Motley Fool Money - The Fed's Next Move, ESPN’s Future

Episode Date: March 17, 2023

Inflation data and the state of play in the banking industry has investors wondering: What will the Fed decide next week about interest rates? (0:21) Jason Moser and Matt Argersinger discuss: - First Republic getting $30 billion in deposits from 11 major banks - The latest CPI and PPI numbers continuing the trend of cooling inflation - Whether the Federal Reserve should raise rates next week (and if so, by how much) or hit the pause button - The latest from FedEx, Adobe, Lennar, and Williams-Sonoma (19:11) John Ourand from Sports Business Journal and the "Sports Media Podcast" analyzes the economics of March Madness, why he's bullish on the upcoming MLB season, and Disney CEO Bob Iger's latest thinking on ESPN. (32:13) Matt and Jason discuss Google raising the price of YouTube TV and share two stocks on their radar: Charles Schwab and Zebra Technologies. Stocks discussed: SIVB, FRC, BAC, JPM, WFC, C, PNC, MTB, FDX, ADBE, LEN, WSM, FOX, WBD, PARA, DIS, AMZN, AAPL, GOOG, GOOGL, SCHW, ZBRA To get your copy of our free report "Top Stocks For Rising Interest Rates" just go to fool.com/interest. Host: Chris Hill Guests: Jason Moser, Matt Argersinger, John Ourand Engineer: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's the Motleyful Money Radio show. I'm Chris Hill, joining me in studio, Motley Fool's senior analyst, Jason Moser, and Matt Argosinger. Good to see you, as always, gentlemen. Hey, Eddie. Chris. We've got the latest headlines from Wall Street. John Oran from the Sports Business Journal is our guest. And as always, we've got a couple of stocks on our radar.

But we begin with the state of play in banking. Last week, the big story was Silicon Valley Bank, and on Friday morning of this week, SVB's parent company officially filed for bankruptcy. The more intriguing story involved First Republic Bank. On Thursday, a collection of major banks, including Bank of America, J.P. Morgan Chase, Wells Fargo, and Citigroup agreed to deposit a combined $30 billion as a sign of confidence in the overall banking system. And while the deal does not include government funding, J.P. Morgan Chase, CEO, Jamie Diamond, reportedly discussed the idea of the First Republic Rescue package earlier in the week with Fed

Chairman Jay Powell and Treasury Secretary Janet Yellen. Matt, I will start with you. Where are we now? Oh, my gosh. What a week. Well, right now, I think, as an investor, you're watching here on a Friday. you just gave the news about the First Republic Bank rescue in the sense. I just think there are too many unknowns. The market obviously believes, investors obviously believe, that there are more problems, more shoes to drop. Because if you look at the performance of regional banks today and how they've performed all week,

and we get the news about Silicon Valley Bank, we got the news about First Republic. But if you look at a lot of regional banks whose deposit bases, whose loan books look a lot different from those banks, I'm talking, I'm talking regions financial, PNC, M&T Bank. You know, in many cases, banks have been around for more than 100 years and been doing business. They've all been killed, and they're getting killed. And so investors are just selling first and asking questions later.

And I actually don't think that's a terrible strategy when it comes to banking. Because with a short-term, full of unknowns, long-term, you have to believe that no matter how this comes out, there are going to be more regulations, they're going to be more costs, insurance premiums are going to go higher. what is the future for regional banks, small to mid-sized banks? I don't know if it's an investable class anymore, and that's what I'm trying to figure out, and I just don't know right now, and I don't blame the investors for selling first and asking questions later. Yeah, you hope that the intention on Jamie Diamond's part and the executives in the industry is to lend some more credibility to the smaller banks. It remains to be seen whether that's going to

