September 15, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss the Fed meeting this week to set interest rates. Morgan Stanley and JPMorgan see stock rally stalling after Fed rate cut. China says Nvidia violated antitrust law. Whirlpool tells US authorities its rivals could be evading tariffs. Gold hasn't rallied this much since 1979. Is turning to ChatGPT for financial advice wise?
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Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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a donation today. This is the Financial Exchange with Chuck
(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:12):
Kicking things off here. It's Chuck, Mike and Sucker with you.
Speaker 3 (01:16):
And we've got.
Speaker 2 (01:17):
A busy, busy week this week that we're gonna be
digging through. Not too much today, today's pretty quiet. We
got New York Empire State Manufacturing Index data at eight thirty.
Speaker 3 (01:27):
It's not overly important.
Speaker 2 (01:29):
It wasn't particularly good data, but I just I don't
think that there's any meaningful fund signal that you can
take from it.
Speaker 3 (01:35):
Not that funds what we're about here, But occasionally I
think we're all about fun, Chuck, not all about fun,
he said in a tie voice. Zero fun, sir.
Speaker 2 (01:47):
Tomorrow, we've got retail sales data, so gonna be interested
to see what consumer spending looked like for the month
of August. Also coming out tomorrow, we're gonna be getting
NHB Housing Market Index this for the month of September,
So I think it'll interesting to see.
Speaker 3 (02:01):
Hey, we've had lower.
Speaker 2 (02:02):
Rates kicking in over the last couple of weeks. Does
that spark a little bit more buyer traffic? Does it
spark a little bit more optimism for builders? Or do
they still remain downbeat the way they've been, you know,
for much of the last year or so.
Speaker 3 (02:16):
I've got the Import Price Index. I don't think it's
something that we generally track, but if you're looking for
evidence of foreign suppliers of goods maybe discounting things or
lowering prices in order to maintain or keep market share
in the US with tariffs, that could be some evidence
of that if it shows up anywhere in those reports.
Speaker 2 (02:36):
Wednesday, big one, We've got the EIA gasoline stocks weekly change, Yes,
and everyone's going to be focused on that. Also, a
little known bank called the Federal Reserve A two PM's
going to announce what they're doing with interest rates.
Speaker 3 (02:50):
They also the good news about this FED meeting.
Speaker 2 (02:52):
They also are going to be giving us their Summary
of Economic Projections, the step which tells us what they
expect inflation, growth, interest rates to be over the next
couple of years. So that'll be informative, I think. And
we're also gonna get building permits and housing starts on Wednesday. Thursday,
another week of weekly jobless claims and Philly Fed manufacturing index.
(03:13):
And then we finished things off on Friday with the
Baker Hughes oil rig count, which always a good way
to finish a week, Michael, Thursday of last.
Speaker 3 (03:20):
Week, we did see a good uptick, not a good uptick,
but a pretty big uptick in initial jobless claims. There's
been some data pointed at Texas that we pointed out
on Thursday of last week where you saw that jump.
Texas did acknowledge they've been having issues with fraudulent claims
for unemployment, but did not definitively say that that's what
(03:41):
caused them to spike. You also had this is the
reading over Memorial excuse me, labor Day holiday, so some
weird seasonal stuff. So we'll be looking for some evidence here.
Was that a weird one time type thing, or do
we have the start of a new trend here? Those
jobless claims last week came in at two hundred sixty three,
which was above all expectations.
Speaker 2 (04:01):
And given all the noise, I suspect that that's a
one time move into that range. If it's not, and
we see similar readings in the coming weeks, then that becomes,
you know, signed that the labor market has taken a
turn for the worst. But that's not what we have
in you know, in the data thus far. And we're
(04:22):
just gonna have to see how things go there.
Speaker 3 (04:24):
So let's talk a little bit about this data point
that really matters, the what you say, gasoline, Yes, the
EIA gasoline stocks and I'm joking. The Federal Reserve meeting
is the one that matters here. And for those that
haven't been paying attention, widely anticipated that they're going to
kick off a new rate cutting cycle with a twenty
(04:45):
five basis point cut. I do think it's generally expected
that they continue that with future cuts as well, Chuck,
and they are I think we should can textualize that
because they are doing this at a time when in
inflation is running. Where are we sitting on core CPI
right now for the last twelve months? Yeah, let's go there. Yeah,
(05:07):
So if you take a look.
Speaker 2 (05:08):
At now, I'll give you a few different inflation numbers,
just because I think it's useful to you know, contextualize.
If you will get headline CPI it's at two nine core?
Is it three to one? Uh PC headline is a
two six core?
Speaker 3 (05:22):
Is it two nine? And for the Producer Price Index
headline is a two six core? Is it two eight?
Speaker 2 (05:28):
So you're generally call it two and three quarters to
three and a quarter pretty consistent with right around three
percent core inflation, I think is the fair way to look.
Speaker 3 (05:38):
At it, which is not world ending inflation. It's a
lot lower than what we were dealing with two twenty
twenty two, a lot lower than we were dealing for
most of the seventies and early eighties, but is a
fairly significantly higher inflation rate than what we became used
to throughout all of the nineties, twenty and twenty tens.
(05:59):
And yet the Fed is pushing for a rate cut
here on concerns about the labor market. Is that your
read too, yes.
Speaker 2 (06:06):
And the other piece is that core inflation has accelerated
in the last few months as well. At the end
of the May data, it was running at two seven seven.
Speaker 3 (06:15):
It's now at three one pint one. So you've seen
an uptick in core inflation over the last few months
that has been notable. And why this matters is not
because three percent inflation in and of itself is awful.
The nineteen nineties were a period where inflation averaged pretty
(06:36):
close to three percent YEP, and it was one of
the best economic decades that we've seen, But it was
also one where much of the inflation that we saw
during the nineteen nineties came during a couple of little
bursts where he had higher oil prices and things like
that at the outset of the decade because of you know,
the outbreak of the Gulf War and things along those lines.
(06:57):
And so if you look at core inflation and during
that time and again I think this is this is
kind of where the meat is on the core inflation
number and why it matters. So if you again looking
at the nineteen nineties and say where was core inflation
during that time period, I'm just getting the average here
(07:20):
just so that i can make sure that I'm speaking
appropriately about this. Nineteen nineties core inflation was three to
two two, so it was hotter during that time. But
all of that was basically.
Speaker 2 (07:35):
Stuck in the first couple of years simply because again,
even when energy prices, you know, go up, it spills
into other parts of the economy. Plus he had some
stuff going on, you know, with housing in this and that,
So most of it was nineteen ninety to ninety two. Effectively,
core inflation in the nineties wasn't above three percent at
(07:57):
any time after nineteen ninety three. You were generally trending
down By the end of the nineties, core inflation was
running at one point eight eight percent for the prior
twelve months, and it wasn't even above two and a
half from ninety seven onward. So I think that when
we look at it, most people, when we talk about
(08:17):
the nineteen nineties and how great of an economic decade
it was, we don't say, Man, ninety one was the year.
We're talking like ninety five to two thousand, and during
that time, core inflation was under three percent the entire time.
It briefly came back above for you know, a couple
months in mid ninety five, but that's it. So I
(08:37):
think that when we're trying to figure out, you know,
what this means, the danger of core inflation running at
three percent is not that inflation runs at three percent,
but hey, are you going to have energy prices falling
ten percent year over year like they've had for the
last year in perpetuity?
Speaker 3 (08:57):
Is that going to be what you see? Probably not.
Speaker 2 (08:59):
Energy prices tend to be kind of mean reverting. They
go up for a little bit. You have you know,
supply that comes offline because people aren't you know, doing
as many doing as much drilling, and then prices go
up the next time there's an increase in demand, and
then you get more drills in the ground, and it's
it's this cycle back and forth.
Speaker 1 (09:16):
Right.
Speaker 2 (09:16):
So the concern with core inflation running at three percent is, hey,
if energy price is next to your move up ten
percent instead of down ten which again I don't know
where they're gonna go. No one knows where oil prices
will be. But now all of a sudden, you got
headline inflation. Instead of running you know, two nine, now
it's running three six, three seven.
