Food delivery business the company partnering with 3 delivery services caviar Grub Hub and liberates and along for the service through its app offering delivery options for 8000 restaurants in 90 u.s. City. Police. This is the financial exchange with Barry Armstrong in. Your exclusive look at business and financial news affecting your day your city your world stay informed and up to date about economic and market trends Plus breaking business news. And the financial exchange with strong and shocks. Home sales were slightly disappointing Boeing reports a massive quarterly loss and Caterpillar lays an egg as a result the Dow's down 87 points either but it's Berry and check with you here on a Wednesday morning new home sales coming in at 646000 that's the rate shock at which new homes would be moving off the shelf this year we had expected a number of 658000 Yes So coming in about 2 percent below expectations still about a 3 percent improvement from the previous month which also had disappointed if you go back and take a look at the data for the month of May We ended up with 6 $126000.00 new homes being sold during that month the expectation was that we were going to be seeing somewhere in the range of 66670000 so again you've had a few months in a row now where new home sales have just not been where we've wanted to see them and you couple that with some other data that's out there that shows that Morgan mortgage applications even with rates remaining low still struggling to gain traction for new purchases and things along those lines and so I think that you know overall housing continues to slow something that started about a year ago I don't think there's a sign that we're seeing a bottom here in housing right now you know it's a curious thing is that I saw the needy in price Now granted this is a national number folks median price 310. $1000.00 So how would you like to be able to buy you know a decent home brand new home for $310000.00 now we pretty much know when I was out and I was in Cedar Rapids a couple weeks ago and looking at property out there and again you're not talking about huge homes but there's a whole bunch of that Iowa yeah right in Iowa and again you know talking there's not a ton to do but you're talking you know 141500 square foot homes that are going for $130000.00 you know then we have you get distorted I'll say appear in them just a little yes just a little bowing we've been waiting for the other shoe to drop on Boeing they still have hundreds of grounded $737.00 Macs is their continuing to manufacture $42.00 a month they reported a massive quarterly loss of $5.82 a share and this is largely related to an accounting charge they took that was equal to a little bit more than $8.00 a share at $74.00 a share actually the accounting hit that they took and the reason why they took this is they're estimating that they're going to have to make about $5000000000.00 in either concessions or repayments to customers who have not been able to use these planes that have either bought them or ordered them and so Boeing stock down about one and a half percent on this news so not moving around a ton this was largely expected I mean this is not coming as a surprise given that they disclosed this charge a couple weeks ago and if you take a look at Boeing stock over the last 2 weeks actually still up about 5 percent over that time he's surprised that we haven't seen a collapse in their stock price you know I look at it and in the last 52 weeks it's traded as low as 292 and it's still trading at 368 now. The market seems to be thinking that their problems with the Macs are going to be short lived maybe another 2 or 3 quarters Yeah what you're seeing now in terms of the guidance that we've been getting both from the f.a.a. And also from. Boeing in the airlines now is that it's probably an end of 4th quarter early 1st quarter 2020 resolution I think one of the people that were saying oh this will be no problem we'll get this fixed in a money issue clearly that was not accurate but based on the noise that we're hearing from the f.a.a. And from Boeing It sounds like we're gearing towards you know more closer to the end of this year at this point what I'm still surprised about is that you have not had calls for the c.e.o. Or anyone to say you have not had calls for any significant fines or anything along those lines I mean this is something that could be easily politicized and I'm a little surprised that it hasn't been now to be can why you think that is. I think in general it's something where for better or for worse it happened overseas and so if these were American citizens who were killed I think we'd probably be hearing a lot more about it then the fact that both of these crashes happened in foreign countries so I think that certainly plays into what. I don't know what what I always find interesting with these kinds of things it's one thing if you have a product that you make that harms someone but you're trying to do something new and revolutionary people generally don't care too much in this case the product that they built it harmed people not because they were trying to do anything revolutionary The 737 Max is not a revolutionary plane it harmed people because they were looking for more profits on an old design that they could kind of eke out