May 5, 2026 • 38 mins
Markets are pushing higher even as a major global risk continues to build.
Mike Armstrong and Paul Lane break down why stocks remain resilient despite ongoing disruptions in the Strait of Hormuz that are tightening global oil supply and pushing energy prices higher.
Also covered:
Mike Armstrong and Paul Lane break down why stocks remain resilient despite ongoing disruptions in the Strait of Hormuz that are tightening global oil supply and pushing energy prices higher.
Also covered:
- Why gas prices could move back toward $5 per gallon
- How strong earnings from AI and semiconductor companies are driving markets
- What the latest labor market data says about hiring and wage pressure
- Why consumer spending remains strong despite rising costs
- The impact of Spirit Airlines’ collapse on future airfare prices
- Why Ford’s $30,000 electric truck may not be realistic
- The growing debate around gas taxes and infrastructure funding
Listen
Watch
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 DAV five 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, Welcome back to the Financial Exchange.
Speaker 3 (01:14):
Happy Tuesday.
Speaker 2 (01:14):
Here it's Mike, Paul and Tucker with you on a
jobs week. We've got data from the Bureau Labor Statistics
out this morning for the Adjults Survey. That's the job
openings labor Turnover survey that we report on once a month.
This Friday, we'll be getting a full blown jobs report.
Speaker 3 (01:31):
Thursday. Of course we get our weekly jobless.
Speaker 2 (01:33):
Claims in the context of a FED that is now
much more worried, seemingly about the inflation effects than the
labor market. But obviously, you know, a few rough labor
market reports can change that viewpoint. And you've got the
new chair coming in with Kevin Warsh. We've got obviously
(01:55):
the airline news continuing with Spirit Spirit Airlines demise and
the Great Wealth transfer that will be playing out of
the course the next couple of decades. But frankly all
of that taking a back seat to the news over
the last couple of days regarding the Middle East Iran
attacks on the United United Arab Emirates and what it
(02:16):
means for the US presence in the Strait of horror.
Mouse So Paul picking up right there. We kicked off
the show yesterday very much in a state of not
really sure what's going on there. There was a lot
of confusion starring.
Speaker 3 (02:30):
In a town.
Speaker 2 (02:31):
Yeah, starting at around four or five in the morning yesterday,
after the President's Sunday statements about helping ships navigate the
Straight and US military presence in that space. What we
now know with a higher degree of certainty is that
two ships were struck, one Korean flag vessel another UAE
(02:53):
flag vessel. There were also attempted strikes on the United
Arab Emirates mainland. They put out a bunch of warnings
to citizens, one of them ended up being a very
quick false warning, another one then repeated. But I think
the biggest thing that we can conclusively say is that
once again, in spite of the US's best efforts, ships
(03:14):
are not feeling safe enough to navigate the Straight. The
US is actively blockading any ships that are navigating the
Straight with Iranian permission, and we are in not much
of a different position than we have been for the
last two months when it comes at least to the
supply of oil and all other goods that navigate through
(03:34):
the Strait.
Speaker 4 (03:35):
Yeah, continued uncertainty in the region, Mic, and it seems
like potential for some sort of pessimism if you sort
of look at the events over the last few days here.
I know you guys have been covering this extensively on
a day to day basis. The question that I keep
coming back to is we have this backdrop where now we're,
what sixty plus days into this whole war, where we
(03:57):
were typically accustomed to one hundred and fifteen, one hundred
and thirty ships traveling through the Strait. We're far off
those numbers, and it's basically been a standstill. We've talked
about on the show at nauseum the impacts that has
on the oil and energy markets as well as global
supply chains. But yet still we sit here, Mike, with
a market that is up again today though it was
(04:18):
slightly down yesterday, and a market that's up close to
six percent your date. I'm just curious you and Chuck's
view kind of covering this day to day as to
why the markets seem to continue to chug along. Obviously,
we've had a really nice earning season here where we've
seen double digit earnings growth for a lot of those
companies in the S and P five hundred. That's certainly
a positive here domestically, But I just am curious is
(04:39):
why we continue to see such positive investor sentiment. When
I read these headlines in preparation for the show, it
makes me a little more pessimistic on markets.
Speaker 2 (04:48):
Yeah, I mean, we're gonna be talking about semiconductors and
Taiwan and everything else later in the program. But I
think the answer is fairly simple. Energy markets are accurately
pricing in the shortage. Now you know twenty percent of
the world supply of oil gone. The United States is
not dependent on low oil prices like they were in
(05:12):
the nineteen seventies and nineteen eighties in order to support
their economy. In fact, energy overall the US economy is
far less energy intensive than it was a few decades ago.
And realistically speaking here, I think I think the main
answer is that this market in the United States since
twenty twenty three has cared about one thing and one
(05:34):
thing only, which has been semiconductors and ai right, And
so long as that supply chain isn't getting disrupted, I'm
not sure that much else matters. There's other things that
forced at work here too. Clearly, there's a by the
dip mentality. I think there is an interesting role that
retail investors are playing today.
Speaker 5 (05:52):
Little more of a risk environment a decade ago.
Speaker 2 (05:54):
But overall, I don't want to overcomplicate it all that much.
There is a looming crisis in energy markets. Spelling out
exactly what the effect is on US markets because of
that is pretty complicated, right, Like do I see a
path where gas prices could be over five bucks a
(06:15):
gallon this summer?
Speaker 3 (06:16):
Sure?
Speaker 5 (06:16):
Do yep?
Speaker 2 (06:17):
Would that be painful for Americans? Absolutely? Would it be
any substantially more painful than the existence of the tariffs
that we initially thought were going into place in the
spring of last year, or other big disruptions to things overall?
Maybe maybe not, you know, like I have a tough
time drawing out how much worse five dollars a gallon
(06:41):
gas is for the average American compared to.
Speaker 3 (06:45):
You know, tax rates.
Speaker 2 (06:46):
Where they were two years ago, or tariffs being you know,
a major contributing factor to things. You know, there are
these offsetting forces, and when I look at, for example,
the total consumption of oil in the United States dates
and the increased price they are compared to the total
benefit of tax cuts that went into place in twenty
twenty six, they kind of wash each other out.
Speaker 4 (07:08):
Yeah, I just wonder that the five dollars a gallon
particularly parallels to where we saw it, I believe, around
July of twenty twenty two, where inflation was at that
breakneck pace. And I'm not suggesting that we get back
to those levels. And perhaps it's worth discussing when you
have oil and gas that high at five dollars a gallon,
it seeps into other areas beyond what you and I
(07:28):
pay in the pump. Obviously, anything from a transportation standpoint,
for the goods that we buy from Amazon or others
out there, you'd have to think that they would have
to increase their prices in order to combat and we've
seen it with the airlines and we're going to talk
about that. In today's program to combat higher fuel costs,
fares have to go up. The same thing applies, And
(07:49):
so I just wonder that it seems that perhaps the
argument could be and I get it, we're not coming
off of post COVID stimulus where people were flushed with
a bunch of money, But how is the inflationary picture
which you did allude to, The FED is concerned about
doesn't seep into to market pess And I guess it
goes back to your overall point is that the market
(08:09):
is lesser concerned about an inflationary picture or a pessimistic
inflationary future here in the next three to six months
than the emergence of continued just crazy demand for semiconductors.
Speaker 5 (08:21):
And yeah, I mean that overpowers it.
Speaker 2 (08:23):
I think I don't know the exact numbers. I'll try
and pull them during the break, but I believe that
year over year earnings growth for this quarter right now
is on there no more closer to twenty wow. Okay,
And so I think my answer is you can pave
over a heck of a lot of problems so long
as you have the big boys, which are the semiconductor
(08:46):
AI players out there, some other tech companies too. But
if you have those big boys pulling in profits that
are growing twenty percent on an annual basis.
Speaker 4 (08:56):
While also spending billions of dollars on capex too to
build out out of which is helpful, you know.
Speaker 2 (09:02):
You might just take a back seat and say, yeah, okay,
I can deal with interest rates at four percent for
longer I can deal with inflation at three to four
percent if companies continue to produce earnings that are just
literally knocking the cover off the ball, right, I think
that's my answer, and it's surprising in a lot of ways.
(09:22):
I don't think it's I don't think it's sustainable from
a political standpoint to have Americans paying five dollars a
gallon for gas and six dollars a gallon for diesel.
And I don't think that it's a good formula for
anybody trying to run for re election in general to
see inflation, you know, getting to nine percent, coming back
down to three, and then you know, shooting back up.
(09:46):
But from a pure US stock market perspective, Wall.
Speaker 5 (09:51):
Street's not about that.