Speaker 3 (09:36):
And hey, how do we you know, feel about inflation
accelerating closer to four percent?
Speaker 1 (09:42):
Right?
Speaker 2 (09:43):
That's why you don't want to have core inflation running
that hot. It's because the headline number never stays in
a straight line. And when you have those wobbles because
of food and fuel, hey, four percent inflation starts to
feel uncomfortable in a hurry.
Speaker 3 (09:58):
So you gotta be off concerned about the labor market
if you're going to cut into that, you do.
Speaker 2 (10:02):
And here's the thing, I think that you can justify
cutting in this environment because there are signs that the
labor market is decelerating faster than inflation is accelerating.
Speaker 3 (10:14):
Yep. But you got to.
Speaker 2 (10:16):
Have you know, your hand on the rudder and say, hey,
I got to turn quickly if the economy turns, because
otherwise I'm going to be behind the eight ball, and
inflation comes back the second that the labor market turns,
and the second oil prices start moving up again, I
got to be in front of that.
Speaker 3 (10:34):
And it's especially difficult given I guess usually using the
same comparison there, how poorly they were guiding that ship
back in early twenty twenty two, when they were faced
with a very different scenario in a lot of ways,
but a lot of the same fundamental issues. It was
an easier question to address.
Speaker 2 (10:54):
Then Yeah, and they got it wrong, and they were
still too slow to start raising rates.
Speaker 3 (10:58):
Then, so again, if you want to, you know, the
the the.
Speaker 2 (11:04):
Whole pattern from the Jerome Powell fed, Hey, we're gonna
we're gonna be dubbish at the first sign of problems
in the economy, but when it comes to inflation, we're
not gonna respond necessarily as quickly. That That's kind of
what we have in evidence at this point. Now, let's
take a quick break. When we return, let's talk a
(11:27):
little bit about uh Morgan Stanley and JP Morgan. They're
trying to tell you what they think the stock market's
gonna do next. We'll tell you if that's useful information
or not.
Speaker 1 (11:39):
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Speaker 2 (12:49):
Morgan Stanley and JP Morgan see stock rally stalling after fedcut.
That is the headline from Bloomberg. I'll now quote here
strategist from Morgan Stanley, JP Morgan, Chase and Oppenheimer Asset Management.
How does Oppenheimer get left out of the headline, poor guys?
Speaker 3 (13:08):
What gives They're only including companies whose names.
Speaker 2 (13:11):
The guy had one movie made about him a couple
of years ago, and now no one cares.
Speaker 3 (13:15):
You have to have the name Morgan in your company
name in order to be included in the Bloomberg. Also,
I don't think it was the same Oppenheimer.
Speaker 4 (13:22):
Was it trying to confirm now stand by.
Speaker 3 (13:25):
I would imagine that it was named after him. No,
we're gonna name a fun company.
Speaker 2 (13:31):
What do you think we should go with Oppenheimer? It's
a little bit long thought. He's very smart, you know. Anyways,
So they're basically saying, look, you might start to see
more caution coming into the market, and.
Speaker 3 (13:45):
To which I say, useless information.
Speaker 2 (13:47):
Why now I'm not saying it will or won't. Because
here's the thing.
Speaker 3 (13:53):
Also, a more cautious tone replacing the bullish mood. Hasn't
it cautious tone all year? Yeah? And that could mean
literally anything, right, Like stocks have rallied twelve and a
half percent through September, So our view is that they
won't be as optimistic as they're worse for the first
nine months.
Speaker 2 (14:08):
Tell me how a caution tone trades? What does that
mean for price action?
Speaker 3 (14:15):
So the only thing that could make them have egg
on their face with this story is if equities rally
another twenty percent into the year end. Otherwise every other
market outcome they could say, told you.
Speaker 2 (14:26):
So someone has to look, there's a million people out
there who look at all this stuff. Now someone's got
to be keeping track of who's actually good at these
predictions are not?
Speaker 3 (14:39):
But like, what does this prediction even mean? Right? If
I'm to take a look at this and say were
they right or wrong? What is the benchmark by which
they are right or wrong? I don't know. And here's
the other just why you can't. But you can't build
the database of all this stuff because anything other than
market's rallying twenty percent by year end would mean that
they're right under this.
Speaker 2 (14:57):
And what does this mean? So this is from Morgan's
Stanley's Michael Wilson. Near term risk is centered on the
tension between lagging weak data labor data, and the fed's
response that may not meet markets. Still, he recommended buying
any dips, and his most bull scenarios, he's the S
and P five hundred climbing nine percent to seventy two
hundred points by mid twenty twenty six. So like, what
(15:18):
what are we even doing here?
Speaker 3 (15:20):
Actually? I don't know. That story wasn't worth the paper
that Tucker printed it on, but it was worth us
talking about it.
Speaker 2 (15:28):
Yeah, uh, in Vidia China, there's some some meat too
that that goes beyond whatever you know, Morgan Smith said.
Speaker 3 (15:37):
So China declared them as it declared that they violated
antitrust law based on this agreement that they inked with
the Chinese government back in twenty twenty, which I didn't remember.
They bought a company called Melanox Technologies that's an Israeli
American firm that they bought back in twenty twenty in
order to get over the hump of anti trust concerns
with each country's regulator. They signed stuff with China saying, no,
(16:01):
we'll continue to make sure you get semiconductor chips and
you know, a good supply of them, which has obviously
not been possible given that the last two presidents have
heavily restricted the export of semiconductors to China.
Speaker 2 (16:13):
So the question, whenever you're talking about anything related to
China and their regulatory apparatus, is.
Speaker 3 (16:23):
The right way to phrase it.
Speaker 2 (16:25):
Is why are why is the Chinese government doing this now?
And what do they want from someone?
Speaker 3 (16:34):
Because we are they shaken down?
Speaker 2 (16:35):
Yes, because the Chinese government could regulate anyone in everyone
on any particular day, but they choose to do so
in very clear ways. The best example of this, Jack
Ma a few years ago came out and criticized the
Chinese Communist Party. A couple weeks later, Hey, guess what
you have to cancel? You know some IPOs. We're going
to conduct a bunch of investigations of Ali Baba and
(16:59):
make things very very difficult for you. So when China's
doing this, I think that there are a couple different
ways that I can potentially read it. The first is
there's now a clear chip on the table between China
and the US in terms of, hey, you give us
something that we want, maybe we'll make this anti trust
you know, investigation go away, as opposed to while we're
(17:23):
just telling our companies not to buy in video chips.
This could be the thing that eventually green lights you know,
the buying at some point. Maybe other things that you
can read into this, Hey, and Vidia is clearly, you know,
being touted as something that like an entity that's pretty
(17:44):
close to the US government right now. I mean, how
many times have you seen Jensen Huang and President Trump
together in the last three months. It's more than a handful,
like it's quite often. And so what message is this
sending about? Hey, are are we going to try to
make things more difficult for companies that are more closely
aligned with President Trump? Like I think that that could
(18:08):
be a reasonable way to read this as well. And
this also comes on the back now of China pushing
for the President to come and visit China in a
state visit that they can obviously, you know, very tightly
control the optics of and everything. And yes, I still
look at this quite honestly, and I say the Chinese
(18:29):
government hasn't.
Speaker 3 (18:30):
Really bent on anything this year.
Speaker 2 (18:33):
You know what's going to be the thing that gets
any kind of deal over the hump And does the
Chinese government actually stick with it instead of just signing
it and then you know, reneging on it. This all
filters into this broader conversation in my opinion.
Speaker 3 (18:47):
Yeah, there are some other things that don't. I know
that the President tweeted on a hint or I don't
know what platform he used, but he hinted at a
deal with TikTok that's going to be announced sooner than later.
But quite honestly, the main two things that matter right
now between the United States and China are semiconductors and tariffs,
(19:08):
and the two are interest and rarers. I'll put that
in the conversation as well. Yeah, yeah, three, yeah, yeah.
