The People Factor

[00:00:00] Speaker A: Foreign. [00:00:05] Speaker B: Welcome back to Intelligent Investment Live with Matt Dahl. I'm Garrett Lille. Matt is trying to clean his camera. Trying to. It sounds like you had a bad facial experience in the last couple of days. From what you were. What you were telling me there, you're kind of recovering from that. So you just had a rough week. It sounds like it's been since. Sounds like it's not been a great. A great week in Matt's world. [00:00:30] Speaker C: Yeah. Terrible facial experience. I bought a mirror. [00:00:34] Speaker B: That's a great line. I like that. Yeah. Yeah. [00:00:38] Speaker C: What's wrong with you, April? How can you be married to me? Gosh, I look like one of the stars of Fraggle Rock. [00:00:44] Speaker B: Well, it has to speak to your bubbling personality to some extent. Right. [00:00:50] Speaker C: That's even worse. [00:00:52] Speaker B: I mean, I'm not here. I'm not here talking to you because of your looks, that's for sure. [00:00:58] Speaker C: I really don't have a lot of, you know, qualities to begin with. [00:01:01] Speaker B: So the fact it's what's behind the face, this mat, that matters. She's there for the brain. [00:01:06] Speaker C: Yeah. Just making it worse. [00:01:08] Speaker B: That's it. So what's going on, man? We've got. It's overall. I mean, since we talked last week. If we just snapshot last week and look at where we're at today, it's almost the exact same. The market's right now at. Let's see where we at right this second. 64, 68. Last week, Friday, we closed at 64.60. So we've moved eight points in five days. That's not a lot of movement. Had a little bit of a drop Tuesday, little rally back. Hit an all time high yesterday at the close. We hit an all time high this morning, Intraday. So I brought it up to you. It's been a quiet week. And you said, well, yeah, it was until this morning. So what's going on today, September 5, 2025, what's going on? [00:01:55] Speaker C: So I think, you know, again, the Intelligent Investment show gets to a victory lap. Nice January, that there's going to be three rate cuts this year. [00:02:06] Speaker A: Right. [00:02:06] Speaker C: Plus or minus one. But our base case was three. There was a time, especially in, you know, right after the tariff talk, early May and May, that the chances of even one rate cut this year were very, very low. The chances of three rate cuts this year effectively non existent. [00:02:21] Speaker A: Right. [00:02:22] Speaker C: Because it ebbs and flows with the data. And I can understand that. But you have to be able to look through the current data directionally, where the data is going and where it's headed and where it's going to be in the several months out. That's literally what we're paid to do. [00:02:40] Speaker A: Right. [00:02:42] Speaker C: And is if you, if you're able to do those things, you can kind of get ahead of what the rest of the market will do. Right. How you infer from that data? We all have the same data. Howard Marks has it better than anyone else. We all have the same access to the same data. We all have that same data. What we do with that data varies all over the place. [00:03:01] Speaker A: Okay. Yeah. [00:03:02] Speaker C: So you know, we think we were correct in our base case of three rate cuts this year. [00:03:08] Speaker A: Okay. [00:03:08] Speaker C: And I think that is, that is part of the recipe to get that market into that 68, 6907,000 range toward the end of the year. Getting that 10 year in the 375 range. Well, it made a heck of a move today. It's at 406, you know, a week ago is, you know, 430. [00:03:28] Speaker A: Okay. [00:03:29] Speaker C: So it's moved significantly. [00:03:31] Speaker B: So not, not a big move in the stock market in the last week, but it has been a big move in the equity market. And pretty much all of that move was today. [00:03:38] Speaker C: We had, well, it's been last couple of days kind of slowly coming, you know, we, I think we had four. We had 417 yesterday on the 10 year. We have. What we had today was over here. We had the unemployment survey, the ADP employment survey come in a week yesterday at 54000 jobs. We had jolts come in Wednesday at seven point. Basically 7.2 million jobs. Seven, 7,881,000 job openings. [00:04:10] Speaker A: Okay. [00:04:11] Speaker C: We are now below. We now have more people looking for work than we have available jobs. [00:04:16] Speaker A: Okay. [00:04:17] Speaker C: Consensus was 7.37 million. [00:04:20] Speaker A: Okay. [00:04:21] Speaker C: Now last month was 7.35 million. So we've seen 191, about 190,000 job openings loss of the last month. [00:04:33] Speaker A: Okay. [00:04:35] Speaker C: So what happened today though? What happened today was payroll jobs report came up, 22,000 new jobs were created for the month of August. 