May 8, 2026 • 38 mins
The labor market remains surprisingly stable even as higher gas prices, inflation pressure, and global tensions continue to build.
Chuck Zodda and Mike Armstrong break down the latest jobs report and why hiring activity continues to hold up despite persistent concerns about economic slowing and rising costs across the economy.
Also covered:
Chuck Zodda and Mike Armstrong break down the latest jobs report and why hiring activity continues to hold up despite persistent concerns about economic slowing and rising costs across the economy.
Also covered:
- Why the labor market may have stabilized after months of weakening
- The industries quietly showing signs of renewed growth
- How AI spending has become the primary driver of economic expansion
- Why disruptions in the Strait of Hormuz still threaten global energy supply
- The growing debate over whether AI is replacing workers or simply masking overhiring
- Why consumer sentiment data may no longer reflect the real economy
- The risks surrounding SpaceX’s massive upcoming IPO
- Why more Americans are being “fired from retirement” and returning to work
- What to expect from the next round of US-China trade talks
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Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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(01:06):
and Mike Armstrong.
Speaker 2 (01:17):
Chuck, Mike and Ben here and as we get things
all spooled up for you, we got all your major
indices in the green. As we go through the day.
So far, the S and P five hundred is up
fifty seven big points point seven eight percent, the Dow
Jones Industrial Average is up fifty points point one percent,
(01:39):
and the NASDAK composite is up three hundred and forty
four points one point three four percent despite stocks being up.
Interesting thing to note, it's a Friday and b uh, well,
just b uh. It's a Friday and the VIX is up,
which is kind of unusual. There's a calendar feature where
typically on Fridays, even if that thing's going on, you
(02:00):
see the VIX fall. So my antenna always go up
when I see stocks moving up, in the VIX moving
up along with them, especially on a Friday. It's a
little bit unusual. And we'll see if somebody knows something
about something. Uh dollar index is I'm sorry. The Tenure
Treasury down three point six basis points to four point
three five eight percent. Mortgage rates from Mortgage News Daily
(02:24):
flat overnight at six point four to four percent on
the thirty year, national average dollar index down point one
six percent to ninety seven to seventy nine, gold up
seventeen twenty and ounce to forty seven to twenty eight.
And we got crude oil up sixty two cents barrel
to ninety five forty triple a. National average for gas
prices down one point two cents overnight to four fifty
(02:44):
four and six tenths. So no major moves on the
oil side at this point.
Speaker 3 (02:50):
Uh.
Speaker 2 (02:51):
Yes, Michael.
Speaker 4 (02:52):
Jobs report this morning at eight thirty am. Yeah, some
people had jobs, some people didn't. About one hundred and
fifteen thousand and new jobs created during the month of April.
Some slightly revisioned for the last two months, but nothing
that changed the overall narrative, and the overall narrative remains that,
in spite of the stories I keep hearing from young
college grads about the difficulty in finding work, in spite
(03:14):
of the conversations I keep hearing from people that have
been out of work for a while and finding new jobs,
the unemployment rate remains low. The pace of hiring remains
by our own guess above above, what the economy can
we stand without seeing the unemployment rate drop?
Speaker 1 (03:30):
Again?
Speaker 4 (03:30):
Two different surveys here, so don't want to mix the
two here. But really nothing that I can see that
detects a signal of a problem in the labor market.
The most significancy is a slight uptick in the unemployment rate,
where you know, on an unrounded basis, it moved.
Speaker 5 (03:48):
Up a little bit.
Speaker 4 (03:50):
But overall, when you speak, especially to businesses that are
responsible for reporting this stuff, the pace of hiring remains
pretty strong.
Speaker 2 (03:59):
I think it's something well, no, the pace is not strong.
The pace is low. The pace of firing is low.
Like you look at the JOLT report and you look
get indeed like that, the pace is low. There's just
not much firing going on, and it's just a low
turnover labor mark.
Speaker 6 (04:14):
Yeah.
Speaker 2 (04:15):
I think the big thing is that we've stabilized in
the last three to four months now, whereas in the
second half of last year we were declining, and there
are some green shoots. Again, like it's it really depends
where you are in the economy. Interestingly, enough, again with
how the with how the Jobs report categorizes this like
(04:36):
different industries, it's not the most specific we have like
jobs in information okay, so that's like you know, tech broadly,
but not just like Apple and Amazon.
Speaker 6 (04:47):
It includes Hollywood.
Speaker 2 (04:48):
So yeah, we've seen three straight months where we've had
negative numbers there for the information category. Financial activities down
for the last two months. Yeah, okay, But then you
take a look at transportation of warehousing, which is you know,
positive to the tune of fifty thousand combined for the
last two months. There's absolutely something happening there. Retail up
(05:10):
forty thousand for the last two months. There's there's something
on that side. So I think that you have some
of these green shoots that are showing up in the
labor market right now, whether they turn into you know,
a full blown what comes after green shoots? Is it?
Do you have a flowers a plant?
Speaker 6 (05:28):
Yeah?
Speaker 5 (05:29):
Is the budding flowers?
Speaker 1 (05:31):
Yeah?
Speaker 2 (05:31):
Do you are we gonna get buds after these green shoots?
And then do we eventually get some flowers? Maybe we do,
But we'll have to see how the economy evolves now
that we have these higher gas prices in place, and
it's obviously also going to be depending on how long
these prices stay here and whether they move up as well.
You know, that's that's a possibility too.
Speaker 6 (05:50):
Yeah.
Speaker 4 (05:51):
Look, I think plainly higher gas prices and high inflation
is difficult for a consumer. The reality is that for
the last quarters, the consumer is not what's been driving
this market and economy forward. It hasn't been detracting significantly
from it. Yeah, and that can shift. But this kind
of is being driven forward by massive spend on artificial intelligence,
(06:12):
and the only thing that's going to slow that down
is a lack of availability of the stuff needed to
drive that move forward in artificial intelligence, which by the way,
could occur if the strait doesn't reopen, but it's not
occurring right now.
Speaker 2 (06:26):
Yeah. If you look at the if you look at
the data that we have from the Bureau of Economic
Analysis on GDP, and you go through and you're like, okay,
Like where is the growth actually coming from? What you
see is okay, Housing's kind of a modest drag the
(06:48):
last couple of years. Consumer spending is a modest uplift.
And yeah, the tech side of things has provided the
rest of the impulse there. And again that's fine, like
not everything has to be all humming all at once.
But I think the question for businesses is going to
be does inflation ever get to the point where the
FED feels like it has to has to act because
(07:12):
that's when you start seeing, you know, the negative consequences
up from a business investment standpoint, And we're not there yet.
Do we get there at some point? Maybe? I don't know,
but this is where we are today speaking of the
Middle East. All kinds of reports for the last twenty
four hours now that there have been just these sporadic
exchanges of fire, you know, with various parts of the
(07:33):
straight offoe moves, a few different things that have popped
up here and there. The big thing I'll tell you, like, look,
regardless of whether or not the ceasefire is an effect
or not, again, I feel like words just have no
meaning anymore at this point, Like the English language is
kind of useless. When the firing has not ceased but
the ceasefire is in effect. It's clear that both sides
(07:55):
are just kind of probing where the lines are for
what the other will permit right now. But here's the thing.
If I am a shipping captain, which you're all very
likely you're very thankful I'm not, because if I were,
you wouldn't believe how many boats I could get stuck
in the Suez Canal. Yeah, lots of that if I
were a shipping captain, the absolute last thing that I
(08:19):
would be doing with my thousand foot long boat is
being like, hey, there's some US destroyers getting you know,
attacked by you know, a bunch of Iranian fast attack
boats and firing back at them. Yeah, let's let's try
to pass by and see what happens at you know,
twelve knots and you know, without the ability to turn quickly.
(08:42):
So what I do know is, regardless of whether the
ceasefire is holding not holding, this that the environment in
Hormuz at this very moment is not conducive to a
lot going through there. And as such we continue to
see production shut ins costing the world oil supply twelve
million barres a day.
Speaker 4 (09:01):
Yes, it's so impossible to know whether or not that
can turn on it.
Speaker 6 (09:06):
Obviously, the oil.