stick. I mean, we're clearly seeing a lack of faith in the banking system right now. I mean, they are right to try to contain this as quickly as possible, but optics matter. And I think that's why you're seeing these conversations between Jay Powell and Jamie Diamond and other banking executives. I mean, can you imagine the phone conversation? Mr. Diamond, Mr. Powell on the line for he's, yeah, you tell him to hold. I'll get to him. I know he needs me more than I need him, right? That's kind of probably the way they're thinking right now. It might be, but, I mean, we're talking about 11 major banks involved in this deal. We are. We were talking about this earlier today. At some point,

you know, this is, there is some self-preservation involved here. There's no question. They don't want to be in a situation that they were in 15 years ago where the phone call coming from the Treasury Secretary or the Federal Reserve Chair at the time is more along the lines of, hey, I need you to buy this troubled bank as opposed to go get some cash out of the register and deposit it into the bank. Yeah, I mean, these deposits that were put down for First Republic, and you're very You're right. The return on that could mathematically be zero for these 11 banks, right?

I'm certain they are thinking longer term. They're thinking, listen, we've got to shore these banks up. We've got to keep credibility within this space, and we've got to prevent this thing from really spreading. So I think they're absolutely taking the longer term view here, which makes a lot of sense. When you look at First Republic and you think about what we've seen just over the course of one week with this bank, we've gone from everything is fine, don't worry, to, uh-oh, it's a bank run, to, uh, never mind, we're good, to, hey, a $30 billion backtrub from our industry peers to what, now we're suspending our dividend, uh, wait, now we probably are going to need to be acquired. All in the period of one week. And I will also remind you that a week ago, First Republic

published an 8K on the front of their website, claiming that everything was okay. And I'll quote you some of the numbers they quoted from this 8K. They said their consumer deposits have an average account size of less than $200,000. Business deposits have an average account size of less than $500,000. Within business deposits, no one sector represents more than 9% of total deposits, with the largest being diversified real estate, Maddie. Technology-related deposits represent only 4% of total deposits. I mean, they put all of this information out there a week ago to instill confidence that clearly didn't stick. That's it. It's confidence. It's confidence. and what you said earlier about faith in the banking system. Right now, there's very little

right now. And think about beyond the banks themselves. Think about the depositors. Think about small to mid-sized businesses across this country. Real estate, for one, that you mentioned. But even if you're an industrial company or a health services company, you've got to likely have deposits that are uninsured at a bank, a regional bank, and you're trying to think to yourself, what's going on with my bank? Do I just need to pull those deposits out? Do I just need to make sure I'm protecting, I'm protecting my balance sheet? And I think those are, questions being asked all across the country. And that's why the tentacles of this thing can really reach out really wide. And there's so much uncertainty. And we just don't know where it ends.

Well, it throws a lot of just rational thinking out of the window, right? I mean, rationally, we know our deposits are protected. I mean, but that flies out the window during times like these. I mean, everybody just gets into self-preservation mode and wants to ultimately protect themselves. And it's very understandable. It's your money. Nobody should care about it more than you. And you can't ask depositors, especially individuals, to analyze the creditworthiness of their bank. I'm not going to say, well, should I be worried about my bank and understanding what my bank's exposed to because, gosh, my deposits can be at risk. You can't ask that of depositors, which makes this situation so precarious. Maddie, you talked earlier about the regional banks and sort of, they are, at least for the moment, in the stayaway category for you personally as an investor.

Where are the big banks in this? Are there enough question marks out there that you think? Yeah, I'm not necessarily rushing to invest in those either. Well, I think because you would think, well, that's where the capital is going to flow. These banks are higher regulatory requirements, so they're going to be fine, and that's maybe where I should be thinking about investing. But I think the problem is the long-term picture is very cloudy, because you're talking about overall faith in the banking system and what the regulatory changes are going to be. So even the big banks are probably going to face higher costs, which I think is why companies like JP Morgan, Bank of America are so interested in trying to prevent First Republic Bank from really going under on a depositor basis because they're worried about the greater implications for their industry

over time. No matter what, it's going to be costlier in the future. That makes it harder to invest. This week, we also got the latest data related to inflation, the Consumer Price Index and the producer price index numbers for February. Continue the trend that we've seen for months. Inflation is cooling off. And with that, Jason, next week, all eyes are going to be in the Federal Reserve's meeting and what they decide to do. with everything related to inflation and everything related to the banks that we've talked about when it comes to, do they raise interest rates? And if so, by how much?