22,000. [00:04:47] Speaker B: That's not a lot, right? [00:04:48] Speaker C: June was also revised down again and it was Revised down to negative 13,000 for June. [00:04:56] Speaker A: Okay. [00:04:57] Speaker C: July was revised up like 3,000 to 79,000. But I fully expect that to be revised down at some point. So if you take the, what I did is I looked at the last four months, okay. I looked at May, June, July, August. [00:05:13] Speaker A: Okay. [00:05:14] Speaker C: And what is that four month window telling us? Because we know that's when you know, all the tariff talks started to Happen and things started to get a little wild. The four month average new jobs is 27,000. [00:05:28] Speaker B: May average. [00:05:29] Speaker C: Yeah, May through August. If you average those four months, 27,000. [00:05:33] Speaker A: Okay. [00:05:36] Speaker C: So what was the previous four months? So if you take the four month chunk, right, 122 and a half thousand January through April. So we've had an 80%, effectively an 80% decrease in new jobs for. On a four month average, not on a month to month basis. Because those monthly numbers, they can be noisy and rock and roll around. [00:05:57] Speaker A: Right. [00:05:58] Speaker C: But when you start looking at it through a three or even a four month average, you can really see a significant move down. Now I was actually looking at the jobs, the new jobs numbers on the grid in fact set this morning, and you can see just January, February, March, April and then May. It just, it just, it just crashed right down. [00:06:18] Speaker A: Right. [00:06:18] Speaker C: And I think that has a lot to do with immigration. [00:06:21] Speaker A: Okay. [00:06:22] Speaker C: So I was, we've been kind of looking at the break even rate. Okay, what, and this is what actually makes this 27,000 new jobs even more alarming. [00:06:34] Speaker A: Okay. [00:06:34] Speaker C: Is the break even rate a year ago was 160,000, 175,000 new jobs created every month. That was the break even. What that means is, is it called 175,000 at 175,000 new jobs created per month, the unemployment rate is not going to go down, it's not going to go up because of people retiring and leaving and leaving the workforce. That's about the number. Okay, well, due to the fact that we have far less people coming across the border now, we have far less immigration coming in now. That new break even number, I've seen that as low as 32,000amonth, as high as 82,000amonth. The consensus number that I think is probably closest is about 70,000amonth. So the new break even number because we have fewer people coming into the country now is about 70,000amonth. So it's a pretty low threshold to come over. And we are still whiffing that by 60%. [00:07:32] Speaker A: Okay. [00:07:33] Speaker C: So we're not even hitting that. You know, it's like somebody took a hurdle and lowered all the way down to the bottom rung. We just ran our face right into it, you know? [00:07:41] Speaker B: You know, so it's a good spot for a golf analogy. It's, it's like playing the back tees for the golfers out there. You're, it's a par, you know, par four. And you've been playing the black tees and now you get to move all the way up to the red tees and you still can't make four. That's not a good sign. [00:07:56] Speaker C: No, the red tees on a par three, and you can't even make to the green, you know, with the driver. So it's like we're, we're just, we're just. The labor market is very concerned right now. [00:08:09] Speaker A: I. [00:08:09] Speaker C: And I think AI has something to do with it. I think a lot of. I think as we're getting, there's just a natural attrition that's taking place in the job market. They're not being replaced. They're being replaced by systems now rather than just people. And I think that will probably work itself out in the next few months. But there's also a lot of companies that are not hiring because, you know, they're concerned what's happening with immigration, what's happening with the economy, what's happening with, with everything, with, with tariffs and all these other things. So what does the, what, what does that tell you? That tells you the economy is softening. And it's softening in a very material way. And it's, and it's starting to show itself in the labor market. [00:08:50] Speaker A: Okay. [00:08:51] Speaker C: And this is that inflection point today as Matt and Garrett sit here on September 5th, year of our Lord 2025. It is that inflection point. And we told them. We didn't, we didn't tell them anything. We've been, we've been saying for the better part, I would say, the last five months that they need to get these rates down. We were ahead. [00:09:16] Speaker B: Why? [00:09:16] Speaker C: Because you fixed the roof when the sun is shining. You fix the roof when the sunshine so you don't run into problems. [00:09:22] Speaker A: Okay. [00:09:22] Speaker C: Well, the clouds showed up today. The clouds have been