If they want to really turn the screws, then rres
matter quite a bit. And so we can talk about
distractions like TikTok, but it doesn't matter. What matters are
those three and will estate visit have any effect on them?
Quick break here when we come back, it's Wall Street.
Speaker 1 (19:30):
Watch like us on Facebook and follow us on Twitter.
Act TFE show. Breaking business news is always first right
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(19:52):
Wall Street watch a complete look at what's moving markets
so far today right here on the Financial Exchange Radio Network.
Speaker 4 (20:00):
Markets are starting a FED meeting week in positive territory
as investors eagerly await the Central banks likely quarter point
interest rate cut at the conclusion of their meeting on Wednesday.
Right now, the Dow is up a quarter percent, or
one hundred and eighteen points higher, SMP five hundred is
(20:21):
up about half a percent, or thirty two points higher,
Nasdaq up seven tenths of one percent, Russell two thousands
up two tenths of one percent, ten year treasure Reel
down one basis point at four point zero four seven percent,
and crude oil up about one percent. Hire today training
at sixty three dollars and forty one cents a barrel,
(20:41):
According to Treasury Secretary Scott Bessint, the US in China
have reached a framework deal for social media platform TikTok.
President Trump and Chinese President Jijiping will meet on Friday
to discuss their terms. Meanwhile, a new filing with the
SEC revealed Tesla's CEO, Elon Musk, purchased about one billion
(21:02):
dollars in the ev makers stock, marking his first purchase
of the stock in the open market since February of
twenty twenty. Tesla stock is jumping over five percent higher
on that news. Another matrix tech name in Nvidia, making
headlines after China's antitrust regulator said a preliminary investigation showed
(21:23):
the chip maker violated the country's anti monopoly law and
it would conduct a further investigation, and Nvidia's stock is
down over one percent. Separately, China said it launched probes
into certain US analog chip imports. Shares in Texas Instruments
down two percent on that news. However, analog devices and
on semiconductor are seeing modest gains at the moment. The
(21:46):
Wall Street Journal report of that agriculture company Corteva is
moulding a breakup that would separate its seed and pesticide
businesses into two separate companies. That stock is down about
four percent in with its four four percent gained today.
Alphabet officially surpassed three trillion dollars in marketcap for the
(22:06):
first time in its history. I'm Tucker Silvan. That is
Wall Street Watch.
Speaker 2 (22:12):
Mike piece from the Wall Street Journal headline is wharpool
tells US authorities its rivals could be evading tariffs. And
this is interesting to me more because I think it's
a bad look for Wharpool than any anything else. So
the appliance maker Warpool is stirring up a new trade dispute,
(22:32):
telling the Trump administration that its overseas competitors could be
evading hefty tariff bills by undervaluing their imports.
Speaker 3 (22:38):
Okay.
Speaker 2 (22:39):
A Wall Street Journal review of the data shows that
garbage disposals from China dropped from an average of twenty
one dollars over the first five months of the year
to nine dollars in June and then less to eight
in July. Gas ranges from Thailand more than half to
one seventy five. The one that seems really crazy, washing
machines from South Korea sank from eight hundred and thirty
eight dollars to seventy three dollars. Okay, So let's let's
(23:02):
look at this, and I'm gonna look at this through
the context of people I know that run businesses where
they import a lot of stuff from Asia, and in
the cases that I know where I've got you know,
three four buddies who work for companies that do this,
and this is like directly related to you know, how
they run their business. In every single instance they said that, Hey,
(23:30):
whether we were looking to you know, replace goods that
were made in China with ones in Vietnam, or whether
we were sticking with, you know, a Chinese supplier, in
every single instance they said their supplier came back with
a better offer on price than where they originally were
because the supplier agreed to help them eat some of
the cost of the tariff in doing so. Yep, So
(23:52):
one would expect that if companies are doing that in
large numbers, import prices come down. Import prices would come down. Yes,
are they necessarily coming down this much? I have absolutely
no idea. The one that seems kind of insane to
me is the front load washers from South Korea. How
they you know, fell over ninety percent.
Speaker 3 (24:11):
Yeah, seems unlikely. Seems a little bit unlikely.
Speaker 2 (24:14):
But could I see, you know, as part of you know,
a Chinese company trying to figure out, Hey, we got
to keep these garbage disposals flowing to the United States.
Are we gonna cut our price by a half and
the state's gonna subsidize us to make.
Speaker 3 (24:28):
Up the difference.
Speaker 2 (24:29):
Possibly, Yeah, I could see that as absolutely being possible
and not fraud, but just China once again figuring out
how to dump goods to maintain market share while not actually,
you know, working by market principles.
Speaker 3 (24:41):
I could see that absolutely being the case. Remember, too,
if you make garbage disposals, you might not only make
garbage disposals. So you might say, Okay, we source these
components from other countries, So we're going to take a
big loss on these garbage disposals because they're all from China,
Whereas we can cut prices only ten percent on this
other competing product and therefore or still maintain the contract
(25:02):
with XYZ company to supply all of their different appliances
that go into a home. So it's probably both. But
why do you think it's such a bad look for
Whirlpool other than they clearly can't compete with these companies
and haven't been able to for a little while.
Speaker 2 (25:16):
Now, Well, here's the way that I look at it. So, look,
there's definitely some trade fraud that happens. I have no
doubt about it, of course, and it could take any
number of different forms where I guess I'm going on
this is look that there's no company in the world
that is one hundred percent correct about how they do everything,
(25:37):
even if they're not intentionally doing something wrong. Every company
has something where it might be a little oversight or
this and that or whatever. All I know is that
wor Warlpool's competitors, you better believe are gonna be on
the horn to US regulators saying, hey, check out what
Warlpool does. Is you know, how's Warlpool treating their workers
at this facility or how you know, like they're going
to be trying to bring up something. And so that's
(26:01):
why I think that this is potentially like it doesn't
solve the problem actually if there is one, and it
potentially puts Whirlpool, you know, with other companies saying, hey,
who are you to like call us out for problems
like go manage your own backyard.
Speaker 3 (26:18):
So Whirlpool does produce about eighty percent of their US
bound appliances domestically. They are the last remaining one who
does so as far, the last large one that does
sure Ge is now owned by Chinese Base. I don't
know how to pronounce that company. Actually I see their
applians at all over air. I R h A I
E R No. I'm not really sure how you pronounce it.
(26:40):
But Samsung and Lerg obviously make up like all of
the washer dryer market and based in Korea, and so Whirlpool,
which also owns a few other brands, is the last major.
I think they owned Maytag and a couple others. There's
not a whole lot of domestic producers of this type
of equipment, and so there I suppose trying to defend
(27:03):
their business. But quite honestly, if you still can't compete
with these tariffs in places, regardless of how they're cheating them, yeah,
it's not a great look.
Speaker 2 (27:13):
Look, Ge Appliances came out and said we value competition
to believe it's good for us consumers. But this attack
from Wharpool looks like frustration over their own lagging performance.
It does kind of feel a little sour crapy.
Speaker 3 (27:24):
Yeah, it does. Take a quick break. When we come back,
we're talking gold right after this.
Speaker 1 (27:31):
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Speaker 3 (28:07):
All right, let's talk a little bit about gold. I
love gold, Thank you gold member.
Speaker 2 (28:15):
It's yellow, it's heavy, and it's now having its best
rally since nineteen seventy nine in a single year.
Speaker 3 (28:23):
Yeah, sure, is up thirty nine percent, out paces anything
we saw during COVID during the Great Recession. Typically when
I hear people talk about gold, and I think sometimes
it's not always properly attributed, But typically when I hear
about people investing in gold, it's as an inflation hedge
(28:46):
or as a catastrophe hedge. Is that fair when you
talk to people about their investments in the shiny yellow metal?
I think so? So, what about this year is contributing
to a thirty nine percent rally? Inflation, while elevated as
we talked about, compared to where I think we were
comfortable in the twentyands and twenty tens in mid nineties,
(29:09):
is not too much of an issue. I think you
could talk about increase global tensions in this day and age,
given that we are, you know, still navigating through a
pretty complex trade war. But what what should we attribute
this rally to.
