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Speaker 1: Live from dall Hertbiner and the Crossroads of America.

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Speaker 2: It's Tony Katz today. So the futures today when we

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Speaker 2: talk about the market started, huge up for the Dow

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Speaker 2: and massive down for the Nasdaq. And then you took

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Speaker 2: a look at things as the market day started, it

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Speaker 2: was huge up for the Dow and a massive down

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Speaker 2: for the Nasdaq. You're like, I don't quite understand what's

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Speaker 2: going on here. I don't know how this is supposed

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Speaker 2: to work. I'm not even sure how people see this

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Speaker 2: economy right now. And you see oil prices had moved

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Speaker 2: back up to one hundred dollars a barrow on the

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Speaker 2: Brent crude and now back down to eighty dollars because

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Speaker 2: Trump said for two days we're not going to fire

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Speaker 2: any weapons at him, and that was enough. I think

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Speaker 2: that the market is a silly place, and I think

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Speaker 2: that the market, like you, doesn't necessarily represent Midwest main

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Speaker 2: for what is it that we can learn? What is

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Speaker 2: it that it's trying to tell us right now? Especially,

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Speaker 2: I mean we talked about the DOO and the overall

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Speaker 2: and the Nasdaq and the overall, and what about things

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Speaker 2: like SpaceX which opened up at one hundred and thirty

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Speaker 2: five dollars a share. This is Elon Musk's company. It's

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Speaker 2: skyrockets to two hundred, then it falls down to one

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Speaker 2: hundred and ten. This normal for an IPO Or is

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Speaker 2: there something else to play? Is there an opportunity for

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Speaker 2: all of us? Or is there something to learn? Tony Katz,

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Speaker 2: Tony Katz today, good to be with you. Doctor Matt

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Speaker 2: will joins us economist at the University of Indianapolis. It's

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Speaker 2: really fascinating that we see the Dow moving the way

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Speaker 2: it is and the Nasdaq getting punched in the throat.

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Speaker 2: And this is the second week in a row where

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Speaker 2: we're hearing about the world of chips and chip manufacturers,

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Speaker 2: whether we're talking about in Video or AMD, Micron, et cetera,

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Speaker 2: all taking the hits, which is insane because all the

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Speaker 2: AI people need the chip in order to have the

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Speaker 2: data centers in order to push their AI, which is

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Speaker 2: getting so much money that Tesla and Google both posted

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Speaker 2: losses because all of their money is going into AI investment.

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Speaker 2: Walk us through a path, or down a path, or

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Speaker 2: through a garden. There are paths and there are gardens.

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Speaker 2: I have amazes. I don't know where we are doctor

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Speaker 2: Mattweill economist. What the hell are we looking at?

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Speaker 1: I am happy to explain it to everyone, and it's

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Speaker 1: not that complicated. There is no panic. Everyone should relax.

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Speaker 1: This is what we would typically call a sector rotation.

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Speaker 1: The market is trying to figure it out. AI is here,

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Speaker 1: it's producing efficiency, the economy is growing, chip stocks are

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Speaker 1: really good. AI is good. Is simply trying to figure

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Speaker 1: out the right price. The growth is going to be.

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Speaker 1: There is going to be this month, next month, next year,

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Speaker 1: five years. So the market is simply reevaluating in repricing

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Speaker 1: all this AI in tech news. That's not a problem.

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Speaker 1: It's so unknown. What we do know it's going to

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Speaker 1: be phenomenal. I mean, Meta this week they borrowed twelve

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Speaker 1: and a half billion dollars at a higher interest rate

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Speaker 1: to fund data centers. There's no stopping it. They're willing

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Speaker 1: to pay a very high interest rate to build more

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Speaker 1: data centers. So everything's okay here. You know, Apple stock

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Speaker 1: is up now. It's interesting. Apple is not an AI

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Speaker 1: R innovation company right now. Their stock is up because

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Speaker 1: of sales. Now we're gonna find out Thursday, because Thursday,

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Speaker 1: both Amazon and Apple announce their earnings Wednesday, Meta and

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Speaker 1: Microsoft report are earnings. So we're gonna have a lot

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Speaker 1: of tech news this week. But everyone's this is fine.