gathering. We've been talking about this. Well, now it's going to start to rain here pretty quick. So all of a sudden there's this. There's this now. Now rate cuts are sort of baked in. There's an 87 chance of a rate cut, of course, this month. [00:09:39] Speaker A: Okay. [00:09:40] Speaker C: What I found interesting, though is they're not giving a double cut enough credibility. There's only about a 13% chance of a double rate cut this month. [00:09:51] Speaker A: Okay. [00:09:52] Speaker C: I think they should do a double rate cut. They should do a double rate cut now. A rate cut in September, I'm sorry, October and, and then another one in December. They need to bring this down. The fed funds rate needs to be a hundred basis points below the 10 year. That's where it needs to be. That's the healthy, that's the healthy relationship, okay? The 10 years at 406 right now. And that's the bond market screaming. We've had a massive move the two years down to 347. [00:10:20] Speaker A: Okay? [00:10:20] Speaker C: So we have, we have the bond market now screaming its head off at the Fed. The Fed saying you need to lower these rates, you need to lower these rates. So that's, it's, the bond market is telling the Fed that that rate needs to be between about three and three and a half percent. So call it three and a quarter today. Right now. Right now. That's where it needs to be. And they're at four and a half on the other end, okay? And every single discussion that one of these Fed governors has or these Fed members have, it's inflation. Inflation. Well, we're not sure about what's going to happen with inflation. We're starting to see some of the pass throughs of tariffs come through into the CPI and the PPI numbers. Again, that's not inflation. That's not a supply and demand imbalance that has a price level shift due to a tax called a tariff, okay? Which in our opinion, in my opinion should require monetary easing. On the other side we have fiscal tightening from a tax on obviously a tariff. Well, to combat that you would need monetary easing. But for some reason they think this, a tariff, a price level shift due to a tariff is inflationary and thus signals a hot economy when it's the opposite. And I really don't know where they're coming to these conclusions from because it's pretty basic, okay, they should have started cutting in May, okay? If it was up to me, they would have cut in May. But they really were screaming, you know, other people were screaming they need to cut in June. [00:11:55] Speaker A: Okay? [00:11:56] Speaker C: They didn't cut in June, they didn't cut in July and they, they didn't even really signal any real weakness anywhere until Jackson Hole, right? And honestly, I mean, I'm not trying to be political here, but Trump was right about everything. Hat is right. [00:12:18] Speaker A: Okay? [00:12:18] Speaker C: Too late is too late. I mean the name, his name, J. Too late, pal. Is too late. He's too late. This labor problem that is now starting to happen is no different than the inflation problem that reared its ugly head in 2021. [00:12:35] Speaker A: Okay? [00:12:36] Speaker C: The bond market was screaming at him then. He didn't listen. They didn't listen. The bond market screaming at them, the other side, they're not listening. And now we're starting to see weakness in the labor markets. [00:12:47] Speaker B: Well, you just successfully ran off half of our potential listeners right there by accidentally uttering the words Trump was right. If you say that, that automatically makes half the country mad at us. So there we go. I have a really, really loaded question and I, you know, this is the benefit of a live show, right? We've known each other for long enough now. You know, you get on a live show with me and you never know what's going to come at you. So we've not rehearsed this, we have not discussed this. I have no idea what you're going to say to this, but I had a conversation with a friend of mine over the weekend and it kind of ties into what you're, you're talking about now with AI. And I know that you've been a big fan of AI and what it has done for the markets and it's, you know, it's a huge tailwind. The stock market, however, you touched on it very briefly there and I just want to ask, can AI be a threat or have we underestimated how big of a threat AI can be to the job market? Because I'm just looking around at things like, you know, I went to. Do you have Bojangles where you're at, by the way? I don't think you do actually. [00:13:51] Speaker C: They're putting their first one in Las Vegas, very first one. It's either just opened or it's opening like in a couple weeks. [00:13:59] Speaker B: Well, I have some fantastic recommendations for Bojangles when you get the opportunity to enjoy that. But anyway, that's neither here nor there. I went to order the other day, few months back and they have AI ordering systems