Speaker 2 (09:53):
It's about yeah, that's it's now, you know. To be clear,
if we start to get into a position where inflation
is now running so hot that interest rates, rather than
staying where they need where they are now need to
go up like it did in twenty twenty two, that's a
different set of circumstances. But we're not there yet. Right,
Let's take a quick break. When we come back. I
do want to get to that job opening's labor turnover survey,
(10:14):
and then a little bit more about this energy impact
on the US economy.
Speaker 3 (10:18):
That's next here on the Financial Exchange.
Speaker 1 (10:20):
Remember, you can watch the show live every day on
our YouTube page. We've got market updates and breaking business
news all morning long, plus a full archive of all
our show's content. It's all there with that click of
a button at YouTube dot com. Slash the Financial Exchange
Show from FED Decisions to Market Moves. Watch the Financial
(10:40):
Exchange live on x face. He's the Financial Exchange.
Speaker 2 (10:57):
We've got a listener text during the last segment about
gas and all sorts of other pieces that I thought
was interesting. By the way, you can text the show
at six one seven three six two thirteen eighty five.
We also do our weekly mail bag segment on is
that Friday's Tucker?
Speaker 5 (11:16):
Yeah, Friday, eleven thirty five, And.
Speaker 3 (11:17):
What's that phone number for that?
Speaker 6 (11:19):
Uh three nine nine three nine nine four triple three
or email TFE Show at gmail dot com.
Speaker 2 (11:27):
You just did it wrong, but it's today three three
nine three nine nine four triple three. Why did you
ask me I TFE Show email number until you said it, Tucker?
In any case, the text, I'll read it. So the
price of gasoline being up significantly is not helpful. Tariffs
are not particularly helpful. It's straight of horror moo Hormuz
blockade war in the Ukraine. All of this is not good.
(11:47):
But I'm a home improven contractor. Yesterday two customers signed
contracts with me for home improvement work. Total is ninety
eight thousand dollars. Single best day I've had in two years.
Previous mark was seventy two thousand. The point is, I
know things are not rate, but there are people who
have the money and choose to spend it in almost
any economy would not agree.
Speaker 5 (12:07):
More like that text.
Speaker 4 (12:08):
Yeah, it's a nice way to kind of crystallize everything
that's gone on, and that's spend the story has been
a resilient consumer through everything for the last three or
four years.
Speaker 5 (12:16):
Yeah.
Speaker 2 (12:17):
And it's not to minimize the experience of a good
chunk of Americans a third or more who are in
very tough place and seeing gas prices increase this much
may knock them over the edge, right, And I am
certain that with gas prices being up like we saw
spirit airlines demise, there will be individuals who fall beyond
(12:37):
the precipice and can't make their student loan payments or
can't pay off that credit card or do those things.
But on the other hand, we have this extraordinarily wealthy group,
especially over the age of sixty, who.
Speaker 3 (12:51):
Are continuing to spend.
Speaker 2 (12:53):
And in this you know, in this individual's instance here,
they usually own a home, they oftentimes have a more mortgage.
That mortgage rate is oftentimes below four percent. And so yeah,
I believe it. I believe that people are spending money
on home renovations. I believe that people are choosing not
to move and instead making those decisions to stay in
(13:13):
their homes for longer and make them the better homes
that they want. Because especially the events of these last
few months have I think signaled to a whole bunch
of people, Well, that mortgage that I was hoping to
get below five and a half percent doesn't look like
it's happening anytime soon.
Speaker 3 (13:30):
So I'm staying right where I am.
Speaker 4 (13:32):
And the other thing that we've seen over the course
of the last five or six years, as much as
we can try and forecast potential economic issues in the future,
the bottom line is to this texture's point, and kind
of that disregards my initial question, the first segment of
why is the market still up? Even though there are
these concerns geopolitically, is that the market has just kicked
(13:52):
putt for the last five or six years. With the
exception of twenty twenty two being a down year, all
these other years post twenty eighteen really have been some
really strong market years. And so as a result, like
you mentioned, this baby boomer population that has pretty significant
amounts of sums in the market in their retirement accounts
or other investment accounts have seen their money grow on paper,
(14:13):
and as a result, when you see that money grow,
it's easier to pay for these type of renovations.
Speaker 3 (14:17):
It's not just the boomers.
Speaker 2 (14:18):
There are plenty of working folks and younger folks that
are independently wealthy and able to do this too. But
in terms of one key demo that holds a lot
of the nation's wealth and is very comfortable spending right now,
it is that younger baby boomer demo that's healthy, newly retired,
and looking to upgrade their lifestyle a little bit. This
(14:39):
morning at ten am, we received a report from the
Bureau of Labor Statistics. It's the first jolt support we've
gotten since the outbreak of war in Iran. It's measuring
data from the month of March, and I think the
key answer here, Paul, is what we kind of already
knew regarding the economy in March, which which was not
(15:01):
much has changed on that front. We did see job
openings increase a little bit, the hiring rate increase a
little bit as well, But overall, if you're looking for
that sign that the economy the labor market is either
on the precipice of dramatically slowing down or quickly heating up,
I don't really see much in the way of signals
(15:23):
on that front.
Speaker 3 (15:23):
And this is one of those reports.
Speaker 2 (15:26):
The reason we report on this one generally speaking, I
don't mean to overly generalize with this, but the reason
that we look at this report specifically is many economists
have looked at it and said, this is a better
indicator of what's going to happen with wage inflation than
the unemployment rate or any other different measure that we
have to look at the state of the labor market.
(15:46):
The pace of hiring and the number of jobs that
are open right now, how many employers are looking for
workers is a better indication of where wages are going
to go. And we saw this in twenty twenty one
and twenty twenty two when there was a real shortage
for workers.
Speaker 4 (15:59):
Yeah, there's I guess the jobs reports have become under
scrutiny over the course of the last few years just
because of some questions regarding how good is the survey
data that they're getting. There's always these revisions to them,
and so this one has been leaned on a little
bit more. But with the labor market, whether it's this report,
the Jolts one that we're covering here, or the Jobs
(16:20):
report that we've got a new one coming out on Friday,
the takeaway has been the same for the last few months.
There's been no real deviation that you can continue to
characterize this labor market as low, fire low, higher and
the unemployment rate has remained kind of plateaued at this
what's anticipated to come in at four point three percent
(16:41):
on Friday, and you've had very little job editions. But
we've talked about some of the factors in place that
have kind of kept that unemployment rate stabilized in terms
of older workers sort of exiting the labor force. Those
baby boomers that Mike and I were just talking about
are retiring in droves and you've got fewer new people
coming in, whether it's immigration or younger workers.
Speaker 5 (17:03):
That is the state of the labor market.
Speaker 4 (17:05):
This report here does nothing to sway opinion or sentiment
for me in one way or the other from what
we've kind of been on this course.
Speaker 2 (17:13):
By the way, this wasn't in the stack that you got, Paul,
But the Wall Street Journal put together a piece on Sunday.
I believe it was on the hiring hotspots, Tucker. I
don't think you guys covered that last week, did you.
Speaker 1 (17:24):
No.
Speaker 2 (17:25):
So there's been a lot written, obviously in a lot
of uproar from younger, younger college grads that I've heard
about the difficulty in finding jobs right now. And Wall
Street Journal put together their list of hiring hot spots
based on wages, affordability in the pace of hiring, and
a bunch of places that I certainly wouldn't have guessed. Yes,
San Jose is on there, a beneficiary of the tech boom.
(17:48):
But when you go take a look, the number one
spot taking the cake is Birmingham, Alabama. And this is
again for top five US metro areas by percentile for
twenty some things with college degrees. This is not just
general hiring. It's specifically looking at, hey, you've got a
college degree, where are you going to get the best
(18:08):
bang for your buck, both in terms of wages and affordability. Birmingham,
Alabama taking the first spot, Tampa, Florida taking the second spot.
Not quite as good on the wages or affordability stand front,
but hiring pace has been incredible there. San Jose Wages
taking the number one spot on that front. Affordability obviously
a real hit there, but the pace of hiring is
(18:29):
still pretty good in San Jose. So if you can
make it work, you can get paid a lot and
get hired. Columbus, Ohio taking that fourth spot, and then Raleigh,
North Carolina rounding out the top five there. They've got
a whole list here, and I think the key answer
to me is one where Hey, you know, this situation
has always been the case, but if you are willing
(18:51):
to relocate and upend your lifestyle in your twenties, you
can dramatically expand your potential options for employment. It's a
big ask to go and leave your family and relocate
to the other side of the country, but it's also
hell of a lot easier to do when you're in
your twenties than it is when you are in your
thirties or forties.
Speaker 3 (19:11):
So interesting case. You can go take a look at it.
Speaker 2 (19:13):
The Wall Street Journal just where they rank these cities,
and they do change year to year, but for the moment,
these were their top five and they've got it broken
out by region two, which I found interesting. Quick break
when we come back, full market update. They're in rebound
mode after yesterday's sell off, with Wall Street Watch coming
up next.