Speaker 2 (29:24):
So I think that when when we look at this,
it's important to understand whether this is something that is
unique to the US or something that's happening globally. Here
in the United States. Whenever we talk about the price
of gold, we talk about it in dollar terms.
Speaker 3 (29:43):
YEP.
Speaker 2 (29:44):
So if the price of gold were rising in dollar
terms but falling elsewhere in yen terms, or in rupee terms,
or in euro terms, you'd say, Okay, this is a
story about the US dollar and it's weakness and the
lack of trust in the US.
Speaker 3 (30:01):
Dollar, and the dollar has fallen this year.
Speaker 2 (30:04):
However, here's what I have to say about that. In
gold in terms of Australian dollar terms, has gone from
around forty two hundred up to fifty four hundred this year.
In euros it has gone from around twenty five hundred
to three thousand this year. In yen it's gone from
around four hundred thousand to five hundred and twenty five thousand.
In rupees it's gone from around two hundred and twenty
(30:26):
thousand to two hundred and ninety thousand. In yuan it's
gone from about nineteen thousand to twenty five thousand. The
point that I make is when you look at all
of the major worldwide currencies, gold has gone up in
value against each of them. Yes, so it's not something
where people are specifically looking at the United States and
(30:47):
saying bad by gold.
Speaker 3 (30:51):
It is very much.
Speaker 2 (30:53):
Hey, there's a demand for this hard currency because I
I think that when we talk about you know, you
mentioned it as like catastrophe insurance. I think the three
things that I see right now out there costco. Sorry,
the three things that I see out there right now
(31:14):
that could potentially relate to this. Number One, countries around
the world don't care about their deficits. You look at
what the EU has announced on this stuff, with China's
announced on this, with the US IS and everyone's basically printed, baby,
we'll figure it out. So that's number one. Number two,
You've got some real geopolitical concerns with some hot shooting
(31:40):
wars this year, whether you're talking about the continuation of
Russia Ukraine, whether you're talking about the India Pakistan stuff
that flared up for a little bit, whether you're talking
about Israel Iran. There's some real concern on that side
of things. And finally, kind of in a related note,
there's just this rush out there for natural resources of
all types right now. True, Like it's just you can
(32:04):
feel it, like just as this constant drumbeat of what's
going on, whether it's rare earth, whether it is uranium,
whatever it is out there, it's this drum beat that's
just going. And so I think these three things are
kind of feeding into gold getting bid up across all currencies.
Speaker 3 (32:23):
And it's you know, if.
Speaker 2 (32:24):
Someone tries to be like, well, this is the US
because of tariff policy, No, no, because.
Speaker 3 (32:29):
If it were the US because of tariff policy.
Speaker 2 (32:31):
Gold wouldn't be going up in euro terms or yen
terms and stuff like that in the same way.
Speaker 3 (32:35):
Yeah, it can't just be that. It can be a
contributing factor. And sure, I think certainly there's more uncertainty.
Certainly there's more uncertainty. I think there's more uncertainty about
the US's strategic relationships with a bunch of countries. Like
I mean, two years ago, I can't couldn't have imagined
the tensions between the US, Canada and Mexico, the US
(32:55):
and India. Those relationships look a lot different than they
did just a few years ago. And so I think
that's a contributing factor, But you're right, were it all
that you would see the dollar weakening and that being
the only thing correct. Folks want to talk to you
about the upcoming live broadcasts of this show along with
the seminars from Armstrong Advisor Group. Chuck's gonna be there,
(33:16):
I'm gonna be there. We're doing two of these events,
one down at the Margaritaville Resort on Cape cod that's
October ninth. Following that, we're doing the showcase super Lux
and Chestnut Hill on October sixteenth. If you have not
yet reserved your seat, please do so now. The numbers
eight hundred three nine three four zero zero one. If
you've never been to one of these types of events,
or even if you have, you'll get to sit down
(33:39):
chat with us. We do the entire show and chat
with folks in between breaks about you know, what it
is we're covering and what it might mean, but if
you have questions about what twenty twenty five, the rest
of twenty twenty five and twenty twenty six might mean
for your financial scenario between inflation. While we were just
talking about surrounding gold and really the main big topics
(34:00):
that are dominating the conversation this year between AI trade
and the US position in the world going forward. Please
tune in and book your seat at one of these
two events. Again the details here. We are going to
be doing this first at the Margaritaville Resort down on
Cape Cod It's on October ninth. Following that showcase super
(34:22):
Lux and Chestnut Hill on October sixteenth. Join us for launch,
catch a broadcast of the show, and then we'll be
talking to you after the fact. But space is going
to be limited here. That number, once again is eight
hundred three nine three for zero zero one. You can
reserve your spot too by going to Armstrong Advisory dot
com slash events, but once more eight hundred three nine
(34:45):
three four zero zero one.
Speaker 1 (34:47):
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
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Speaker 2 (35:04):
New York Times piece they had money problems, they turned
to chat GPT for solutions.
Speaker 3 (35:08):
Do they make money off chat GPT? No, they chat
GPT had some interesting suggestions as to how they might
clean up their money problems, though some of them very reasonable,
others awfully strange.
Speaker 2 (35:23):
It's another thing where, hey, you can probably be directionally
accurate in most cases with the advice that you get,
but if you're not a subject matter expert, you won't
know where it's telling you something that's wrong with a
whole lot of confidence behind it.
Speaker 3 (35:42):
So I'm really I honed in on one story here
with a Jennifer Allen from Clayton, Delaware, who had racked
up some twenty three thousand dollars worth of credit card
debt and decided to make a thirty day challenge to
ask GPT how she could improve of her situation every day.
(36:03):
One of the I guess, presumably this is a suggestion
from CHATCHPT, was that she donate plasma for eighty dollars.
That's good. She recovered seven hundred dollars from her state's
uncleaned property registry. Fantastic. The one that I had a
tough time figuring out was who suggested she sell a
fresh watermelon with her debt total tattooed on it, and
(36:27):
then subsequently who paid fifty one dollars for said watermelon.
How do you tattoo a watermelon? I would assume the
same way you tattoo a person.
Speaker 2 (36:36):
How much do you have to pay the tattoo artists
to do it? Was it more than the fifty one
dollars she got?
Speaker 3 (36:40):
You know, she's a realtor, so I assume she doesn't
also tattoo people. But maybe maybe it's she already had
the supplies, or maybe she just used a marker. I'm
not sure, but that sure is inventive. So again, I.
Speaker 2 (36:55):
Think that, like most things, you can get some good
advice from a systems and some that is just not
useful and not good. The other thing that I'll say,
after using the most recent version of chat GPT for
what's it been out for the last month or so.
Speaker 3 (37:12):
I'm not sure.
Speaker 2 (37:13):
Yeah, honestly, it's really annoying, Like it just it's after
everything that you ask you, it's like, do you want
me to help you figure out how to do this
and this and this in addition to this? No, I
just want you to shut up and answer my questions.
Don't talk to her like that. You're gonna you're gonna
end up the first one.
Speaker 3 (37:30):
Killed in the AI.
Speaker 2 (37:31):
Right, listen, when the robots come for us, and I
know they will like, what are you gonna do?
Speaker 3 (37:36):
You know? Honestly, South Park had a pretty good episode
about this. Here is one of the problems with AI
bias is that it just wants to give you the
answer that you want, yes, and so it's, you know,
going to reaffirm everything you say if you ask it
for you know, hey, what do you think of this
business idea or this plan that I have, or this
way of paying off debt. The main thing it's gonna
(37:57):
try and do is make you happy, just like social
media in a lot of.
Speaker 2 (38:01):
Ways, just as tell me the positives of tattooing watermelons.
It could be a practice medium for artists. It's cost
effective and accessible, would be the right. It's a biodegradable canvas.
It's a conversation starter.
Speaker 3 (38:13):
Yeah, no, you're dumb, Chuck. Quick break. A lot more
to cover in the second hour of the Financial Exchange.