now at the drive thrus there at some select stores. And me personally, I don't like that because I have a lot of specialized custom orders and that can be hard to explain to AI. So anyway, but the capabilities or the types of jobs that AI is now able to perform to replace what have commonly been held by human beings is getting outside the box a little bit and starting to get into some areas that I had really not, I couldn't have imagined two years ago trying to order my food from a robot basically, or a computer or whatever you want to call it. And I was just thinking about this as you were talking. Can AI change the definition of skilled labor versus unskilled labor or redefine what skills you need to find a job? Because a lot of the things that I want to say, lower paying, you know, traditionally unskilled labor jobs are going to be able to be replaced by AI. But even some Skill positions. I mean, the guy that I was talking to the other day, he has a, I mean he went to school for a long time to get the job that he's got. Okay. But I was even telling him there's a chance that, I mean, I could see a computer replacing the knowledge that you have and being able to do that to the point where your $150,000 a year job turns into a 60,000 doll year button pushing job. Because we don't need your knowledge anymore. The computer can do that. We just need somebody to push the button and hand out the supplies. Can AI take over so many different tasks that we end up finding it hard to find jobs for human beings? [00:15:53] Speaker C: Well, I think that's starting to take place now. And I think if you look at what jobs AI is taking over, it's, it's lower skilled, for lack of a better word, white collar jobs, your customer service people, those types of things. [00:16:15] Speaker A: Okay. [00:16:16] Speaker C: Phone operators, a lot of that. And I think that's a lot, where a lot of people. But I, I think there's an interesting cascading effect that happens. [00:16:26] Speaker A: Okay. [00:16:27] Speaker C: And I'm not fully developed this thought yet, so it might come out a little clunky, but a lot of people, they, they, maybe they start in customer service, they start on the, on the phone boards or whatever it is. Now that's an AI thing, okay. And they, they, they develop their skills, they develop their relationships and they develop who they are as, as a, as an employee, as a person, as a worker and eventually as a leader into these companies. And that's what leads these companies. And honestly, I'm a big proponent of people who are loyal to those companies who've done a good job for those companies who stick with those companies, should be rewarded with those companies, buy those companies and be put in leadership positions if they're confident they can do it. So I think a lot of that is going to go away. So when people are hired now, are they going to be hired into more senior positions directly from school or from different industries? I don't know that that whole, that particular part of the system is necessarily worked out. I don't think anyone really knows how this is going to end. It absolutely will replace, will replace jobs. I mean, we've had, you know, there's been some attrition here at our firm, which is rare and we've not replaced those people. We've, we've installed AI systems, Right. Note taking for, for, for client calls, things like that, general planning tools and all. We, we're using these things now, these AI tools, and it's saving us a lot of time. So one of the metrics I look at on S and P and I, I try to follow as a business owner is revenue per employee. [00:18:09] Speaker A: Okay? [00:18:09] Speaker C: How much revenue are you generating per employee? So you look a lot of the businesses where they become insolvent and they're not well run businesses. One of the key factors is what is the general revenue per employee, okay? And I like that number to be a half a million or higher. Half a million dollars per employee in revenue generated. So that says, okay, that means there's enough money left over now to not just pay that person, but pay cost of goods, pay the overheads, all those other things. And that's just, it's kind of a beginning. So I think what you're going to see now is you're going to see with these AI systems, you're going to have the cost for these systems that will be higher to some extent, of course, but the cost per, but the revenue per employee is going to absolutely skyrocket. It'll probably double or triple over the next 10 years, you know, and I think that's going to be one of those things. I think it'll be good for the stock market, it'll be for those economies. And I think Jensen Wong said it better than anyone else. You probably won't lose your job to AI. There will be a few people. Nothing is ever 100. There will be a few people that do lose their job to AI. I think we need to accept that. But for the most