March Money Matters: Google-Apple Appliance, Fed Forecasts, Intel's Windfall & More! | The Weekly MoneyClip

[00:00:00] Apple and Google partner again. What are the Fed's tea leaves saying? How to activate semiconductor

[00:00:18] manufacturing in America? Japan's rare interest rate hike and more. Welcome back to the weekly

[00:00:24] Money Clip. In a market with millions of podcasts, it is tough to stay on top of the essential

[00:00:29] business and tech stories beyond headlines. This week we will be counting down five key moments

[00:00:35] from last week to give you context for the week ahead. As always, clips are under five minutes

[00:00:41] from voices you trust adding context to headlines from the week behind to prepare you for the week ahead.

[00:00:48] Before we jump in, let's review the top headlines. This past week in the world of business,

[00:00:53] Finance and Technology, the headlines have been buzzing with significant developments.

[00:00:58] From the gaming industry in Seattle, where a new studio is rising with fresh investments to forge

[00:01:03] ahead in creating immersive experiences to the intriguing sphere of pet tech, where an app is

[00:01:08] revolutionizing how animal lovers connect. Meanwhile, the tech job market shows its volatile nature as

[00:01:15] layoffs continue, highlighting the challenges even experienced workers face in securing new roles.

[00:01:21] In the broader tech landscape, Microsoft made a strategic move by appointing a former Google

[00:01:27] executive to lead its AI efforts, signaling a deeper dive into the potential of artificial intelligence.

[00:01:34] On the legal and regulatory front, Apple finds itself under the scrutiny of the DOJ adding to

[00:01:40] its pile of antitrust challenges, a scenario that underscores the tightening grip of regulation on

[00:01:46] big tech. Elsewhere, in a mix of finance and philanthropy, McKenzie Scott's generosity shines

[00:01:52] through with a substantial grant distribution, underscoring the impactful role of philanthropy

[00:01:58] in addressing societal needs. And not to be overlooked, the financial markets have been a roller coaster,

[00:02:04] with major indices showing mixed signals amidst ongoing economic uncertainties.

[00:02:10] Finally, Reddit had a strong IPO on Thursday, but will their positive momentum continue?

[00:02:15] Investors hope this is an indicator of a prolific return of the IPO landscape.

[00:02:20] Those were the key headlines. Now let's dive into the stories behind the headlines.

[00:02:25] This week we welcome Tom Hayes, Mitch Rochelle, Josh Hammer, Scott Stantis and Jake Novak.

[00:02:31] At number five in our countdown, we begin with Tom Hayes from Great Hill Capital

[00:02:35] in the groundbreaking deal between Google and Apple regarding AI.

[00:02:40] Google's AI services, particularly Gemini, will now be integrated into Apple's devices,

[00:02:46] solving Apple's long-standing AI quality issues, especially with Siri.

[00:02:51] The partnership reflects the existing relationship between the two tech giants,

[00:02:55] with Google already paying Apple billions annually to remain the default search provider.

[00:03:00] This move not only enhanced the value of both the phone and Google, but also positions Google as a

[00:03:06] leader in AI technology. This game-changing partnership has the potential to revolutionize

[00:03:12] the AI landscape, making the Apple phone indispensable and solidifying Google's dominance

[00:03:17] in search, query, and generative AI. Here is the full analysis from Tom.

[00:03:23] Tom Hayes from Great Hill Capital wanted to get on and talk about the articles today regarding

[00:03:31] Google and Apple creating a deal where Google will provide their AI services, namely Gemini,

[00:03:41] to Apple's handsets. This has solved an enormous problem for Apple.

[00:03:49] Their AI has been mediocre to put it kindly as it relates to Siri has been a complete disaster.

[00:03:57] And so much so, I've even considered going to a Google phone just so when I ask my phone

[00:04:04] a question, I could get an answer quickly that would be useful and that has certainly not been

[00:04:10] the case with Apple. I think this is a brilliant partnership. It mimics the relationship that they have

[00:04:17] in search. Google has been paying Apple billions of dollars a year to remain their default

[00:04:24] search provider for many years and it's been a win-win relationship.

[00:04:29] Mix the phone more valuable, makes Google more valuable and I think what's going to happen now

[00:04:36] is this could be a game changer because the vast majority of people will go with the default

[00:04:43] provider. And in this case, it's no longer going to be open AI or chat GPT for AI queries.