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):
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(00:42):
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a donation today. This is the Financial Exchange with Chuck
(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:12):
Kicking things off here. It's Chuck, Mike and Sucker with you.
Speaker 3 (01:16):
And we've got.
Speaker 2 (01:17):
A busy, busy week this week that we're gonna be
digging through. Not too much today, today's pretty quiet. We
got New York Empire State Manufacturing Index data at eight thirty.
Speaker 3 (01:27):
It's not overly important.
Speaker 2 (01:29):
It wasn't particularly good data, but I just I don't
think that there's any meaningful fund signal that you can
take from it.
Speaker 3 (01:35):
Not that funds what we're about here, But occasionally I
think we're all about fun, Chuck, not all about fun,
he said in a tie voice. Zero fun, sir.
Speaker 2 (01:47):
Tomorrow, we've got retail sales data, so gonna be interested
to see what consumer spending looked like for the month
of August. Also coming out tomorrow, we're gonna be getting
NHB Housing Market Index this for the month of September,
So I think it'll interesting to see.
Speaker 3 (02:01):
Hey, we've had lower.
Speaker 2 (02:02):
Rates kicking in over the last couple of weeks. Does
that spark a little bit more buyer traffic? Does it
spark a little bit more optimism for builders? Or do
they still remain downbeat the way they've been, you know,
for much of the last year or so.
Speaker 3 (02:16):
I've got the Import Price Index. I don't think it's
something that we generally track, but if you're looking for
evidence of foreign suppliers of goods maybe discounting things or
lowering prices in order to maintain or keep market share
in the US with tariffs, that could be some evidence
of that if it shows up anywhere in those reports.
Speaker 2 (02:36):
Wednesday, big one, We've got the EIA gasoline stocks weekly change, Yes,
and everyone's going to be focused on that. Also, a
little known bank called the Federal Reserve A two PM's
going to announce what they're doing with interest rates.
Speaker 3 (02:50):
They also the good news about this FED meeting.
Speaker 2 (02:52):
They also are going to be giving us their Summary
of Economic Projections, the step which tells us what they
expect inflation, growth, interest rates to be over the next
couple of years. So that'll be informative, I think. And
we're also gonna get building permits and housing starts on Wednesday. Thursday,
another week of weekly jobless claims and Philly Fed manufacturing index.
(03:13):
And then we finished things off on Friday with the
Baker Hughes oil rig count, which always a good way
to finish a week, Michael, Thursday of last.
Speaker 3 (03:20):
Week, we did see a good uptick, not a good uptick,
but a pretty big uptick in initial jobless claims. There's
been some data pointed at Texas that we pointed out
on Thursday of last week where you saw that jump.
Texas did acknowledge they've been having issues with fraudulent claims
for unemployment, but did not definitively say that that's what
(03:41):
caused them to spike. You also had this is the
reading over Memorial excuse me, labor Day holiday, so some
weird seasonal stuff. So we'll be looking for some evidence here.
Was that a weird one time type thing, or do
we have the start of a new trend here? Those
jobless claims last week came in at two hundred sixty three,
which was above all expectations.
Speaker 2 (04:01):
And given all the noise, I suspect that that's a
one time move into that range. If it's not, and
we see similar readings in the coming weeks, then that becomes,
you know, signed that the labor market has taken a
turn for the worst. But that's not what we have
in you know, in the data thus far. And we're
(04:22):
just gonna have to see how things go there.
Speaker 3 (04:24):
So let's talk a little bit about this data point
that really matters, the what you say, gasoline, Yes, the
EIA gasoline stocks and I'm joking. The Federal Reserve meeting
is the one that matters here. And for those that
haven't been paying attention, widely anticipated that they're going to
kick off a new rate cutting cycle with a twenty
(04:45):
five basis point cut. I do think it's generally expected
that they continue that with future cuts as well, Chuck,
and they are I think we should can textualize that
because they are doing this at a time when in
inflation is running. Where are we sitting on core CPI
right now for the last twelve months? Yeah, let's go there. Yeah,
(05:07):
So if you take a look.
Speaker 2 (05:08):
At now, I'll give you a few different inflation numbers,
just because I think it's useful to you know, contextualize.
If you will get headline CPI it's at two nine core?
Is it three to one? Uh PC headline is a
two six core?
Speaker 3 (05:22):
Is it two nine? And for the Producer Price Index
headline is a two six core? Is it two eight?
Speaker 2 (05:28):
So you're generally call it two and three quarters to
three and a quarter pretty consistent with right around three
percent core inflation, I think is the fair way to look.
Speaker 3 (05:38):
At it, which is not world ending inflation. It's a
lot lower than what we were dealing with two twenty
twenty two, a lot lower than we were dealing for
most of the seventies and early eighties, but is a
fairly significantly higher inflation rate than what we became used
to throughout all of the nineties, twenty and twenty tens.
(05:59):
And yet the Fed is pushing for a rate cut
here on concerns about the labor market. Is that your
read too, yes.
Speaker 2 (06:06):
And the other piece is that core inflation has accelerated
in the last few months as well. At the end
of the May data, it was running at two seven seven.
Speaker 3 (06:15):
It's now at three one pint one. So you've seen
an uptick in core inflation over the last few months
that has been notable. And why this matters is not
because three percent inflation in and of itself is awful.
The nineteen nineties were a period where inflation averaged pretty
(06:36):
close to three percent YEP, and it was one of
the best economic decades that we've seen, But it was
also one where much of the inflation that we saw
during the nineteen nineties came during a couple of little
bursts where he had higher oil prices and things like
that at the outset of the decade because of you know,
the outbreak of the Gulf War and things along those lines.
(06:57):
And so if you look at core inflation and during
that time and again I think this is this is
kind of where the meat is on the core inflation
number and why it matters. So if you again looking
at the nineteen nineties and say where was core inflation
during that time period, I'm just getting the average here
(07:20):
just so that i can make sure that I'm speaking
appropriately about this. Nineteen nineties core inflation was three to
two two, so it was hotter during that time. But
all of that was basically.
Speaker 2 (07:35):
Stuck in the first couple of years simply because again,
even when energy prices, you know, go up, it spills
into other parts of the economy. Plus he had some
stuff going on, you know, with housing in this and that,
So most of it was nineteen ninety to ninety two. Effectively,
core inflation in the nineties wasn't above three percent at
(07:57):
any time after nineteen ninety three. You were generally trending
down By the end of the nineties, core inflation was
running at one point eight eight percent for the prior
twelve months, and it wasn't even above two and a
half from ninety seven onward. So I think that when
we look at it, most people, when we talk about
(08:17):
the nineteen nineties and how great of an economic decade
it was, we don't say, Man, ninety one was the year.
We're talking like ninety five to two thousand, and during
that time, core inflation was under three percent the entire time.
It briefly came back above for you know, a couple
months in mid ninety five, but that's it. So I
(08:37):
think that when we're trying to figure out, you know,
what this means, the danger of core inflation running at
three percent is not that inflation runs at three percent,
but hey, are you going to have energy prices falling
ten percent year over year like they've had for the
last year in perpetuity?
Speaker 3 (08:57):
Is that going to be what you see? Probably not.
Speaker 2 (08:59):
Energy prices tend to be kind of mean reverting. They
go up for a little bit. You have you know,
supply that comes offline because people aren't you know, doing
as many doing as much drilling, and then prices go
up the next time there's an increase in demand, and
then you get more drills in the ground, and it's
it's this cycle back and forth.
Speaker 1 (09:16):
Right.
Speaker 2 (09:16):
So the concern with core inflation running at three percent is, hey,
if energy price is next to your move up ten
percent instead of down ten which again I don't know
where they're gonna go. No one knows where oil prices
will be. But now all of a sudden, you got
headline inflation. Instead of running you know, two nine, now
it's running three six, three seven.
Speaker 3 (09:36):
And hey, how do we you know, feel about inflation
accelerating closer to four percent?
Speaker 1 (09:42):
Right?