part, you won't lose your job to AI. Your job will. Your, your job just won't be replaced. It'll be replaced with an AI system. [00:19:17] Speaker A: Okay? [00:19:18] Speaker C: However, if you do lose your job to AI, you won't lose your job to AI but you will lose your job to someone who uses AI that's what Jensen Wong said. And that I believe. [00:19:30] Speaker A: Okay? [00:19:30] Speaker C: And I think, I think folks that are putting this aside as not that big of a deal, I think are mistaken. I, I think, I think it is trans. I think it's as transformational to the economy as the Internet was in 1995. But look what happened. We all thought that every brick and mortar store was going to go up in flames and we were all done shopping and everything was going to be Amazon. Everything was be on the computer. We're just all going to sit at home and we're going to live a life like Wall E where we're all floating around in little chairs in Space. Well, it didn't turn out that way. And I think the other side of this argument to say would be, we can't, we, we, we can't discount the human factor, okay? The human factor is incredibly important. People, people want to talk to a person. They don't want to talk to a robot. They want, specifically in our industry and, you know, this well, is when it comes to people's money and their plan and their estates and all of it, they, they want to know that the, that what they're talking to is a person with compassion and understanding and can see through. You cannot just look at the, the numbers, but look at the human and what challenges they faced to get to where they got to. You know, I mean, if you're talking about, you know, I'll never forget, I. Many a long time ago, there was an older man who was born in the, in the Deep south, and he went to school in the Deep south. And it was, and he, this was many, many years ago. And he was very old then, so he, he was an African American man and he was a physician and he was incredibly bright and he mopped his, he mopped floors to get through college and medical school. [00:21:14] Speaker A: Okay? [00:21:16] Speaker C: The guy was incredible. He was an incredible human being. He was, he's been, he was married to his wife like 65 years. These were two just amazing human beings, and I love speaking with them. [00:21:27] Speaker A: Okay? [00:21:29] Speaker C: So you look at someone like that, that human equation that they communicate to me, that affects me, that matters to me, and I know it matters to other advisors. You want to make sure you take care of these people. You want to acknowledge and celebrate that they didn't just get a red carpet rolled out for them. Somebody handed them a lot of money. This man had to work, work himself to the bone just to become who he wanted to be. And then once he got there, he had to work double time to become as successful as he was. And he was very successful, but he got there through sheer grit and will and brain. [00:22:12] Speaker A: Okay? [00:22:12] Speaker C: And he's not going to hand that. This and this man, this woman, they are not going to just hand their money over to some robot who doesn't care who they are as people. Okay, yeah, though that's going to matter. So there, there's going to be, there's going to be an engagement of the two. But you have to understand as. From the human side, you have to, as a business owner, the business owners, you have to adopt those systems that can make you more efficient. Okay, that can help. That can bring up your revenue per employee. Because if you don't, you're going to suffer and you're going to lose market share. [00:22:51] Speaker B: Yeah, we hadn't discussed this and we hadn't, you know, obviously rehearsed this at all, but you really couldn't have answered that any more. In line with where I was, was kind of going with it, I think, because I think that when you look up the definition, I literally had to do this just now, the definition between skilled labor and unskilled labor. I think the skills that differentiate those two categories are changing maybe faster than we realize them. Because what happens. I did a podcast about this on my podcast for financial advisors, the Advisor Advocates Podcast, where I talked about the more technology evolves and becomes a bigger part of our industry, it actually ends up increasing the importance of the human element because you can't win based on your technology anymore. Everybody's got the same technology. That's not a key differentiator. Your people become the key differentiator. Now, maybe not the right platform to this is what we usually talk about, but I will say to listeners, viewers, your clients, whoever may hear this, I have kids. My kids are 13, 10 and 6. Okay. Or almost 6. And they have grown up at a time where you didn't really have to learn people skills. Right. You make friends online as much as you meet them in person