Speaker 4 (09:07):
Production and resupply of global oil cannot turn on a dime.
But the idea of traffic flowing through the straight up
form most could turn on a dime and then turn
right back in the other direction. It is really difficult
to know what comes next.
Speaker 2 (09:21):
Let's take a quick break. When we return, let's do
some trivia, and then let's talk about China right after this.
Speaker 1 (09:30):
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Speaker 3 (10:07):
The Money Matters mail bag is coming up at eleven
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Cardinal Robert Prevost was elected as the two hundred and
sixty seventh Pope of the Catholic Church. He's the first
American to hold the office, and he took the name
Pope Leo the fourteenth. Today's question, which US city is
(10:51):
Pope Leo?
Speaker 2 (10:52):
The fourteenth?
Speaker 1 (10:52):
From?
Speaker 3 (10:53):
Which US city is Pope Leo the fourteenth from? Be
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Speaker 2 (11:12):
Pierce in The New York Times is titled when You're
fired from retirement and specifically talking about, Hey, the people
that have to return to work because the financials didn't
actually make sense the way they thought they didn't retirement.
Speaker 4 (11:28):
I thought it was when you really misbehaved in the villages,
they fire you and send you out. I don't think
you can misbehaving.
Speaker 2 (11:35):
I think you gotta do a lot to get kicked
out of the village.
Speaker 3 (11:38):
We did the Costanzas get fired in retirement from Bulta Vista.
Speaker 2 (11:41):
Yeah, the barons did also in uh and everybody loves Raymond.
Speaker 4 (11:47):
So what they're talking about here is a phenomenon that
we've covered before, and you do see this showing up
in some of the data, which is uh. Overall, while
we as society are getting older, people who are working
past the age of sixty five continues to grow. And
while I'd love to believe it's because they're all passionate
about their work and just really love what they do,
(12:10):
the reality is not so much the case. It is
that people are unfortunately woefully underprepared for retirement and a
lot of cases underestimate things like is are covered in
this New York Times piece about you know, just higher
than expected medical costs. For instance, in retirement, one woman
is talking about how Medicare only covers a small portion
(12:31):
of her diabetes medication, and so the planning she had
done between Social Security and the pension she had don't
quite cover it. I think where this lands for me
is in I guess both directions of the fired from
retirement story. As many of those situations that I have
seen of people needing to make changes to their retirement lifestyle,
(12:53):
I'll say that I've seen an equal number of people who.
Speaker 5 (12:57):
Regret having worked longer than.
Speaker 6 (13:00):
They needed to.
Speaker 4 (13:01):
Because I've never met anybody on their deathbed who's like, oh, man,
I wish I had just put in a few more
years of work. It's always been my only regret is
I wanted to spend more time doing than the you know,
the great things that I was able to do when
I was finally done working. It does cut both ways,
but the real answer, as terrifying as the idea of
(13:23):
retiring and the needing to go back to work is
for people, the focus should also be on, hey, you know,
can I get to a place where I'm able to
retire early or earlier than I anticipated and focus on
that exciting new part of life. It's a lot of
complexities between how Medicare works and social security, your future
(13:44):
required minimum distributions, taxes.
Speaker 6 (13:47):
And retirement.
Speaker 4 (13:48):
They're all really complex subjects, but you can't possibly assess
the answer until you do the groundwork and ask the question.
Don't work longer than you have to call Armstrong Advice
Group for free consultation on your future retirement. The numbers
eight hundred three nine three for zero zero one. You
can book a time for us to call you back
(14:08):
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again eight hundred three nine three for zero zero one.
Speaker 1 (14:16):
The proceeding was paid for by Armstrong Advisory Group, a
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Armstrong guide a specific financial, legal, or tax advice. Consult
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Speaker 2 (14:32):
The US and China are scheduled to get together, with
President Trump and President g meeting next week in China.
I believe it is. I think it's the fourteenth to
the sixteenth that the summit is scheduled. It's kind of
taken a back seat given the broader geopolitical things swirling
over the last couple of months. I mean, heck, it
(14:54):
was delayed, right, This was originally supposed to be a
month ago. Yeah, So I think it's it's interesting to
me that they are still scheduled to meet. Obviously, the
US is going in if you look at the typical
asks from the US during either of the Trump terms,
the US is going in saying, hey, we want you
(15:14):
to buy more US products. China is going to be saying, hey,
we want you to stop tariffing US yep. And I
think expectations are fairly low. I think for this this meeting,
I don't think anyone's expecting some giant grand breakthrough or
(15:35):
anything like that, and other.
Speaker 4 (15:38):
Things that are you know, undercurrents in the conversations always Taiwan.
You know, China will always be pushing for something on
Taiwan and they continue to view it as their territory
that you know, would also have the nice side benefit
of being the only place that produces semiconductors in the world.
Speaker 5 (15:58):
There's also been a lot of men of you know,
the AI arms.
Speaker 6 (16:02):
Race between these two countries.
Speaker 4 (16:05):
When we talk about the AI build out, it's really
only about two countries, the US and China, or the
US versus China, And you know, there could be some
low hanging fruit there I think, for if not written agreements,
then at least stated understandings of how it's used or
not used in military applications and things along those lines.
(16:26):
But yeah, I too hold pretty low expectations for where
this goes because frankly, it's just not the priority of
the day for the Trump administration.
Speaker 2 (16:36):
I don't think it's the priority of the day for
China either. Yeah, I think there. I think both before
the Iran conflict, we're looking towards the shows. Hey, is there, like,
can we build towards something bigger. But I think there's
just so many complicating factors right now. Yeah, that it's
just tough for me to see anything huge coming out
(16:56):
of this. But look, as always, when you're thinking about
the things, it's it's not binary, and it's not yes
or no, one hundred percent either way, it's okay along
the spectrum, how can things potentially move and just be
aware that, you know, there is the possibility that maybe
something larger does come together. But yeah, we'll see.
Speaker 4 (17:15):
One thing that's definitely true here is the US has
certainly seeded a lot of influence in Asia over the
course of the last year or so, between trade, terrif
fights and now with the events in Iran. I mean,
I know we tend to be very domestic, focused on
on this program and talking about higher gas prices here,
(17:36):
but what phenomenon has occurred in you know, Southeast Asia
has been China exceptionally well prepared for the events in
Iran and certainly impacted.
Speaker 2 (17:48):
But I don't know, now, I think sometimes we give
China a little too much credit, like they're not infallible.
Speaker 6 (17:55):
They're they're not infallible.
Speaker 4 (17:57):
Is there any Asian nation you can point to that
is more energy independent right now than China.
Speaker 2 (18:02):
No, but their economy is also a mess.
Speaker 6 (18:04):
Yeah, agreed.
Speaker 4 (18:05):
But I think one thing that's clear is a number
of those countries that are in a bigger mess right
now have turned to China as a relief out. I
don't know that they're getting it, but they are going
to China and saying, Hey, can we get some jet fuel,
can we get some sort of relief on energy infrastructure?
And I would imagine that the Chinese are saying, yeah, absolutely,
(18:26):
just plan on taking a bunch of our solar panels
and cars and other things that we have overproduced over
the last few years in exchange for it. So I
think this moment, the last year especially, but the last
few months too, have probably been a lot about China
trying to expand their influence in the region, and I'd
imagine they've been somewhat successful with it.
Speaker 2 (18:46):
Mike, You know how sometimes we have those you see
those quotes where it's like, hey, if you invested like
five thousand in Microsoft forty years ago, you'd be worth
like ten million dollars today. Yeah, I just saw a
new one here. If you invested thirty thousand dollars in
(19:06):
sand disc twelve months ago, you'd be a millionaire now.
I wish I had known again, It's just wild, Like
what would.
Speaker 4 (19:15):
I be worth if I invested thirty thousand dollars in
Verizon ten years ago?
Speaker 6 (19:21):
Don't answer that question.
Speaker 2 (19:26):
Still working on. Let's take a quick break. We got
the trivia answer Wall Street Watching mail bag.
