Trump: $39 Million Raised after Conviction | Business Matters Full Broadcast (May 31)

How is the business community reacting to Trump's guilty verdict? We go to Wall Street to find out today coming up on Business Matters. Good Friday afternoon and thank you very much for being here with me today. I appreciate it. I'm Don. The S&P 500 and Nasdaq today posted losses for the week and breaking their five-week winning streaks. And the Dow as well rose. So investors today trying to digest an inflation report and is trying to figure out when the Federal Reserve might begin cutting interest rates. We'll tell you more about that in just a moment. You know, people were pleased today that it wasn't surprising to the negative side. But, you know, there are still signs that the consumer potentially feeling a bit of strain here, as well as shares of Gap soared 28 percent just about after the retailer lifted its full-year sales target. The stock is on track to its biggest one-day percentage gain since November. Okay, let's talk about reactions here. The day after former President Trump was convicted of 34 felonies, Trump vowed to fight the guilty verdict, as he calls it, a great honor. Have a listen. So we're going to be appealing this scam. We're going to be appealing it on many different things. He wouldn't allow us to have witnesses. He wouldn't allow us to talk. He wouldn't allow us to do anything. Meanwhile, following the historic jury decision, Trump got a boost from donors. So he told reporters today that the campaign website raised a record $39 million in a 10-hour period. And 30 percent of it came from first-time Trump donors. And shares of Trump's media company fell about 5 percent today. The stock actually opened higher and was among the top trends on Reddit's forum WallStreetBets. And that is indicating potentially strong interest from individual traders. So how exactly is the business and finance community reacting to this guilty verdict? We asked Joseph Trevisani, a veteran financial analyst who is also a New Yorker. For the verdict itself, I don't think there's any immediate market impact. But I think long term, the willingness of the New York state legal community and the New York state democratic establishment to take charges like this against a presidential candidate, I think, is very unsettling for the legal basis in New York. This is the kind of thing that makes people think long term about whether this should perhaps be the base for their financial operations. For even more reactions, we also took a trip down to Wall Street. Let's go to NTD's Sean Marshall now to see what the people are saying. The Trump trial verdict came out yesterday and pretty much everybody knows how it went. NTD Business Matters is going to head on over to Wall Street and get some public opinions. I think it was richly deserved, given the overwhelming evidence, documentation as well as witnesses in the case. Interesting. And as someone that works in law yourself, did you look closely at the trial? I didn't read the transcripts or anything, but I did follow fairly regularly. Yes. Not everyone finds it easy to take a side. I think both sides is doing wrong. I believe he needs to be held accountable. But you have to look at the other side. And the truth is, a lot of people wouldn't get tried for that. I think it's all kind of crazy. And like the timing is a little sus. Yeah, I don't know. Definitely weird timing. And what makes it, what makes the timing weird? Because like with the campaign coming up, I think, I think maybe there's another agenda behind it. Trump's approval rating went up by six points after the verdict, according to a Daily Mail poll. Sean Marshall, NTD News. Looking good, Sean. Thank you for going down there. Now let's talk about inflation. A closely watched gauge tracked by the Federal Reserve rose at the slowest pace this year. Inflation in April remained at a stubbornly high level, though. The Federal Reserve's favorite inflation gauge, I'm talking about the Personal Consumption Expenditures Price Index. It rose 0.3 percent last month, and that's an annual rate of 2.7 percent, matching March's gain. So this isn't a complete surprise for economists who weren't expecting a meaningful shift. Still, though, costs rising too fast for Americans. Consumer spending cooled, as did disposable income gains. So the gauge is a step in the right direction. But much work remains. Earlier, I spoke to Sam Burns, Chief Strategist at Mill Street Research, for further analysis of the inflation reading. Here he is. Sam, thank you very much for your time today, this afternoon. So another day, another inflation reading. So we have to talk about it. How did you feel about this one, PCE Price Index? Well, I think this one today luckily came in pretty much right on expectations. So there were no real surprises in either the inflation data or in the income or spending data. So most of it was pretty much in line and didn't seem to have changed the market's view too much overall in response to it. The general consensus seems to be that inflation is not quite where the Fed wants it, but it's getting close. And these numbers were generally pretty decent. If we get more of numbers like this, we'll probably get closer to the Fed's target. And it certainly was not a surprise or negative surprise to the bond market. So we've had yields come down some today. Actually, they backed up a little bit in the last week or so. So I think it's generally a kind of a relief. Now, I'm sure there are some out there who's worrying that potentially inflation may be stuck or sticky here. What are your thoughts? I think the measurement of inflation, I think, is sticky a little bit. I don't know if actually inflation is. My guess is that there are still some issues in the data about housing and shelter costs that are still kind of lagged. And so that's keeping particularly the services component of the inflation data higher than it might otherwise be because of the way they measure it. I think most of the components of the PCE or the CPI are generally in kind of a slowing inflation trend. I think that'll continue over the rest of the year. So my view has generally been that inflation is on its way back to that 2 percent level that the Fed wants to see. It's a matter of kind of how bumpy the path is for the data to get there. But I think we will get there. Right. And speaking of the Federal Reserve, we have to talk about that. More likely or less likely to deliver a rate cut after today's report? This report probably doesn't change a whole lot. I