Speaker 1 (19:40):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now full wool
Street Watch tracking the stocks, the dato and the headlines
driving markets so far today right here on the Financial
Exchange Radio Network.
Speaker 6 (20:01):
Markets rebounding today after yesterday's sell off amid the fragile
ceasefire between the US and Iran.
Speaker 5 (20:06):
Yesterday, the UAE set.
Speaker 6 (20:08):
That Iran launched drones and missiles against it. Right now,
the Dow is up over half a percent, SMP five
hundred is up about three quarters of a percent, Nasdaq
up about one percent higher two hundred and forty seven points.
RUSS two thousand is up one and a quarter percent,
Tenure treasure reil down two basis points at four point
four to two percent, and oil pulling back about four
(20:30):
percent today, training at one hundred and two.
Speaker 5 (20:32):
Dollars a barrel.
Speaker 6 (20:34):
According to Bloomberg, Appled has held exploratory discussions with Intel
and Samsung about producing main processors for its devices in
the US as a secondary option beyond longtime partner Taiwan Semiconductor.
Intel stock rallying again today, up fourteen percent, while Apple
shares are up by one percent. Mewhile Pallanteer stock falling
(20:55):
over five percent, despite the data analytics company posting a
record quarterly red new and profit for its previous quarter. Elsewhere,
Beer Giant Aarnheuser Busch Imbev booked its first sales volumes
growth in three years, sending shares up by nine percent,
PayPal sinking ten percent despite beating earnings expectations. Pfizer reported
(21:16):
stronger than expected first quarter earnings in revenue, batstocked down
by one percent. Coinbase announced the company we'll cut about
fourteen percent of its workforce, sending shares down by over
two percent, and after today's closing, bell A and D
will post its quarterly results I'm Tucker Silvan, that is
Wall Street Watch.
Speaker 2 (21:36):
Well, if you haven't already heard, over the weekend, Spirit
announced their own demise liquidation, however you want to phrase
it here, end of an era for the largest discount airline.
I'm not sure that I would still throw Southwest into
the discount to airline category, although I guess you have to.
They don't have any first class cabins, so I guess
(21:59):
you would still put them and Jet Blue in there,
in which case Southwest is the bigger one. But in
terms of fair cost, I'm not sure you can really
put them in the same category that Spirit was. Nonetheless
the business model which had been under strained for the
better part of a decade and extreme strain since the
last four years and since COVID finally met its demise
(22:20):
as they did not find a path to reopening and
are now facing liquidation to well of all of their
assets and I'm sure a long drawn out process as
they go through all of this, but ceasing operations effective
this past weekend.
Speaker 4 (22:37):
And ultimately as much as they are the punching bag,
I feel like in the airline industry, where a lot
of us will say with families or whatever, I'm never
gonna fly Spirit again. This piece does a good job
of outlining while I did have mixed reactions, a little
bit of a similar reaction, what's outlined this piece this
idea that it's not good for all of us as
(22:57):
consumers of the airfares that the lowest, the cheapest discount
option gets eliminated because of the simple thing that you
learn in economics of supply and demand them being out there,
Spirit with these cut rate flights does allow for it
creates increased competition, and it makes the other Jet Blues
and other competitors keep their prices lower. And their studies
(23:19):
that have been done that even in twenty four and
twenty five that in roots that Spirit backed away from,
they saw a twenty three percent average increase of the
cost of other fares in that same transit route that
was backed away by Spirit. There's all sorts of data
that points to what all of us should probably know
that if you don't have a competitor in the market,
(23:39):
you're probably going to lean in and increase your prices further.
There's also arguments that have been made by United Airlines
executives that airline fares pre pandemic versus where they are today,
are still twenty seven percent lower on an inflation adjustent
basis from where they should be.
Speaker 5 (23:57):
So that and now you have the.
Speaker 2 (23:58):
Course against So if you look at twenty nineteen airfares,
they are lower than inflation would have predicted them.
Speaker 4 (24:07):
No, So if you look at the price of airfares
in twenty twenty five compared to were where they were
a pre pandemic, they're twenty seven percent lower than they
should be if you equate it to pre pandemic pricing
adjusted for inflation.
Speaker 3 (24:19):
Got yeah, OK, So.
Speaker 4 (24:21):
Their point being that prices should should be higher, and
you do step away and that that's probably the takeaway
from this. You have the jet fuel price increases that
are muddying some of the data that we're getting recently
and probably will muddy it going forward now that Spirit
is no longer flying, but this will create upwards pricing
pressure on domestic airfares aside from everything with the jet
(24:43):
fuel cost.
Speaker 3 (24:44):
Yeah, it's interesting.
Speaker 2 (24:45):
I'm sure other people have experiences too, But I personally
use Google Flights. When I'm looking for a new flight
and I want to track the prices, I use that
and I started tracking a couple of international flights prior
to the outbreak of war in Iran. Both of those
are up a good forty percent in terms of total costs.
And somebody did an analysis out there I think I
(25:06):
heard quoted that international flights are up about fifty percent
of the outbreak of war, domestic flights in the US
up about twenty five percent. And frankly, you know, the
demise of Spirit really the only path there is for
it to be driven higher. Now, I do also think
that there is a place for that business model, and
(25:28):
it does leave the door open for more success from
say Jet Blue, Frontier, Allegiant, towards some of these other
you know, these other airlines that Jet Blue wasn't modeled
after Spirit, but some of the other ones were, Hey,
we're going to be a no frills airline that charges you.
Speaker 3 (25:45):
I have this experience because I just flew my.
Speaker 2 (25:46):
Mother in law two weeks ago on Spirit Airlines down
to Florida. I think it was seventy five bucks for
a carry on, eighty bucks for a check bag. Yeah,
like that was the model, like, yeah, we are going
to charge you for everything. It's not going to be
a Delta experience. But they were also pretty clear about it. Yeah,
like they weren't sugarcoating it, like, hey, you know, if
(26:08):
you pay extra, we're gonna put you in this nice first. No,
like that wasn't the deal. The deal was you took
a lower price ticket and you got a lower price experience.
Speaker 4 (26:19):
Yeah, I mean the parallel They modeled themselves after Ryan
Air in Europe. And for anyone who's been a study
of Bridespoon, like I was back in the day, that's
what you were getting. You were getting an experience where
it wasn't the nicest ride around, but you got from
point A to eight point B cheaply. And there's something
to be said about having that as an option for
consumers out there. And so hopefully you do see some
(26:42):
of those other players take the mantle there and keep
you know, sort.
Speaker 5 (26:46):
Of the lower end around. But we'll see.
Speaker 2 (26:48):
I'm unconvinced that this will be the last domestic airline
bankruptcy that we see in twenty twenty six or twenty
twenty seven. Yeah, we talked about this a bit yesterday.
Jet Blues finances they're on the ropes, not great, has
not made a full year profit since twenty nineteen. They've
got some you know They've got some cash, but they
(27:08):
face a lot of big hurdles, and like Spirit, I
doubt they had the cash available to hedge against fuel
jet fuel prices. So I think one, they're already facing
reputational damage from being an unreliable airline according to the
Wall Street Journal reliability rankings, and now this additional hurdle.
Speaker 4 (27:26):
And how does that not point to like higher airfares
if you think about that, right, Like, they've one competitor
has been eliminated. They are jet blues on the ropes.
If you want to seize their territory, you're gonna have to.
You'll charge a little bit more because there's not other options. Yeah,
I think it's.
Speaker 2 (27:39):
Very clear which direction airfares will be going over the
course the next five years, and it's not going to
benefit consumers. So yeah, is what it is. End of
an era with Spirit Airlines. Not that they were the
biggest I think in total. Yeah, their total passenger volume
only accounted for the overall market travel wasn't huge, but
(28:01):
it was enough of a player in critical roots to
keep airfares lower elsewhere. And that era is now dead
from the Spirit perspective. Let's take a quick break when
we come back. I want to talk about Ford's thirty
thousand dollars truck.
Speaker 3 (28:17):
You just wait.
Speaker 2 (28:18):
It's allegedly coming in twenty twenty seven. We'll be talking
about it next on The Financial Exchange.
Speaker 1 (28:23):
Subscribe now to our YouTube page, where you'll find daily
interviews and full shows of the Financial Exchange. We'll get
you caught up on anything and everything you might have
missed right here on The Financial Exchange. Text us six one, seven, three, six,
two thirteen eighty five with your comments and questions about
today's show, and let us know what you think about
(28:43):
the stories we are covering. This is the Financial Exchange
Radio Network.