Speaker 1 (19:31):
When we come back, bringing the latest financial news straight
to your radio. Every day, it's the Financial Exchange on
the Financial Exchange Radio Network. Tell you now full Wall
(19:51):
Street Watch tracking the stocks, potato, and the headlines driving
markets so far today right here on the Financial Exchange
Radio Network.
Speaker 3 (20:04):
All our markets are still green right now as they're
reacting to the positive news from this morning's jobs report
that came in better than expected. The Dow Jones just
barely holding on to positivity. It is up point zero
two percent, or just under ten points. The S and
P five hundreds up over fifty three points or three
quarters of a percent. The Nasdaq is up over three
hundred and thirty four points or one point three percent.
(20:26):
Gold is still holding strong, up a tenth of a percent,
and silver is up point seven seven percent. Cloud infrastructure
company core Weave is seeing its share price drop twelve
and a half percent as its second quarter revenue guidance
disappointed Wall Street Core We've sees revenue ranging from two
point four to five billion to two point six billion.
(20:47):
The midpoint of two point five three billion fell short
of the two point six to nine billion consensus. Upwork
shares are tumbling twenty percent after the company announced a
restructuring plan that includes reducing its work force by twenty
four percent. Upwork said it was doing this to make
sure the company remains profitable as work evolves. It also
reported first quarter earnings and revenue that came in slightly
(21:09):
lower than expected. Expedia shares are down seven percent after
the online travel agency called for second quarter revenue of
four point one to one billion to four point one
nine billion, compared to the four point one two anticipated
by analysts. Booked room nights in the first quarter missed expectations,
landing at one hundred and thirteen point nine billion dollars
versus the consensus of one hundred and seventeen and finally,
(21:33):
Wendy's stock is up four percent after reporting better than
expected revenue of five hundred and forty point six million
dollars in its first quarter financial report. Analysts polled estimated
revenue would be five hundred and eighteen million. Earnings also
came in above estimates, and the company also announced it
planned to build up to one thousand restaurants in China
(21:53):
over the next decade. I am Ben Kitchen and that
was Wall Street Watch and let's pay off a little
bit of our trivia here. Today's question was which US
city is Popolio. The fourteenth from the answer is Chicago.
Jim from Roachdale, Mass is our winner. He'll be taking
home at Financial Exchange Show t shirt. We play trivia
every day here on the Financial Exchange. See complete contest
(22:14):
rules at Financial Exchange Show dot com.
Speaker 2 (22:20):
For mails here here's the mail.
Speaker 3 (22:22):
Then for mails it makes me one the wag my
tail when it comes to Wanta whil mail.
Speaker 1 (22:29):
You've got questions, We've got answers. It's time for the
money matters mailback. We are tackling your calls and emails
on everything from economic policy to global markets and everything
in between. Leave us a voicemail at three three nine
three nine nine four three three three and you might
hear it on the show. You can also email your
question to TFE Show at gmail dot com. Now it's
(22:52):
time for the Money Matters mail bag.
Speaker 2 (22:57):
All right, first question up here.
Speaker 3 (22:59):
The Money Matters mail Bag currently twenty nine years old,
and I make twenty six dollars and thirty five cents
at my job, which is fifty five thousand ish per year.
My job contributes fifty percent up to eight percent. My
question is should I sign up for a standard four
oh one K through my work a roth ira or
split it between both?
Speaker 4 (23:21):
Okay, So first thing I have to acknowledge here that
we don't have enough context answer this question.
Speaker 2 (23:27):
There's a few more pieces of.
Speaker 4 (23:28):
Information we would want to know, and as we've talked about,
we don't give specific investment or planning advice when we
do all this. But I want to think through the
context of how I would assess this question were I
do we.
Speaker 6 (23:41):
Have a name, no name, we're called him Dan?
Speaker 4 (23:45):
Were I Dan in this situation earning around fifty five
grand a year and deciding what to do with the money.
So first of all, I want to acknowledge a piece
that you know, he grew up poor and just starting
it sounds like a four oh one K, and there
is a match attached to that four oh one K
contribution here which sounds pretty generous. First things first would
(24:08):
have to be understanding that at twenty nine years old,
any money that you put into this thing you are
not really able to access without some extreme scenarios before
fifty nine and a half. So first things first, before
you even consider putting the money in, make sure you
can afford to do so. You know, if you're living
paycheck to paycheck, you need to have enough money to
afford a car repair if it happens. You need to
(24:30):
have enough money to pay the rent if something happens
to your income, So start there. Raindy Day fund has
to be covered first, We've talked about it before. Between
three and twelve months of expenses, depending on your specific
scenario is kind of where we start. Beyond that, how
would you go about assessing the traditional versus roth as.
I mean, we check those boxes and we're concluding, yeah,
(24:51):
there's money on the table here we should be contributing
to retirement.
Speaker 5 (24:54):
Yeah.
Speaker 2 (24:54):
The big one is a tax bracket analysis. What tax
bracket are you in today and as you get towards retirement,
because remember you're not touching that money until, uh, you know,
you're after age fifty nine and a half. Ideally, Hey,
what tax bracket do you expect to be? And then
now look, if you're what was it twenty six years old,
twenty nine, twenty nine. Let's be honest, none of us
(25:15):
know exactly where tax brackets are gonna be in thirty years, right,
don't know Assume current ones just for the sake of argument.
And hey, if you think your tax bracket's gonna be
higher in the future, then you're typically better off putting
the money in a row today. If you think your
tax bracket's going to be higher today, you're typically better
off putting the money in an IRA. If you don't know,
(25:38):
then you can hedge and say, Okay, I'll do fifty
to fifty because I don't know exactly what things are
gonna look like.
Speaker 4 (25:42):
Other factors that are pretty unique to New England. Right,
If you live in California, you're probably not gonna be
commuting to another state here in New England. Right, Like,
let's say you live in New Hampshire and you're currently
working in Massachusetts, but you don't think you will for long.
That means your income that's from Massachusetts is getting an
extra five percent income tax. Maybe it makes sense to
defer more of that into the four oh one k,
(26:03):
because you're saying, hey, by the time I pull it out,
I'm certainly not going to be paying that extra five
percent over to mass. So there are a number of
different factors, and again that's pretty unique to the New
England area where we have such small geographic states and
a lot of people commute to other states. But it
is a factor to consider too when you're making those
retirement contributions. Hey where am I physically going to live
(26:24):
when I retire?
Speaker 2 (26:25):
What else we got? Ben? All right?
Speaker 3 (26:26):
Julia and Gloucester says, I have fifteen thousand dollars of
inheritance to invest for my one year old son, but
I know pretty much nothing about finance. What can I
do to maximize the amount of return he will receive
when he's an adult.
Speaker 6 (26:40):
Hmm.
Speaker 2 (26:41):
It's a tough one because again there's nothing that you
don't know what's going to maximize it. Because you don't
know whether stocks the S and P five hundred is
going to be great over the next twenty years. You
don't know if international markets are going to be better,
Like you just don't know what the situation's going to
look like.
Speaker 4 (27:00):
Other stuff would be you know, I would ask myself, Okay,
I've got this inheritance. I know you want to build
something for your son's future. Yeah, what do you want
to build for your son's future? Is this so he
can go out and buy his first home at thirty?
Is this so he can afford to, you know, get
a good education and you know, find a solid job
(27:22):
in his early twenties. Because there's gonna be different types
of investments that you use for one versus the other.
I will say, you know, generally speaking, when I hear
about very young children and you know, tools that can
be used for their investing future, college savings plans always
come to mind.
Speaker 6 (27:39):
For me. These are commonly known as five twenty nine plans.
Speaker 4 (27:42):
Sure, there are very simply very few other tools out
there that give you the special tax treatment that a
college savings plan will. I'll also say, for a one
year old, those new Trump accounts, you may have a
potential like government check, they can come your way for that.
So something to look into there with the Trump accounts,
(28:04):
but not for a significant sum. But the college savings
plans again, if you think it's likely that it could
be used for that purpose. With the flexibility that they
now offer between high school, college and then maybe even
a roth down the road. It's uh, it's pretty important
to at least consider that as an option for you know,
(28:26):
for the future.
Speaker 2 (28:27):
Let's take a quick break. Here, we got Paul Amonica
from Barons, Who's going to be joining us next ben.