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Speaker 1: This trying to just figure it out.

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Speaker 2: So the figuring out is one thing. The figuring out

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Speaker 2: while you play with people's four oh one k's is another.

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Speaker 2: And the final aspect of this is that figuring out

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Speaker 2: would be a lot easier if it played a normal

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Speaker 2: part in understanding, if things flowed by a normal, normal rhythm.

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Speaker 2: We take a look at oil prices, for example, you're

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Speaker 2: telling me three days of not firing missiles can bring

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Speaker 2: down oil prices twenty dollars a barrel, and if we

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Speaker 2: look at it, it wasn't actually twenty dollars bals twenty dollars

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Speaker 2: from the high. But things have already come down while

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Speaker 2: we were firing missiles. So what we see is, you know,

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Speaker 2: not a question to panic. It's a question of trying

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Speaker 2: to comprehend what it is that those who make the

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Speaker 2: market are trying to say. What is it that they

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Speaker 2: look at? So let's move over to oil for a second.

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Speaker 2: What do you see in this sector? What is it

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Speaker 2: that you're seeing from just the last week.

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Speaker 1: Well, you and I because I think we're on the

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Speaker 1: same page on Iran. We're not going to like what

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Speaker 1: the market is saying. The market is saying stop the war.

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Speaker 1: They don't even care if Iran has a nuclear missile.

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Speaker 1: They don't care if Iran runs and controls the Straits.

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Speaker 1: The market doesn't care. The market doesn't want the war.

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Speaker 1: You and I want the regime gone. That's not what

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Speaker 1: the market wants. The market wants stability. They don't want

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Speaker 1: to keep looking to the White House and looking to

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Speaker 1: the Middle East to determine where the market should go.

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Speaker 1: So that's what the oil picture is. The oil is

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Speaker 1: simply a reaction to what's happening in politics. And you've

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Speaker 1: heard me say a million times I wish politics would

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Speaker 1: get out of the picture. But you mentioned something a

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Speaker 1: moment ago about watching your four oh one k go

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Speaker 1: up and down. I have advice. This is stock advice

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Speaker 1: that we're never supposed to give to anybody. Don't watch it.

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Speaker 1: You should not be investing in individual stocks as the

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Speaker 1: average investor. Individual stock picking is a tough game and

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Speaker 1: people don't win at it. You should be a well

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Speaker 1: diversified portfolio, and markets go up, markets go down. Just

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Speaker 1: relax and let them move. That's what's going on now.

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Speaker 1: If you want to get into a specific stock that

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Speaker 1: I think is fascinating right now, and that's going to

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Speaker 1: be SpaceX and what's happening with them. But as far

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Speaker 1: as the market goes, relax everybody. It's going to fluctuate,

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Speaker 1: but long term it's going to do amazing.

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Speaker 2: I've got questions about SpaceX, and full disclosure, I do

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Speaker 2: not own SpaceX, but it has been a conversation talking

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Speaker 2: to doctor Matt Well, economists at the University of Indianapolis.

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Speaker 2: This sector rotation that you talk about as we go

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Speaker 2: back to the tech market, is this about? This isn't,

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Speaker 2: as you say, a rejection of AI. This is about

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Speaker 2: repricing of AI. And it is interesting that the chip

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Speaker 2: manufacturers are taking the hit. So what do you mean

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Speaker 2: by repricing.

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Speaker 1: Well, the market is simply what we call the present

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Speaker 1: value of future cash flows, and it's trying to forecast

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Speaker 1: future cash flows. But think about it, the future is

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Speaker 1: one year, five year, ten years, one. In fact, I've

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Speaker 1: done a lot of research on this. One half of

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Speaker 1: one percent change in your growth forecast can change your

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Speaker 1: stock price today by twenty percent. So it's simply the

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Speaker 1: unknown of the future. We don't know when it's going

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Speaker 1: to be hugely profitable. No one disc degrees it's going

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Speaker 1: to be profitable. But the difficulty is when will it

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Speaker 1: become profitable? When will it produce all these returns. We're

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Speaker 1: seeing it now, We're seeing it right now. We see

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Speaker 1: a lot of these companies growing from it. I mean

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Speaker 1: you just look at things like, you know, Chili's, I mean,

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Speaker 1: Chili's is growing by phenomenal amounts. Coca Cola announced incredible

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Speaker 1: earnings this week. Everything is doing very well. It's just

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Speaker 1: how well it's going to grow it seven percent or

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Speaker 1: nine percent. That difference has a huge impact on the

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Speaker 1: value of your stock and the value of your portfolio.