Speaker 2 (09:43):
That's why you don't want to have core inflation running
that hot. It's because the headline number never stays in
a straight line. And when you have those wobbles because
of food and fuel, hey, four percent inflation starts to
feel uncomfortable in a hurry.
Speaker 3 (09:58):
So you gotta be off concerned about the labor market
if you're going to cut into that, you do.
Speaker 2 (10:02):
And here's the thing, I think that you can justify
cutting in this environment because there are signs that the
labor market is decelerating faster than inflation is accelerating.
Speaker 3 (10:14):
Yep. But you got to.
Speaker 2 (10:16):
Have you know, your hand on the rudder and say, hey,
I got to turn quickly if the economy turns, because
otherwise I'm going to be behind the eight ball, and
inflation comes back the second that the labor market turns,
and the second oil prices start moving up again, I
got to be in front of that.
Speaker 3 (10:34):
And it's especially difficult given I guess usually using the
same comparison there, how poorly they were guiding that ship
back in early twenty twenty two, when they were faced
with a very different scenario in a lot of ways,
but a lot of the same fundamental issues. It was
an easier question to address.
Speaker 2 (10:54):
Then Yeah, and they got it wrong, and they were
still too slow to start raising rates.
Speaker 3 (10:58):
Then, so again, if you want to, you know, the
the the.
Speaker 2 (11:04):
Whole pattern from the Jerome Powell fed, Hey, we're gonna
we're gonna be dubbish at the first sign of problems
in the economy, but when it comes to inflation, we're
not gonna respond necessarily as quickly. That That's kind of
what we have in evidence at this point. Now, let's
take a quick break. When we return, let's talk a
(11:27):
little bit about uh Morgan Stanley and JP Morgan. They're
trying to tell you what they think the stock market's
gonna do next. We'll tell you if that's useful information
or not.
Speaker 1 (11:39):
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Speaker 2 (12:49):
Morgan Stanley and JP Morgan see stock rally stalling after fedcut.
That is the headline from Bloomberg. I'll now quote here
strategist from Morgan Stanley, JP Morgan, Chase and Oppenheimer Asset Management.
How does Oppenheimer get left out of the headline, poor guys?
Speaker 3 (13:08):
What gives They're only including companies whose names.
Speaker 2 (13:11):
The guy had one movie made about him a couple
of years ago, and now no one cares.
Speaker 3 (13:15):
You have to have the name Morgan in your company
name in order to be included in the Bloomberg. Also,
I don't think it was the same Oppenheimer.
Speaker 4 (13:22):
Was it trying to confirm now stand by.
Speaker 3 (13:25):
I would imagine that it was named after him. No,
we're gonna name a fun company.
Speaker 2 (13:31):
What do you think we should go with Oppenheimer? It's
a little bit long thought. He's very smart, you know. Anyways,
So they're basically saying, look, you might start to see
more caution coming into the market, and.
Speaker 3 (13:45):
To which I say, useless information.
Speaker 2 (13:47):
Why now I'm not saying it will or won't. Because
here's the thing.
Speaker 3 (13:53):
Also, a more cautious tone replacing the bullish mood. Hasn't
it cautious tone all year? Yeah? And that could mean
literally anything, right, Like stocks have rallied twelve and a
half percent through September, So our view is that they
won't be as optimistic as they're worse for the first
nine months.
Speaker 2 (14:08):
Tell me how a caution tone trades? What does that
mean for price action?
Speaker 3 (14:15):
So the only thing that could make them have egg
on their face with this story is if equities rally
another twenty percent into the year end. Otherwise every other
market outcome they could say, told you.
Speaker 2 (14:26):
So someone has to look, there's a million people out
there who look at all this stuff. Now someone's got
to be keeping track of who's actually good at these
predictions are not?
Speaker 3 (14:39):
But like, what does this prediction even mean? Right? If
I'm to take a look at this and say were
they right or wrong? What is the benchmark by which
they are right or wrong? I don't know. And here's
the other just why you can't. But you can't build
the database of all this stuff because anything other than
market's rallying twenty percent by year end would mean that
they're right under this.
Speaker 2 (14:57):
And what does this mean? So this is from Morgan's
Stanley's Michael Wilson. Near term risk is centered on the
tension between lagging weak data labor data, and the fed's
response that may not meet markets. Still, he recommended buying
any dips, and his most bull scenarios, he's the S
and P five hundred climbing nine percent to seventy two
hundred points by mid twenty twenty six. So like, what
(15:18):
what are we even doing here?
Speaker 3 (15:20):
Actually? I don't know. That story wasn't worth the paper
that Tucker printed it on, but it was worth us
talking about it.
Speaker 2 (15:28):
Yeah, uh, in Vidia China, there's some some meat too
that that goes beyond whatever you know, Morgan Smith said.
Speaker 3 (15:37):
So China declared them as it declared that they violated
antitrust law based on this agreement that they inked with
the Chinese government back in twenty twenty, which I didn't remember.
They bought a company called Melanox Technologies that's an Israeli
American firm that they bought back in twenty twenty in
order to get over the hump of anti trust concerns
with each country's regulator. They signed stuff with China saying, no,
(16:01):
we'll continue to make sure you get semiconductor chips and
you know, a good supply of them, which has obviously
not been possible given that the last two presidents have
heavily restricted the export of semiconductors to China.
Speaker 2 (16:13):
So the question, whenever you're talking about anything related to
China and their regulatory apparatus, is.
Speaker 3 (16:23):
The right way to phrase it.
Speaker 2 (16:25):
Is why are why is the Chinese government doing this now?
And what do they want from someone?
Speaker 3 (16:34):
Because we are they shaken down?
Speaker 2 (16:35):
Yes, because the Chinese government could regulate anyone in everyone
on any particular day, but they choose to do so
in very clear ways. The best example of this, Jack
Ma a few years ago came out and criticized the
Chinese Communist Party. A couple weeks later, Hey, guess what
you have to cancel? You know some IPOs. We're going
to conduct a bunch of investigations of Ali Baba and
(16:59):
make things very very difficult for you. So when China's
doing this, I think that there are a couple different
ways that I can potentially read it. The first is
there's now a clear chip on the table between China
and the US in terms of, hey, you give us
something that we want, maybe we'll make this anti trust
you know, investigation go away, as opposed to while we're
(17:23):
just telling our companies not to buy in video chips.
This could be the thing that eventually green lights you know,
the buying at some point. Maybe other things that you
can read into this, Hey, and Vidia is clearly, you know,
being touted as something that like an entity that's pretty
(17:44):
close to the US government right now. I mean, how
many times have you seen Jensen Huang and President Trump
together in the last three months. It's more than a handful,
like it's quite often. And so what message is this
sending about? Hey, are are we going to try to
make things more difficult for companies that are more closely
aligned with President Trump? Like I think that that could
(18:08):
be a reasonable way to read this as well. And
this also comes on the back now of China pushing
for the President to come and visit China in a
state visit that they can obviously, you know, very tightly
control the optics of and everything. And yes, I still
look at this quite honestly, and I say the Chinese
(18:29):
government hasn't.
Speaker 3 (18:30):
Really bent on anything this year.
Speaker 2 (18:33):
You know what's going to be the thing that gets
any kind of deal over the hump And does the
Chinese government actually stick with it instead of just signing
it and then you know, reneging on it. This all
filters into this broader conversation in my opinion.
Speaker 3 (18:47):
Yeah, there are some other things that don't. I know
that the President tweeted on a hint or I don't
know what platform he used, but he hinted at a
deal with TikTok that's going to be announced sooner than later.
But quite honestly, the main two things that matter right
now between the United States and China are semiconductors and tariffs,
(19:08):
and the two are interest and rarers. I'll put that
in the conversation as well. Yeah, yeah, three, yeah, yeah.
If they want to really turn the screws, then rres
matter quite a bit. And so we can talk about
distractions like TikTok, but it doesn't matter. What matters are
those three and will estate visit have any effect on them?
Quick break here when we come back, it's Wall Street.
Speaker 1 (19:30):
Watch like us on Facebook and follow us on Twitter.