If if anyone does want to get a question in
for next week's mail bag, what are the ways they
can do so?
Speaker 3 (28:39):
They can email us at TFE Show at gmail dot
com or call us at three three nine three nine
nine four three three three Quick break. Paul Amonica is next.
Speaker 1 (28:51):
You get in real time financial insight as news breaks.
The Financial Exchange is live on x Watch the show
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(29:13):
YouTube dot com slash the Financial Exchange Show face. He's
the Financial Exchange. Ladies and gentlemen the weekend.
Speaker 2 (29:33):
Alrighty as promises, as promised, I've got echo as promised,
You've got got me talking to myself. I think we've
got Paul Monica on here.
Speaker 7 (29:52):
I'm here and hopefully.
Speaker 2 (29:53):
Not echoing Ben Paul, do you hear two of me?
Speaker 6 (29:57):
I do?
Speaker 2 (29:58):
Okay, Paul, here's two of me?
Speaker 7 (30:00):
Now I don't.
Speaker 2 (30:01):
Oh look we've got one. There we go fantastic. The
last thing that we need is two of me. Paul,
appreciate you joining us today. Earlier this week, game Stop
announced that they were trying to buy eBay. The CEO
of game Stop, Ryan Cohen, went on CNBC and had
(30:22):
one of the more memorable interviews that we've seen in
terms of, you know, being asked, Hey, how is this
deal going to come together? From a dollars and cents perspective?
Can you talk just a little bit about the structure
of the deal and what some of the questions are
surrounding it.
Speaker 7 (30:37):
Yeah, there was no echo during that conversation, but there
might as well have been, because I think Cohen repeated
almost response to every question.
Speaker 2 (30:46):
It's a mix of cash and stop. Half cash, half stock,
you know.
Speaker 7 (30:51):
Half cash half stock, you know, over and over again.
But that begs the question, you know when you do
the math, and this is why I think Wall Street
is a little confused.
Speaker 1 (31:00):
Used.
Speaker 7 (31:01):
GameStop is worth about eleven billion and change. Obviously that fluctuates.
They have about nine little more than nine billion in
cash in the balance sheet, so it's a healthy amount
of cash. So that gets you to twenty. Then there's
a financing commitment tentatively of twenty billion from TV Securities.
(31:22):
That's forty billion, but they're offering fifty six billion to
buy eBay. So where does that sixteen billion come from?
If that part is the stock part, and you're issuing
all these new shares, that's going to massively dilute your
current shareholder base, and I think that's why investors are skeptical.
(31:43):
There's also the fact that you know eBay is doing
reasonably well. They're not a company that potentially is in
dire straits and in need of being acquired. So if
you're eBay, who you know put out the requisite you know,
we're reviewing the proposal type of statement, it does beg
(32:04):
the question of, you know, why does eBay think it
should merge with game Stop? Does Ryan Cohen really have
this magical way to turn an eBay GameStop combination into
another Amazon. That's what he's hoping, but I don't think
wal Street believes it.
Speaker 2 (32:22):
What do you think the vision is in terms of
you know, put yourself in code shoes. What's the thing
that he looks at and says, this is why the
combination of these two companies can get me to where
I want to be.
Speaker 7 (32:35):
Yeah, I mean, I think there's a fair argument to
be made that you know, game Stop, you know, which,
which is obviously more than just a video game retailer.
There's a certain amount of collectibles, you know that those
stores sell that that could be the types of things
that you would see people put up on eBay. So
(32:56):
maybe there is this notion that a combined you know,
Game Stop eBay could be a rival to Amazon. The problem, though,
I think with that argument, is that you know, Amazon
already has a fair amount of competition for other brick
and mortar retailers that are you know, much stronger, namely
(33:19):
that little one in Arkansas named Walmart. So that I
think is posing a challenge. You know, I spoke to
one shareholder of eBay who's skeptical that a deal go through.
But you know, he said, you know that eBay is
kind of like the New York Stock Exchange of pre
owned items. So if you buy that argument, you can
(33:39):
see why Ryan Cohen would you know, covet eBay as
something that could enhance Game Stops earnings power.
Speaker 2 (33:47):
Is there any chance that this is kind of, you know,
declared open season for you know, other companies to look
at eBay and would anyone else be interested? Or is
this just kind of a one off? Do you think I.
Speaker 7 (34:00):
Would be surprised that this opens up the door to
other strategic bidders coming in for eBay. Maybe it changes
if Cohen goes hostile with his offer, but you know,
if you're eBay right now, I'm not so sure that
you're necessarily thinking we need to really reach out to
(34:22):
other potential strategic acquirers. Because again, the stock was already
up this year before the Game Stop announcement, and it's
had a very solid run in the past twelve months.
I think investors recognize that this is, you know, a
company that's doing quite well. Its valuation is also higher
than its historical average, too, which might dissuade other buyers
(34:43):
from coming in and saying, hey, eBay's a great bargain
right now.
Speaker 2 (34:47):
Very good, Paul. I appreciate you joining us today and
I hope you have a fantastic weekend.
Speaker 7 (34:54):
Thanks Andy.
Speaker 2 (34:54):
You guys, that is Paul Monica from Baron's talking about
game stop, end eBay Mike, what else we got today?
Speaker 4 (35:04):
I'm hosting the show with two people that know a
lot more about sports than I do, So I want
to talk about Rupert Murdoch's high stake blitz against the NFL,
and maybe you guys can explain to me what's going on,
because all that I see is a large group of
equally dislikable parties fighting each other when it comes to
rights over the NFL, and I'm not really sure what
to do about it. But apparently Fox is pretty nervous
(35:27):
about the NFL being able to really push further and
further into all these deals they're making with Netflix and
Amazon and everybody else, and they want the government to
go take another look at the anti trust protection under
the nineteen sixty one Sports Broadcasting Act.
Speaker 2 (35:44):
So I don't know.
Speaker 6 (35:45):
I'm looking to you too.
Speaker 4 (35:46):
What does this all mean for the NFL, the networks,
and for viewers like myself.
Speaker 2 (35:53):
Here's what it means is that there's a bunch of
billionaires that want to fight over who gets the most billions,
and it's probably gonna end up resulting in us having
to have forty three subscription services because the first half
of the game is gonna be on ESPN Minus and
the second half is gonna be on Paramount Equals, and
(36:14):
if there's overtime, you got to tune into Amazon Squared
in order to watch it.
Speaker 4 (36:20):
If there's one thing I'm fairly confident about, it's that
I don't think the government has any business being involved
in any of this.
Speaker 2 (36:26):
Well, they already are though, Okay, they already are with
the anti trust exception. Now, the point that I've made
is that, you know, people, I forget what was the
thing a couple months ago with someone wanted the anti
trust exception looked into because because it's gotten too complicated
to watch these things. And my point was, okay, so
(36:48):
get rid of it. Now, all of the teams negotiate
their own deals. You're gonna have Packers TV that you know,
the Packers decide they're gonna make available at you know,
nine thousand dollars a month, and Jacksonville's to give their
games away on you know, Jaguars I'm limited, yeah, because
it's Jacksonville. So I just I don't know what is
(37:10):
going to actually help us get better viewing experiences. What
I do know is as much as I think the
viewing experience kind of sucks for professional sports right now
because there's so many different platforms they're on, it's not
a problem worth solving by. Like, I don't want Congress
people spending a minute of their time worrying about what
(37:32):
channel the Patriots play on. Yeah, I can figure it
out and then complain to you, because that's all that is.
Speaker 6 (37:39):
It's entertainment. Who cares?
Speaker 4 (37:40):
Like we got I do really feel like I want
all parties to lose, though. It's like it's like when
you're watching I don't know, a sports final that you
just hate both teams, Like, yeah, could they.
Speaker 5 (37:52):
All come out losing on this one somehow?
Speaker 2 (37:55):
Ultimately, hey, Congress, spend some time fixing Social Security and
once you've done that, then you can deal with fixing
the NFL broadcast schedule. Yeah we can agree there, but
otherwise we're we're done for the day. And I hope
you all have a great weekend. I hope you have, Yeah,
a great weekend. And we're gonna see you on Monday
(38:16):
and we'll see, uh, see what we get from the
Middle East in that time.
