An afternoon. This is Josh Arnold, mister money Talk normally with Judd Arnold, but not this week. Judd is away visiting his daughter in Florida. But I am here to answer your questions on stocks, bonds, mutual funds. Now, you should position your investment dollars including your IRA in four oh one K. But you do, yes, you do have to give us a call at nine five two nine two five five six o eight. That's nine five two at nine two five five six o eight. You always get
at straight talk, not sugarcoated advice. As we begin, I do want to apologize for any coughing, sneeze, etc. Or even my hoarse voice having to do with some allergies that I'll put it. Put them as unknown allergies that I've never had before. So please bear bear with me as we go through through this show. But again, any questions you might have nine two nine two five five six zero eight, you always get straight talk,
not sure coded advice. Another up and down week in the in the Marketplace, with both the Dala and the S and P five hundred finishing in the in the negative for the second second week in a row. The NAS deck while it finished negative on Friday, completed another up week with some of my
favorites doing pretty well this week. And an addition, a company that will say has been around for a while and as the leading search company had on had this week had their not only analysts update, but they're app developers update, and Google really made a big catchup trade and caught up in terms of its year to date game to Microsoft, which has been doing very well on the backs not only is their earnings, but on the back of Microsoft for
a into artificial intelligence and Microsoft spending up to thirty billion dollars for an investment into private company open Ai, which has a product called chat GPT. Microsoft has taken an early lead we'll say, into regenerative artificial intelligence with this particular product, the chat GPT, which they plan on adding to all of all
of their products and their offerings. Now. Microsoft is doing that initially so they can get we'll call it a leg up in search, to which they do not have a large share of the search market with their being Search search Engine. The larger share of search still goes to Google, and Google has been working diligently on their artificial intelligence offer and they too will be incorporating,
incorporating their artificial intelligence offer into more of their more of their products. Now right now, there are some analysts who are saying that artificial intelligence right now is where we'll say the Internet was in the late nineties, and a number of companies are trying to we'll say take advantage of the i'll say excitement around
artificial intelligence. And numerous companies are starting up with as was true with the Internet and companies trying to develop products or services that's come through the Internet in the late nineties. Those companies do not generate a lot of profits yet. They might have some revenues, but not a lot of profits. Not all of these companies are going to be around anytime in the future. But again there is a lot of hype. Whereas one analyst I saw said, there's
a lot of whiz bang related to artificial intelligence. Now, in my i'll say limited experience, we've already seen artificial intelligence already working. Even it fits small through every company from Amazon. Hey, if you've got the Alexa device at home, I would say that that is the use of artificial intelligence. If you have Apple Siri, similar type of concept. If you've got or you know, download Pandora or Spotify. They will also use some measure of
artificial intelligence to feed you certain types of music. Google has been using UH that to help in in search also for a long time. But as we go on the uses of this artificial intelligence, and particularly the regenerative artificial intelligence, the users will increase and that could help companies with their productivity going you
know, going forward. One developer with with Google, Wendy's, is going to be starting in the next month a trial in Columbus, Ohio at their at numerous outlets to install the chat box at you before you get to the drive in Windows. So you say, when you place your order, you'll be talking to a chatbot or a robot that will take your order and then you'll pick pick that up. UM. Wendy's wants to see how not only cost effect of it is, but also what the productivity game they'll get from
from using this. So there's a real life example. And in this case, you know they're they're using Google uh, Google's product for that UH and they're not not as much interested. And we'll call the pick and shovel or pick and shovels of artificial intelligence. That being the the chips that that could be used, chips coming from the likes of Navidia, which would be the leader in this, or Advanced micro Devices, which is coming on strong in
artificial intelligence. But it was very i'll say very interesting, quite frankly to read about Google's App Developer Conference and what they're doing to expand artificial intelligence, in particular regenerative artificial intelligence going forward, you know. More to the point when we talk about Google doing well or Microsoft coming up one artificial intelligence,
we'll also see Facebook now known as Meta. They have talked about artificial intelligence being applied to their products, and Meta has cut about a third of their employees as they both to get productivity gains, both to cut some of their costs and also to concentrate on areas that they do the best in. And Meta this year has seen pretty big increase in their stock price just off their focus on generating profit as opposed to just trying all kinds of things that might