Speaker 6 (28:50):
The Financial Exchange is incredibly proud to be a partner
of the DVY Department of Massachusetts. Nearly four hundred runners
up already registered for this year's DAV five k. The
event sold out in record time last year. So at
the DAV fivek dot Boston for all the information about
how you can participate this November, or make a donation
(29:11):
to support our great American heroes. Your gifts help fund
free rides to medical appointments for veterans and the nation's
first DAV ledhousing initiative, providing homes for single veterans and
veteran families. Go to dav fivek dot Boston and make
your donation today. That's dav five k dot Boston.
Speaker 3 (29:31):
Uh.
Speaker 2 (29:33):
As Tucker pointed out during the break, there's a secret
team blowing up for its assembly line. It's not much
of a secret, given that the Wall Street Journal and
every other major news publication is reporting it this morning,
but they're blowing up the assembly lines in order to
make a thirty thousand dollars electric truck, to which I
(29:53):
gotta say, does this not feel exactly like Elon Musk
promising a twenty five thousand dollars Tesla since like twenty ten?
And that's what it feels like to me, is that
we are going to get this promise of a thirty
thousand dollars Ford electric truck that.
Speaker 5 (30:09):
I just.
Speaker 3 (30:11):
I'm not buying. I don't believe it's ever gonna happen.
Speaker 5 (30:15):
Yeah.
Speaker 4 (30:15):
So, Ford has had previously set up a secret team that,
as we you just mentioned, is no longer a secret,
but put together a skunkworks Ford version of the.
Speaker 2 (30:26):
Ragtag group of misfits, yells of techies, and old school four.
Speaker 4 (30:32):
Veterans to create a super team to try and basically
take on the Chinese EV market. It sounds like a
great movie plot, but the execution is what it's all
gonna come down to. It's rumored that this car would
come out in twenty twenty seven. The new truck is
supposed to have three hundred miles on a single charge,
and like you mentioned, cost thirty thousand, and be as
(30:55):
fast as the Mustang. And a little bit of skepticism here,
like you mentioned, because Ford, like you said, has been
sort of going through its tried and true playbook.
Speaker 5 (31:06):
They were the ones who basically.
Speaker 4 (31:09):
Created the manufacturing supply line that companies have been so
familiar with for hundreds of years, and they're trying to
blow this thing up and do it in a more
cost effective fashion.
Speaker 5 (31:20):
The reason I have a.
Speaker 4 (31:21):
Degree of skepticism on it is that the person that
was leading Ford's EV and tech, their chief of that
since twenty twenty one, Doug Field, who was a former
Tesla executive, just left this last month in the month
of April. So I'm sitting here saying, Okay, this guy
was the head of this EV and digital design officer
overseeing this endeavor for the last five or six years.
(31:44):
You would think if he feels that this is going
to be a rousing success, that perhaps he hangs on.
And again I'm speculating, maybe there were other reasons why
he left his posts. Sure, but you would won't think
that if it was going to be met with a
tremendous amount of adulation, that he would want to be
there in twenty twenty seven when it rolls.
Speaker 2 (32:02):
Out, one would think that, yes, look other factors at
play here. Just yesterday we were covering how Ford themselves.
We're talking about how the F one fifty is kind
of screwed because of the amount of aluminum that goes
into it. Ford's own aluminum costs have nearly doubled this
year because of well three factors. A fire at one
(32:26):
of the main US aluminum production facilities, tariffs on imported aluminum,
plus the fact that there is not really any imported
aluminum because it all comes from the Middle East, and
the straight up fom Moves is blocked has made it
so that, Yeah, the aluminum that goes into their F
one fifty has been really expensive. And I got to
guess that if you're planning on building a thirty thousand
(32:46):
dollars electric truck.
Speaker 3 (32:47):
There's probably a heck of a lot of.
Speaker 2 (32:49):
Aluminum that goes into that too, So I'm going to
file this one in Tugra. If you want a prediction
that we can. I don't know how you pay this off.
But it'll never happen. Okay, you thirty thousand dollars truck
will it'll get released, but it won't be thirty thousand dollars.
Speaker 3 (33:05):
Okay, it'll never be. There will never be.
Speaker 2 (33:07):
A thirty thousand dollar truck, and we can you can
put an end date on that if you want, But
there will not ever be a Ford branded thirty thousand
dollars pickup truck that's electric. I just I'm not seeing
it happening. I don't think they ever get there. Wow, Yeah,
I think this is I think this is silliness. Just again,
(33:28):
they're not the only ones. Elon Musk's been promising a
twenty five thousand dollars ev since god knows when, and
it's never gonna happen either. Maybe just for inflation, yeah
you want to adjust it for inflation, that's fine, But
in terms of an actual yeah, it's just never gonna happen.
Thank you for And by the way, I drive one
of your electric vehicles. I own a Ford Mustang mache
(33:51):
I love it.
Speaker 3 (33:52):
It's a good car, but it was forty five grand.
Speaker 2 (33:55):
You're just not going to get there on a pickup
truck for thirty thousand.
Speaker 5 (33:59):
Dollars, Mike the Ford Skunkirk Stent.
Speaker 2 (34:01):
And if you do, it's going to give you a
fifty mile range because it's going to have a basically
golf cart battery in it. So that's that's I guess
my point. Switching gears here away from electric vehicles. Want
to talk a bit about gas taxes. There's a piece
in Bloomberg You'll you'll miss gas taxes when they're gone. Yeah,
we would, because our infrastructure across the nation is crumbling
(34:22):
and this is one of the main sources to pay
for it. The gas tax at the federal level is
around eighteen cents a gallon. I believe it's more for diesel,
and there's obviously state gas taxes as well. But unsurprisingly,
when we've got the national average for gasoline today sitting at.
Speaker 4 (34:44):
I'm gonna guess for forty close for forty eight on
the national average, there's obviously a lot of pushback and
like in.
Speaker 2 (34:53):
Twenty twenty two when a number of states pause their
gas tax. Connecticut was one of those states, are con
considering doing so again. And the point that's being made
here is not on the merits of gas tax or not.
He actually makes the point that, you know, with the
growing number of evs, we need some sort of different replacement,
a use tax of roads instead of just a gas tax,
(35:15):
because I'm personally not paying any gas taxes and contributing
to highway funding in any way, shape or form when
I drive my EV. But the point he makes is
if you just get rid of them, are crumbling infrastructure
that's already problematic across the country is going to get worse.
Speaker 4 (35:32):
Completely on board with this. It's no one likes the
idea of a tax, but this one is pretty straightforward,
and the incentives or the costs around it makes sense
in that cars that are less fuel sufficient, that are
typically heavier and really grind down the roads more think
a big eighteen wheeler or an suv versus you know your.
Speaker 2 (35:54):
Which is why diesel gas taxes are higher. Exactly what
the thought problem.
Speaker 4 (35:57):
The diesel gas tax are about twenty five cents a
gallon versus eighteen for for just regular, regular gas. So
that makes sense. Okay, right, you've got a bigger vehicle,
it's beating up the roads more. That is a higher
tax that you should have to incur. And we all
like to be able to drive on highways that are
maintained in good order for safe and safety reasons and
(36:17):
for just you know, making an easy drivable experience. So
all this makes sense that you have to have this
in place. It's really easy to administer. There's not the
nuances of tracking mileage or all these other GPS positioning
things that there's been room not rumored. But he suggests
here as to how you can combat this as it
from an ev perspective, which I guess I'm less concerned
(36:40):
over from a market share perspective. I don't have the
numbers out front of me, but it's not so much
that it's going to lead to roads being in disarrayed.
Speaker 5 (36:46):
But he's right, it's a point that it.
Speaker 2 (36:48):
Is something more of a fairness issue than it is
anything else. People have the perception of, well, you know,
these jerk evy people with their you know, Braggadocia's license
plates aren't paying.
Speaker 3 (36:57):
The gas tax. And I am so I agree.
Speaker 2 (36:59):
There the other thing that I would be perfectly willing
as a taxpayer to flirt with the idea on, Hey,
you want to eliminate the gas tax. If the national
average is above five bucks a gallon, I'm on board,
But double it if it's under four bucks a gallon.
Wouldn't like just listening out there, Wouldn't you be willing
(37:20):
to pay a higher gas tax if gasoline was at
a lower price at the moment in exchange for a
lower gas tax if the gas was at a higher price.
Now again, don't trust the government. I'm not saying that
we should trust them to do this properly, but just
as a concept, I would be perfectly willing to say, Yeah,
if gas prices are up over five bucks a gallon,
(37:40):
the gas tax is zero. If it's four to five
bucks a gallon, then it's eighteen cents. And it's under
four bucks a gallon, it's thirty six cents. Interesting, I'd
be all on board. You also need to know trigger
this stuff with inflation, because that gas tax hasn't been
moved since the nineties, so it doesn't actually pay for anything, right.