Act TFE show. Breaking business news is always first right
here on the Financial Exchange Radio Network. Time now for
(19:52):
Wall Street watch a complete look at what's moving markets
so far today right here on the Financial Exchange Radio Network.
Speaker 4 (20:00):
Markets are starting a FED meeting week in positive territory
as investors eagerly await the Central banks likely quarter point
interest rate cut at the conclusion of their meeting on Wednesday.
Right now, the Dow is up a quarter percent, or
one hundred and eighteen points higher, SMP five hundred is
(20:21):
up about half a percent, or thirty two points higher,
Nasdaq up seven tenths of one percent, Russell two thousands
up two tenths of one percent, ten year treasure Reel
down one basis point at four point zero four seven percent,
and crude oil up about one percent. Hire today training
at sixty three dollars and forty one cents a barrel,
(20:41):
According to Treasury Secretary Scott Bessint, the US in China
have reached a framework deal for social media platform TikTok.
President Trump and Chinese President Jijiping will meet on Friday
to discuss their terms. Meanwhile, a new filing with the
SEC revealed Tesla's CEO, Elon Musk, purchased about one billion
(21:02):
dollars in the ev makers stock, marking his first purchase
of the stock in the open market since February of
twenty twenty. Tesla stock is jumping over five percent higher
on that news. Another matrix tech name in Nvidia, making
headlines after China's antitrust regulator said a preliminary investigation showed
(21:23):
the chip maker violated the country's anti monopoly law and
it would conduct a further investigation, and Nvidia's stock is
down over one percent. Separately, China said it launched probes
into certain US analog chip imports. Shares in Texas Instruments
down two percent on that news. However, analog devices and
on semiconductor are seeing modest gains at the moment. The
(21:46):
Wall Street Journal report of that agriculture company Corteva is
moulding a breakup that would separate its seed and pesticide
businesses into two separate companies. That stock is down about
four percent in with its four four percent gained today.
Alphabet officially surpassed three trillion dollars in marketcap for the
(22:06):
first time in its history. I'm Tucker Silvan. That is
Wall Street Watch.
Speaker 2 (22:12):
Mike piece from the Wall Street Journal headline is wharpool
tells US authorities its rivals could be evading tariffs. And
this is interesting to me more because I think it's
a bad look for Wharpool than any anything else. So
the appliance maker Warpool is stirring up a new trade dispute,
(22:32):
telling the Trump administration that its overseas competitors could be
evading hefty tariff bills by undervaluing their imports.
Speaker 3 (22:38):
Okay.
Speaker 2 (22:39):
A Wall Street Journal review of the data shows that
garbage disposals from China dropped from an average of twenty
one dollars over the first five months of the year
to nine dollars in June and then less to eight
in July. Gas ranges from Thailand more than half to
one seventy five. The one that seems really crazy, washing
machines from South Korea sank from eight hundred and thirty
eight dollars to seventy three dollars. Okay, So let's let's
(23:02):
look at this, and I'm gonna look at this through
the context of people I know that run businesses where
they import a lot of stuff from Asia, and in
the cases that I know where I've got you know,
three four buddies who work for companies that do this,
and this is like directly related to you know, how
they run their business. In every single instance they said that, Hey,
(23:30):
whether we were looking to you know, replace goods that
were made in China with ones in Vietnam, or whether
we were sticking with, you know, a Chinese supplier, in
every single instance they said their supplier came back with
a better offer on price than where they originally were
because the supplier agreed to help them eat some of
the cost of the tariff in doing so. Yep, So
(23:52):
one would expect that if companies are doing that in
large numbers, import prices come down. Import prices would come down. Yes,
are they necessarily coming down this much? I have absolutely
no idea. The one that seems kind of insane to
me is the front load washers from South Korea. How
they you know, fell over ninety percent.
Speaker 3 (24:11):
Yeah, seems unlikely. Seems a little bit unlikely.
Speaker 2 (24:14):
But could I see, you know, as part of you know,
a Chinese company trying to figure out, Hey, we got
to keep these garbage disposals flowing to the United States.
Are we gonna cut our price by a half and
the state's gonna subsidize us to make.
Speaker 3 (24:28):
Up the difference.
Speaker 2 (24:29):
Possibly, Yeah, I could see that as absolutely being possible
and not fraud, but just China once again figuring out
how to dump goods to maintain market share while not actually,
you know, working by market principles.
Speaker 3 (24:41):
I could see that absolutely being the case. Remember, too,
if you make garbage disposals, you might not only make
garbage disposals. So you might say, Okay, we source these
components from other countries, So we're going to take a
big loss on these garbage disposals because they're all from China,
Whereas we can cut prices only ten percent on this
other competing product and therefore or still maintain the contract
(25:02):
with XYZ company to supply all of their different appliances
that go into a home. So it's probably both. But
why do you think it's such a bad look for
Whirlpool other than they clearly can't compete with these companies
and haven't been able to for a little while.
Speaker 2 (25:16):
Now, Well, here's the way that I look at it. So, look,
there's definitely some trade fraud that happens. I have no
doubt about it, of course, and it could take any
number of different forms where I guess I'm going on
this is look that there's no company in the world
that is one hundred percent correct about how they do everything,
(25:37):
even if they're not intentionally doing something wrong. Every company
has something where it might be a little oversight or
this and that or whatever. All I know is that
wor Warlpool's competitors, you better believe are gonna be on
the horn to US regulators saying, hey, check out what
Warlpool does. Is you know, how's Warlpool treating their workers
at this facility or how you know, like they're going
to be trying to bring up something. And so that's
(26:01):
why I think that this is potentially like it doesn't
solve the problem actually if there is one, and it
potentially puts Whirlpool, you know, with other companies saying, hey,
who are you to like call us out for problems
like go manage your own backyard.
Speaker 3 (26:18):
So Whirlpool does produce about eighty percent of their US
bound appliances domestically. They are the last remaining one who
does so as far, the last large one that does
sure Ge is now owned by Chinese Base. I don't
know how to pronounce that company. Actually I see their
applians at all over air. I R h A I
E R No. I'm not really sure how you pronounce it.
(26:40):
But Samsung and Lerg obviously make up like all of
the washer dryer market and based in Korea, and so Whirlpool,
which also owns a few other brands, is the last major.
I think they owned Maytag and a couple others. There's
not a whole lot of domestic producers of this type
of equipment, and so there I suppose trying to defend
(27:03):
their business. But quite honestly, if you still can't compete
with these tariffs in places, regardless of how they're cheating them, yeah,
it's not a great look.
Speaker 2 (27:13):
Look, Ge Appliances came out and said we value competition
to believe it's good for us consumers. But this attack
from Wharpool looks like frustration over their own lagging performance.
It does kind of feel a little sour crapy.
Speaker 3 (27:24):
Yeah, it does. Take a quick break. When we come back,
we're talking gold right after this.
Speaker 1 (27:31):
Text does six one seven three six two one three
eight five with your comments and questions about today's show.
This is the Financial Exchange Radio Network. The Financial Exchange
Show podcast drops every day on Apple, Spotify, and iHeartRadio.
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Speaker 3 (28:07):
All right, let's talk a little bit about gold. I
love gold, Thank you gold member.
Speaker 2 (28:15):
It's yellow, it's heavy, and it's now having its best
rally since nineteen seventy nine in a single year.
Speaker 3 (28:23):
Yeah, sure, is up thirty nine percent, out paces anything
we saw during COVID during the Great Recession. Typically when
I hear people talk about gold, and I think sometimes
it's not always properly attributed, But typically when I hear
about people investing in gold, it's as an inflation hedge
(28:46):
or as a catastrophe hedge. Is that fair when you
talk to people about their investments in the shiny yellow metal?
I think so? So, what about this year is contributing
to a thirty nine percent rally? Inflation, while elevated as
we talked about, compared to where I think we were
comfortable in the twentyands and twenty tens in mid nineties,
(29:09):
is not too much of an issue. I think you
could talk about increase global tensions in this day and age,
given that we are, you know, still navigating through a
pretty complex trade war. But what what should we attribute
this rally to.