[00:04:53] It is now going to be Google Gemini and it's going to make the Apple phone and

[00:04:59] moat indispensable. And it's going to accelerate Google's development and primacy in terms of their

[00:05:07] historic data vast data pool that they can then reinvest and become the leader in AI search, AI

[00:05:16] query, etc. to generative AI and beyond. So huge win-win for both parties today

[00:05:23] as that plays out in coming days and weeks. I think it'll be constructive for both companies

[00:05:29] and thanks for tuning in.

[00:05:34] We now continue the countdown with number four. We join Mitch Rochelle for an in-depth analysis

[00:05:40] of the recent release of Federal Reserve Minutes. Mitch is a media commentator, macro strategist,

[00:05:45] podcaster and public speaker on the economy, real estate and policy. He can be seen regularly

[00:05:52] on Fox News, Fox Business and News Nation. Despite investor excitement, Rochelle remains skeptical

[00:05:58] of the Fed's dovish stance due to potential political pressures as seen with President Trump's past

[00:06:04] perceived attempts to influence policy. The current economic and political climate may lead the

[00:06:10] Fed to maintain its stance to avoid allegations of meddling with the election. With Fed Chair Powell's

[00:06:16] concern for his legacy, any allegations of interference could be detrimental. Any signs of the

[00:06:22] Fed not lowering rates could trigger negative market reactions as seen in 2018. What else did Mitch

[00:06:28] have to say on the Fed's tea leaves? Here is the segment. Mitch Rochelle with the money clip

[00:06:35] here on CenterClip. Well, the Fed minutes came out and when you read the tea leaves known in Fed

[00:06:43] spoke as dot plot, those are the interest rate aspirations of the various members of the Federal

[00:06:53] Reserve and when they think they should the Fed should lower rates and by how much so how much

[00:07:02] and when. And if you look at the consensus of the dot plots, it looks like as many as three

[00:07:10] rate cuts in 2024, these minutes came out on Wednesday and as soon as they hit the tape,

[00:07:18] the stock market rallied, hit new highs because one thing stock market investors love is lower

[00:07:25] interest rates. And the prospect of the Fed is going to ease monetary policy by lowering

[00:07:33] interest rates. That's good news for Wall Street. Is it good news for Main Street? That remains

[00:07:41] to be seen because easing monetary policy could fuel more inflation. So we will wait and see. I for

[00:07:51] one do not think that the Fed will be as dubbish, meaning lowering interest rates that much this

[00:08:00] year because the second half of the calendar year, when they'll be doing it, we're sliding into

[00:08:06] the second half of the calendar year with spring upon us and only three quarters ahead or three seasons

[00:08:12] ahead, I should say. It's very possible that the politics of the economy may be so acute

[00:08:23] that the Fed may find themselves politically pressured into doing nothing. Donald Trump famously

[00:08:31] said jawbone, the Fed when he didn't like fiscal monetary policy and the Fed ignored and dug in

[00:08:43] to their policy at the time. But it'll be interesting if the Biden administration jawbones the

[00:08:50] Fed a little bit. So there's a lot of weight and see there and the half the least resistance of

[00:08:56] the Fed would be to do nothing in that political cycle, less they'd be accused of interfering with

[00:09:05] the election by shining it right light on an economic issue that surrounds interest rates.

[00:09:11] One comment I've made in the past on other platforms is Jerome Powell chairman of the Fed. His

[00:09:18] undergraduate degree was in history and as a student of history, I think he cares deeply about

[00:09:28] how he as a Fed share will be remembered in history and interfering with an election potentially

[00:09:37] or being accused of interfering in an election by one of the candidates, either one. It's something

[00:09:45] that I don't think he wants on his historical resume. So I for one, don't think we're going to get

[00:09:53] that easing from the Fed and if I were to make a prediction, if the tea leaves from the Fed,

[00:10:00] whether they be dot-polytes or speeches made by Fed governors or board members,

[00:10:06] start indicating that they may be reversing course and not lowering rates. You can expect the stock

[00:10:12] market to send a signal. One last thing, it was October of 2018 and in a speech Jerome Powell

[00:10:22] in talking about interest rates said we were far from neutral, neutral interest rates real quickly

[00:10:28] as the rate at which it's no longer it's not neither hurting or helping the economy sort of like

[00:10:35] slack tide if you are a voter and the market didn't like that and precipitously sold off from

[00:10:43] that speech in October through the end of the year 2018. The market doesn't like when the Fed

[00:10:49] is not cooperating so we've got market forces, we've got political forces and we've got an economy

[00:10:58] that's still is far from perfect. Mitchell Shell with a money clip on center clip.

