environmental and all
sorts of reasons behind that. But that is the reality.
Quick break when we come back a little bit trivia
next on the Financial Exchange.
Speaker 1 (12:56):
Miss any of the show. Catch up and your convenience
by visiting Financial Exchange Show dot com and clicking the
on demand icon where you'll find all of our interviews
in full showers. This is your home for the latest
business and financial news in New England and around the country.
This is the Financial Exchange Radio Network. Here the Financial
(13:18):
Exchange every day from eleven to noon non Serious XM's
Business Radio Channel one thirty two. Keep it here for
the latest business and financial news and the trends on
Wall Street. The Financial Exchange is now life on Serious
XM's Business Radio Channel one thirty two. This is the
Financial Exchange Radio Network.
Speaker 5 (13:45):
This segment of The Financial Exchange is brought to you
by the US Virgin Islands Department of Tourism. Experience America's
Caribbean and fall naturally and rhythm with the heartbeat of
the islands while enjoying credible beaches, world class cuisine and
unforgettable sunsets. The weather is perfect all year rounds ahead
to visit USBI dot com and book your trip to
Saint Croix, Saint Thomas or Saint John. Enjoy one or
(14:07):
all three and enjoy the vacation of a lifetime. The
USBI is America's Caribbean paradise, playing your winter escape. Now
visit USVII dot com. That's visit USVII dot com. Time
for trivia here on the Financial Exchange and on this day.
Back in nineteen sixty nine, the first test flight of
the Concord supersonic jet took place. Concord jets were capable
(14:30):
of flying at MAK two or twice the speed of
sound and crossing the Atlantic in under four hours. So
trivia question today, what year did the Concord supersonic jets retire?
Once again, what year did the Concord supersonic jets retire?
Be the third person today to Texas at six one
(14:52):
seven three six two thirteen eighty five with the correct
answer along with the keyword trivia, and you want a
Financial Exchange Show T sure once again the third correct
response to textas to the number six one seven three
six two thirteen eighty five with the correct answer along
with the key word trivia, We'll win that T shirt.
See complete contest rules at Financial exchine Show dot com.
Speaker 3 (15:15):
Uh General motors taking a six billion dollar hit tied
to electric vehicles, continuing to see demand for these things
just fall off a cliff. I some interesting context here.
I just spent the last two weeks shopping for an EV.
We decided on one that is not a general motors vehicle.
(15:35):
But looking at we did look at Chevy's, we looked
at Hyundai's, and we bought a Ford. There were a
lot of incentives to get these things off the lot.
Let me just let me just put it that way.
Sure the calls, got a few follow up calls, and
we're talking, you know, on the Hundai especially, I was
looking at potentially fifteen thousand off of MSRP to take
(15:57):
a previous model year. I think it might have been
even a twenty two twenty four model a year that
was new. We're talking about fairly steep discounts. And when
you see stories like this you can guess why. But
GM taking a six billion dollar charge on its EV business.
That follows a charge that Ford took on their EV business.
Basically seeing these sales creater since the expiration of the
(16:19):
EV tax credit of seventy five hundred bucks that was
in place until September of last year. I don't know
that there's much else to be said about this. Again,
we ended up buying an EV for our household. We
have two gas powered vehicles. We need three vehicles just
based on hauling our kids.
Speaker 2 (16:36):
All over New England.
Speaker 3 (16:38):
So we ended up buying an EV for our third
car that's primarily going to be a commuter. Very happy
with it. I've enjoyed driving other evs before. I think
I'll be happy with this one. But generally speaking, these
companies have all poured a lot of money into these
EV businesses and are very rapidly finding that without the
incentives in place, pretty big mismatch between their supply and
(17:03):
demand from consumers.
Speaker 4 (17:04):
Yeah, not too much more to add. You did hit
a lot of the major points. It's only six percent
of GM sales are EV's and if you look at
where gas prices sit today, it's hard when you're under
three three dollars a gallon to really make a huge
push for for evs. And then you talk about all
the policy changes too. It's just it's a tougher spot
(17:24):
for them right now.