The Financial Exchange is produced by Money Matters Radio and
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(01:06):
and Mike Armstrong.
Speaker 2 (01:17):
Chuck, Mike and Ben here and as we get things
all spooled up for you, we got all your major
indices in the green. As we go through the day.
So far, the S and P five hundred is up
fifty seven big points point seven eight percent, the Dow
Jones Industrial Average is up fifty points point one percent,
(01:39):
and the NASDAK composite is up three hundred and forty
four points one point three four percent despite stocks being up.
Interesting thing to note, it's a Friday and b uh, well,
just b uh. It's a Friday and the VIX is up,
which is kind of unusual. There's a calendar feature where
typically on Fridays, even if that thing's going on, you
(02:00):
see the VIX fall. So my antenna always go up
when I see stocks moving up, in the VIX moving
up along with them, especially on a Friday. It's a
little bit unusual. And we'll see if somebody knows something
about something. Uh dollar index is I'm sorry. The Tenure
Treasury down three point six basis points to four point
three five eight percent. Mortgage rates from Mortgage News Daily
(02:24):
flat overnight at six point four to four percent on
the thirty year, national average dollar index down point one
six percent to ninety seven to seventy nine, gold up
seventeen twenty and ounce to forty seven to twenty eight.
And we got crude oil up sixty two cents barrel
to ninety five forty triple a. National average for gas
prices down one point two cents overnight to four fifty
(02:44):
four and six tenths. So no major moves on the
oil side at this point.
Speaker 3 (02:50):
Uh.
Speaker 2 (02:51):
Yes, Michael.
Speaker 4 (02:52):
Jobs report this morning at eight thirty am. Yeah, some
people had jobs, some people didn't. About one hundred and
fifteen thousand and new jobs created during the month of April.
Some slightly revisioned for the last two months, but nothing
that changed the overall narrative, and the overall narrative remains that,
in spite of the stories I keep hearing from young
college grads about the difficulty in finding work, in spite
(03:14):
of the conversations I keep hearing from people that have
been out of work for a while and finding new jobs,
the unemployment rate remains low. The pace of hiring remains
by our own guess above above, what the economy can
we stand without seeing the unemployment rate drop?
Speaker 1 (03:30):
Again?
Speaker 4 (03:30):
Two different surveys here, so don't want to mix the
two here. But really nothing that I can see that
detects a signal of a problem in the labor market.
The most significancy is a slight uptick in the unemployment rate,
where you know, on an unrounded basis, it moved.
Speaker 5 (03:48):
Up a little bit.
Speaker 4 (03:50):
But overall, when you speak, especially to businesses that are
responsible for reporting this stuff, the pace of hiring remains
pretty strong.
Speaker 2 (03:59):
I think it's something well, no, the pace is not strong.
The pace is low. The pace of firing is low.
Like you look at the JOLT report and you look
get indeed like that, the pace is low. There's just
not much firing going on, and it's just a low
turnover labor mark.
Speaker 6 (04:14):
Yeah.
Speaker 2 (04:15):
I think the big thing is that we've stabilized in
the last three to four months now, whereas in the
second half of last year we were declining, and there
are some green shoots. Again, like it's it really depends
where you are in the economy. Interestingly, enough, again with
how the with how the Jobs report categorizes this like
(04:36):
different industries, it's not the most specific we have like
jobs in information okay, so that's like you know, tech broadly,
but not just like Apple and Amazon.
Speaker 6 (04:47):
It includes Hollywood.
Speaker 2 (04:48):
So yeah, we've seen three straight months where we've had
negative numbers there for the information category. Financial activities down
for the last two months. Yeah, okay, But then you
take a look at transportation of warehousing, which is you know,
positive to the tune of fifty thousand combined for the
last two months. There's absolutely something happening there. Retail up
(05:10):
forty thousand for the last two months. There's there's something
on that side. So I think that you have some
of these green shoots that are showing up in the
labor market right now, whether they turn into you know,
a full blown what comes after green shoots? Is it?
Do you have a flowers a plant?
Speaker 6 (05:28):
Yeah?
Speaker 5 (05:29):
Is the budding flowers?
Speaker 1 (05:31):
Yeah?
Speaker 2 (05:31):
Do you are we gonna get buds after these green shoots?
And then do we eventually get some flowers? Maybe we do,
But we'll have to see how the economy evolves now
that we have these higher gas prices in place, and
it's obviously also going to be depending on how long
these prices stay here and whether they move up as well.
You know, that's that's a possibility too.
Speaker 6 (05:50):
Yeah.
Speaker 4 (05:51):
Look, I think plainly higher gas prices and high inflation
is difficult for a consumer. The reality is that for
the last quarters, the consumer is not what's been driving
this market and economy forward. It hasn't been detracting significantly
from it. Yeah, and that can shift. But this kind
of is being driven forward by massive spend on artificial intelligence,
(06:12):
and the only thing that's going to slow that down
is a lack of availability of the stuff needed to
drive that move forward in artificial intelligence, which by the way,
could occur if the strait doesn't reopen, but it's not
occurring right now.
Speaker 2 (06:26):
Yeah. If you look at the if you look at
the data that we have from the Bureau of Economic
Analysis on GDP, and you go through and you're like, okay,
Like where is the growth actually coming from? What you
see is okay, Housing's kind of a modest drag the
(06:48):
last couple of years. Consumer spending is a modest uplift.
And yeah, the tech side of things has provided the
rest of the impulse there. And again that's fine, like
not everything has to be all humming all at once.
But I think the question for businesses is going to
be does inflation ever get to the point where the
FED feels like it has to has to act because
(07:12):
that's when you start seeing, you know, the negative consequences
up from a business investment standpoint, And we're not there yet.
Do we get there at some point? Maybe? I don't know,
but this is where we are today speaking of the
Middle East. All kinds of reports for the last twenty
four hours now that there have been just these sporadic
exchanges of fire, you know, with various parts of the
(07:33):
straight offoe moves, a few different things that have popped
up here and there. The big thing I'll tell you, like, look,
regardless of whether or not the ceasefire is an effect
or not, again, I feel like words just have no
meaning anymore at this point, Like the English language is
kind of useless. When the firing has not ceased but
the ceasefire is in effect. It's clear that both sides
(07:55):
are just kind of probing where the lines are for
what the other will permit right now. But here's the thing.
If I am a shipping captain, which you're all very
likely you're very thankful I'm not, because if I were,
you wouldn't believe how many boats I could get stuck
in the Suez Canal. Yeah, lots of that if I
were a shipping captain, the absolute last thing that I
(08:19):
would be doing with my thousand foot long boat is
being like, hey, there's some US destroyers getting you know,
attacked by you know, a bunch of Iranian fast attack
boats and firing back at them. Yeah, let's let's try
to pass by and see what happens at you know,
twelve knots and you know, without the ability to turn quickly.
(08:42):
So what I do know is, regardless of whether the
ceasefire is holding not holding, this that the environment in
Hormuz at this very moment is not conducive to a
lot going through there. And as such we continue to
see production shut ins costing the world oil supply twelve
million barres a day.
Speaker 4 (09:01):
Yes, it's so impossible to know whether or not that
can turn on it.
Speaker 6 (09:06):
Obviously, the oil.
Speaker 4 (09:07):
Production and resupply of global oil cannot turn on a dime.
But the idea of traffic flowing through the straight up
form most could turn on a dime and then turn
right back in the other direction. It is really difficult
to know what comes next.
Speaker 2 (09:21):
Let's take a quick break. When we return, let's do
some trivia, and then let's talk about China right after this.
Speaker 1 (09:30):
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Speaker 3 (10:07):
The Money Matters mail bag is coming up at eleven
thirty five. It's your chance to ask the question about
business and the economy that you want answers. To call
three three nine three nine nine four three three three
and leave your message anytime, day or night. That's three
three nine three nine nine four three three three or
(10:28):
email us at TFE show at gmail dot com. We
may use your question on the show. It's time now
for trivia here on the Financial Exchange. One year ago today,
Cardinal Robert Prevost was elected as the two hundred and
sixty seventh Pope of the Catholic Church. He's the first
American to hold the office, and he took the name
Pope Leo the fourteenth. Today's question, which US city is
(10:51):
Pope Leo?