think they're probably still looking at some time, you know, towards the later part of the year to start cutting rates. I think they'll need to see the actual year over year inflation numbers come down a little bit further and be stable before they can come out and say, OK, it's OK to cut rates now, unless I guess we see real weakness in, say, the labor market or in spending or something. It looks like the economy is actually getting weak enough to be a concern. So far, it doesn't seem to be. It still seems to be holding up relatively well. So right now, the Fed seems pretty content to kind of sit on the sidelines with tight policy and just kind of wait and see for a few more months at least. OK, speaking of the Fed feeling confident, I mean, how many months do you think exactly of good inflation readings do we need before the Fed actually does indeed feel confident? My guess would be that, you know, given where we are now, if we had, you know, two or three months of good inflation data, meaning, you know, the month on month changes being 0.2 percent or less would probably be enough to kind of shift their thinking that, OK, that's enough persistence and stability to argue that the rate cut could be done without causing inflation. So I think that probably another two or three months of decent data will probably be enough for them to see as long as the data don't show any real upside surprises. All right. Always great to hear your thoughts, Sam. Thank you. My pleasure. Thanks for having me. Dell Technologies shares tumbled about 18 percent today, and this is as the PC and server maker expects sizable AI investments to dent its quarterly profits. So Dell lost about 20 billion dollars in market value and the stock has risen more than 80 percent so far this year. Now, tech companies, that's including Dell, have been investing heavily in pricey hardware to build out advanced servers in order to process complex artificial intelligence tasks. While the shipment of the company's AI optimized servers more than doubled in the first quarter, they do represent less than 7 percent of the total value. And the market is raining in unrealistic expectations for Dell's ability to benefit from AI spending. That's a quote from Morningstar analysts. And four tech stocks have added more value than the rest of the S&P 500 combined, with Nvidia leading the charge. Is AI being overhyped? Experts weigh in. Are the markets overhyped about AI? This month, stocks in four tech companies that develop AI added more value than the rest of the S&P 500 combined, with Nvidia leading the charge, making up over half the gains and trading at 63 times earnings. Many find AI chatbots to be useful, but not extraordinarily so, even for coders. I would say moderate impact. It saves some time for things that I already know. I would just go and use those chatbots to find the syntax. And I think it's really faster for me because if instead if I go to the Google search, it would take time. Coder Ankit Archia says he also sees mistakes in AI output, and he still has to test to make sure what he sees is correct. Others report being unhappy to see chatbots on websites and prefer to talk to actual people. AI researcher Alexander DeRitter doesn't think AI is overhyped, but it's a different story for Nvidia, which is leading the stock charge. The truth will be in how well they can continue to innovate at the pace they have in the past. If Nvidia continues to release new technologies and chips at the rate they have been, they have a commanding market lead. DeRitter says current semiconductor chips are very energy inefficient. Data centers require tremendous amounts of power, power that America may not have. What we need is breakthroughs for many, many years to come. Now, Nvidia will eventually face competition and eventually will have bottlenecks around energy because you can only make these models so powerful until they cannot build a data center. DeRitter suggests a massive disruption could hit Nvidia once AI becomes able to design custom chips. Welcome back. Let me go through some quick headlines with you. I think that is worth your time today. Fitch Ratings lowered its 2024 forecast for Boeing's aircraft delivery and free cash flow. Fitch says the delivery forecasts were affected by Chinese officials limiting Boeing's deliveries and as well as the FAA's decision to maintain oversight on the planemaker. Meanwhile, Tesla is recalling 125,000 vehicles in the United States due to a malfunction in its seatbelt warning system. This is a malfunction that can increase the risk of injury in a collision, the National Highway Traffic Safety Administration said today. Meanwhile, Pfizer said it expects its cancer drug Lobrena to top $1 billion in annual sales by 2030. This expectation comes on the strength of data today, which is showing that most patients treated for a rare form of advanced lung cancer in a clinical trial were alive and without the disease worsening after five years. And Vermont is now the first state to enact a law requiring fossil fuel companies to pay a share of the damage caused by their emissions. Treasurer Mike Psiak, in support of the bill, said previously that as Vermont explores how to finance ways to combat climate change, it seems fair to ask those who contributed to the problem to help pay. And consumers look to be buried in auto loan debt, according to a WalletHub report, and some are having trouble paying it back. So just how serious is the issue? I spoke to WalletHub analyst Cassandra Happy for more details on the report. Cassandra, thank you very much for your time again today. So WalletHub released a report sheds light on a key issue here, which is how much auto loan debt is weighing on Americans. What are we seeing? So unfortunately, we're seeing that Americans collectively carry about $1.6 trillion in auto loan debt, which averages to over $13,000 per household. So there's definitely a concern about how much debt is there. And as interest rates rise, these loans become more expensive. And cities with significant increases in auto loan debt may indicate financial struggle for residents. Well, I'm sure $1.6 trillion didn't happen overnight. So I mean, how did we get here? So it's important to note that with the pandemic, there was that shortage of vehicles, and it seemed like car prices just skyrocketed during that time. So I think that part of what we're seeing now is the result of that, because so many people took on more debt than maybe they typically would because the price of vehicles was just so high. And now they're