Speaker 2 (17:25):
But continues to surprise me.
Speaker 3 (17:27):
They all kind of copied Tesla, and so in my mind,
the reason that things like Chevy supercrus or GM Supercrews
and Ship and fort Blue Crews exist is because Tesla
did it first, and they felt they needed to match that,
and so most of these car companies are primarily putting
those really cool pieces of technology exclusively into their electric vehicles,
(17:49):
and I just don't get it.
Speaker 2 (17:50):
To me, that is a huge selling point in a car.
Speaker 3 (17:52):
I know I'm in kind of rare company with this stuff,
but I don't really understand why they put it in there,
And the only context I have is that they feel
like they need to compete with Tesla's, or at least
they did feel like they needed to compete with Tesla's,
when in fact, I think the self driving car technology
is pretty darn cool and something that a lot of
people buying all sorts of different commuter cars.
Speaker 2 (18:15):
Would really like. That.
Speaker 3 (18:16):
That's where it's helpful as commuting. It's not like it's
really going to help you on your drive to the
grocery store. But if you're driving a long haul, thirty
forty mile commute with stop and go traffic into Boston
every day, man, that technology is pretty useful. Sure, it
really does make a difference, at least from my experience,
(18:36):
in not having to constantly monitor the road in such
an exhausting fashion as you need to when you're driving,
for instance, anywhere on ninety five from Maine to Florida.
So yeah, GM and many others kind of reshaping that
business and we will see what comes next in the
vehicle market.
Speaker 2 (18:55):
I still think that Toyota really has a leg.
Speaker 3 (18:59):
Up on all these guys with the investments that they
have made into their hybrid vehicle space.
Speaker 2 (19:06):
They are pretty far beyond everybody else.
Speaker 3 (19:10):
Pricing isn't all that out of whack, and I think
the other guys have some catchup to do to.
Speaker 4 (19:15):
In the discipline that they showed when in the twenty
twenties everyone wanted to talk evs.
Speaker 3 (19:20):
Everyone wanted to be Tesla, and Toyota said no, thank you.
Quick Break, Wall Street Watches next.
Speaker 1 (19:42):
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 (20:01):
Markets are in positive territory after the December jobs report
revealed fifty thousand jobs were added in December, softer than
forecasts of seventy three thousand. The unemployment rate fell to
four point four percent, better than estimates of four point
five percent. Right now, the Dow is up about four
tenths of a percent or one hundred and fifty one points.
(20:25):
Sm P five hundred also up four tenths of a
percent or thirty points. NASDAC up six tenths of one
percent of one hundred and forty three points higher. Russell
two thousand is up nearly one percent now, Tenure Treasure
reeled down one basis point of four point one seven
three percent, and crude oil up nearly three percent now,
trading fifty nine dollars in thirty eight cents a barrel.
(20:47):
Intel shares are rallying six percent after President Trump said
yesterday he finished a great meeting with CEO lip Boutan.
The US government took a ten percent stake in Intel
through an eight and a half billion dollar back in August. Meanwhile,
nuclear power companies, including Vista and Ochlow, are both rallying
(21:07):
over twelve percent after Meta announced agreements with the companies
in addition to terror Power as part of Meta's efforts
to secure necessary resources for its AI ambitions. MetaStock is
up modestly, and General Motors were revealed it would record
a seven point one billion dollar loss for the final
quarter of twenty twenty five, primarily from its investments in
(21:31):
electric vehicles. Last month, competitor Ford said it expected to
take nineteen point five billion dollars in charges, mostly tied
to its EV business. GM shares it down nearly three percent.
I'm Tucker Silvan. That is Wall Street watching. In the
previous segment, we asked you the triviute question, what year
did the Concord supersonic jets retire? That will be two
(21:55):
thousand and three. Timothy from Shrewsbury, Masis is our winner today,
taking home a Financial sit Show t shirt. Congrats to Timothy,
and we play trivia every day here in the Financial
looks Change. See complete contest rules at Financial Exchange Show
dot com.
Speaker 2 (22:08):
Well, Tucker is still a little bit of the thunder here.