Speaker 2 (10:52):
The fourteenth?
Speaker 1 (10:52):
From?
Speaker 3 (10:53):
Which US city is Pope Leo the fourteenth from? Be
the fourth person who text us at six seven three
six two thirteen eighty five with the correct answer, and
you'll win a Financial Exchange show t shirt. The fourth
correct responsibility are winner. See the complete contest rules at
Financial exchangehow dot Com.
Speaker 2 (11:12):
Pierce in The New York Times is titled when You're
fired from retirement and specifically talking about, Hey, the people
that have to return to work because the financials didn't
actually make sense the way they thought they didn't retirement.
Speaker 4 (11:28):
I thought it was when you really misbehaved in the villages,
they fire you and send you out. I don't think
you can misbehaving.
Speaker 2 (11:35):
I think you gotta do a lot to get kicked
out of the village.
Speaker 3 (11:38):
We did the Costanzas get fired in retirement from Bulta Vista.
Speaker 2 (11:41):
Yeah, the barons did also in uh and everybody loves Raymond.
Speaker 4 (11:47):
So what they're talking about here is a phenomenon that
we've covered before, and you do see this showing up
in some of the data, which is uh. Overall, while
we as society are getting older, people who are working
past the age of sixty five continues to grow. And
while I'd love to believe it's because they're all passionate
about their work and just really love what they do,
(12:10):
the reality is not so much the case. It is
that people are unfortunately woefully underprepared for retirement and a
lot of cases underestimate things like is are covered in
this New York Times piece about you know, just higher
than expected medical costs. For instance, in retirement, one woman
is talking about how Medicare only covers a small portion
(12:31):
of her diabetes medication, and so the planning she had
done between Social Security and the pension she had don't
quite cover it. I think where this lands for me
is in I guess both directions of the fired from
retirement story. As many of those situations that I have
seen of people needing to make changes to their retirement lifestyle,
(12:53):
I'll say that I've seen an equal number of people who.
Speaker 5 (12:57):
Regret having worked longer than.
Speaker 6 (13:00):
They needed to.
Speaker 4 (13:01):
Because I've never met anybody on their deathbed who's like, oh, man,
I wish I had just put in a few more
years of work. It's always been my only regret is
I wanted to spend more time doing than the you know,
the great things that I was able to do when
I was finally done working. It does cut both ways,
but the real answer, as terrifying as the idea of
(13:23):
retiring and the needing to go back to work is
for people, the focus should also be on, hey, you know,
can I get to a place where I'm able to
retire early or earlier than I anticipated and focus on
that exciting new part of life. It's a lot of
complexities between how Medicare works and social security, your future
(13:44):
required minimum distributions, taxes.
Speaker 6 (13:47):
And retirement.
Speaker 4 (13:48):
They're all really complex subjects, but you can't possibly assess
the answer until you do the groundwork and ask the question.
Don't work longer than you have to call Armstrong Advice
Group for free consultation on your future retirement. The numbers
eight hundred three nine three for zero zero one. You
can book a time for us to call you back
(14:08):
at Armstrong Advisory dot com, but the phone number once
again eight hundred three nine three for zero zero one.
Speaker 1 (14:16):
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 2 (14:32):
The US and China are scheduled to get together, with
President Trump and President g meeting next week in China.
I believe it is. I think it's the fourteenth to
the sixteenth that the summit is scheduled. It's kind of
taken a back seat given the broader geopolitical things swirling
over the last couple of months. I mean, heck, it
(14:54):
was delayed, right, This was originally supposed to be a
month ago. Yeah, So I think it's it's interesting to
me that they are still scheduled to meet. Obviously, the
US is going in if you look at the typical
asks from the US during either of the Trump terms,
the US is going in saying, hey, we want you
(15:14):
to buy more US products. China is going to be saying, hey,
we want you to stop tariffing US yep. And I
think expectations are fairly low. I think for this this meeting,
I don't think anyone's expecting some giant grand breakthrough or
(15:35):
anything like that, and other.
Speaker 4 (15:38):
Things that are you know, undercurrents in the conversations always Taiwan.
You know, China will always be pushing for something on
Taiwan and they continue to view it as their territory
that you know, would also have the nice side benefit
of being the only place that produces semiconductors in the world.
Speaker 5 (15:58):
There's also been a lot of men of you know,
the AI arms.
Speaker 6 (16:02):
Race between these two countries.
Speaker 4 (16:05):
When we talk about the AI build out, it's really
only about two countries, the US and China, or the
US versus China, And you know, there could be some
low hanging fruit there I think, for if not written agreements,
then at least stated understandings of how it's used or
not used in military applications and things along those lines.
(16:26):
But yeah, I too hold pretty low expectations for where
this goes because frankly, it's just not the priority of
the day for the Trump administration.
Speaker 2 (16:36):
I don't think it's the priority of the day for
China either. Yeah, I think there. I think both before
the Iran conflict, we're looking towards the shows. Hey, is there, like,
can we build towards something bigger. But I think there's
just so many complicating factors right now. Yeah, that it's
just tough for me to see anything huge coming out
(16:56):
of this. But look, as always, when you're thinking about
the things, it's it's not binary, and it's not yes
or no, one hundred percent either way, it's okay along
the spectrum, how can things potentially move and just be
aware that, you know, there is the possibility that maybe
something larger does come together. But yeah, we'll see.
Speaker 4 (17:15):
One thing that's definitely true here is the US has
certainly seeded a lot of influence in Asia over the
course of the last year or so, between trade, terrif
fights and now with the events in Iran. I mean,
I know we tend to be very domestic, focused on
on this program and talking about higher gas prices here,
(17:36):
but what phenomenon has occurred in you know, Southeast Asia
has been China exceptionally well prepared for the events in
Iran and certainly impacted.
Speaker 2 (17:48):
But I don't know, now, I think sometimes we give
China a little too much credit, like they're not infallible.
Speaker 6 (17:55):
They're they're not infallible.
Speaker 4 (17:57):
Is there any Asian nation you can point to that
is more energy independent right now than China.
Speaker 2 (18:02):
No, but their economy is also a mess.
Speaker 6 (18:04):
Yeah, agreed.
Speaker 4 (18:05):
But I think one thing that's clear is a number
of those countries that are in a bigger mess right
now have turned to China as a relief out. I
don't know that they're getting it, but they are going
to China and saying, Hey, can we get some jet fuel,
can we get some sort of relief on energy infrastructure?
And I would imagine that the Chinese are saying, yeah, absolutely,
(18:26):
just plan on taking a bunch of our solar panels
and cars and other things that we have overproduced over
the last few years in exchange for it. So I
think this moment, the last year especially, but the last
few months too, have probably been a lot about China
trying to expand their influence in the region, and I'd
imagine they've been somewhat successful with it.
Speaker 2 (18:46):
Mike, You know how sometimes we have those you see
those quotes where it's like, hey, if you invested like
five thousand in Microsoft forty years ago, you'd be worth
like ten million dollars today. Yeah, I just saw a
new one here. If you invested thirty thousand dollars in
(19:06):
sand disc twelve months ago, you'd be a millionaire now.
I wish I had known again, It's just wild, Like
what would.
Speaker 4 (19:15):
I be worth if I invested thirty thousand dollars in
Verizon ten years ago?
Speaker 6 (19:21):
Don't answer that question.
Speaker 2 (19:26):
Still working on. Let's take a quick break. We got
the trivia answer Wall Street Watching mail bag.
Speaker 1 (19:31):
When we come back, bringing the latest financial news straight
to your radio. Every day, it's the Financial Exchange on
the Financial Exchange Radio Network. Tell you now full Wall
(19:51):
Street Watch tracking the stocks, potato, and the headlines driving
markets so far today right here on the Financial Exchange
Radio Network.