struggling just to keep up with it, with everything else going on in the economy. So you mentioned interest rates and how high they are and how expensive is it to service that debt. So I mean, are people falling behind on their Generally speaking, yes. In cities that are experiencing significant increases in auto loan debt, there is a concern about people falling behind on their payments. For instance, Winston Salem, which saw the largest increase in auto loan debt, has one of the highest debt delinquency rates in the country. And Scottsdale, who came in second in auto loan debt increases, has residents raising their average balance by 1.8% during the same period. So this suggests that residents may be struggling to keep up with their payments, potentially indicating more financial distress. Help us elaborate further here. What is the increase in auto loan debt? What does that tell us about the consumer, for example, or perhaps the economic environment or anything else that you can think of? So in general, the increase in auto loan debt suggests several things. First, it indicates growing reliance on credit to finance vehicle purchases, which potentially reflects consumer confidence in the economy and willingness to spend and really take on that debt. Second, it could be a signal of an increase in vehicle ownership or the purchase more expensive vehicles. Or it could be that it might also indicate financial strain among certain demographics or regions, especially if coupled with rising delinquency rates or economic instability. And if somebody is in a lot of auto debt and they're having trouble perhaps paying that off, maybe they're not. But what are some tips that you can give us? So it's always a good idea to make extra payments when you can afford to do so. That will help reduce the principal and you'll save more on interest that way and pay it off faster. You can also look at refinancing depending upon when you took that auto loan out. There may be better rates now than there were back then, but it really just depends upon what your situation is right now. And automatic payments are always a great tool to make sure you don't miss payments and potentially fall behind. And just budget wisely. Budgets are a huge tool that are really important to not only put together, but to follow and keep yourself accountable for. All right, Cassandra. Happy Wallet Hub. Thank you very much. Thank you for having me. And a new survey by financial services firm Thrivent found that adult children are moving back in with their parents and the numbers are substantial. I talked about the findings of the survey with Derek Georgino, risk consultant in the greater L.A. area. Here he is. Derek, glad to have you back today. So let me ask you this. A new survey by financial services firm Thrivent found that 46 percent of parents say that their adult children have come back home to live at some point, and 50 percent of them say that sky-high housing costs are to blame. So what are some of the things that you can think of as contributing to this so-called boomerang kids coming back home? Well, I don't solely blame housing costs for this trend, Don, in terms of the rising rate of boomerang young adults returning home and also staying home for a longer period of time. I think rising housing costs has something to do with it, but I have to say this younger generation, particularly Gen Z but also millennials, are taking on a lot of debt for large discretionary purchases such as vacations, personal entertainment and so forth. Now that said, boomeranging back home with your parents, in my opinion, if you're doing it for the right reasons and you aren't reckless with your personal finances, can be a great idea in order to save up some money, build a nest egg and move out and start your own life. But I do think there's an angle on this, a string to pull, to look at really the personal finance habits of these younger generations, because more of these young folks than ever are taking international trips, going on pretty lavish vacations and they're taking on a lot of personal debt to do so. So I think we need to engage in some introspection as a society as to our personal finance habits and not just point the finger at quote housing costs for the reason why we're living at home with our parents for too long. So you're saying the younger generation is spending beyond their means and then moving back to their parents' place as a result. It seems to me they're relying on their parents to some degree to fund this expense. Yeah, agreed. Now, I say this as a former boomerang kid myself, if you're doing it for the right reasons and you have a plan, you have a work ethic, you have goals financially, you know where you want to be and when, then moving back home for a few years is a great idea. But the minute you become sedentary, fully dependent on the pocketbook of your parents for too long and you're not progressing yourself professionally into adulthood, then it becomes destructive to the human condition, to the human work ethic. And then you have fewer and fewer folks actually contributing to the society because they're used to feeding out of the hands of their parents. Okay, let me just mention one more data point here from that survey. So it found that 38% of parents whose kids have boomerang back home say they're struggling to pay off their own debt, their parents. And 37% say they find it harder to save for retirement or housing costs. Your thoughts on that? Yeah, it's having a burden on the parents who are subsidizing these living costs for their boomerang children. At some point, parents need to hold their children accountable, their adult children. We were calling them children. They're not really children anymore, right? We're talking folks ages 18 to 34 or so. So my advice to parents is make sure your adult children are living with you for the right reasons, not using the situation to free up discretionary spending, take on debt and travel the world or do other irresponsible things that they can't actually afford. As a parent, you need to make sure progress is being made. And you should not let your adult children become idle. Very well said here just underscores the importance of financial education and financial responsibility. Thank you very much for your time today, Derek. Thank you, Don. All right, and that's all the stories we have for you today. Thank you very much for watching. And if you have any feedback for the episode, feel free to let me know. And don't forget business matters. As I always say, see you Monday.