Speaker 3 (22:10):
I do still want to talk about Vistra and Vistracorp
and Oaklow, so not household names. Vistra is a current
operator of retail electricity a few nuclear power plants.
Speaker 2 (22:22):
Oaklow is more of a startup.
Speaker 3 (22:23):
They are a designer of small modular nuclear reactors based
in California.
Speaker 2 (22:28):
Startup in twenty thirteen.
Speaker 3 (22:29):
Bill Gates back no Gae, Bill Gates back terror Power. Sorry,
but these two companies are moving up big today, thirteen
percent on Oaklow, twelve point four percent on Vistra. This
is a fairly significant deal. And we've talked a lot
about the.
Speaker 2 (22:46):
Energy requirements needed here.
Speaker 3 (22:49):
It is if we talk about a bottleneck or constraint
for the USAI industry, it's not so much the semiconductors. Yeah,
we talked about RAM price in every storage price is
going up. But the energy electricity problem seems to be
a growing one for this industry. And when you talk
(23:11):
to the experts in this space who are saying, hey,
we want to construct data centers, the number one answer
they're getting is yeah, but are you going to be
able to hook up to the power grid? And so
now you have Meta putting big, big dollars into this,
enough to drive these stock prices up.
Speaker 2 (23:26):
Again.
Speaker 3 (23:27):
This is we talked about hypothetical a lot, but this
is real. These stock prices are moving twelve or thirteen
percent on this newly announced deal for them.
Speaker 4 (23:37):
Again, the stock prices are moving. There has been any money.
Speaker 3 (23:39):
Made yet, but there is not the Two things that
I think are interesting about this one what's this going
to continue to do to consumer electricity prices? You are
competing I know not you directly, but you are competing
for electricity with Facebook. Now they got deeper pockets than you.
(24:00):
This is this is a finite resource right now. Right
I don't mean yes, you can create more electricity, We
can build more nuclear power plants. But in the immediate term,
electricity is a finite resource that we do not have
a lot of capability to dramatically scale up. It is
going to increase prices regionally, nationally, et cetera. More and
more communities pushing back against this. The other big question
(24:23):
that I have is if you buy that we are
in an AI arms race with China. There's one big
competitive advantage that the United States has, chip design. We
build and design far more efficient chips that we do
not allow to be sold at least on mass to China.
They get funneled in there, they get stolen and moved
(24:45):
across borders illegally. But by and large China Chinese companies
do not have the ability to go buy a ton
of Nvidia, Blackwell chips, Google, Facebook, Amazon, all doom. China
has one big competit of advantage over the United States.
Way more electricity, way more electricity, way more capacity for
new electricity and the ability to just tell their citizens,
(25:09):
you know, hey, we're building a dam here, you're out
of here.
Speaker 2 (25:13):
Seal later.
Speaker 3 (25:14):
We don't do that in the United States, thank god.
But that is the competitive advantage, and I don't think
that well. I am certainly not qualified to tell you
which advantage is more important to the development of the
next new, profitable AI tool that the whole world is
going to want to make. But if you buy that
this is an arms race, that's what you're up against
(25:35):
is better designs chips. Here in the United States, maybe
we've got some creative competitive advantage that has been proven
over the years in the US compared to China. China
has a giant competitive advantage when it comes to generating electricity,
and so they might have far less efficient semiconductors and
you know, data centers that run these models. I'm not
(25:56):
sure how much that matters when you can construct a
new nuclear power plant in China in something like eighteen.
Speaker 4 (26:02):
Months, right, Yeah, it is. That is what is at
stake in one of the biggest arms race that we'll
be focusing on over the next few years. It is
really significant.
Speaker 3 (26:14):
I want to talk to folks about the brand new
guide from the Armstrong Advisory Group. We put one together
this month on what we deem to be the most
frequent questions we get from clients, especially those that are
heading towards retirement, and they're all about Social Security and Medicare.
These are two programs that apply to almost every working
American once they get to that key age, and this
(26:37):
guid is all about how to apply for the programs.