Speaker 3 (20:04):
All our markets are still green right now as they're
reacting to the positive news from this morning's jobs report
that came in better than expected. The Dow Jones just
barely holding on to positivity. It is up point zero
two percent, or just under ten points. The S and
P five hundreds up over fifty three points or three
quarters of a percent. The Nasdaq is up over three
hundred and thirty four points or one point three percent.
(20:26):
Gold is still holding strong, up a tenth of a percent,
and silver is up point seven seven percent. Cloud infrastructure
company core Weave is seeing its share price drop twelve
and a half percent as its second quarter revenue guidance
disappointed Wall Street Core We've sees revenue ranging from two
point four to five billion to two point six billion.
(20:47):
The midpoint of two point five three billion fell short
of the two point six to nine billion consensus. Upwork
shares are tumbling twenty percent after the company announced a
restructuring plan that includes reducing its work force by twenty
four percent. Upwork said it was doing this to make
sure the company remains profitable as work evolves. It also
reported first quarter earnings and revenue that came in slightly
(21:09):
lower than expected. Expedia shares are down seven percent after
the online travel agency called for second quarter revenue of
four point one to one billion to four point one
nine billion, compared to the four point one two anticipated
by analysts. Booked room nights in the first quarter missed expectations,
landing at one hundred and thirteen point nine billion dollars
versus the consensus of one hundred and seventeen and finally,
(21:33):
Wendy's stock is up four percent after reporting better than
expected revenue of five hundred and forty point six million
dollars in its first quarter financial report. Analysts polled estimated
revenue would be five hundred and eighteen million. Earnings also
came in above estimates, and the company also announced it
planned to build up to one thousand restaurants in China
(21:53):
over the next decade. I am Ben Kitchen and that
was Wall Street Watch and let's pay off a little
bit of our trivia here. Today's question was which US
city is Popolio. The fourteenth from the answer is Chicago.
Jim from Roachdale, Mass is our winner. He'll be taking
home at Financial Exchange Show t shirt. We play trivia
every day here on the Financial Exchange. See complete contest
(22:14):
rules at Financial Exchange Show dot com.
Speaker 2 (22:20):
For mails here here's the mail.
Speaker 3 (22:22):
Then for mails it makes me one the wag my
tail when it comes to Wanta whil mail.
Speaker 1 (22:29):
You've got questions, We've got answers. It's time for the
money matters mailback. We are tackling your calls and emails
on everything from economic policy to global markets and everything
in between. Leave us a voicemail at three three nine
three nine nine four three three three and you might
hear it on the show. You can also email your
question to TFE Show at gmail dot com. Now it's
(22:52):
time for the Money Matters mail bag.
Speaker 2 (22:57):
All right, first question up here.
Speaker 3 (22:59):
The Money Matters mail Bag currently twenty nine years old,
and I make twenty six dollars and thirty five cents
at my job, which is fifty five thousand ish per year.
My job contributes fifty percent up to eight percent. My
question is should I sign up for a standard four
oh one K through my work a roth ira or
split it between both?
Speaker 4 (23:21):
Okay, So first thing I have to acknowledge here that
we don't have enough context answer this question.
Speaker 2 (23:27):
There's a few more pieces of.
Speaker 4 (23:28):
Information we would want to know, and as we've talked about,
we don't give specific investment or planning advice when we
do all this. But I want to think through the
context of how I would assess this question were I
do we.
Speaker 6 (23:41):
Have a name, no name, we're called him Dan?
Speaker 4 (23:45):
Were I Dan in this situation earning around fifty five
grand a year and deciding what to do with the money.
So first of all, I want to acknowledge a piece
that you know, he grew up poor and just starting
it sounds like a four oh one K, and there
is a match attached to that four oh one K
contribution here which sounds pretty generous. First things first would
(24:08):
have to be understanding that at twenty nine years old,
any money that you put into this thing you are
not really able to access without some extreme scenarios before
fifty nine and a half. So first things first, before
you even consider putting the money in, make sure you
can afford to do so. You know, if you're living
paycheck to paycheck, you need to have enough money to
afford a car repair if it happens. You need to
(24:30):
have enough money to pay the rent if something happens
to your income, So start there. Raindy Day fund has
to be covered first, We've talked about it before. Between
three and twelve months of expenses, depending on your specific
scenario is kind of where we start. Beyond that, how
would you go about assessing the traditional versus roth as.
I mean, we check those boxes and we're concluding, yeah,
(24:51):
there's money on the table here we should be contributing
to retirement.
Speaker 5 (24:54):
Yeah.
Speaker 2 (24:54):
The big one is a tax bracket analysis. What tax
bracket are you in today and as you get towards retirement,
because remember you're not touching that money until, uh, you know,
you're after age fifty nine and a half. Ideally, Hey,
what tax bracket do you expect to be? And then
now look, if you're what was it twenty six years old,
twenty nine, twenty nine. Let's be honest, none of us
(25:15):
know exactly where tax brackets are gonna be in thirty years, right,
don't know Assume current ones just for the sake of argument.
And hey, if you think your tax bracket's gonna be
higher in the future, then you're typically better off putting
the money in a row today. If you think your
tax bracket's going to be higher today, you're typically better
off putting the money in an IRA. If you don't know,
(25:38):
then you can hedge and say, Okay, I'll do fifty
to fifty because I don't know exactly what things are
gonna look like.
Speaker 4 (25:42):
Other factors that are pretty unique to New England. Right,
If you live in California, you're probably not gonna be
commuting to another state here in New England. Right, Like,
let's say you live in New Hampshire and you're currently
working in Massachusetts, but you don't think you will for long.
That means your income that's from Massachusetts is getting an
extra five percent income tax. Maybe it makes sense to
defer more of that into the four oh one k,
(26:03):
because you're saying, hey, by the time I pull it out,
I'm certainly not going to be paying that extra five
percent over to mass. So there are a number of
different factors, and again that's pretty unique to the New
England area where we have such small geographic states and
a lot of people commute to other states. But it
is a factor to consider too when you're making those
retirement contributions. Hey where am I physically going to live
(26:24):
when I retire?
Speaker 2 (26:25):
What else we got? Ben? All right?
Speaker 3 (26:26):
Julia and Gloucester says, I have fifteen thousand dollars of
inheritance to invest for my one year old son, but
I know pretty much nothing about finance. What can I
do to maximize the amount of return he will receive
when he's an adult.
Speaker 6 (26:40):
Hmm.
Speaker 2 (26:41):
It's a tough one because again there's nothing that you
don't know what's going to maximize it. Because you don't
know whether stocks the S and P five hundred is
going to be great over the next twenty years. You
don't know if international markets are going to be better,
Like you just don't know what the situation's going to
look like.
Speaker 4 (27:00):
Other stuff would be you know, I would ask myself, Okay,
I've got this inheritance. I know you want to build
something for your son's future. Yeah, what do you want
to build for your son's future? Is this so he
can go out and buy his first home at thirty?
Is this so he can afford to, you know, get
a good education and you know, find a solid job
(27:22):
in his early twenties. Because there's gonna be different types
of investments that you use for one versus the other.
I will say, you know, generally speaking, when I hear
about very young children and you know, tools that can
be used for their investing future, college savings plans always
come to mind.
Speaker 6 (27:39):
For me. These are commonly known as five twenty nine plans.
Speaker 4 (27:42):
Sure, there are very simply very few other tools out
there that give you the special tax treatment that a
college savings plan will. I'll also say, for a one
year old, those new Trump accounts, you may have a
potential like government check, they can come your way for that.
So something to look into there with the Trump accounts,
(28:04):
but not for a significant sum. But the college savings
plans again, if you think it's likely that it could
be used for that purpose. With the flexibility that they
now offer between high school, college and then maybe even
a roth down the road. It's uh, it's pretty important
to at least consider that as an option for you know,
(28:26):
for the future.
Speaker 2 (28:27):
Let's take a quick break. Here, we got Paul Amonica
from Barons, Who's going to be joining us next ben.
If if anyone does want to get a question in
for next week's mail bag, what are the ways they
can do so?
Speaker 3 (28:39):
They can email us at TFE Show at gmail dot
com or call us at three three nine three nine
nine four three three three Quick break. Paul Amonica is next.