But yeah, different story for a different day. We've got
to take a quick break markets remain in positive territory
(38:03):
as we close out the first hour of the show here,
but a lot more to cover in the second hour
and including a full market recap.
Speaker 3 (38:09):
We'll be right back
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 DAV five 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, Welcome back to the Financial Exchange.
Speaker 3 (01:14):
Happy Tuesday.
Speaker 2 (01:14):
Here it's Mike, Paul and Tucker with you on a
jobs week. We've got data from the Bureau Labor Statistics
out this morning for the Adjults Survey. That's the job
openings labor Turnover survey that we report on once a month.
This Friday, we'll be getting a full blown jobs report.
Speaker 3 (01:31):
Thursday. Of course we get our weekly jobless.
Speaker 2 (01:33):
Claims in the context of a FED that is now
much more worried, seemingly about the inflation effects than the
labor market. But obviously, you know, a few rough labor
market reports can change that viewpoint. And you've got the
new chair coming in with Kevin Warsh. We've got obviously
(01:55):
the airline news continuing with Spirit Spirit Airlines demise and
the Great Wealth transfer that will be playing out of
the course the next couple of decades. But frankly all
of that taking a back seat to the news over
the last couple of days regarding the Middle East Iran
attacks on the United United Arab Emirates and what it
(02:16):
means for the US presence in the Strait of horror.
Mouse So Paul picking up right there. We kicked off
the show yesterday very much in a state of not
really sure what's going on there. There was a lot
of confusion starring.
Speaker 3 (02:30):
In a town.
Speaker 2 (02:31):
Yeah, starting at around four or five in the morning yesterday,
after the President's Sunday statements about helping ships navigate the
Straight and US military presence in that space. What we
now know with a higher degree of certainty is that
two ships were struck, one Korean flag vessel another UAE
(02:53):
flag vessel. There were also attempted strikes on the United
Arab Emirates mainland. They put out a bunch of warnings
to citizens, one of them ended up being a very
quick false warning, another one then repeated. But I think
the biggest thing that we can conclusively say is that
once again, in spite of the US's best efforts, ships
(03:14):
are not feeling safe enough to navigate the Straight. The
US is actively blockading any ships that are navigating the
Straight with Iranian permission, and we are in not much
of a different position than we have been for the
last two months when it comes at least to the
supply of oil and all other goods that navigate through
(03:34):
the Strait.
Speaker 4 (03:35):
Yeah, continued uncertainty in the region, Mic, and it seems
like potential for some sort of pessimism if you sort
of look at the events over the last few days here.
I know you guys have been covering this extensively on
a day to day basis. The question that I keep
coming back to is we have this backdrop where now we're,
what sixty plus days into this whole war, where we
(03:57):
were typically accustomed to one hundred and fifteen, one hundred
and thirty ships traveling through the Strait. We're far off
those numbers, and it's basically been a standstill. We've talked
about on the show at nauseum the impacts that has
on the oil and energy markets as well as global
supply chains. But yet still we sit here, Mike, with
a market that is up again today though it was
(04:18):
slightly down yesterday, and a market that's up close to
six percent your date. I'm just curious you and Chuck's
view kind of covering this day to day as to
why the markets seem to continue to chug along. Obviously,
we've had a really nice earning season here where we've
seen double digit earnings growth for a lot of those
companies in the S and P five hundred. That's certainly
a positive here domestically, But I just am curious is
(04:39):
why we continue to see such positive investor sentiment. When
I read these headlines in preparation for the show, it
makes me a little more pessimistic on markets.
Speaker 2 (04:48):
Yeah, I mean, we're gonna be talking about semiconductors and
Taiwan and everything else later in the program. But I
think the answer is fairly simple. Energy markets are accurately
pricing in the shortage. Now you know twenty percent of
the world supply of oil gone. The United States is
not dependent on low oil prices like they were in
(05:12):
the nineteen seventies and nineteen eighties in order to support
their economy. In fact, energy overall the US economy is
far less energy intensive than it was a few decades ago.
And realistically speaking here, I think I think the main
answer is that this market in the United States since
twenty twenty three has cared about one thing and one
(05:34):
thing only, which has been semiconductors and ai right, And
so long as that supply chain isn't getting disrupted, I'm
not sure that much else matters. There's other things that
forced at work here too. Clearly, there's a by the
dip mentality. I think there is an interesting role that
retail investors are playing today.
Speaker 5 (05:52):
Little more of a risk environment a decade ago.
Speaker 2 (05:54):
But overall, I don't want to overcomplicate it all that much.
There is a looming crisis in energy markets. Spelling out
exactly what the effect is on US markets because of
that is pretty complicated, right, Like do I see a
path where gas prices could be over five bucks a
(06:15):
gallon this summer?
Speaker 3 (06:16):
Sure?
Speaker 5 (06:16):
Do yep?
Speaker 2 (06:17):
Would that be painful for Americans? Absolutely? Would it be
any substantially more painful than the existence of the tariffs
that we initially thought were going into place in the
spring of last year, or other big disruptions to things overall?
Maybe maybe not, you know, like I have a tough
time drawing out how much worse five dollars a gallon
(06:41):
gas is for the average American compared to.
Speaker 3 (06:45):
You know, tax rates.
Speaker 2 (06:46):
Where they were two years ago, or tariffs being you know,
a major contributing factor to things. You know, there are
these offsetting forces, and when I look at, for example,
the total consumption of oil in the United States dates
and the increased price they are compared to the total
benefit of tax cuts that went into place in twenty
twenty six, they kind of wash each other out.
Speaker 4 (07:08):
Yeah, I just wonder that the five dollars a gallon
particularly parallels to where we saw it, I believe, around
July of twenty twenty two, where inflation was at that
breakneck pace. And I'm not suggesting that we get back
to those levels. And perhaps it's worth discussing when you
have oil and gas that high at five dollars a gallon,
it seeps into other areas beyond what you and I
(07:28):
pay in the pump. Obviously, anything from a transportation standpoint,
for the goods that we buy from Amazon or others
out there, you'd have to think that they would have
to increase their prices in order to combat and we've
seen it with the airlines and we're going to talk
about that. In today's program to combat higher fuel costs,
fares have to go up. The same thing applies, And
(07:49):
so I just wonder that it seems that perhaps the
argument could be and I get it, we're not coming
off of post COVID stimulus where people were flushed with
a bunch of money, But how is the inflationary picture
which you did allude to, The FED is concerned about
doesn't seep into to market pess And I guess it
goes back to your overall point is that the market
(08:09):
is lesser concerned about an inflationary picture or a pessimistic
inflationary future here in the next three to six months
than the emergence of continued just crazy demand for semiconductors.
Speaker 5 (08:21):
And yeah, I mean that overpowers it.
Speaker 2 (08:23):
I think I don't know the exact numbers. I'll try
and pull them during the break, but I believe that
year over year earnings growth for this quarter right now
is on there no more closer to twenty wow. Okay,
And so I think my answer is you can pave
over a heck of a lot of problems so long
as you have the big boys, which are the semiconductor
(08:46):
AI players out there, some other tech companies too. But
if you have those big boys pulling in profits that
are growing twenty percent on an annual basis.
Speaker 4 (08:56):
While also spending billions of dollars on capex too to
build out out of which is helpful, you know.
Speaker 2 (09:02):
You might just take a back seat and say, yeah, okay,
I can deal with interest rates at four percent for
longer I can deal with inflation at three to four
percent if companies continue to produce earnings that are just
literally knocking the cover off the ball, right, I think
that's my answer, and it's surprising in a lot of ways.
(09:22):
I don't think it's I don't think it's sustainable from
a political standpoint to have Americans paying five dollars a
gallon for gas and six dollars a gallon for diesel.
And I don't think that it's a good formula for
anybody trying to run for re election in general to
see inflation, you know, getting to nine percent, coming back
down to three, and then you know, shooting back up.
(09:46):
But from a pure US stock market perspective, Wall.
Speaker 5 (09:51):
Street's not about that.
Speaker 2 (09:53):
It's about yeah, that's it's now, you know. To be clear,
if we start to get into a position where inflation
is now running so hot that interest rates, rather than
staying where they need where they are now need to
go up like it did in twenty twenty two, that's a
different set of circumstances. But we're not there yet. Right,
Let's take a quick break. When we come back. I
do want to get to that job opening's labor turnover survey,
(10:14):
and then a little bit more about this energy impact
on the US economy.
Speaker 3 (10:18):
That's next here on the Financial Exchange.
Speaker 1 (10:20):
Remember, you can watch the show live every day on
our YouTube page. We've got market updates and breaking business
news all morning long, plus a full archive of all
our show's content. It's all there with that click of
a button at YouTube dot com. Slash the Financial Exchange
Show from FED Decisions to Market Moves. Watch the Financial
(10:40):
Exchange live on x face. He's the Financial Exchange.