of it many think they made a mistake not making maybe a 100 of them and putting them in the air for a year or 2 and then doing mass production not really I mean they they never really do that with any plane that gets developed you have your you have to 3 years of testing that you go through in different flight scenarios and they still went through all of that and the plane was still certified the bigger problem was that they decided to reuse the 737 chassis and start instead of starting from a clean sheet if you start from a clean sheet there's no other Boeing plane that has this system right because if you have a clean sheet design you don't need to because you can put the engines in the right place on the plane Caterpillar shares are down $6.00 they're trading at $131.00 a share they've reported an unexpected decline in quarterly adjusted earnings per share that is not good news the market does not like it when you miss unexpectedly Yes of the adjusted earnings per share coming in at $2.93 versus $312.00 so almost a 10 percent miss that they came in with their revenue was pretty much in line actually beat on revenue but missed on earnings which is the exact opposite of what we've seen in the last decade Normally you have companies that beat on earnings but missed on revenue this caterpillar saying hey we're still making all the sales that we want to be making but we're not making the. Profit that we should be making off of that labor I think Labor is part of it tariffs are the other piece of it. And yeah I mean I think all of that factors in there and neither of those situations are going away any time soon what is interesting Caterpillar did reiterate their guidance for the full year but did say it would probably be at the lower end of that guides and I think that's the real reason why the stock is down 5 percent today the difference in guidance from the height of the low is about 5 or 6 percent so Caterpillar saying we're going to be at the lower end of that great stock's going to sell off 5 percent on that news good news here u.s. And China are set to resume trade talks in Shanghai next week snooze fest this thing and you know the longer it goes on it seems like the less progress they make . I don't think you're going to get anything meaningful coming out of this right now it's still is a case where you have 2 sides that are very dug in on the issues that are important to each other Chinese still haven't bought any farm products either I had seen some reports they'd been picking up a little as I don't know you know the exact numbers or anything along those lines because LHO is not happy about it. Yeah obviously he's somewhere more in the know than I am so I'll trust his word on it. I think the the big thing here is. The Chinese delegation continues to dig in and I've said it before but the number one thing the president has always said was that he believes that Russia cave too easily to the west and he doesn't want to do the same thing and you look at this in the context of everything else that China is doing right now as far as military expansion as far as what's going on in Hong Kong and the continued crackdown on protesters there do you think their attitude changes if Trump wins a 2nd term. Because then they're looking at the same she's going to go through another 4 years with this guy. Now kind of feel the same way I do I think they're banking on a trump law next year and they're saying Ok we can suck it up for for. The dragging out of negotiations Well that's that's kind of like logically. You know the problem you know the prob with this stuff is you never really know what's going on. You think you do we know the players here but. Really if logic would tell you that they probably think they could get a better deal out of the Dems but I'm not sure they could actually be a lot of Trump's policies here are ones that are embraced by the Democrats Well it depends on the Democrat you know I think certainly when you look at how things are being talked about with regards to China on the Democrat side you're seeing. More chatter than we've searched seen previously about how a hard line needs to be taken with China I do think there are a couple candidates that are not necessarily gearing themselves that way but I think it's also too early to start talking about specific candidates just because at this point are they 25 or north of 20 at this point 4 years ago President Trump was still trailing significantly in the Republican primary so I think it's still very early on and as far as specific candidate policies I think that's probably something it's best left until January or February next year next year coming up we're going be talking about the Justice Department and big tech companies. We are. Breaking business news every day right here on the financial exchange radio never. 