nowadays. And we live on our devices and we live on technology. And the scary thing about that is when I think about my 13 year old or my 10 year old or my 6 year old and think about the types of skills they need to develop to be able to have good careers and to be able to have good jobs when they get out of school, they probably need to be developing the very skills that they've not had to develop for the last 20, you know, the last 10 years because of what technology has done. Because I think what's going to happen over the next little bit is as AI can do more of the, for lack of a better word, menial tasks, then you're going to have to develop some human skills. And we've spent a generation untraining humans on how to have human skills because of the advancements in technology. So I don't mean to go on an unprompted soapbox there or tirade, but I think that was kind of where I'm going with that, is that I think that it doesn't mean that none of us are ever going to have jobs, but I think what AI is going to do is change that qualification section on the job boards. Or the job postings that tell you what skills you need to have. And I think that we're going to need to have that human element. And the technical skills we've worked so hard to perfect may not necessarily carry as much value moving forward. That's as much of a question as it is a statement. I don't think I asked a question in it, but I guess. Do you agree with that and is that kind of paraphrasing what you're saying there? Because I just think that you're right. I agree. Someone like who you were describing. Yeah, they, they want to trust their money to somebody who has empathy and has compassion and has that human element. And you can't train AI to have that. But I mean, we already have robo traders. If we're just asking. They're not going to pay you just to click the buy button on the stocks. Right? I mean, that's. We have people that can do that or computers can do that. [00:26:04] Speaker C: Well, at the end of the day, when you call any person, calls any company, whether it's Whirlpool because your dryer stopped working or it's Vanguard because you want to roll your money out of Vanguard and put it with us because we good. Or any customer service hotline for any reason whatsoever. And of course you get the, you get the automated representative, but you always have the option to speak with a human. 99 of U.S. representative. Representative. I want to talk to a person because the nuance that a human can understand, that a robot or an automated system can, or even an AI really can. And I think it's that humans require coded in our DNA, connection with another human. And we need to know that we're speaking with someone who empathizes with us and understands us and maybe has walked on a similar path or even if they haven't, that you can, that they're, that they're. You have somebody that is listening because AI is AI, but it can't listen. It can't do anything. [00:27:22] Speaker A: It can. [00:27:23] Speaker C: It can only understand what you're saying and then figure out a response. And I'm sure those things will be coded to whatever response is the most profitable for the company for whatever it is, rather than. I understand, let me escalate this to my manager. He would understand or she would understand. Those things will never go away. So this will be an adjustment, but it will be. I think it'll be an adjustment in a good way, but it's going to take some time. [00:27:55] Speaker A: Okay. [00:27:55] Speaker C: And I think there's a lot of folks Especially kids coming out of college these days that are. [00:28:00] Speaker A: That are. [00:28:01] Speaker C: That are going to have to sort of shift where, you know, rather than going into a business where they start on the ground floor and you worked. You worked in customer service or you worked in the, you know, in the. In the lower levels, a lot of that's going to be taken with AI. So I don't know how that's going to be worked out. I wish I did, but I don't. But, you know, nonetheless, it's here, and it's not going away. In fact, back to the market, Broadcom is up 10% today, 9% today. Nvidia is down 3% today. Because Nvidia OpenAI is now going to use Broadcom for their. Their chips, to create their proprietary chips, and they're not going to use Nvidia. Why? Because Nvidia is expensive. Their black hole chips are very expensive compared to the other ones. So, you know, but I think what's going to happen is these AI chip companies, they're gonna. [00:28:59] Speaker A: They're. [00:28:59] Speaker C: They're going to continue to grow. But I think, you know, companies like Nvidia that have the more expensive ones and the better ones, those will somehow develop because they have the war chest to do it, and they have the people do it and the talent to do it, they will develop in a way that can really bridge that gap a lot better. So, you