I mean, that is going to be the topic de jour for these next few days. And I think rightly so. I mean, it's an interesting exercise to go through in your mind. We were talking about it in production. You hear every perspective, and it's like, yeah, I get that. That makes sense, right? And you hear someone with the contrarian perspective. Yeah, I get that to it. It makes sense, right? It's hard to figure out exactly what they will do because this is such a unique situation. I mean, we've seen rates rise at such a rapid pace. I mean, it's the fastest we've seen this push and interest rates since back to the 1980s. It's something that's not normal, right?

I mean, the last three years have not been normal. And it's kind of all coming to a head here. It does seem like we're seeing signs that inflation is easing, right? I mean, the producer price index numbers there indicate that things could be cooling off at least a little bit. I don't know that we necessarily need to make a call, but my mind is thinking that if I was going to make a call here, I personally would probably say, you know what, let's just hold tight this time around. And the main reason why, let's not cut, let's not bump up, let's just kind of leave things the way they are, right? Because what we're seeing is still plenty of uncertainty, right?

There's enough uncertainty to my mind that for Powell and company to be able to say they can predict the ripple effects of their policy decisions here over the last year, for them to say they can predict these effects over the course of the next six months, much less six days, I think it would be difficult to take that very seriously. And so I think that it would make sense to just stand down and sort of reassess the. next meeting. That makes sense, Jason, but I just, it's the prisoner's dilemma, right? It's like, Powell's thinking himself, if I know what investors know what I'm thinking, but then I'm thinking this, then what are they thinking if I do this? And the thing is, if they hold Pat, like, and I think that is probably a sound thing to do, given all the uncertainty, right? But if you

don't raise 25 basis points, are investors going to say, well, wait a second, wait, wait, are you, you saying there's a problem? Are you admitting that? There's a problem here. I need to be worried. The Fed has changed course. Okay, there are bigger problems here than I knew about. But mathematically, there's not a huge difference, literally and figuratively, between holding Pat and raising it a quarter percent, which leads to this question. We talk all the time about companies reporting earnings, and the earnings results are one thing, but the guidance is something else, and that's what guides today. Is the language that we get out of the Fed next week more important than what they actually do. Is the press conference? And I hate to say that, but it does

make me wonder, is it essentially the Fed interest rate version of that where it's like, whatever they do, the language around whatever they do is more important. I think that's right. And it's just one of those things where it's, we wordsmith every Fed statement, right? We look for subtle changes, word to word, you know, month a month, right? And this is going to be the ultimate one, right? Because we're just, that's what investors want to know is exactly what the Fed is thinking and the way they disclose things. And, yeah, it's going to be parsed to death. Yeah, it's the math.

And I think this is what makes investing in what we do for a living so fun and so fascinating because there's the mathematics involved, right? There's the objective answer. But then there's the psychology that comes with it. And that obviously is a much broader brush. We play the weighing game. We try to at the Motley Fool, long-term weighing game. We weigh the value of stocks.

but investors are voting right now in the short run. They are voting like crazy, and the votes are, you know, they're being counted in so many different ways right now. Yeah, but ultimately you have to ask yourself, is that psychology? It sure feels like there's a bit more glass-half-empty out there right now. Is that offering up some opportunities? And I think we all would agree there probably are some opportunities that are starting to bubble up to the surface.