happen. So, if I were to look right now at the what was known as the Fang and that's not Diamond Energy, that's their market symbol f Anng. Diamond Energy blue stock is underperformed, but fan as in Facebook, now Meta, Amazon, Netflix, Google, we can add an apt Apple favorite Apple and then even Microsoft to that. Or instead of using Netflix, I could use Na Video. These stocks, which are heavily weighted in both the SMP and in nas DEC in terms of market capitalization, could well continue
to outperform going forward. Now that's not to say they're going to go straight up, because we've got could have an inevitable pullback coming due to concerns with the debt limit being breached. But we'll talk about that and more when we come back. I am Josh Arnold, mister money Talk. Give me a call nine five two nine two, five, five six or eight here to help you. This is Josh Arnold, borister Money Talk with Judd Arnold. Well usually Judd is Judd is here, but this week he is down in
Florida with his daughter. So you've got me. You've got me with my allergies working. So please forgive the hoarseness, the squeaky voice, and even the sneezing that might might come along. Wow. There is another concern with the in the in the market place and both a stock market and the bond market. And usually when I talked about concerns in the marketplace, at least on a macro sense, I've typically been talking about the Federal Reserve and the
direction of interest rates. You know. FED speak has continued to be on the hawkish side, with concerns about the stickiness of inflation, particularly stickiness of wage inflation being up, the stickiness of housing prices continue to we'll say, move up or not moved down significantly, and also the stickiness of food prices continuing to stay stay up. Other commodity prices currently have continued to come down, whether it be or aluminum, oil, natural gas, fertilizer, sugar,
steel, those prices have continued to come down. But those the prices coming down one have not necessarily been included right now in pricing of finished goods. But at some point we'll see prices right now level off. I don't think prices of goods that we're going to have to buy, I don't see them coming down significantly unless we have some type of recession and or we'll say
there's too much merchandise that's left on the floor of any retail stores. Well, this week we'll find out how much merchandise is still sitting on shelves, how much merchandise is we'll say, in inventory, what the turnover is in in UH in retail stores, and what the retail stores see um see with consumers and spending. Now, we've got some of the major retailers reporting next week, including Walmart on there. The focus of course is going to be
on food, as Walmart generates most of their dollars from from grocery. You've got Home Depot, TJ Max, Target, and foot Locker and Lows all reporting and all going to you know, focus on a slightly different sector of fun of retail. So do have to pay pay attention to what the retailers are are saying and how they're dealing with we'll say, with pricing coming from
there their supplier supplier companies. But the Fed coming back. The FED is still talking about interest rates being higher for longer, although at some point they might pause in terms of raising rates, as they just raised another twenty five
basis points just a few weeks ago. Their next meeting is the middle of June, and depending on what happens with i'll say Congress, the Senate, and the President dealing with the death the debt ceiling, the Fed may leave interest rates untouched or may continue to move up twenty five basis points depending on
what their quote unquote data says. I have been I'll say, we'll say I've been angry, put it mildly at the FED for the will say the speed and that they have raised interest rates over the course of last year from zero percent to five percent without waiting to see the impact that they've had, that their moves of had on the economy. And they keep saying, well, you know, the data shows this, this, this, and this, and therefore we're going to have to continue to raise interest rates to slow
the economy down and to bleed out inflation. Well, I have been talking, you know, in the past, that the FED will keep doing this until they break something. All the Fed, as we have talked for the past month and a half, definitely broke something and that was we'll say several banks. First it was Silicon Valley Bank and Signature Bank, and since then we've had First Republic Bank. This weekend, we might have and I do
emphasize the might. I have no idea. We might have Pacific West Bank, and there could be others that the FDIC might have to engineer a bailout on all because of the Feds we'll say, raising interest rates so high and so fast, and recently with i'll say depositors withdrawing funds from the bank at low interest rates on savings to move to higher interest bearing money market accounts or
shorter or long term treasuries. So this has definitely put a crimp into banks, in particular the regional banks, which still are definitely a linchpin of the economy. More regional banks, you know, are lending money out to local businesses for business expansion, for real estate, real estate development, and when they're unable to do that or too many, too much deposit money is moving out. That puts a crimp on credit. And if you have a crimp
on credit and all, that too will contribute to an economic slowdown. Now, in terms of bank stocks, we've you know, I've gone over before. I am not a bank stock investor. I've only invested, you know, for a brief period of time, very very brief period of time, like a week back in two thousand and eight, a trade I did in JP. Morgan might have done that trade twice during the last we'll say the