Speaker 2 (10:57):
We've got a listener text during the last segment about
gas and all sorts of other pieces that I thought
was interesting. By the way, you can text the show
at six one seven three six two thirteen eighty five.
We also do our weekly mail bag segment on is
that Friday's Tucker?
Speaker 5 (11:16):
Yeah, Friday, eleven thirty five, And.
Speaker 3 (11:17):
What's that phone number for that?
Speaker 6 (11:19):
Uh three nine nine three nine nine four triple three
or email TFE Show at gmail dot com.
Speaker 2 (11:27):
You just did it wrong, but it's today three three
nine three nine nine four triple three. Why did you
ask me I TFE Show email number until you said it, Tucker?
In any case, the text, I'll read it. So the
price of gasoline being up significantly is not helpful. Tariffs
are not particularly helpful. It's straight of horror moo Hormuz
blockade war in the Ukraine. All of this is not good.
(11:47):
But I'm a home improven contractor. Yesterday two customers signed
contracts with me for home improvement work. Total is ninety
eight thousand dollars. Single best day I've had in two years.
Previous mark was seventy two thousand. The point is, I
know things are not rate, but there are people who
have the money and choose to spend it in almost
any economy would not agree.
Speaker 5 (12:07):
More like that text.
Speaker 4 (12:08):
Yeah, it's a nice way to kind of crystallize everything
that's gone on, and that's spend the story has been
a resilient consumer through everything for the last three or
four years.
Speaker 5 (12:16):
Yeah.
Speaker 2 (12:17):
And it's not to minimize the experience of a good
chunk of Americans a third or more who are in
very tough place and seeing gas prices increase this much
may knock them over the edge, right, And I am
certain that with gas prices being up like we saw
spirit airlines demise, there will be individuals who fall beyond
(12:37):
the precipice and can't make their student loan payments or
can't pay off that credit card or do those things.
But on the other hand, we have this extraordinarily wealthy group,
especially over the age of sixty, who.
Speaker 3 (12:51):
Are continuing to spend.
Speaker 2 (12:53):
And in this you know, in this individual's instance here,
they usually own a home, they oftentimes have a more mortgage.
That mortgage rate is oftentimes below four percent. And so yeah,
I believe it. I believe that people are spending money
on home renovations. I believe that people are choosing not
to move and instead making those decisions to stay in
(13:13):
their homes for longer and make them the better homes
that they want. Because especially the events of these last
few months have I think signaled to a whole bunch
of people, Well, that mortgage that I was hoping to
get below five and a half percent doesn't look like
it's happening anytime soon.
Speaker 3 (13:30):
So I'm staying right where I am.
Speaker 4 (13:32):
And the other thing that we've seen over the course
of the last five or six years, as much as
we can try and forecast potential economic issues in the future,
the bottom line is to this texture's point, and kind
of that disregards my initial question, the first segment of
why is the market still up? Even though there are
these concerns geopolitically, is that the market has just kicked
(13:52):
putt for the last five or six years. With the
exception of twenty twenty two being a down year, all
these other years post twenty eighteen really have been some
really strong market years. And so as a result, like
you mentioned, this baby boomer population that has pretty significant
amounts of sums in the market in their retirement accounts
or other investment accounts have seen their money grow on paper,
(14:13):
and as a result, when you see that money grow,
it's easier to pay for these type of renovations.
Speaker 3 (14:17):
It's not just the boomers.
Speaker 2 (14:18):
There are plenty of working folks and younger folks that
are independently wealthy and able to do this too. But
in terms of one key demo that holds a lot
of the nation's wealth and is very comfortable spending right now,
it is that younger baby boomer demo that's healthy, newly retired,
and looking to upgrade their lifestyle a little bit. This
(14:39):
morning at ten am, we received a report from the
Bureau of Labor Statistics. It's the first jolt support we've
gotten since the outbreak of war in Iran. It's measuring
data from the month of March, and I think the
key answer here, Paul, is what we kind of already
knew regarding the economy in March, which which was not
(15:01):
much has changed on that front. We did see job
openings increase a little bit, the hiring rate increase a
little bit as well, But overall, if you're looking for
that sign that the economy the labor market is either
on the precipice of dramatically slowing down or quickly heating up,
I don't really see much in the way of signals
(15:23):
on that front.
Speaker 3 (15:23):
And this is one of those reports.
Speaker 2 (15:26):
The reason we report on this one generally speaking, I
don't mean to overly generalize with this, but the reason
that we look at this report specifically is many economists
have looked at it and said, this is a better
indicator of what's going to happen with wage inflation than
the unemployment rate or any other different measure that we
have to look at the state of the labor market.
(15:46):
The pace of hiring and the number of jobs that
are open right now, how many employers are looking for
workers is a better indication of where wages are going
to go. And we saw this in twenty twenty one
and twenty twenty two when there was a real shortage
for workers.
Speaker 4 (15:59):
Yeah, there's I guess the jobs reports have become under
scrutiny over the course of the last few years just
because of some questions regarding how good is the survey
data that they're getting. There's always these revisions to them,
and so this one has been leaned on a little
bit more. But with the labor market, whether it's this report,
the Jolts one that we're covering here, or the Jobs
(16:20):
report that we've got a new one coming out on Friday,
the takeaway has been the same for the last few months.
There's been no real deviation that you can continue to
characterize this labor market as low, fire low, higher and
the unemployment rate has remained kind of plateaued at this
what's anticipated to come in at four point three percent
(16:41):
on Friday, and you've had very little job editions. But
we've talked about some of the factors in place that
have kind of kept that unemployment rate stabilized in terms
of older workers sort of exiting the labor force. Those
baby boomers that Mike and I were just talking about
are retiring in droves and you've got fewer new people
coming in, whether it's immigration or younger workers.
Speaker 5 (17:03):
That is the state of the labor market.
Speaker 4 (17:05):
This report here does nothing to sway opinion or sentiment
for me in one way or the other from what
we've kind of been on this course.
Speaker 2 (17:13):
By the way, this wasn't in the stack that you got, Paul,
But the Wall Street Journal put together a piece on Sunday.
I believe it was on the hiring hotspots, Tucker. I
don't think you guys covered that last week, did you.
Speaker 1 (17:24):
No.
Speaker 2 (17:25):
So there's been a lot written, obviously in a lot
of uproar from younger, younger college grads that I've heard
about the difficulty in finding jobs right now. And Wall
Street Journal put together their list of hiring hot spots
based on wages, affordability in the pace of hiring, and
a bunch of places that I certainly wouldn't have guessed. Yes,
San Jose is on there, a beneficiary of the tech boom.
(17:48):
But when you go take a look, the number one
spot taking the cake is Birmingham, Alabama. And this is
again for top five US metro areas by percentile for
twenty some things with college degrees. This is not just
general hiring. It's specifically looking at, hey, you've got a
college degree, where are you going to get the best
(18:08):
bang for your buck, both in terms of wages and affordability. Birmingham,
Alabama taking the first spot, Tampa, Florida taking the second spot.
Not quite as good on the wages or affordability stand front,
but hiring pace has been incredible there. San Jose Wages
taking the number one spot on that front. Affordability obviously
a real hit there, but the pace of hiring is
(18:29):
still pretty good in San Jose. So if you can
make it work, you can get paid a lot and
get hired. Columbus, Ohio taking that fourth spot, and then Raleigh,
North Carolina rounding out the top five there. They've got
a whole list here, and I think the key answer
to me is one where Hey, you know, this situation
has always been the case, but if you are willing
(18:51):
to relocate and upend your lifestyle in your twenties, you
can dramatically expand your potential options for employment. It's a
big ask to go and leave your family and relocate
to the other side of the country, but it's also
hell of a lot easier to do when you're in
your twenties than it is when you are in your
thirties or forties.
Speaker 3 (19:11):
So interesting case. You can go take a look at it.
Speaker 2 (19:13):
The Wall Street Journal just where they rank these cities,
and they do change year to year, but for the moment,
these were their top five and they've got it broken
out by region two, which I found interesting. Quick break
when we come back, full market update. They're in rebound
mode after yesterday's sell off, with Wall Street Watch coming
up next.
Speaker 1 (19:40):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now full wool
Street Watch tracking the stocks, the dato and the headlines
driving markets so far today right here on the Financial
Exchange Radio Network.
Speaker 6 (20:01):
Markets rebounding today after yesterday's sell off amid the fragile
ceasefire between the US and Iran.
Speaker 5 (20:06):
Yesterday, the UAE set.
Speaker 6 (20:08):
That Iran launched drones and missiles against it. Right now,
the Dow is up over half a percent, SMP five
hundred is up about three quarters of a percent, Nasdaq
up about one percent higher two hundred and forty seven points.