know, I think. I think AI for the economy is good. I think AI for the stock market is good. I think A.I. for the lower end of the job market will be tricky for the next few years, but as always, just like the Internet, boom, it will get worked out. [00:29:44] Speaker B: Well, as. As always, we are here for your entertainment and education purposes only. But if you are looking, I want. [00:29:52] Speaker C: I want to address the Trump thing real quick. [00:29:53] Speaker A: Okay? [00:29:54] Speaker C: We are not. [00:29:55] Speaker B: Oh, man. Okay. Sorry I jumped the gun on you. I jumped the gun. My bad, My bad. [00:29:59] Speaker C: We're not political. We're not political here. I'm not endorsing one side or another. I. We're not like that. We are independent. I just. So we're clear, so everyone who's listening, I am an independent, nonpartisan. I'm not registered to either party. [00:30:11] Speaker B: Okay, Same here. [00:30:12] Speaker C: Yeah. [00:30:12] Speaker B: We are literally two independents, both of us. [00:30:15] Speaker C: However, I. Sometimes you got to give the devil is due or the dog is due or whatever you want to call it. [00:30:20] Speaker A: Okay. [00:30:21] Speaker B: You got to call it like it is. [00:30:22] Speaker C: Yeah, it is. We got to call it like we see it. [00:30:25] Speaker A: Okay. [00:30:25] Speaker C: J. Powell, in my professional opinion as an investment manager, as the CIO of a. Of a large RIA was late. He was late to cut rates. And he looked. He, he. I think their equations were incorrect and I think President Trump was correct. Take it for what it's worth. It doesn't mean it's one person's a good person and one person's a bad person. It just means, in my opinion, based on the knowledge that I have, based on the data that I have seen, they should have started cutting in May. [00:31:01] Speaker A: Okay. [00:31:02] Speaker C: They didn't. [00:31:03] Speaker A: Okay. [00:31:04] Speaker C: They're just now going to make their first cut in a year in September, which should have happened several months ago, which would have prevented, I believe, this cooling of the labor markets. There's. We have one last little thing that's kind of holding everything up right now, and that's services. [00:31:21] Speaker A: Okay. [00:31:21] Speaker C: ISM services came out this week at 52. So it was a nice little jump. [00:31:27] Speaker A: Okay. [00:31:28] Speaker C: ISM services a month ago was 50.1. It barely expanded. Just. I mean, at 50, it's flat at 49.9 is contracting. It was 50.1 for July. [00:31:41] Speaker A: Okay. [00:31:41] Speaker C: ISM Services for August came out at 52. Now, why is that important versus ISM Manufacturing? [00:31:48] Speaker A: Okay. [00:31:48] Speaker C: ISM manufacturing came up a little bit, but it's still contracting. It was at 48 in July, it's at 48.7 in August. So it's still contracting, but it's not as contracting as fast. Okay. Manufacturing, although it's popular, doesn't hold as much weight. [00:32:05] Speaker A: Okay. [00:32:06] Speaker C: The services sector contributes 72 and a half percent. 72 and a half percent of US GDP services. So that is the big, gnarly, fanged gorilla in the room. For our gdp, manufacturing is nine and a half percent. [00:32:25] Speaker A: Okay. [00:32:26] Speaker C: It's. It's not even. It's. So services is six times the size of manufacturing. So we need services to keep going. [00:32:33] Speaker A: Okay. [00:32:34] Speaker C: We need services to do its job. And it is. But again, you fix the roof when the sun is shining. This will also turn and go the other way if the Fed doesn't get the let out. [00:32:49] Speaker B: Well, as I was trying to tee you up there as we were going out there, I just echo kind of what we were saying earlier in that there are a lot of. As the human element becomes more important. To whatever extent I'm right about that, I will say, Matt, you are one of the finest humans I've come across in the industry. In addition to a pretty, pretty good brain, as modest as you want to be about it, you're also a great dude. And we've. I was just Looking it up as we were talking here. Our next show will be our 50th episode, so at least 50 hours or so worth of chatting with you over the last couple of years and have really enjoyed getting to know you and becoming friends. So for those out there who are looking for an advisor with empathy who has a brain but also has human compassion and just a genuine good heart, I gotta be careful saying the word endorse, because I found out from the last time I said something along those lines that ends up creating, like, seven paragraphs of disclosures when I say endorse. But if you're looking for an advisor, you should give Matt a call at 702-655-8300. He or someone on his fantastic team would love to chat with you, so. Or just check them out at intelligent investment.com as well. [00:33:57] Speaker C: You know, one