mortgage banking meltdown. But other than that, I've stayed stayed away from banks and several other businesses, but banks in particularly the regional banks have continued to suffer. As you know, some people say, well, it's the short sellers that are going after these these banks. Maybe, but I would also look at the number of these banks, regional banks that are in exchange traded funds both broadly speaking or in the specific funds that will focus or on regional
banks or in banks in general. And the ETFs are very very liquid, but they hold a lot of ill liquid assets. That being the regional banks. There typically is not a lot of trading in them. But as the selling goes on in the ETF, the ETF has got to sell assets and usually to meet the redemptions. And usually that ETF could be the one that's selling down the regional bank bank stocks just because the amount of dollars that come into them and come in on the on the downside. So that is to
me a negative, We'll say with the ETF. And if I am using ETFs other than abroad NAS dec Index QQQ or the Spider Spy or the Diamond d IA, make sure that you know what's what that is invested in and how they are are weighted point of all this, the fed's interest rate moves have had an adverse effect on banks. I think that the banks definitely are not a place to be. If you want to be in financials, I would take take a look at possibly will say Visa, American Express or even
favorite Apple. This is Josh Arnold, mister money talk here to answer your questions on investing. Give me a call ninety five two nine two five five six o eight. This is Josh Arnold, missed or money buck here to answer your question on stocks, funds, mutual funds. How you should position your investment dollars including your IRA in four oh one K, don't hesitate to give us a call at nine five two nine two five five six o eight. That's nine five two nine two five five six oh eight. You always
get straight talk, not sure coded advice. It's ninety five two nine two five five six o eight. Another interesting week on on the doubt in the marketplace. Stocks did finish down for the second consecutive week. Continued to concerns not only about the FED. Mac Down'd speaking mac mcreley so continued concerns about the FED and now concerns about the debt feeling and whether Congress, the Senate, and the President can reach a negotiated settlement. I do think until that
happens, we could have some continued to volatility. I do believe that at some point that this will be resolved. I think that als we say, cooler heads will prevail. But in listening to some of the talk coming from both Congress, congressmen and women and senators, looks like it's going to be a tough, tough sled And if I really want to hear a doomsday speech, I can listen to Secretary of Treasury Janet yelling you know who who has
talked this week. Unless something happens to raise the debt ceiling, Unless Congress drops their demands for spending spending cuts or spending restraints, and Congress comes up with a clean bill just to raise the debt ceiling, then chaos is going to prevail. We could have a constitutional crisis. And what the Republican Congress has proposed in their a bill to raise the debt ceiling are draconian cuts to the budget. Well that's um that becomes a little bit overboard. Coming from
the Secretary of Treasury and former UH Federal Reserve chief. Um, that to me is not helping helping matters. Um, that's woy that that that kind of we'll say that kind of speech. Um, I'm not going to say rings of of desperation, but it makes her sound, Um, we'll say more like more like a politician than somebody wanting to solve solve a problem, and and also like somebody who will not budge off their position. The draconian cuts that she is talking about really come down to, uh going back to
the budget or the spending pattern from a year ago. That did not seem all that that draconian to me. But I'm not a I'm not a politician. I'm just a just an investment guy. And the debt debt ceiling is something I've got no control over. What I do have control over, and what you have control over is how to position uh your dollars through this.
Through this period of time, I we and Judd and I have kept a larger percentage of dollars in cash and have still focused on some of our our stronger names, which will they could pull back during this period of time. I really do not want to to sell and in the case of favorite Apple having owned it, will say continually since two thousand and four, and I've seen that stock go up or down, you know, fifty percent on several different periods of time, and each pullback to me, was an opportunity to
add share at a better, better price. Apple is one stock that I would continue to pound the table on for a lot of reasons that I have covered covered before. Company continues to generate a lot of cash. They have a product or service that people seem to need and want, and you know,
a tremendous amount of recurring revenue. Not to mention, of course, their expansion into India, where Apple has a five percent market share of we'll say smartphones, cell phones, and or computers, so that offers them a big, big runway going forward. This past week, Apple signed a deal for another manufacturing partner in India. Tata Industries is going to do some manufacturing for them. There are other contract manufacturer, fox Con, also expanding into
India. Now just an aside, fox Coon did report some earnings this week and their earnings were not as good as had been expected, so fox Coon stock went down. But when you look at the earnings, a good chunk of that had to do with fox Con taking a write down on an ownership stake they had in Japanese electronic manufacturer Sharp, so they took a very significant write down on that, which had an adverse effect on Fox cons UH numbers.