Speaker 1 (28:51):
You get in real time financial insight as news breaks.
The Financial Exchange is live on x Watch the show
and follow us for the most up to date business
news you need to know. Is the Financial Exchange, market insight,
retirement strategies, real talk about Wall Street and economic trends,
all live every day on our YouTube channel. Go to
(29:13):
YouTube dot com slash the Financial Exchange Show face. He's
the Financial Exchange. Ladies and gentlemen the weekend.
Speaker 2 (29:33):
Alrighty as promises, as promised, I've got echo as promised,
You've got got me talking to myself. I think we've
got Paul Monica on here.
Speaker 7 (29:52):
I'm here and hopefully.
Speaker 2 (29:53):
Not echoing Ben Paul, do you hear two of me?
Speaker 6 (29:57):
I do?
Speaker 2 (29:58):
Okay, Paul, here's two of me?
Speaker 7 (30:00):
Now I don't.
Speaker 2 (30:01):
Oh look we've got one. There we go fantastic. The
last thing that we need is two of me. Paul,
appreciate you joining us today. Earlier this week, game Stop
announced that they were trying to buy eBay. The CEO
of game Stop, Ryan Cohen, went on CNBC and had
(30:22):
one of the more memorable interviews that we've seen in
terms of, you know, being asked, Hey, how is this
deal going to come together? From a dollars and cents perspective?
Can you talk just a little bit about the structure
of the deal and what some of the questions are
surrounding it.
Speaker 7 (30:37):
Yeah, there was no echo during that conversation, but there
might as well have been, because I think Cohen repeated
almost response to every question.
Speaker 2 (30:46):
It's a mix of cash and stop. Half cash, half stock,
you know.
Speaker 7 (30:51):
Half cash half stock, you know, over and over again.
But that begs the question, you know when you do
the math, and this is why I think Wall Street
is a little confused.
Speaker 1 (31:00):
Used.
Speaker 7 (31:01):
GameStop is worth about eleven billion and change. Obviously that fluctuates.
They have about nine little more than nine billion in
cash in the balance sheet, so it's a healthy amount
of cash. So that gets you to twenty. Then there's
a financing commitment tentatively of twenty billion from TV Securities.
(31:22):
That's forty billion, but they're offering fifty six billion to
buy eBay. So where does that sixteen billion come from?
If that part is the stock part, and you're issuing
all these new shares, that's going to massively dilute your
current shareholder base, and I think that's why investors are skeptical.
(31:43):
There's also the fact that you know eBay is doing
reasonably well. They're not a company that potentially is in
dire straits and in need of being acquired. So if
you're eBay, who you know put out the requisite you know,
we're reviewing the proposal type of statement, it does beg
(32:04):
the question of, you know, why does eBay think it
should merge with game Stop? Does Ryan Cohen really have
this magical way to turn an eBay GameStop combination into
another Amazon. That's what he's hoping, but I don't think
wal Street believes it.
Speaker 2 (32:22):
What do you think the vision is in terms of
you know, put yourself in code shoes. What's the thing
that he looks at and says, this is why the
combination of these two companies can get me to where
I want to be.
Speaker 7 (32:35):
Yeah, I mean, I think there's a fair argument to
be made that you know, game Stop, you know, which,
which is obviously more than just a video game retailer.
There's a certain amount of collectibles, you know that those
stores sell that that could be the types of things
that you would see people put up on eBay. So
(32:56):
maybe there is this notion that a combined you know,
Game Stop eBay could be a rival to Amazon. The problem, though,
I think with that argument, is that you know, Amazon
already has a fair amount of competition for other brick
and mortar retailers that are you know, much stronger, namely
(33:19):
that little one in Arkansas named Walmart. So that I
think is posing a challenge. You know, I spoke to
one shareholder of eBay who's skeptical that a deal go through.
But you know, he said, you know that eBay is
kind of like the New York Stock Exchange of pre
owned items. So if you buy that argument, you can
(33:39):
see why Ryan Cohen would you know, covet eBay as
something that could enhance Game Stops earnings power.
Speaker 2 (33:47):
Is there any chance that this is kind of, you know,
declared open season for you know, other companies to look
at eBay and would anyone else be interested? Or is
this just kind of a one off? Do you think I.
Speaker 7 (34:00):
Would be surprised that this opens up the door to
other strategic bidders coming in for eBay. Maybe it changes
if Cohen goes hostile with his offer, but you know,
if you're eBay right now, I'm not so sure that
you're necessarily thinking we need to really reach out to
(34:22):
other potential strategic acquirers. Because again, the stock was already
up this year before the Game Stop announcement, and it's
had a very solid run in the past twelve months.
I think investors recognize that this is, you know, a
company that's doing quite well. Its valuation is also higher
than its historical average, too, which might dissuade other buyers
(34:43):
from coming in and saying, hey, eBay's a great bargain
right now.
Speaker 2 (34:47):
Very good, Paul. I appreciate you joining us today and
I hope you have a fantastic weekend.
Speaker 7 (34:54):
Thanks Andy.
Speaker 2 (34:54):
You guys, that is Paul Monica from Baron's talking about
game stop, end eBay Mike, what else we got today?
Speaker 4 (35:04):
I'm hosting the show with two people that know a
lot more about sports than I do, So I want
to talk about Rupert Murdoch's high stake blitz against the NFL,
and maybe you guys can explain to me what's going on,
because all that I see is a large group of
equally dislikable parties fighting each other when it comes to
rights over the NFL, and I'm not really sure what
to do about it. But apparently Fox is pretty nervous
(35:27):
about the NFL being able to really push further and
further into all these deals they're making with Netflix and
Amazon and everybody else, and they want the government to
go take another look at the anti trust protection under
the nineteen sixty one Sports Broadcasting Act.
Speaker 2 (35:44):
So I don't know.
Speaker 6 (35:45):
I'm looking to you too.
Speaker 4 (35:46):
What does this all mean for the NFL, the networks,
and for viewers like myself.
Speaker 2 (35:53):
Here's what it means is that there's a bunch of
billionaires that want to fight over who gets the most billions,
and it's probably gonna end up resulting in us having
to have forty three subscription services because the first half
of the game is gonna be on ESPN Minus and
the second half is gonna be on Paramount Equals, and
(36:14):
if there's overtime, you got to tune into Amazon Squared
in order to watch it.
Speaker 4 (36:20):
If there's one thing I'm fairly confident about, it's that
I don't think the government has any business being involved
in any of this.
Speaker 2 (36:26):
Well, they already are though, Okay, they already are with
the anti trust exception. Now, the point that I've made
is that, you know, people, I forget what was the
thing a couple months ago with someone wanted the anti
trust exception looked into because because it's gotten too complicated
to watch these things. And my point was, okay, so
(36:48):
get rid of it. Now, all of the teams negotiate
their own deals. You're gonna have Packers TV that you know,
the Packers decide they're gonna make available at you know,
nine thousand dollars a month, and Jacksonville's to give their
games away on you know, Jaguars I'm limited, yeah, because
it's Jacksonville. So I just I don't know what is
(37:10):
going to actually help us get better viewing experiences. What
I do know is as much as I think the
viewing experience kind of sucks for professional sports right now
because there's so many different platforms they're on, it's not
a problem worth solving by. Like, I don't want Congress
people spending a minute of their time worrying about what
(37:32):
channel the Patriots play on. Yeah, I can figure it
out and then complain to you, because that's all that is.
Speaker 6 (37:39):
It's entertainment. Who cares?
Speaker 4 (37:40):
Like we got I do really feel like I want
all parties to lose, though. It's like it's like when
you're watching I don't know, a sports final that you
just hate both teams, Like, yeah, could they.
Speaker 5 (37:52):
All come out losing on this one somehow?
Speaker 2 (37:55):
Ultimately, hey, Congress, spend some time fixing Social Security and
once you've done that, then you can deal with fixing
the NFL broadcast schedule. Yeah we can agree there, but
otherwise we're we're done for the day. And I hope
you all have a great weekend. I hope you have, Yeah,
a great weekend. And we're gonna see you on Monday
(38:16):
and we'll see, uh, see what we get from the
Middle East in that time.
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