After the break, we've got the latest in the housing industry, retail software, and more. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser and Matt Argusinger. The cost cutting that has been going on at FedEx appears to be paying off. Third quarter profits were much higher than expected for the Bellwether business and shares of FedEx up on Friday, man. That's the key question, Chris, for every company actually right now. But in FedEx particular, it's could they cut costs fast enough and raise prices fast enough to offset the big slowdown and volume that they started to see last year? right now, the answer is kind of yes. Because if you look at the pricing power they're getting,

particularly in the ground and freight business segments, they saw revenue per shipment rise 11% there. The guidance that they gave was much better than expected. I mean, they were looking at a range between $13 and $14 a share for the entire fiscal year, now ranging $14.60 to $15.20, so roughly $15 a share per earnings. So clearly it's working. I just think the question for FedEx is they're doing all this fiscal. cost-cutting and efficiency, will that matter if revenue, the top line doesn't come back? Because this is an operating leverage business all the way, right? And so that's down.

They're still seeing big slowdown in their express business, which is the biggest part of the business, almost 50% of revenue. That's got to come back. I think today, though, based on those earnings projections, you're getting FedEx at roughly 15 times forward earnings. It's a below-market multiple. They've been raising the dividend. They were absolutely hammered last year.

So you're getting a pretty big break there. So if volume started to come back, the economy turns around, FedEx is a leaner, meaner machine that could be producing a lot more cash flow. Shares of Adobe up 7% this week after the software giant's first quarter results came in higher than expected. Adobe also raised guidance for the full fiscal year. That is the one-two punch we like to see. Yes, in a world where budgets continue to tighten and companies are playing more defense.

Adobe, I think they really did report a very encouraging quarter. It's been a tough stretch for the business and for shareholders alike, I think really by any measure over the last several years. But revenue, $4.6 billion, it was up 13% from a year ago, excluding currency impacts. You saw non-gap earnings per share of $3.80 that was up almost 13% as well. They saw some big customer wins in the quarter with Accenture, BBC, Disney, IBM, emphasis, Nintendo. And it was a nice quarter for their document cloud business, which grew revenue around 16% from a year ago. They continue to do a good job in repurchasing shares and bringing that count down. It's down about 6 percent from 2018.

And as you mentioned, I mean, raising guidance, they're calling for earnings per share of $15.45 at the midpoint. And that value shares today at around 23 times full year estimates. Historically, I would argue an opportunistic look at this stock. Now, the wild card, the big question mark, still is this Figma acquisition. That has not happened. It's not clear that it necessarily will. Management is optimistic that it will. They're continuing to go through the process and meet the requirements that regulators are asking. They see this

closing by the end of this year. Again, it's still a question mark as to whether regulators will actually let it happen. Lenar is the second largest home builder in America. First quarter profits in revenue were higher than expected. But Lenar said that orders for new homes fell. What do you make of their lives. Yeah, with the homebuilders and Lennar, I think right now, it's a matter of kind of balancing, you know, demand against trying to protect margins. We know demand is lower, obviously, and new orders were down 10%. I like to look at backlog, which was down 29%. That's a pretty big drop. Cancellation rate was 21%. That's up from 10%, which is more typical of homebuilders.

So the future right now is they're not building a lot of homes or not going to be delivering a lot of homes. But I think that's, it's with home builders right now, with Lanar, it's more about design. I think it's protecting sales price. If you look at their average sales price of homes in the quarter, $448,000 versus $457,000 a year ago, not a huge drop. I think a lot of us following the housing market would say, wow, I expected that to be a bigger drop. So they're protecting price, protecting margin. And by going slower now, doing less business, they can, you know, they can sort of recharge when demand returns and there's, you know, better pricing power. So tough in the short term, but, you know, Lenar makes the argument that a lot of homebuilders do, which I agree, which is that we have a national shortage of housing still, even after this housing bubble that we saw. And it might even get exasperated. So there's still long term a pretty good demand outlook for homes.