But Apple still i'll say my largest position, still a company that continues to surprise UM and still even where to pull back, a company that I want to own. And even add add two I mentioned earlier about Apples, you know, Apple being a bank so to speak, and rather than investing in banks, I can invest in Apple. Well, Apples recently a few weeks ago offered a savings account paying four point one five percent UH two Apple
credit card holders and that's that's an ministered through Goldman Sachs. Apple got within about five days just about a billion over a billion dollars came into that to that product. So that's another place that Apple, as we'll call a little stickiness to their to their sales. So someplace that I want to hold onto
during any pullback. I would almost say the same would be true of a Google or a Microsoft, given their move into artificial intelligence, and well if should we have a pullback, those would be companies that I would want to you know, want to own. Amazon well, that has been very frustrating to me as a shareholder. But they've got a lot of earnings power. Uh, that's that's there potentially, but on any sell off, you know that that could come down. So yes, I am concerned about them,
the government and dealing with the debt ceiling. This has happened before. It has created some additional volatility in the marketplace. Do recommend keeping some cash on the sideline so that when the market pulls back, there's some money you can invest in some quality companies that have retreated a little bit. This is Josh Arnold, mister money talk. Give us a calle five, six or eight. This is Gosh Arnold, mister money talk with John Arnold here to answer
your questions on stocks bumm. It's mutual funds. How you should position your investment dollars including your IRA in four one k. Don't hesitate to give us a call nine five two nine two five five six oh eight. That's nine five two nine two five five to six o eight. You'll always get straight talk, not sure coded advice. It's just me here today, me with my stuff nose from some allergies. John is on is down and down in Florida with his daughter. So I'm here to help you. Do give a
call nine five two nine two five five six o eight. You always get straight talk, not sure coded advice, well with concerns not only about the FED continuing and the FED meets again in the middle of June, concerns about the debt, the debt ceiling, and that could go on for the next several weeks. Um Volativity in the market, you know, could could pick up, and the question becomes or a question becomes, do I sell everything and wait till till all all is decided? And then then invest or,
do I hang tight with what I have? And how how big is the market turned down? Going to going to be well? Depending on what strategists you listen to, h there have been numerous ones throughout this year and last year, you know, predicting anything from a five to ten percent pullback, which to me would be in the normal normal range as during the course of any year, the stock market typically is going to pull back five to ten
percent three to four times during during a typical year. There are some strategists that said, hole, it's going to be ugly. Just take a look at what happened in two eleven and how much the market sold off both prior to the depth ceiling being breached and then just after as there was one of the bond or one of the credit ranging agencies cut cut the US debt rating from triple A to double A plus, so a downgrade on the ability for the fit to repay debts. Well, I do believe that all the debt
is going to be repaid. Should there be a breach of the debt ceiling, it could mean that the Treasury is going to have to pick and choose what gets paid out and when. It could mean that people on Social Security might not might not get their checks when they usually do. They might be
a few weeks late, but they will be paid. I did see something today, which is Friday, so when I when we're recording this, that said that if if the Treasury can get through the first two weeks of June, there will be enough money that's coming in into the treasury from tax payments that they'll be able to continue making these payments and push out the time that the depth ceiling is reached into July. Well, wouldn't that be be special?
But in keeping with that, you know, we I've maintained you know, an asset allocation through we'll say, we'll say through thickens, and of keeping up to thirty percent in cash, both for safety and to have cash available for the inevitable pullback so we can add to either new positions or existing
positions. We have continued to focus, or I've continued to focus. Judge focus is a little different than mine, but I've continued to focus when companies involved in the Internet leisure related business is China related businesses without necessarily investing in China real assets such as real estate, and for a small portion doing some shorter term training. So that is the focus that I've I've had and probably
will continue to have. As these areas I have found, uh do have companies that generate some rising, rising revenues and then rising earnings over a period of time, and they also act or I have found that that even in tough economic times, people are still spending money on those uh you know, those those areas. Here are a few, you know, areas that might be considered well they safe stocks to hold onto during this period of time. I happen to like, of course, my Apple still have a good position
in Amazon. You could look at the Google, Facebook, and Microsoft. They've also they've been leaders sold so far and have held up pretty pretty well. Now they could be considered over owned, so maybe money flows out of them during a market selldown due to the death ceiling, but they're still generating a tremendous amount of money. You take a look at Pepsicola or Coca Cola, take a look at a company like Eli Lilly, particularly with their alzheimer
drug and their obesity drug. And then I think I have talked about you know, my partner Annie's proactivity for Hershey's, Hershey's kisses. Now Hershey it's another stock that should do well even in a market sell off. And some might say, don't fear the debate on the debt ceiling, but a default and a downgrade of US debt could could hurt and companies that we have talked about here could help you through through that going forward. Say this is Josh
Arnold, mister money talk here to help you have a question. Don't hesitate to give us a call at nine to five two nine two five five six o eight. That's nine to five two nine two five five six o eight. You always get straight talk, not sure coded Advice. Josh Arnold Investment Consultant is a registered investment advisor local in a state of Minnesota. All securities discussed are for informational purposes only. Investing contains risks, including risk of loss.
Consult your investment professional before making any decisions about your investment portfolio.