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Or you can give them a call at 781-641-8691 again dot net or 781-641-8691. Security software to securities America Inc member Finra s.i.p.c. An advisory services offered through securities American Advisors Inc Barry Armstrong representative Armstrong advisory group and the securities America companies are an affiliate in the financial exchange with. Every morning beginning it. Is the financial exchange radio network. The Justice Department is opening a broad anti-trust review into whether dominant technology firms are unlawfully stifling competition adding a new Washington threat for companies such as Facebook Google Amazon and Apple so I have 2 thoughts with regards to this in terms of the direction that this could go in I'm not sure which way it's going to go right now the 1st is that typically when the people who make the rules start talking about changing the rules you need to be careful as an investor because that's one thing that you have no control over it's not something where you say oh earnings are going to be this or that in theory they could come out and say no you can't do x. Y. Or z. And if that's what they saved and that's how it's going to be so you can be very careful when you have added regulation it could be added regulation it could be forced breakup some things along those lines but isn't that that could actually be a good thing for investors can they let's say they go in and they say Facebook you can't Instagram anymore and you can't own Oculus New can't own. Messenger or like a they break that company up if you're a shareholder you're getting shares in those new companies you are but you're also getting the bad parts that you might not want and the parts that don't drive the value right now so with Facebook Instagram is a huge driver of value today is the basic desktop Facebook platform a huge driver a value it's a consistent cash cow but there's not a ton of growth there with that part anymore so on one level you look at this and say Ok Do you have to be aware. This and again a break up yeah you might get different parts of the company what if the Justice Department says hey we're going to put new restrictions on far as what you can have as far as market share for online ad sales where you can sell ads now you're talking about less revenue generation it's a different ballgame the other place that you potentially go with this and this is something you always have to be careful about with this there is a big public groundswell to look at and reform big tech companies you have both Democrats and Republicans talking about this which is something that you don't get very often. These companies have some of the most powerful lobbying groups out there right now though you look at the amount and. Think about how many congressmen they have paid off you look at what they spend on lobbying and things like that in what you worry about in this situation is Ok you've got a legitimate movement that wants to reform these companies but does that almost get co-opted by Congress in some way and they say oh yeah we're putting in these steps to reform it it may be you actually in a blocking competition through some of the regulation that's put in place they could say that you put in a regulation and again I'm spitball here that you have to have one content reviewer for every 100 users that you have on this platform you know well Facebook can afford to do that if I start Chuck book right I can't afford to pay people to review content they like it creates barriers to entry and that's the kind of stuff that you worry about. Tucker and I were talking earlier about you know the $5000000000.00 fine that Facebook received which is by the way less than one percent of their market capitalization and. There's a perspective that that fine was not enough in terms of a penalty against them and I like and what Facebook did you know you can disagree with me but I liken it to Madge and your neighbor sneaks into your house somehow finds your wallet takes your driver's license grabs the all the information off your driver's license and then sells it. You know for the purpose of data I mean it back out go to jail nobody at Facebook nobody at Apple nobody at Google nobody nobody nobody is going to jail. So if we think I'm not saying that what Facebook did is right because I do think that the fine was light as well there but if we think that the Facebook fine is like what do we think about the fact that Equifax and we get hit with 600000000 bucks you know the I think part of that Chuck is the ability to pay the you know like you look at the 600. Dollars you put them out of business maybe I should Yeah I mean that's the facts contribute anything meaningful to society. Credit monitoring credit reporting I mean they're one of the 3 so he put them out of business then you're left with to play it again if if a company does something that causes significant army talk about going into someone's wallet and having all their information and then mishandling it what Equifax did getting back to Facebook here yeah I think there's a real case in to the f.t.c. Commissioners actually said that they thought this was what they actually dissented so they voted against this not because they didn't want to punish Facebook but for 2 key reasons Number one they said that the penalty was significantly too white and they said look the fact that Facebook's did this direct quote The fact that Facebook stock value increased with the disclosure of potential $5000000000.00 penalty suggests that the market believes the penalty at this level makes a violation profitable So that's problem number one the 2nd problem is that they didn't hold Mark Zuckerberg accountable right personally thank you what's that guy still doing ru