What sort of documentation you're going to need if you
are divorced, if you have if you are a widower
or a widow, what sort of documentation are you going
to need when you apply for Social Security? When you
apply for Medicare? What are these specific ages that you
need to be focused on? When do you need to apply?
How does part A work if you are still working?
(27:00):
These are all very frequent questions that Paul gets that
I get on a weekly basis. We put together a
guide for you to try and answer some of them.
The name of the guide how to apply for Social
Security and Medicare. It's our new guide for January twenty
twenty six. It's free. You can get it by calling
us at eight hundred three nine three for zero zero one. Again,
(27:21):
our brand new guide on social Security and Medicare. You
can request it online at Armstrong Advisory dot com or
you can call us at eight hundred three nine three
for zero zero one.
Speaker 1 (27:32):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong Guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 4 (27:47):
Had to help my mother in law rull into Medicare party,
I should just give her the guide.
Speaker 3 (27:50):
Yeah, would have saved the time missed opportunity there, Paul,
I'm sure she would have loved that. No, no, Ma,
no help for you, take this thing figured out on
your own.
Speaker 4 (27:58):
Just kidding.
Speaker 2 (28:00):
Uh may not?
Speaker 4 (28:03):
I or at least that she helps a lot with
the kids.
Speaker 3 (28:06):
So yeah, that's the trade that's actually a reasonable trade off.
The state of California is. If you thought that the
millionaires tax in Massachusetts about the billionaires, wait until you
hear about the billionaire at tax in California. So very
early stages here, but honestly, I'm not sure there's a
good reason to believe this wouldn't pass. They are talking
(28:27):
about a five percent one time wealth tax in California
on anyone worth more than a billion dollars who is
a resident.
Speaker 4 (28:37):
I believe there are two hundred and twenty some odd
billionaires in California. I thought I had read it's.
Speaker 2 (28:43):
A lot of dough. Yeah, that would be coming in here.
Speaker 3 (28:47):
The questions that I had initially, I was thinking about constitutionality.
I don't think there's anything there. I know, I know
that's been raised before. But Paul, you have a car,
you pay an excise tax.
Speaker 4 (28:57):
I'm a billionaire, you're a billionaire.
Speaker 3 (29:03):
We all own You pay an xise tax that's not
based on your income, based on your property.
Speaker 2 (29:09):
This isn't all that different. Now.
Speaker 3 (29:11):
Would they be able to say, hey, you own a
home in Texas and we're counting that as part of
your wealth and assessing your tax on it.
Speaker 2 (29:17):
I doubt it. Massa Chuse has tried to try.
Speaker 3 (29:19):
I think mass Choos has tried something similar with their
estate tax and they got that kicked out.
Speaker 2 (29:24):
So I doubt they'd be able to do something like that.
But if you are.
Speaker 3 (29:29):
Jensen Wong and you live in California, own multiple homes
and own, you know, sixty percent of a company headquartered
in California. I don't know that there's a constitutional issue here.
I think there's a massive wealth flight issue that California
is going to face with this, because I'm sure there
are a number well no, I'm not. I'm sure there
(29:50):
are a number of billionaires who have already announced they
are going to leave the state out of concern that
this might pass.
Speaker 4 (29:56):
Oh you have to if you're in their shoes.
Speaker 3 (29:58):
I mean you're talking about billions of dolls, billionaires.
Speaker 4 (30:01):
I bet you have other properties that you could easily
make your private residence pretty quickly.
Speaker 2 (30:05):
Yeah.
Speaker 3 (30:05):
I mean we talked about this with the millionaire's tax,
and I was kind of theorizing, like, Okay, you know,
how much do you have to be worth to just
say I'm going to move to Portsmouth, New Hampshire and
avoid this and just take my helicopter to Boston every day.
If you're a billionaire, it's not even a question like
you already owned the home in Florida. You just got
to change a few records over So we'll be it'll
(30:25):
be interesting to see if this actually goes anywhere, and
how dramatic the effect would be. The governor has actually
expressed concerns about this. He's not in favor of the
billionaire's tax. It seems they are just in the signature
stage of setting this up. But this would be, I mean,
this would easily be the most significant tax on the
(30:47):
ultra wealthy that we've seen at any.