RUSS two thousand is up one and a quarter percent,
Tenure treasure reil down two basis points at four point
four to two percent, and oil pulling back about four
(20:30):
percent today, training at one hundred and two.
Speaker 5 (20:32):
Dollars a barrel.
Speaker 6 (20:34):
According to Bloomberg, Appled has held exploratory discussions with Intel
and Samsung about producing main processors for its devices in
the US as a secondary option beyond longtime partner Taiwan Semiconductor.
Intel stock rallying again today, up fourteen percent, while Apple
shares are up by one percent. Mewhile Pallanteer stock falling
(20:55):
over five percent, despite the data analytics company posting a
record quarterly red new and profit for its previous quarter. Elsewhere,
Beer Giant Aarnheuser Busch Imbev booked its first sales volumes
growth in three years, sending shares up by nine percent,
PayPal sinking ten percent despite beating earnings expectations. Pfizer reported
(21:16):
stronger than expected first quarter earnings in revenue, batstocked down
by one percent. Coinbase announced the company we'll cut about
fourteen percent of its workforce, sending shares down by over
two percent, and after today's closing, bell A and D
will post its quarterly results I'm Tucker Silvan, that is
Wall Street Watch.
Speaker 2 (21:36):
Well, if you haven't already heard, over the weekend, Spirit
announced their own demise liquidation, however you want to phrase
it here, end of an era for the largest discount airline.
I'm not sure that I would still throw Southwest into
the discount to airline category, although I guess you have to.
They don't have any first class cabins, so I guess
(21:59):
you would still put them and Jet Blue in there,
in which case Southwest is the bigger one. But in
terms of fair cost, I'm not sure you can really
put them in the same category that Spirit was. Nonetheless
the business model which had been under strained for the
better part of a decade and extreme strain since the
last four years and since COVID finally met its demise
(22:20):
as they did not find a path to reopening and
are now facing liquidation to well of all of their
assets and I'm sure a long drawn out process as
they go through all of this, but ceasing operations effective
this past weekend.
Speaker 4 (22:37):
And ultimately as much as they are the punching bag,
I feel like in the airline industry, where a lot
of us will say with families or whatever, I'm never
gonna fly Spirit again. This piece does a good job
of outlining while I did have mixed reactions, a little
bit of a similar reaction, what's outlined this piece this
idea that it's not good for all of us as
(22:57):
consumers of the airfares that the lowest, the cheapest discount
option gets eliminated because of the simple thing that you
learn in economics of supply and demand them being out there,
Spirit with these cut rate flights does allow for it
creates increased competition, and it makes the other Jet Blues
and other competitors keep their prices lower. And their studies
(23:19):
that have been done that even in twenty four and
twenty five that in roots that Spirit backed away from,
they saw a twenty three percent average increase of the
cost of other fares in that same transit route that
was backed away by Spirit. There's all sorts of data
that points to what all of us should probably know
that if you don't have a competitor in the market,
(23:39):
you're probably going to lean in and increase your prices further.
There's also arguments that have been made by United Airlines
executives that airline fares pre pandemic versus where they are today,
are still twenty seven percent lower on an inflation adjustent
basis from where they should be.
Speaker 5 (23:57):
So that and now you have the.
Speaker 2 (23:58):
Course against So if you look at twenty nineteen airfares,
they are lower than inflation would have predicted them.
Speaker 4 (24:07):
No, So if you look at the price of airfares
in twenty twenty five compared to were where they were
a pre pandemic, they're twenty seven percent lower than they
should be if you equate it to pre pandemic pricing
adjusted for inflation.
Speaker 3 (24:19):
Got yeah, OK, So.
Speaker 4 (24:21):
Their point being that prices should should be higher, and
you do step away and that that's probably the takeaway
from this. You have the jet fuel price increases that
are muddying some of the data that we're getting recently
and probably will muddy it going forward now that Spirit
is no longer flying, but this will create upwards pricing
pressure on domestic airfares aside from everything with the jet
(24:43):
fuel cost.
Speaker 3 (24:44):
Yeah, it's interesting.
Speaker 2 (24:45):
I'm sure other people have experiences too, But I personally
use Google Flights. When I'm looking for a new flight
and I want to track the prices, I use that
and I started tracking a couple of international flights prior
to the outbreak of war in Iran. Both of those
are up a good forty percent in terms of total costs.
And somebody did an analysis out there I think I
(25:06):
heard quoted that international flights are up about fifty percent
of the outbreak of war, domestic flights in the US
up about twenty five percent. And frankly, you know, the
demise of Spirit really the only path there is for
it to be driven higher. Now, I do also think
that there is a place for that business model, and
(25:28):
it does leave the door open for more success from
say Jet Blue, Frontier, Allegiant, towards some of these other
you know, these other airlines that Jet Blue wasn't modeled
after Spirit, but some of the other ones were, Hey,
we're going to be a no frills airline that charges you.
Speaker 3 (25:45):
I have this experience because I just flew my.
Speaker 2 (25:46):
Mother in law two weeks ago on Spirit Airlines down
to Florida. I think it was seventy five bucks for
a carry on, eighty bucks for a check bag. Yeah,
like that was the model, like, yeah, we are going
to charge you for everything. It's not going to be
a Delta experience. But they were also pretty clear about it. Yeah,
like they weren't sugarcoating it, like, hey, you know, if
(26:08):
you pay extra, we're gonna put you in this nice first. No,
like that wasn't the deal. The deal was you took
a lower price ticket and you got a lower price experience.
Speaker 4 (26:19):
Yeah, I mean the parallel They modeled themselves after Ryan
Air in Europe. And for anyone who's been a study
of Bridespoon, like I was back in the day, that's
what you were getting. You were getting an experience where
it wasn't the nicest ride around, but you got from
point A to eight point B cheaply. And there's something
to be said about having that as an option for
consumers out there. And so hopefully you do see some
(26:42):
of those other players take the mantle there and keep
you know, sort.
Speaker 5 (26:46):
Of the lower end around. But we'll see.
Speaker 2 (26:48):
I'm unconvinced that this will be the last domestic airline
bankruptcy that we see in twenty twenty six or twenty
twenty seven. Yeah, we talked about this a bit yesterday.
Jet Blues finances they're on the ropes, not great, has
not made a full year profit since twenty nineteen. They've
got some you know They've got some cash, but they
(27:08):
face a lot of big hurdles, and like Spirit, I
doubt they had the cash available to hedge against fuel
jet fuel prices. So I think one, they're already facing
reputational damage from being an unreliable airline according to the
Wall Street Journal reliability rankings, and now this additional hurdle.
Speaker 4 (27:26):
And how does that not point to like higher airfares
if you think about that, right, Like, they've one competitor
has been eliminated. They are jet blues on the ropes.
If you want to seize their territory, you're gonna have to.
You'll charge a little bit more because there's not other options. Yeah,
I think it's.
Speaker 2 (27:39):
Very clear which direction airfares will be going over the
course the next five years, and it's not going to
benefit consumers. So yeah, is what it is. End of
an era with Spirit Airlines. Not that they were the
biggest I think in total. Yeah, their total passenger volume
only accounted for the overall market travel wasn't huge, but
(28:01):
it was enough of a player in critical roots to
keep airfares lower elsewhere. And that era is now dead
from the Spirit perspective. Let's take a quick break when
we come back. I want to talk about Ford's thirty
thousand dollars truck.
Speaker 3 (28:17):
You just wait.
Speaker 2 (28:18):
It's allegedly coming in twenty twenty seven. We'll be talking
about it next on The Financial Exchange.
Speaker 1 (28:23):
Subscribe now to our YouTube page, where you'll find daily
interviews and full shows of the Financial Exchange. We'll get
you caught up on anything and everything you might have
missed right here on The Financial Exchange. Text us six one, seven, three, six,
two thirteen eighty five with your comments and questions about
today's show, and let us know what you think about
(28:43):
the stories we are covering. This is the Financial Exchange
Radio Network.
Speaker 6 (28:50):
The Financial Exchange is incredibly proud to be a partner
of the DVY Department of Massachusetts. Nearly four hundred runners
up already registered for this year's DAV five k. The
event sold out in record time last year. So at
the DAV fivek dot Boston for all the information about
how you can participate this November, or make a donation
(29:11):
to support our great American heroes. Your gifts help fund
free rides to medical appointments for veterans and the nation's
first DAV ledhousing initiative, providing homes for single veterans and
veteran families. Go to dav fivek dot Boston and make
your donation today. That's dav five k dot Boston.
Speaker 3 (29:31):
Uh.