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Speaker 1: So it's just it's just the unknown, Tony. That's really

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Speaker 1: all it's going on here. Where else is this happening?

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Speaker 2: You know, if we take a look at the tech sector,

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Speaker 2: where else can you point to out I'm pointing to you,

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Speaker 2: for example, as you brought up the chip stocks, the

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Speaker 2: NVIDIAs of the world. Where else within the tech sector

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Speaker 2: is this this happening? That there is rethink, there's a

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Speaker 2: reallocation of dollars, there's there's a different level of planning

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Speaker 2: going on. Where else can we point to in the

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Speaker 2: tech sector to see this?

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Speaker 1: Well, first of all, I have a problem with the

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Speaker 1: tech sector. Everything is tech nowadays. What is in tech?

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Speaker 1: I mean you go through you know, you drive through

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Speaker 1: the fast food place. You're using your app to order

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Speaker 1: your food before you get to the fast food joint.

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Speaker 2: The food place is the food place. No one thinks

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Speaker 2: of McDonald's as a tech sector. You know what, I

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Speaker 2: try not to hurt me, sir. I'm doing my best,

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Speaker 2: and you don't make my life difficult for a second.

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Speaker 1: Okay, let's merge tech with financial services, so fintech as

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Speaker 1: we call it. Yes, so Visa laid off twenty six

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Speaker 1: hundred people. Twenty six hundred people, they announce they're laid off.

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Speaker 1: Now you're thinking, oh, this is a disaster. It's AI related,

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Speaker 1: it's AI efficiencies. And when we look at the unemployment report,

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Speaker 1: we see, oh, the unemployment report is absorbing this pretty well.

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Speaker 1: And then now let's flip the coin. So Visa lays

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Speaker 1: off twenty six hundred people. PayPal, which is in the

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Speaker 1: fintech business as well. I mean, they're the ultimate fintech company.

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Speaker 1: By the way, another Elon Musk started company. They're looking

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Speaker 1: to buy someone. They're so successful. So the fintech in

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Speaker 1: PayPal says, I'm going to buy someone. The fintech in

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Speaker 1: Visa is saying, we're cutting jobs, but AI is improving

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Speaker 1: our business. So this tech is just touching everywhere and

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Speaker 1: it's disrupting. It's disrupting Visa, which is a big dog

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Speaker 1: in credit. It's disrupting PayPal, which was actually pulling back.

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Speaker 1: Now they're coming forward. I love this disruption. The disruption

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Speaker 1: is confusing people good.

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Speaker 2: Does the disruption lead to more problems on Midwest main

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Speaker 2: Street or is it really in its own world and

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Speaker 2: not connected to things that Midwest deals with mainStreet deals with,

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Speaker 2: like like tariffs and insurance pricing, etc.

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Speaker 1: Well, if people can stay off their social media and

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Speaker 1: their computer, then yeah, it's gonna not affect them as much.

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Speaker 1: Because let's go back to the Chili's example. You know,

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Speaker 1: Chili's revenue is up twenty two percent over two years.

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Speaker 1: That's main street people are going out to eat at

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Speaker 1: the local restaurant. That's a good thing that's not being

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Speaker 1: impacted by the disruption. You know, you and I talk

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Speaker 1: about this all the time. How is that people are

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Speaker 1: still going out to eat all the time if they've

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Speaker 1: got affordability issues. It's hard to get into a restaurant

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Speaker 1: in some places where we live. So I'm kind of,

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Speaker 1: you know, saying main street. Main Street's also confused affordability

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Speaker 1: is an issue. Yet they're still behaving like it's not.

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Speaker 2: Talking to doctor Matt Will, economist at the University of Indianapolis.