Speaker 2 (30:49):
State level by far, definitely by far, and.
Speaker 3 (30:53):
Would really reshape the conversation there. Let's take quick break.
Paul Lamonica is waiting for us next from Baron's. We'll
be right back.
Speaker 1 (31:00):
The Financial Exchange streams live on YouTube. Subscribe to our
page and stay up to date on breaking business news
all morning. Long Face is the Financial Exchange Radio Network.
The Financial Exchange is now available every day from eleven
to noon non Serious XM's Business Radio Channel one thirty two.
Stay informed about the latest from Wall Street, fiscal policy,
(31:22):
and breaking business news every day. The Financial Exchange is
life on Serious XM's Business Radio Channel one thirty two.
This is the Financial Exchange Radio Network, Ladies and gentlemen.
Speaker 6 (31:35):
The weekend, as promised, we are joined by Paul Amnica
from Barons to talk a little bit about a recent
company's IPO.
Speaker 4 (31:51):
Paul, thanks so much for joining us.
Speaker 7 (31:53):
Yeah, thank you very much, appreciate it, Paul.
Speaker 4 (31:55):
Obviously, this year is rumored twenty twenty six to be
a huge year for IPOs. Rumor has it, you could
see SpaceX, Data, Bricks and some other anthropics, some really
large company IPOs. But we're covering here a recent IPO
of a company called weal Front that was a little
bit more lackluster than some of these other big names
(32:16):
would anticipate their performance being on the public market. Entry,
give us a little bit of background, Paul, first about
well Front, you know who they are and what they do,
and then just give us some context on their recent
public offering.
Speaker 7 (32:27):
Yeah, definitely. I mean obviously, wealth Front much smaller company
than the ones you name that are rumored to be
twenty twenty six IPO candidates. Your wealth Front is, you know,
a wealth management firm. I think a lot of people
might recognize it for their quote unquote robo advisor type
(32:47):
product you know, using you know AI you know to
you know help you know, come up with portfolios for investors,
you know, in public, like in December at about fourteen
dollars a share, and you know, the stock has declined
(33:10):
since then, even though we've had you know, this rally
in the broader market. But what's really interesting and perhaps
maybe concerning, is that you know, had several investment bankers,
you know, Wall Street firms you'll launch coverage of the
stock this week, and while there are some fairly bullish ones,
the analystic Goldman Sachs, you know, has a price target
(33:34):
of you know, just fourteen fifty a share, which is
below you know where the you know, the price was
trading just a few days ago of you know, so
I and he has a you know, kind of a
neutral rating on it. You know. His concern is that
one of the products that is popular is this high
(33:55):
yield savings you know product, and that might be something
that with bond yields coming down, the possibility of more
fed rate cuts, you know, that might be something that
investors aren't as interested in at a time where you know,
you know, they could be looking for yield elsewhere.
Speaker 4 (34:15):
Yeah, Paul, it seems like part of their calling card
is the the money market interest rate that they're able
to offer, and that's hyper competitive. I mean, it's hard
to really it seems like differentiate yourself that much there.
You mentioned the robo advisor piece, which is something that
isn't necessarily a new concept, but you did mention here
in this piece something regarding a new mortgage offering. What
(34:36):
does that entail and could that add any legs to
the stock?
Speaker 7 (34:41):
Yeah, that's going to be something that I think is
interesting because you know, wealth Front you know, has a
lot of what analysts refer to as kind of a
younger digitally native millennial gen Z demographic. These are you know,
the types of people that might be finally in uh
(35:02):
you know, a prime age of potentially looking for a
house and then obviously the mortgage that goes with that.
So that's why some analysts have you know, buy and
outperform ratings on the stock because there is the hope
that the you know, the offering uh you know mortgages
is a you know, very nascent part of the business
(35:25):
that could grow pretty rapidly. So uh, you know, that's
potentially an area for wealth Front to uh, you know,
increase its customer base and you know, I think that
it goes out saying would probably be you know, a stickier,
higher margin type of business than you know what you're
(35:45):
seeing with these uh you know, uh, the the cash
you know yield uh type products and even uh you know,
I think the hope is that if you lock in
some customers to uh you know, have a mortgage, that
they may all so want to use some of their
extra income on the side to be investing in stocks
(36:06):
and ETFs.