[00:11:08] The world's best known investor and Wall Street expert Warren Buffett once said

[00:11:12] Wall Street is the only place that people ride to an arouse-roise to get advice from those who take

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[00:11:49] Podcast Network or your favorite podcast channel. Welcome back to number three in our weekly countdown

[00:11:56] with back with Josh Hammer discussing a $95 billion grant given to Intel. Hammer is the

[00:12:02] Newsweek opinion editor, the Josh Hammer show host syndicated columnist and Edmund Burke Foundation

[00:12:08] research fellow. In this audio op ed, Josh discusses Intel, the top semiconductor company in California

[00:12:15] receiving a hefty $8.5 billion grant from the US government to bolster semiconductor production

[00:12:21] in the country. The chips act signed into law by President Joe Biden aims to bring semiconductor

[00:12:27] manufacturing back to the US and counter China's dominance in the industry. Despite some shortcomings,

[00:12:33] the act is crucial for national security and supply chain resilience. With Taiwan's semiconductor

[00:12:39] manufacturing companies leading technologically, the US must step up. The $8.5 billion investment

[00:12:46] in Intel is a positive outcome of the chips act, signaling a move away from laissez-faire policies

[00:12:52] towards a focus on national security. The US desperately needs a comprehensive industrial policy

[00:12:58] for semiconductors. Here is the rest of the audio op ed. Intel, the leading semiconductor company

[00:13:04] and general California stalwart when it comes to contemporary technology is now touting a massive

[00:13:10] $8.5 billion grant from the US government in order to jumpstart US semiconductor production.

[00:13:16] This is downstream of the chips act, the federal legislation that was being debated at times quite

[00:13:24] quite hotly in the United States Congress about a year and a half ago or so ago in the year 2022

[00:13:30] was signed and law by President Joe Biden. Look, many folks on the right objected to the chips act

[00:13:35] and it was not a perfect piece of legislation. I think in many ways it could have gone

[00:13:39] even further, especially as it pertains to cracking down on China which is really what is going on

[00:13:45] in this bill when it comes to trying to reshore manufacturing for semiconductors, get some new

[00:13:51] foundries up and going there. I thought that there could have been some slightly stronger intellectual

[00:13:55] property protections and things like that but fundamentally, fundamentally to quibble like that

[00:14:01] is to miss the force for the trees. America needs an industrial policy when it comes to semiconductors.

[00:14:08] In the year 2024 it is barely an exaggeration to say that semiconductors make the world go around.

[00:14:15] Your chip, your semiconductor is used in everything from your iPhone or your computer

[00:14:21] to F-35 fighter jets and it is a travesty. It should be nothing short of a five alarm

[00:14:28] fire and a wake up call heard around the world that right now Taiwan semiconductor manufacturing

[00:14:37] company, TSMC has by far the largest market share of any foundry, any semiconductor manufacturer

[00:14:47] in the world. Furthermore, TSMC is actually creating chips, semiconductors at a much more advanced

[00:14:55] level than American foundries are. Right now TSMC has gone down chips to around three nanometers or so

[00:15:01] which is really just remarkable. Intel hasn't as far as I'm aware, hasn't gone in any small or

[00:15:07] more concise than seven nanometers. So, technologically speaking, holding volume aside, technologically speaking,

[00:15:15] just looking at that alone, America is seriously, seriously far below where many of our semiconductor

[00:15:22] rivals are around the world very much including TSMC, Taiwan semiconductor manufacturing company.

[00:15:29] And we have to get our act in order here. I mean, the idea of the neoliberal Washington consensus

[00:15:36] let the chips fall where they may, there's an infamous line from the George H. W. Bush White House

[00:15:41] computer chips potato chips was the difference. What astounding hubris, what a total and complete

[00:15:47] failure to think in the mid to long term, to think about national security, to think about resiliency,

[00:15:52] to think about durability, to think about supply change, to think about national security above all

[00:15:57] else. Fortunately when it comes to things like the chips act, when it comes to things like this very

[00:16:01] bipartisan piece of legislation in the House to actually go ahead and force a divestiture of bite

[00:16:06] dance to sell TikTok, these are the kind of moves that give me hope and optimism that the American

[00:16:13] political conversation is no longer solely focused on letting the chips fall where they may, so to speak

[00:16:19] and is increasingly focused on core national security. So I for one, look forward to hopefully

[00:16:25] seeing what comes from this in half billion dollar investment and intel that again is downstream

[00:16:30] of the chips act, the law that passed a couple years ago.