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Speaker 2: Now let's move over to SpaceX. Full disclosure, I do

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Speaker 2: not own SpaceX. I think I've said this before. I

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Speaker 2: like to be very very clear. I thought about it

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Speaker 2: when it opens, I thought about it at that open price,

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Speaker 2: and every bit of good advice that I got. And remember,

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Speaker 2: I'm not a financial planner. Never listen to me about

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Speaker 2: your your market. Never listen to me about your investments. No no, no, no, no.

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Speaker 2: Was these things usually pop and then fall, and that's

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Speaker 2: exactly what happened. We're talking about something that rose to

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Speaker 2: a little over two hundred and then fell to about

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Speaker 2: one hundred, and who knows where it's at right now,

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Speaker 2: and who knows what's of course going to happen. But

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Speaker 2: I had said, you know, this thing gets down to

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Speaker 2: one hundred and ten, I'm like, all right, maybe I'll

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Speaker 2: do that and I'll buy some shares. A full disclosure

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Speaker 2: as of this conversation right now, I have not yet.

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Speaker 2: I'm always very honest about these things. But rather the

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Speaker 2: question about SpaceX, because nothing has had more hype before

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Speaker 2: it started, because of Elon Musk, because we're talking about

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Speaker 2: space travel other technological advances. Is SpaceX a good indicator

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Speaker 2: for people regarding either market strength or market direction.

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Speaker 1: I don't think it's a good indicator of market strength

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Speaker 1: or direction, but I think it's a good indicator of

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Speaker 1: the tech sector we were just talking about. You know,

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Speaker 1: I always say be well diversified, don't play individual stocks

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Speaker 1: because you're not an expert at valuing these things. Well,

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Speaker 1: let me tell you. I'm an expert at valuing these things.

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Speaker 1: And I will say right now what I told everyone

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Speaker 1: that I could get in touch with. If you had

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Speaker 1: a chance to get in on the IPO at one

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Speaker 1: hundred and thirty five, you should have done it. You

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Speaker 1: should have jumped in, and then you should bail within

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Speaker 1: the first forty eight hours. That's what the history shows.

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Speaker 1: And if you'd have done that, anybody out there, they'd

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Speaker 1: have got in at one thirty five they'd have gotten

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Speaker 1: out at about one seventy and they'd have made quite

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Speaker 1: a bit of money. Now, where's it at now? Again,

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Speaker 1: if I were telling people how to invest in, if

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Speaker 1: they knew how to price stocks, and I'm guessing almost

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Speaker 1: nobody listening to your show is an expert at this

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Speaker 1: SpaceX right now, According to Bloomberg, consensus is undervalued. If

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Speaker 1: I look at the list. Now, look at the list

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Speaker 1: right now. Morgan Stanley projects that they're going to be

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Speaker 1: at this is within a year at three hundred. RBC

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Speaker 1: Capital projects two twenty five. Raymond James, this is insane.

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Speaker 1: They project eight hundred. Even Goldman Sachs, the big dog

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Speaker 1: in the world, they project two five.

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Speaker 2: Raymond James predicts eight hundred.

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Speaker 1: I think that analyst should be fired. I don't go

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Speaker 1: that far, But then, well I heard the interview. They believe,

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Speaker 1: and I'm not opposed to this, that SpaceX may be

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Speaker 1: the most consequential company of our lifetime, even more than Nvidia.

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Speaker 1: This is a company that is going out and saving

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Speaker 1: people from the space station. They're going to deliver people

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Speaker 1: to Mars. They're the ones launching all the satellites. This

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Speaker 1: is hard to fathom. The impact they're going to have now,

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Speaker 1: Raymond James a little bit over the top, but I

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Speaker 1: can't disagree with the sentiment.

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Speaker 2: Yeah, you know, I will tell you that I don't

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Speaker 2: own in video stock either in terms of assa a

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Speaker 2: separate stock. I don't believe I own it in any fund.