Speaker 4 (36:07):
Sure take up more wall chair. That's Paul Monica from
Baron's talking to us about Well Front. Paul, thank you
so much for your time, and have a fantastic weekend.
Speaker 7 (36:15):
Thanks lots and you guys appreciate it.
Speaker 3 (36:18):
CS wraps up today the Consumer Electronics Show and Wirecutter's
got a summary for us on the good, the bad,
and the ugly.
Speaker 2 (36:25):
There.
Speaker 3 (36:25):
They said, there are a ton of robots, so many
dancing robots. There was a robot that could fold laundry
pretty poorly, deal cards very slowly, played table tennis for
some reason, and do mixed martial arts the top of
the list that they put out there. CS debuted a
company that is putting out a BlackBerry like smartphone Clicks
(36:48):
Communicator going to be running on Android. Looks just like
a BlackBerry and has a physical keyboard. Don't know what
the market looks like. They highlighted a stair climbing robot, vacuum.
Speaker 4 (36:57):
Stair climbing robo of it.
Speaker 3 (36:59):
Okay, pretty cool, vacuum those stairs well, I mean, if
I wanted to vacuum my downstairs and down stairs, now
I can buy one robot instead of take six take
it currently, take that six roombas that I currently. The
other highlight that I put in here, which was big
headline disappointment in the in the reality, it's a robot
(37:23):
lawnmower with lasers.
Speaker 2 (37:25):
And immediately my blade went to know.
Speaker 3 (37:28):
My mind immediately went to Austin Powers with you know,
little robots with lasers on their heads, but instead you
just have a robot that runs on lidar.
Speaker 2 (37:37):
So lasers to detect stuff that's in your lawn that
are going to mow it laser.
Speaker 3 (37:43):
Other than that, I didn't see much that they highlighted
that got me all that excited.
Speaker 2 (37:47):
I mean, I think the.
Speaker 3 (37:48):
Idea of the robot lawnmower is pretty cool, but we've
already had it for a few years, so not all
that new. And they did highlight that, hey, while the
ten thousand dollars full laundry robot is pretty clunky and.
Speaker 2 (38:02):
Slow, that if they've figured out how to get this.
Speaker 3 (38:05):
Far, you know a few years from now, maybe we'll
all have a laundry folding robot taking care.
Speaker 2 (38:10):
Of things for us.
Speaker 3 (38:11):
My wife would love that markets are up more than
half a percent as we close out the show today
on a Jobs Friday, we'll be back on It at
It on Monday.
Speaker 2 (38:20):
Have a great weekend, everybody,
Popular Podcasts
Two Guys, Five Rings: Matt, Bowen & The Olympics
Two Guys (Bowen Yang and Matt Rogers). Five Rings (you know, from the Olympics logo). One essential podcast for the 2026 Milan-Cortina Winter Olympics. Bowen Yang (SNL, Wicked) and Matt Rogers (Palm Royale, No Good Deed) of Las Culturistas are back for a second season of Two Guys, Five Rings, a collaboration with NBC Sports and iHeartRadio. In this 15-episode event, Bowen and Matt discuss the top storylines, obsess over Italian culture, and find out what really goes on in the Olympic Village.
iHeartOlympics: The Latest
Listen to the latest news from the 2026 Winter Olympics.
Milan Cortina Winter Olympics
The 2026 Winter Olympics in Milan Cortina are here and have everyone talking. iHeartPodcasts is buzzing with content in honor of the XXV Winter Olympics We’re bringing you episodes from a variety of iHeartPodcast shows to help you keep up with the action. Follow Milan Cortina Winter Olympics so you don’t miss any coverage of the 2026 Winter Olympics, and if you like what you hear, be sure to follow each Podcast in the feed for more great content from iHeartPodcasts.