Speaker 2 (29:33):
As Tucker pointed out during the break, there's a secret
team blowing up for its assembly line. It's not much
of a secret, given that the Wall Street Journal and
every other major news publication is reporting it this morning,
but they're blowing up the assembly lines in order to
make a thirty thousand dollars electric truck, to which I
(29:53):
gotta say, does this not feel exactly like Elon Musk
promising a twenty five thousand dollars Tesla since like twenty ten?
And that's what it feels like to me, is that
we are going to get this promise of a thirty
thousand dollars Ford electric truck that.
Speaker 5 (30:09):
I just.
Speaker 3 (30:11):
I'm not buying. I don't believe it's ever gonna happen.
Speaker 5 (30:15):
Yeah.
Speaker 4 (30:15):
So, Ford has had previously set up a secret team that,
as we you just mentioned, is no longer a secret,
but put together a skunkworks Ford version of the.
Speaker 2 (30:26):
Ragtag group of misfits, yells of techies, and old school four.
Speaker 4 (30:32):
Veterans to create a super team to try and basically
take on the Chinese EV market. It sounds like a
great movie plot, but the execution is what it's all
gonna come down to. It's rumored that this car would
come out in twenty twenty seven. The new truck is
supposed to have three hundred miles on a single charge,
and like you mentioned, cost thirty thousand, and be as
(30:55):
fast as the Mustang. And a little bit of skepticism here,
like you mentioned, because Ford, like you said, has been
sort of going through its tried and true playbook.
Speaker 5 (31:06):
They were the ones who basically.
Speaker 4 (31:09):
Created the manufacturing supply line that companies have been so
familiar with for hundreds of years, and they're trying to
blow this thing up and do it in a more
cost effective fashion.
Speaker 5 (31:20):
The reason I have a.
Speaker 4 (31:21):
Degree of skepticism on it is that the person that
was leading Ford's EV and tech, their chief of that
since twenty twenty one, Doug Field, who was a former
Tesla executive, just left this last month in the month
of April. So I'm sitting here saying, Okay, this guy
was the head of this EV and digital design officer
overseeing this endeavor for the last five or six years.
(31:44):
You would think if he feels that this is going
to be a rousing success, that perhaps he hangs on.
And again I'm speculating, maybe there were other reasons why
he left his posts. Sure, but you would won't think
that if it was going to be met with a
tremendous amount of adulation, that he would want to be
there in twenty twenty seven when it rolls.
Speaker 2 (32:02):
Out, one would think that, yes, look other factors at
play here. Just yesterday we were covering how Ford themselves.
We're talking about how the F one fifty is kind
of screwed because of the amount of aluminum that goes
into it. Ford's own aluminum costs have nearly doubled this
year because of well three factors. A fire at one
(32:26):
of the main US aluminum production facilities, tariffs on imported aluminum,
plus the fact that there is not really any imported
aluminum because it all comes from the Middle East, and
the straight up fom Moves is blocked has made it
so that, Yeah, the aluminum that goes into their F
one fifty has been really expensive. And I got to
guess that if you're planning on building a thirty thousand
(32:46):
dollars electric truck.
Speaker 3 (32:47):
There's probably a heck of a lot of.
Speaker 2 (32:49):
Aluminum that goes into that too, So I'm going to
file this one in Tugra. If you want a prediction
that we can. I don't know how you pay this off.
But it'll never happen. Okay, you thirty thousand dollars truck
will it'll get released, but it won't be thirty thousand dollars.
Speaker 3 (33:05):
Okay, it'll never be. There will never be.
Speaker 2 (33:07):
A thirty thousand dollar truck, and we can you can
put an end date on that if you want, But
there will not ever be a Ford branded thirty thousand
dollars pickup truck that's electric. I just I'm not seeing
it happening. I don't think they ever get there. Wow, Yeah,
I think this is I think this is silliness. Just again,
(33:28):
they're not the only ones. Elon Musk's been promising a
twenty five thousand dollars ev since god knows when, and
it's never gonna happen either. Maybe just for inflation, yeah
you want to adjust it for inflation, that's fine, But
in terms of an actual yeah, it's just never gonna happen.
Thank you for And by the way, I drive one
of your electric vehicles. I own a Ford Mustang mache
(33:51):
I love it.
Speaker 3 (33:52):
It's a good car, but it was forty five grand.
Speaker 2 (33:55):
You're just not going to get there on a pickup
truck for thirty thousand.
Speaker 5 (33:59):
Dollars, Mike the Ford Skunkirk Stent.
Speaker 2 (34:01):
And if you do, it's going to give you a
fifty mile range because it's going to have a basically
golf cart battery in it. So that's that's I guess
my point. Switching gears here away from electric vehicles. Want
to talk a bit about gas taxes. There's a piece
in Bloomberg You'll you'll miss gas taxes when they're gone. Yeah,
we would, because our infrastructure across the nation is crumbling
(34:22):
and this is one of the main sources to pay
for it. The gas tax at the federal level is
around eighteen cents a gallon. I believe it's more for diesel,
and there's obviously state gas taxes as well. But unsurprisingly,
when we've got the national average for gasoline today sitting at.
Speaker 4 (34:44):
I'm gonna guess for forty close for forty eight on
the national average, there's obviously a lot of pushback and
like in.
Speaker 2 (34:53):
Twenty twenty two when a number of states pause their
gas tax. Connecticut was one of those states, are con
considering doing so again. And the point that's being made
here is not on the merits of gas tax or not.
He actually makes the point that, you know, with the
growing number of evs, we need some sort of different replacement,
a use tax of roads instead of just a gas tax,
(35:15):
because I'm personally not paying any gas taxes and contributing
to highway funding in any way, shape or form when
I drive my EV. But the point he makes is
if you just get rid of them, are crumbling infrastructure
that's already problematic across the country is going to get worse.
Speaker 4 (35:32):
Completely on board with this. It's no one likes the
idea of a tax, but this one is pretty straightforward,
and the incentives or the costs around it makes sense
in that cars that are less fuel sufficient, that are
typically heavier and really grind down the roads more think
a big eighteen wheeler or an suv versus you know your.
Speaker 2 (35:54):
Which is why diesel gas taxes are higher. Exactly what
the thought problem.
Speaker 4 (35:57):
The diesel gas tax are about twenty five cents a
gallon versus eighteen for for just regular, regular gas. So
that makes sense. Okay, right, you've got a bigger vehicle,
it's beating up the roads more. That is a higher
tax that you should have to incur. And we all
like to be able to drive on highways that are
maintained in good order for safe and safety reasons and
(36:17):
for just you know, making an easy drivable experience. So
all this makes sense that you have to have this
in place. It's really easy to administer. There's not the
nuances of tracking mileage or all these other GPS positioning
things that there's been room not rumored. But he suggests
here as to how you can combat this as it
from an ev perspective, which I guess I'm less concerned
(36:40):
over from a market share perspective. I don't have the
numbers out front of me, but it's not so much
that it's going to lead to roads being in disarrayed.
Speaker 5 (36:46):
But he's right, it's a point that it.
Speaker 2 (36:48):
Is something more of a fairness issue than it is
anything else. People have the perception of, well, you know,
these jerk evy people with their you know, Braggadocia's license
plates aren't paying.
Speaker 3 (36:57):
The gas tax. And I am so I agree.
Speaker 2 (36:59):
There the other thing that I would be perfectly willing
as a taxpayer to flirt with the idea on, Hey,
you want to eliminate the gas tax. If the national
average is above five bucks a gallon, I'm on board,
But double it if it's under four bucks a gallon.
Wouldn't like just listening out there, Wouldn't you be willing
(37:20):
to pay a higher gas tax if gasoline was at
a lower price at the moment in exchange for a
lower gas tax if the gas was at a higher price.
Now again, don't trust the government. I'm not saying that
we should trust them to do this properly, but just
as a concept, I would be perfectly willing to say, Yeah,
if gas prices are up over five bucks a gallon,
(37:40):
the gas tax is zero. If it's four to five
bucks a gallon, then it's eighteen cents. And it's under
four bucks a gallon, it's thirty six cents. Interesting, I'd
be all on board. You also need to know trigger
this stuff with inflation, because that gas tax hasn't been
moved since the nineties, so it doesn't actually pay for anything, right.
But yeah, different story for a different day. We've got
to take a quick break markets remain in positive territory
(38:03):
as we close out the first hour of the show here,
but a lot more to cover in the second hour
and including a full market recap.
Speaker 3 (38:09):
We'll be right back
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Hey Jonas!
Hey Jonas! The official Jonas Brothers podcast. Hosted by Kevin, Joe, and Nick Jonas. It’s the Jonas Brothers you know... musicians, actors, and well, yes, brothers. Now, they’re sharing another side of themselves in the playful, intimate, and irreverent way only they can. Spend time with the Jonas Brothers here and stay a little bit longer for deep conversations like never before.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by Audiochuck Media Company.