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Speaker 2: Again with the full disclosure, but it's hard to think

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Speaker 2: of something more tangibly part of life and part of

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Speaker 2: being changing in video over SpaceX every day of the

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Speaker 2: week and twice on Sunday. So again it's playing to

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Speaker 2: the future here. But does this lead to us saying

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Speaker 2: that people are so busy looking for the quick fix,

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Speaker 2: the quick dollar that the days of just investing in

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Speaker 2: the basics and getting your your six eight nine percent return,

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Speaker 2: which is all nice stuff, that's over. It's it's it's

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Speaker 2: about the flash. The flash is necessary to drive the

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Speaker 2: rest of the market.

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Speaker 1: No, no, no, We've always looked for the flash. We

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Speaker 1: always talk about the flash. If it bleeds, it leads,

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Speaker 1: if it flashes, we talk about it. We don't talk

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Speaker 1: about those boring things like grocery stores and restaurants and

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Speaker 1: making ballpoint pins and making you know, little aired things

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Speaker 1: and you know, writing devices. This is you know, I

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Speaker 1: can tell you one of the companies I invest in.

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Speaker 1: We own the largest maker of ballpoint pins in North America.

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Speaker 1: It's a great investment. It is so boring. It is

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Speaker 1: so boring.

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Speaker 2: By the way, the Uni ball two oh seven bold

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Speaker 2: this is this is what I write with. I do

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Speaker 2: not own any part of the stock whatsoever, but it

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Speaker 2: is the greatest pen. Listen, we can play mom blancs

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Speaker 2: so we could do all the things I'm telling you

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Speaker 2: just in a look, clickie, clickie. This is it right here.

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Speaker 2: I do know when we go back to SpaceX and

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Speaker 2: this story got reported and we were talking before we

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Speaker 2: came on and you brought it up. You take a

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Speaker 2: look at the members of Congress who've been buying SpaceX stock,

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Speaker 2: do we? I'm all about getting ending the insider trading stuff.

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Speaker 2: I mean, I am all there for it, are are we?

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Speaker 2: Is this an example of follow your congressional leaders? Or

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Speaker 2: is this an example of, man, you really shouldn't let

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Speaker 2: these people trade it all.

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Speaker 1: By the way, if you follow your congressional leaders, by

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Speaker 1: the time you hear about it, it's too late. Good point,

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Speaker 1: solid there, and here's what I love. Five of the

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Speaker 1: six people, Okay, these people that bought SpaceX, they didn't

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Speaker 1: buy it to our knowledge. We don't know for sure.

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Speaker 1: We don't think they got it at the IPO price.

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Speaker 1: It looks like they may have bought it during the

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Speaker 1: first week between June twelfth and eighteenth. Here's what I love.

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Speaker 1: If they bought it between the twelfth and the eighteenth.

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Speaker 1: Thing they own it today. They've lost money. Good, they

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Speaker 1: deserve to lose money for that. I'm happy to hear

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Speaker 1: that since five of the six of them oversee SpaceX contracts.

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Speaker 2: Good, they oversee SpaceX contracts five of the six, Yes, yeah,

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Speaker 2: you see? You see this is this is what gets

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Speaker 2: people crazy. So I knew they had bought the stock.

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Speaker 2: I did not know you're talking about as members of

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Speaker 2: Congress overseeing contracts.

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Speaker 1: Well, okay, the reporting is that either the yes, I mean,

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Speaker 1: because it's on their subcommittee or their committee.

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Speaker 2: Yeah.

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Speaker 1: But the funny part is we don't know exactly who

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Speaker 1: bought it because the reports are either them or members

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Speaker 1: of their immediate family. That's how it has to be reported.

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Speaker 1: From the Stock Act of twenty twelve, they're not banned

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Speaker 1: from buying it. That's actually something that's proposed this year.

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Speaker 1: The Stop Trading Act, which isn't passed yet. All they

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Speaker 1: have to do is report it now. So yeah, if

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Speaker 1: they make money on inside trading, they just have to

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Speaker 1: tell us now. They can't do it on inside secret information.

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Speaker 1: That's against the law. We'll go ahead and prove that

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Speaker 1: they had secret inside information. They investigate themselves.

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Speaker 2: Doctor Matt Will coming out swinging Economists, University of Indianapolis.

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Speaker 2: I appreciate you taking the time to be with us.

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Speaker 2: We've got more to get to keep it here, guys,

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Speaker 2: this is Tony Katz today