[00:16:37] At number two this week we address Japan's interest rate announcement with Scott Stantis.

[00:16:42] Scott is an internationally syndicated editorial cartoonist, senior fellow at the Alabama

[00:16:48] Policy Institute and co-host of DMZ America podcast. Japan recently raised its interest rates

[00:16:54] for the first time since 2007, signaling the end of free money and a shift towards a stronger

[00:17:01] economy. On the other hand, the Federal Reserve in the United States is anticipated to maintain its

[00:17:06] current interest rates as inflation persists around 3.1 to 3.2%. Despite rising fuel prices,

[00:17:14] indicators such as employment rates and GDP continue to climb. Japan's decision to increase

[00:17:20] interest rates may lead to a short-term economic downturn, but in the long run it will make borrowing

[00:17:26] more attractive and hold borrowers accountable. What else does this interest rate decision mean?

[00:17:33] Let's join Scott now. Hi, I'm editorial cartoonist Scott Stantis coming to you for money clip.

[00:17:38] Well, Japan has raised its interest rates for the first time since George W. Bush was president.

[00:17:46] I'm not kidding. 2007, Japan has raised its interest rates above zero. It's about time.

[00:17:54] They've been suffering stagflation in Japan. The economy has not moved and that's due in large

[00:18:01] part to the fact that money is free. If you're borrowing money, awesome. If you're lending money,

[00:18:08] sucks to be you. Looking at interest rates here in the United States, the Federal Reserve Board will

[00:18:14] be meeting this week and virtually everybody is betting that they won't budge on interest rates.

[00:18:23] Why am I obsessed with interest rates? I do a lot of postings here for that because interest rates

[00:18:28] seem to be the most glaring example of where government meets free markets and government planning

[00:18:35] usually fails free markets. I would much prefer a free floating and more, I don't know, reactive interest

[00:18:43] rate. But in this case, the Federal Reserve is looking at a stubborn inflation rate of 3.1, 3.2 percent.

[00:18:51] Fuel prices are going back up which of course were no pun intended fuel inflation.

[00:18:57] But employment continues to go up. GDP continues to grow by the way. These are good things,

[00:19:03] Federal Reserve just saying because as I've said before, it would be better to have slightly higher

[00:19:10] prices in a job than slightly lower prices and no job. But getting back to Japan when you can have

[00:19:18] money and money begins to have value again, I suspect short term Japan's going to have a bit of a

[00:19:26] down turn because of the news that there's no longer free money. I suspect any economy when

[00:19:33] they're told that there's no longer free money is going, people are going to be sad but very quickly

[00:19:39] it will recover. Interest rates will start to go back up there. That means banks and lenders

[00:19:45] will actually have rewards for letting money. People who are borrowing money will actually be

[00:19:51] responsible for it. It's a good thing. So interest rates going up in Japan, interest rates

[00:20:01] staying stagnant in the United States where this leads to my suspicion is in the American economy,

[00:20:08] we're going to see it leveling off. It was getting pretty hot. An interest rate cut would really

[00:20:16] drive it into the stratosphere. That's great short term, long term, it's unsustainable. So if we

[00:20:22] can say kind of in this great niche where we're growing the economy but not at a white hot pace,

[00:20:29] that's a good thing. Looking to Japan raising their interest rates slightly and believe me when

[00:20:34] I tell you it's very slight but it also tells you that their economy is robust enough where the central

[00:20:41] bank feels secure in raising interest rates and actually making money have value. For MoneyClip,

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[00:21:42] To round out our countdown this week, we have Jake Novak to discuss the United States

[00:21:47] anti-trust lawsuit against Apple. Novak is a political analyst and commentator.

[00:21:53] The Department of Justice filed an anti-trust lawsuit against Apple, causing a sharp 4% drop in

[00:21:59] their shares. Despite this, historical evidence shows that companies targeted in such cases often

[00:22:05] emerge stronger. Just look at Microsoft in 1998, initially thought to be doomed, they adapted,

[00:22:11] collaborated with the government and thrived. Apple, under CEO Tim Cook, is likely to do the same.