Speaker 2 (29:24):
So I think that when when we look at this,
it's important to understand whether this is something that is
unique to the US or something that's happening globally. Here
in the United States. Whenever we talk about the price
of gold, we talk about it in dollar terms.
Speaker 3 (29:43):
YEP.
Speaker 2 (29:44):
So if the price of gold were rising in dollar
terms but falling elsewhere in yen terms, or in rupee terms,
or in euro terms, you'd say, Okay, this is a
story about the US dollar and it's weakness and the
lack of trust in the US.
Speaker 3 (30:01):
Dollar, and the dollar has fallen this year.
Speaker 2 (30:04):
However, here's what I have to say about that. In
gold in terms of Australian dollar terms, has gone from
around forty two hundred up to fifty four hundred this year.
In euros it has gone from around twenty five hundred
to three thousand this year. In yen it's gone from
around four hundred thousand to five hundred and twenty five thousand.
In rupees it's gone from around two hundred and twenty
(30:26):
thousand to two hundred and ninety thousand. In yuan it's
gone from about nineteen thousand to twenty five thousand. The
point that I make is when you look at all
of the major worldwide currencies, gold has gone up in
value against each of them. Yes, so it's not something
where people are specifically looking at the United States and
(30:47):
saying bad by gold.
Speaker 3 (30:51):
It is very much.
Speaker 2 (30:53):
Hey, there's a demand for this hard currency because I
I think that when we talk about you know, you
mentioned it as like catastrophe insurance. I think the three
things that I see right now out there costco. Sorry,
the three things that I see out there right now
(31:14):
that could potentially relate to this. Number One, countries around
the world don't care about their deficits. You look at
what the EU has announced on this stuff, with China's
announced on this, with the US IS and everyone's basically printed, baby,
we'll figure it out. So that's number one. Number two,
You've got some real geopolitical concerns with some hot shooting
(31:40):
wars this year, whether you're talking about the continuation of
Russia Ukraine, whether you're talking about the India Pakistan stuff
that flared up for a little bit, whether you're talking
about Israel Iran. There's some real concern on that side
of things. And finally, kind of in a related note,
there's just this rush out there for natural resources of
all types right now. True, Like it's just you can
(32:04):
feel it, like just as this constant drumbeat of what's
going on, whether it's rare earth, whether it is uranium,
whatever it is out there, it's this drum beat that's
just going. And so I think these three things are
kind of feeding into gold getting bid up across all currencies.
Speaker 3 (32:23):
And it's you know, if.
Speaker 2 (32:24):
Someone tries to be like, well, this is the US
because of tariff policy, No, no, because.
Speaker 3 (32:29):
If it were the US because of tariff policy.
Speaker 2 (32:31):
Gold wouldn't be going up in euro terms or yen
terms and stuff like that in the same way.
Speaker 3 (32:35):
Yeah, it can't just be that. It can be a
contributing factor. And sure, I think certainly there's more uncertainty.
Certainly there's more uncertainty. I think there's more uncertainty about
the US's strategic relationships with a bunch of countries. Like
I mean, two years ago, I can't couldn't have imagined
the tensions between the US, Canada and Mexico, the US
(32:55):
and India. Those relationships look a lot different than they
did just a few years ago. And so I think
that's a contributing factor, But you're right, were it all
that you would see the dollar weakening and that being
the only thing correct. Folks want to talk to you
about the upcoming live broadcasts of this show along with
the seminars from Armstrong Advisor Group. Chuck's gonna be there,
(33:16):
I'm gonna be there. We're doing two of these events,
one down at the Margaritaville Resort on Cape cod that's
October ninth. Following that, we're doing the showcase super Lux
and Chestnut Hill on October sixteenth. If you have not
yet reserved your seat, please do so now. The numbers
eight hundred three nine three four zero zero one. If
you've never been to one of these types of events,
or even if you have, you'll get to sit down
(33:39):
chat with us. We do the entire show and chat
with folks in between breaks about you know, what it
is we're covering and what it might mean, but if
you have questions about what twenty twenty five, the rest
of twenty twenty five and twenty twenty six might mean
for your financial scenario between inflation. While we were just
talking about surrounding gold and really the main big topics
(34:00):
that are dominating the conversation this year between AI trade
and the US position in the world going forward. Please
tune in and book your seat at one of these
two events. Again the details here. We are going to
be doing this first at the Margaritaville Resort down on
Cape Cod It's on October ninth. Following that showcase super
(34:22):
Lux and Chestnut Hill on October sixteenth. Join us for launch,
catch a broadcast of the show, and then we'll be
talking to you after the fact. But space is going
to be limited here. That number, once again is eight
hundred three nine three for zero zero one. You can
reserve your spot too by going to Armstrong Advisory dot
com slash events, but once more eight hundred three nine
(34:45):
three four zero zero one.
Speaker 1 (34:47):
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. Strong make contact you to offer investment
advisory services.
Speaker 2 (35:04):
New York Times piece they had money problems, they turned
to chat GPT for solutions.
Speaker 3 (35:08):
Do they make money off chat GPT? No, they chat
GPT had some interesting suggestions as to how they might
clean up their money problems, though some of them very reasonable,
others awfully strange.
Speaker 2 (35:23):
It's another thing where, hey, you can probably be directionally
accurate in most cases with the advice that you get,
but if you're not a subject matter expert, you won't
know where it's telling you something that's wrong with a
whole lot of confidence behind it.
Speaker 3 (35:42):
So I'm really I honed in on one story here
with a Jennifer Allen from Clayton, Delaware, who had racked
up some twenty three thousand dollars worth of credit card
debt and decided to make a thirty day challenge to
ask GPT how she could improve of her situation every day.
(36:03):
One of the I guess, presumably this is a suggestion
from CHATCHPT, was that she donate plasma for eighty dollars.
That's good. She recovered seven hundred dollars from her state's
uncleaned property registry. Fantastic. The one that I had a
tough time figuring out was who suggested she sell a
fresh watermelon with her debt total tattooed on it, and
(36:27):
then subsequently who paid fifty one dollars for said watermelon.
How do you tattoo a watermelon? I would assume the
same way you tattoo a person.
Speaker 2 (36:36):
How much do you have to pay the tattoo artists
to do it? Was it more than the fifty one
dollars she got?
Speaker 3 (36:40):
You know, she's a realtor, so I assume she doesn't
also tattoo people. But maybe maybe it's she already had
the supplies, or maybe she just used a marker. I'm
not sure, but that sure is inventive. So again, I.
Speaker 2 (36:55):
Think that, like most things, you can get some good
advice from a systems and some that is just not
useful and not good. The other thing that I'll say,
after using the most recent version of chat GPT for
what's it been out for the last month or so.
Speaker 3 (37:12):
I'm not sure.
Speaker 2 (37:13):
Yeah, honestly, it's really annoying, Like it just it's after
everything that you ask you, it's like, do you want
me to help you figure out how to do this
and this and this in addition to this? No, I
just want you to shut up and answer my questions.
Don't talk to her like that. You're gonna you're gonna
end up the first one.
Speaker 3 (37:30):
Killed in the AI.
Speaker 2 (37:31):
Right, listen, when the robots come for us, and I
know they will like, what are you gonna do?
Speaker 3 (37:36):
You know? Honestly, South Park had a pretty good episode
about this. Here is one of the problems with AI
bias is that it just wants to give you the
answer that you want, yes, and so it's, you know,
going to reaffirm everything you say if you ask it
for you know, hey, what do you think of this
business idea or this plan that I have, or this
way of paying off debt. The main thing it's gonna
(37:57):
try and do is make you happy, just like social
media in a lot of.
Speaker 2 (38:01):
Ways, just as tell me the positives of tattooing watermelons.
It could be a practice medium for artists. It's cost
effective and accessible, would be the right. It's a biodegradable canvas.
It's a conversation starter.
Speaker 3 (38:13):
Yeah, no, you're dumb, Chuck. Quick break. A lot more
to cover in the second hour of the Financial Exchange.
We'll be right back
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