The fourth quarter capped what William Sonoma called a year of record revenue and profits. Despite that, shares down a bit on Friday after the report. Jason, you look at the chart. Wall Street is not rushing to reward. William Sonoma for their last 12 months? Well, maybe so, but they have rewarded them for the last three years. It's been a very good stretch for shareholders, this shares up 250% over that stretch. That seems like it makes sense, though. I mean, people had a lot of money to spend over the last few years. And so I think the question really is, what does this story look like going forward? That remains to be seen because it's so dependent on the consumer. But the business itself, fundamentally doing very well. Revenue was essentially flat for the quarter, and gross margin was down. a good bit from a year ago that was driven by higher shipping and freight costs, occupancy costs,

whatnot. So not terribly surprising, and that ultimately resulted in earnings per share of $5.50 also basically flat from a year ago. But they continue to grow the business, and they are taking this business in a number of different directions. You see e-commerce that now represents fully two-thirds of overall revenue. And I think a neat dynamic that probably most investors aren't considering is the company's B-to-B business, right? The business-to-business, these consumers, you're talking about, William Sonoba being a furnishing company for restaurants and hotels and football stadiums. They're growing this business considerably closing in on a billion dollars in revenue for the company

and grew 27% from a year ago. So I think putting that together, the share count down better than 20% over the last five years as well. Again, a lot depends on the future of the consumer here, but this is a business being run very well. All right, Jason Moser, Matt Argersinger. Guys, we'll see you a little bit later in the show. March Madness is exciting for sports fans, but is it translating into ad dollars for the TV networks? We'll get into that and more with our guest, John Orand, right after the break.

This is Motley Fool Money. I'm Chris Hill. As March Madness gets underway and Major League Baseball is just around the corner, seems like a really good time to check in on the business angles related to the sports world with our friend John Oran. covers media for the Sports Business Journal, and he joins me now from Washington, D.C. John, thanks for being here. Anytime, Chris. So it occurred to me this week that every year before the Super Bowl, there's a lot of conversation around the advertising. And some of that is because

there's genuine excitement about what are the ads going to be, the creative of advertising. But a lot of it is about the money and how much the network is going to make off of a 30-second commercial, that sort of thing. And this week for the first time, I started to think, well, wait a minute. The NCAA basketball tournament is a big event that lasts for the entire month. How are the economics for the networks involved in the NCAA basketball tournament? Because my hunch is they're looking pretty good. They are looking great.

In fact, Turner, the NCAA tournament is so unique. The Super Bowl, Fox had it this year. Fox sold the advertising this year. and it's network by network. The tournament is shared by CBS and by Turner. And you have the ad sales groups for each network who usually are competing against each other, now working together.

And it has been working out really well this year to where they brought in a record hall of revenue more than a billion dollars in just advertising revenue. And the advertising around the NCAA tournament and doesn't have as much panache as, say, the Super Bowl where people wait and look. But they are unique. They have, you know, these commercials that stars a lot of the talent. And so you'll see Samuel Jackson, Charles Barkley, and Jim Nance, you know, on a road trip.

And, you know, there are different commercial campaigns that are really just launched off of the NCAA tournament. And so the business behind not just the tournament, but all of college basketball this season has been really healthy. Well, I remember when you and I talked last year, and we'll talk more broadly about ESPN in a minute, but I remember you saying when we talked last year that one of the best television deals when it comes to the rights of live sports is ESPN's deal with the NCAA. And if you think, John, not just about the men's basketball tournament, but the women's basketball tournament and the compelling storylines there, it really does seem like

the economics are working out very well for the television networks. Oh, and especially that ESPN does not pay for the women's basketball tournament. They pay for this whole bucket of rights that include everything from like college rowing that they stream to college lacrosse to the college World Series and the NCAA women's basketball tournament. What makes me so bullish about the next couple of weeks with March Madness is that there's been, you know, over the last decade, two decades, college basketball has struggled somewhat. The play isn't nearly as good. Do you have people going directly from high school to the NBA or staying for one season and then going? So the idea of having like a coach K with a player for three or four years and building like a really good. good, high-quality team that hasn't worked. Well, that doesn't exist anymore. And ratings generally