[00:22:18] Investing in Apple stocks during this dip could prove to be a strategic move as past cases reveal

[00:22:24] that these situations lead to stronger partnerships and profitability. Let's hear the rest of Jake's

[00:22:30] opinion on the Apple downturn.

[00:22:32] Hi, I'm Jake Novak and buying opportunity alert. The Department of Justice is suing Apple in a

[00:22:40] landmark anti-trust case. Apple shares are down 4% and this seems like real bad news for Apple.

[00:22:46] Don't want to touch Apple right? Well, wrong because if you take a look at the history

[00:22:52] of major anti-trust efforts, especially against big tech in this country, it is almost always led to

[00:22:59] the company being targeted, becoming even more powerful and even more profitable in not even

[00:23:06] the very long run. I would say the medium run. And I think that's what's going to happen here with

[00:23:11] Apple because you need to understand the motivations behind some of these anti-trust suits.

[00:23:18] It's not so much to destroy the company or in this case to destroy the goose that lays the golden egg

[00:23:24] that is Apple. But get it into more partnership with the government and when I say the government,

[00:23:31] I don't mean politicians or elected leaders but the regulatory bureaucracy. Now,

[00:23:37] I've got a good case study to prove this and I think it's very important we all look at this more

[00:23:42] closely. When the Clinton administration, the bureaucracy, the Justice Department and Clinton

[00:23:49] administration slapped Microsoft with its anti-trust action back in 1998. A lot of people thought

[00:23:57] this was going to be the end of Microsoft as we know it. It was going to be split up into many parts.

[00:24:03] There were all kinds of epitaphs being written for Microsoft. What really ended up being

[00:24:08] the result of that anti-trust action was that Microsoft adjusted itself to be a much different,

[00:24:16] did become a different company but became a more profitable company. Microsoft as far as market

[00:24:22] cap right now is ginormous. It's done very, very well. The company that it was in 1998 bears very

[00:24:30] little resemblance to what it is now and that is a lot because of how it adjusted, how it worked

[00:24:35] with the government, how it worked with the bureaucracy after it was him with that anti-trust case.

[00:24:40] Now I don't know if Apple is going to change all that much the way that Microsoft did as a result

[00:24:45] of this case but I do know that Apple is not stupid and Tim Cook, the CEO of Apple is not stupid

[00:24:52] and they will do what they need to do to work with the Justice Department to make this case.

[00:24:58] I wouldn't say go away but work with it in a way that will make everybody happy in the end

[00:25:03] including investors. If I were you, I would buy more Apple shares today especially if they go down

[00:25:11] again in the next couple of days with the belief that this anti-trust action is going to somehow shrink

[00:25:16] Apple's business. It won't. History tells us it won't and the government in particular isn't

[00:25:23] really interested in that. The government just wants a bigger piece of the action or other kinds

[00:25:28] of benefits that it can get from reminding companies like Apple because this isn't just about Apple,

[00:25:33] it's about all big tech. Government has realized that there's a lot it can get from partnering with

[00:25:39] Big Tech and getting it on its team. That's what these things are all about. I'm Jake Novak, thanks for

[00:25:45] listening. We'll have to hold it there. Please remember this episode presents the personal opinions

[00:25:54] of these individuals and should not be viewed as investment advice. Thank you to Tom Hayes,

[00:26:00] Mitch Rochelle, Josh Hammer, Scott Stantis and Jake Novak. For their work and more in real time,

[00:26:06] please visit centerclip.com. This show has been produced in collaboration with Crosscheck Media

[00:26:13] Management. Crosscheck redefines family office services with a distinctive blend of financial

[00:26:18] expertise, media innovation and alternative investments. One topic at a time leaders on both sides

[00:26:25] always under five minutes. That is elevating discourse. Again, centerclip.com for more throughout

[00:26:31] the week. We'll be back next week. This has been the Weekly Money Clip.

[00:26:47] On any given day in Washington, policy proposals are created, debated and decimated by tens of

[00:26:52] thousands of people and organizations working behind the scenes. On 80 proof politics,

[00:26:57] a guest and I will visit a DC watering hole and distill the art of advocacy by pulling back the

[00:27:02] curtain a bit and taking a look at how they play their part in the sausage factory we call our

[00:27:07] federal government. So if you're at all interested in how the sausage is made, pull up a chair,

[00:27:12] grab a drink and join us. After all, what goes better with sausage than a tall cold one?