of these days, we need to do a Live from Las Vegas show. [00:34:01] Speaker B: We really do. Yep. Yeah, we got to get on that at some point soon. It's been a while. I actually. Did I tell you. Do you know that I got married in Las Vegas on purpose? [00:34:09] Speaker C: Yeah, yeah, yeah. [00:34:10] Speaker B: Okay. I think I told you that. But, yeah, that was. It was funny. When I was filing for the divorce, I thought, I wonder how many divorces start in Las Vegas. All of them. Yeah. [00:34:25] Speaker C: I also got divorced in Las Vegas. [00:34:27] Speaker B: Did you really? [00:34:28] Speaker A: Oh, yeah. [00:34:29] Speaker B: Hey, brotherhood. [00:34:30] Speaker C: Best decision I ever made. [00:34:32] Speaker B: Sounds like it. Yeah. [00:34:33] Speaker C: Second best. Well, I don't know, because I had. If I hadn't divorced that one, I wouldn't have married that one. [00:34:39] Speaker B: You couldn't have made the best decision. [00:34:42] Speaker C: Right. That's chicken egg. [00:34:43] Speaker A: Yeah. [00:34:45] Speaker C: Never married April. [00:34:46] Speaker A: And that would. If I. [00:34:47] Speaker C: If I didn't have April. It's like, if you don't have your health, you don't have anything. [00:34:52] Speaker B: Yeah. If you. You couldn't have made the best decision if you hadn't made the second best decision, I guess is the way that plays itself out. [00:34:59] Speaker C: One day, hopefully soon, you know, you'll meet her and you're like, you're right. What does she see in you? She's way out of your league. Like, I mean, I haven't met her. Optometrist. You're done. [00:35:09] Speaker B: I haven't met her. And I already wonder that a little bit. I haven't met her, but I met you. All right, man. We'll have a fantastic weekend. Great to see you, as always. And watch those. A little. Little mini party next week for episode number 50. That'll be fun. [00:35:24] Speaker C: We should. Let's maybe let's figure out this, this, this, this, this Live from Las Vegas show soon. [00:35:31] Speaker B: That, that would be great. I would love to. That would be a great time. So we'll see you next. Next time. When is the wedding, by the way? Your daughter. So you had the bridal shower last week. When's the actual wedding? [00:35:40] Speaker C: So we had the bridal shower. Well, we didn't. The girls did. So we had our brew shower called the. So I call it. I've coined a term, the brew shower. [00:35:47] Speaker A: Right. [00:35:48] Speaker C: So we only have beers. So we went to my favorite Irish pub here in Vegas called McMullen. Solid, little wonky, weird place. All kinds of nooks and crannies. And they have the best beer. They got Harps Kill, Kenny Smiths, Carlsbergs course, Guinnesses Bass. They've got all the good ones there. They even got good like, you know, 805s and, you know, more of your. Your, your typical. Just a good place, good food, good time. We sat there and did the opposite of a bridal shower. We had beers and called each other names. [00:36:20] Speaker B: That sounds like a lot more fun. Yeah. So when is the wedding itself? [00:36:24] Speaker C: October 4th. [00:36:26] Speaker B: Okay, so right at a month yesterday. So right. Right there at it. So awesome stuff, man. We'll have a great weekend. See you next time. And yeah, we'll. We'll get together and figure out a time for the Live in Las Vegas show. I think that'd be a lot of fun. [00:36:38] Speaker C: Let's do it. [00:36:39] Speaker B: All right. See you, man. [00:36:40] Speaker A: Bye. [00:36:41] Speaker D: Discussions in the Intelligent Investment show are for educational purposes only. The information presented should not be considered specific investment advice or a recommendation to take any particular course of action. Often, always consult with a financial professional regarding your personal situation before making investment or financial decisions. The views and opinions expressed are based on current economic and market conditions and are subject to change. There is no guarantee that any statements of future expectations will come to fruition. All investing involves risk, including the potential for loss of principal. Securities offered through United Planners Financial Services member finra, SIPC Advisory services offered through American Retirement Planning Group. ARPG and United Planners are independent companies. Garrett Lille and Wealth Partners are not affiliated with ARPG or United Planners. Any endorsement that I may have given during this recording, it is important to note that I am not a client of arpg. The views expressed should not be considered representative in any way of my past, present or future experience with MAT or arpg. No incentives have been provided to me in connection with any endorsements I may have given on the Intelligent Investment Show. Investing involves risks and there is no guarantee of any future results, performance or success.