have been soft. Like the March Madness is so popular, the theory it was, that it devalued regular season. Well, this season, Fox set an all-time record with viewership. CBS was up. ESPN was up. Fox had the most watched basketball game in its history. And on the women's side, ESPN had the most watched women's game in history as well, South Carolina game. And ratings were also up over there. So everything is working out really well. The business behind college basketball for the 2022-23 season was very healthy. Let's move on to baseball because a year ago at this time,

you and I were talking about the animosity between the MLB players and owners, There were serious questions about whether the season would start on time. Here we are a year later, and the story is about the rules changes implemented to speed up the game. Do you think, you know, the early reviews are good. And I'm wondering if you think this is going to translate into higher ratings for all of the networks involved in Major League Baseball. I think that's almost a certain bet that that's going to happen. reports coming out of spring training and it's hard to look at spring training and see if it's going to translate to regular season. But the reports are they cut off about a half hour of game time.

There have been viral videos about a pitcher that gets all three outs in an inning in the same time. It took a pitcher two seasons ago to make one pitch. The game moves a lot quicker and there's different pacing. And that translates to television as well. there's an expectation because they got rid of the shift and they increased the size of the bases. And that matters because you're going to get more stolen bases. You're going to get more people trying to leg out doubles. And there's going to be more exciting plays in the field than kind of the traditional homerunner strikeout,

which has been a problem with the last little bit. TV networks expect the ratings nationally to increase. I don't know what significantly is, but they expect them to be up from last year. The only, it's baseball. So, of course, there's a red flag, right, Chris? The only red flag right now is locally where Diamond Sports, which owns all the Bally Sports RSNs and has deals with close to, I think it's 17, close to 20 Major League Baseball teams.

They filed for bankruptcy. Then there's Warner Brothers. which own four regional sports networks, including the Pirates in Pittsburgh and the Rockies in Denver. And they've told teams that they're just going to walk away from this. And then the rights are going to revert back to baseball. So right now, everybody's still going to be able to see those games locally. But how that transpires and what happens in July and August is a question that I'm going

to be reporting on until July or August. Well, and it seems like part of the challenge from Major League Baseball and the networks at a national level is, one is the length of the game. And so if you live on the East Coast, you're unlikely to stay up for a West Coast game. If the East Coast game takes three and a half hours. So, you know, they're addressing the timing challenge. But it seems like it could have a good ripple effect when you think about some of the biggest stars in Major League Baseball are on the West Coast. Yeah, and the idea that I could see possibly the first half of a game with the Mike Trout in Anaheim or all the stars,

Matt Manny Machadoes in San Diego, the Dodgers have a stock team again. And they've been, you know, those have been games that had started on the East Coast at 10 p.m. And end well after midnight, well, well after 1 a.m. There are not a lot of friends of mine in the East Coast that are committed to stay up to the end of those games. One other change since the last time you and I talked. Bob Eager is back as the CEO of Disney. One of the big questions he is being asked about are the company's plans for Hulu. And increasingly, a question he's getting asked about is the fate of ESPN. What are you hearing and where do you think this story is going?

The question about ESPN has been around for a while. And it's funny because from the early 2,000 to right before the pandemic, that's a question that would have been laughed at because ESPN drove that entire business, while with cord cutting and the rights fees that ESPN is paying out, all of a sudden, like, ESPN is, its profits are not coming in as wildly steep as they had been. So what Iger had decided to do is, you know, he took Disney and he basically cut it into three different parts, and one of those parts is ESPN. So ESPN is almost like, it's still a part of Disney, of course, but it's almost like a standalone company right now where it's responsible for its revenues, for its profits, for its expenditures, and it has to exist on

its own. And people inside ESPN insist to me that that is not a step toward selling this piece of ESPN. Rather, Bob Iger is totally committed to ESPN. P.N. Bob Eiger and Jimmy Pitaro, who runs ESPN, have an extremely close relationship. I would be very surprised if anything happens within the next two years of Disney's sort of unwinding ESPN from its books. And not only would I be surprised, but my sources were generally on target would be dead wrong. Does the increase of non-traditional broadcast companies, Apple Plus, Amazon getting into live sports, does that increase the pressure on Iger and his team to get this right? A little bit. I will say that that's a trend that I've been writing about a ton.

As you look, Amazon has Thursday night football. Apple, of course, just did a major league soccer deal. I think that there's a big question mark about the appetite for Amazon and for Apple to do these volume deals that ESPN has been known for. Amazon really likes having Thursday night football, one package of one game a week of the NFL. If you look at what Amazon does in England, they have a couple of really unique deals with English Premier League, including Boxing Day games, you know, on the 7th.

26, every Premier League team plays a game, they bought that package of games. So you have to go to Amazon to watch that. Amazon isn't particularly interested in having all of the college basketball that ESPN has. Like all of the, you know, you name the sport, all the NBA, they would like an NBA deal and they would like an NBA package, but they don't want all that volume that ESPN has. And there's also, while there's an unmistakable trend going towards streaming, I will tell you that in 233, you will be watching the NFL on broadcast television. 2028, the Stanley Cup playoffs, every single game will be available on linear television. The NBA deal that's coming up. They're redoing a deal. Their rights are up in 2025, I guarantee you that their championship series will be on broadcast television until

the end of that. So this isn't a Netflix situation where they pretty much decimated the entertainment programming on cable. This is a situation where the sports leagues still need that reach that traditional linear television provides. I know you're a proud graduate of the University of Maryland. So as March men as heats up, good luck to both the men's and the women's teams. I think I'll be happier with the women's results than the men's. You can hear him every week on the sports media podcast with Andrew Marchand of the Newarkos, John Oren. Always great talking to you. Thanks for being here. Thanks, Chris. Coming up after the break, Jason Moser and Matt Argusinger return, they got a couple

of stocks on their radar, so stay right here. You're listening to Motley Full Money. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So, don't buy or sell stocks based solely on what you hear. Welcome back to Motley Full Money. Chris Hill here in studio once again with Matt Argusinger and Jason Moser. We talked earlier in the show about interest rates and what the Fed might be doing next week. And let's face it, when interest rates rise, that is a good thing for certain industries.

Our investing team has put together a special report highlighting five stocks. they think are fit for this environment right now, and it's free just for trying out Motley Fool Stock Advisor, which comes with its own membership feedback guarantee. So you get 30 days to decide whether Stock Advisor is a good fit for you. And even if you cancel, the special report is yours to keep. Just go to fool.com slash interest to get your copy of the report entitled Top Stocks for Rising Interest rates. Again, go to Fool.com slash interest. On Thursday, Google announced the price of YouTube TV is going higher. For those unfamiliar, YouTube TV is Google's answer to cable television subscription packages,

and the cost is moving from $65 a month to 73. And Matt, Google's reason is pretty simple. Content costs are going up, so the price of YouTube TV is going up. Makes total sense. It does. And I doubt, and we have Jason here who's a subscriber himself, I doubt many subscribers are going to cut the... I guess I'm not cutting the cord.

What do you do with YouTube TV? Turn off the subscription, you don't cut the cord. But anyway, no, I think that's fascinating. And I think, you know, the cable bundle in a way is kind of come back a little bit with YouTube TV and Hulu TV and others. But what I've heard, and I'm not a subscriber, is that it's a much better experience. It's more seamless. It's good quality, good content. And, by the way, we know that YouTube TV won the NFL ticket contract.

So, obviously, that's probably going to be an additional cost from what you get just with the basic YouTube TV package. But I'm intrigued by it, and especially to see what kind of impact the pricing increase is going to have. Jason, I don't have YouTube TV, but I'm an Alphabet shareholder, so I approve of this movie. Me too, me too. And a small correction, I am a subscriber to Hulu Live. Oh, I am sorry. But the very same thing with the same dynamic playing. Great service, but those costs just continue to go up.

I mean, they have raised the price, I think, every year since we started a subscriber. about six years ago, but we continue to pay it because it is a very good service that gives us access to virtually everything we want to watch. All right, let's get to the stocks on our radar, our man behind the glass. Dan Boy is going to hit you with a question. Matt Argusinger, you're up first. What are you looking at this week? Chris, I can't take my eyes off Charles Schwab, ticker S-C-H-W.

Now, we talked earlier in the show about the regional banks. Charles Schwab is not a regional bank, but it does own a bank and operates a bank. but this is a blue-chip company in the brokerage space for investing services. It's an incredibly recognizable brand and incredibly sticky as well. I mean, it's one thing if you're a customer at a bank and you're going to pull your deposits out. Are you going to do that in your brokerage account, in your retirement accounts with Charles Schwab? Probably not. So this makes Schwab's business far more stickier.

On the bank that they own and operate, more than 80% of their total bank deposits fall within FDIC insurance limits, their bank loan and deposit ratio is just 10%. For the average bank, it's over 60%. So I don't understand why Schwab is being thrown out in the bathwater, so to speak. It's down more than 30% in a week. Essentially, five years worth of gains wiped out in a second. So it's caught my attention. I'm not saying it's an fantastic opportunity.

I'd like to learn more, but it's got my attention. Dan, question about Charles Schwab? Not really a question, Chris, but I'd like to commend Matt's bravery on picking a $100 billion company for stocks. on our radar today. Well, you know, it's not every day, Dan, that a $100 billion company falls 30% in a week. I was going to say, I mean, a week ago, it was a much higher than $100 billion. Right. Jason Moser, what are you looking at this week? Yeah, digging a little bit more into Zebra Technologies, ticker as ZBRA. Zebra, they provide enterprise asset intelligence solutions.

Isn't that a mouthful, Dan, in the automatic identification and data capture industry. And so ultimately, the business itself is divided into two parts. There's the asset and intelligence and tracking side. They sell things like the printers that produce those high-quality barcodes and labels. And then you also have the enterprise visibility and mobility segment. They sell mobile computing products, barcode scanners, RFID, right? That's radio frequency ID, Dan, readers, machine vision, cameras, all sorts of cool stuff. This is a company. They're poised to benefit from StrongTal ones in the coming years when you look at things like IoT, cloud-based data analytics, intelligent automation, mobility, computer vision. I could go on and on, Dan,

but I'll stop there. Real quick, before I go to Dan, is this one of those businesses that is competing against larger tech companies that have their own version of what Zebra is doing? I'm thinking about a company like Honeywell. Seems like they would have their version of this. It absolutely can. You definitely will see some homegrown solutions, but it is a very, very big market. Dan, question about Zebra technologies? Not really a question, again, sorry, gang. But I'm really loving the trend that Jason is bringing kind of boring tech companies that do a good job at what they do to stocks on our radar. You're very welcome, Dan. I mean, we say this all the time. Boring is beautiful, right? When it

comes to investing, boring is beautiful. Yeah, but I got kind of a backhanded compliment from Dan. Jason got a real compliment. I don't know how I feel about this. Well, you know, Dan's been storing these up. Well, you know, he's been on leave recently. He's back from that. So he's, you know. It's back to form. He's back to form. Dan, two very different businesses. You got one you want to add to your watch list? You know, I'm actually going to go Charles Schwab this time because you guys are right. Not every day. It is a $100 plus billion company fall 30% for what feels like, you know, not really earned motives or reasons there. So I think Schwab's very interesting. Right on, Dan. I'm just concerned. that when Matt said he can't take his eyes off Charles Schwab, that we're going to get like an angry email from Mrs. Schwab. Oh, I don't know.

Chuck. Chucky is pretty attractive. Oh, home-wrecking Argersinger over here. All right. Jason Moser, Matt Argusinger, guys. Thanks so much for being here. Thanks, Chris. That's going to do it for this week's Motley Full Money Radio show. The show is Mixed by Dan Boyd. I'm Chris Hill.

Thanks for listening. We'll see you next time.