The Weight-Loss Drug Boom Hits Its Middle Age: What the GLP-1 Economy Means for Your Portfolio

This is Invest Talk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero. Good afternoon fellow investors and welcome to the Tuesday, September 2020, September 22nd, 2026 edition of Invest Talk. Ooh, hopefully things got smoother than that in Trow did. As always, we got a great show for you planned today, including a great focus point, important stories, and answers to your finance and investment questions. Additionally, at the top of the show, I did want to give you a bit of a quick reminder for you to mark your calendars for October 24th. It is a Saturday, and you are invited to join the KPP team as well as guest experts for our first in-person retirement summit. This is a special event and it is free of charge, but seating is limited, so pre-register now at Invest Talk.com. Alrighty, with that being said, before we talk about today's market performance and run down our show topics, why don't we tackle this color question now? Hey Justin and Luke, Jeremy from New Jersey here, long time listener, I just want to say real quick, you guys actually inspired me to become a financial advisor, which is awesome, and I love it. So just wanted to get your insights on a ticker EME, Mcore group, and it looks like an interesting company. You know, I kind of want to pile money into it, so I don't want the figures thought. Jeremy, I'm glad to hear that you hopefully not just through us, but through other experience as well have found a love for investing that you've been able to transition to a career. So it's great to hear that. We're so happy to hear that we were a small part of that journey. That being said, let's take a look at ticker EME, which is Mcore, and Mcore is actually a name we hold for clients in one of our strategies. It is a mechanical and electrical construction services company. So I think about electrical systems, mechanical systems, each of X, something that's certainly been doing very well, recently plumbing and fire protection for data centers as well, and also it has a bit of a diversity. They got industrial plants, they got healthcare facilities and government buildings. Most recently, they had a record quarter across nearly every single metric. Revenue was at 5.15 billion. That was a quarterly record, it was up 20 percent. Year over year that beat the consensus of 476, 4.76 billion by nearly 400 billion, diluted earnings per share at 906. That beat the 730 estimate net income at 403. That beat the 302 estimate. So pretty impressive stuff, and a lot of this is organic growth. Once you adjusted for some of the acquisitions they made, it was pretty broad based across segments. It was around 18 to 20 percent growth is what I'm seeing here. And their balance sheet quarter end had 924 million dollars cash on hand. And at the same time, for guidance, they raised guidance on revenue. They raised guidance on diluted EPS. They raised guidance on operating margin. So all in all, pretty solid quarter and decent upgrades. So understandably, the market did in fact appreciate that. Geared a date that companies up 23.65 percent, about 15.35 percent over the past 52 weeks. And up about 12.9, sorry, apologies, opposite direction. I meant to say in spite of that, it's actually down 12.93 percent over the past three months. And a lot of ways coming back down from the strong momentum that it's had since 2022. I mean from 2022 into mid to 2026 about June. This thing was just on a tear. Now it seems to have found a little bit of resistance momentum weakening a bit. But it's put itself into a position where its valuation is now around its average. And so for me, coming off of a record quarter, that's something that is certainly very attractive to somebody who might want to put money into this thing, especially for the first time. Now I do want to say, right? Something that I didn't mention is his record backlog. I just we like this company. I can't really put it any other way. We hold it for clients and it's now a bit more of a reasonable valuation than it has been in quite some time. Thanks to the call. It's like we got a live call. It's going to Chris from Maine. He's got a question on MDT. Yeah. Hey, Luke. Thanks for taking my call. I always really appreciate everything you guys do. Yeah, common about Medtronic and there are many med exchange that they're offering at a 7% discount. I know you guys did hold MDT in some of your accounts. I was just curious what you guys are considering doing without a offer. Sure. That is a great question. We actually were taking a look at that today for those who don't know Medtronic is a name that we do still hold for our clients in a couple of our strategies. It is one of those global leaders in healthcare technology. They have really expanded more recently in their heart segment. And it's done certainly a decent compared to the industry. Right? It's still down about 5.5% year to date. It's outperforming healthcare by about 2.8%. Now for this many med exchange offer, what is happening is Medtronic is spinning off its diabetes business, MiniMed, and to take our MNED as a separate public company. So you can exchange your MDT shares at about a 7% discount, meaning you're getting essentially a $7 worth of MiniMed for every dollar of a Medtronic that you tender. It is something that was launched in September. So there's going to be up to 225 newly issued MiniMed shares. And generally speaking it is it is tax free for U.S. federal income tax purposes when you do this type of exchange. The reason why they're doing this and I from a shareholder of Medtronic perspective, I like it is because the diabetes business has really been a drag on the company. And so Medtronic essentially wants to spin off that poor segment and focus more on what's been really strong, cardiovascular, surgical, robotics, and neuroscience as well. Now it's difficult because you're looking at this on its face and it is moving part of its business that is not doing well. And that's why they are trying to entice shareholders with this type of discount. You immediately get a you know 7% discount. So if you believe that the diabetes insulin pump market has long term growth, this is a bit more of a focused way to do it. I would say if you, it kind of depends why you're invested in this name, right? If you believe that the company is going to be better off without it, that's kind of one of the reasons why you would want to hold on to Medtronic. We haven't fully made a decision here yet. But on its face, a discount like this exists because there is risk. So are they compensating you enough for the risk that you're taking on from this spin off? We are still doing some analysis. Certainly, you know, this doesn't happen too often with individual companies that you hold. So it does present a bit of an interesting situation. So for us, haven't made a decision yet. But hopefully that provides you some context with what's going on here and what the real risks might be. Thanks for the call, Chris. Yeah, great. Thank you very much. All right. We got a great show for you today. But I do want to mention yesterday's show where we talked about the AI stock sell-off in 2026. And whether or not that was an overreaction or a real warning sign for investors, we also answered a question on ticker, MRNA, which is MoDerna Inc. If you haven't missed yesterday's episode, I encourage you to check it out if you want to hear answers and explanations on both of those topics. And remember the best way to never miss an episode of Invest Talk is to subscribe wherever you get your podcasts. Now on to today, where we have a lot of ground to cover in the next 45 minutes, including my main focus point about the weight loss drug boom and how it's kind of hitting its middle ages now, leading to the question, what will the GLP1 economy mean for your portfolio? The obesity drug market is shifting from scarcity of fierce competition as new pills direct to consumer pricing and looming patent inspirations up in what was once a two-player race with one in five US households now, including a GLP1 user. We're going to talk a little bit about what the next phase means for healthcare investors and for the food, apparel and employer health costs, these drugs are already reshaping. We also have a couple important topics for you as well, including one on the freight squeeze that is likely to affect pricing on holiday shelves, financial health networks, new pulse study that was published this morning, and should be of time at the end of the show, what corporate insiders are doing with their shares. We also have some voice bank calls ready to play, and some questions that came in from the comment section of the Invest Talk YouTube channel. But right now, we are going into our first break. It is a quick one. Please remember you can call any time and leave your questions on the Invest Talk voice bank, and either if you're listening to our live stream or on AMP 12. 20th of an area. Give me a call now at 888-99 chart. When we come back, we'll talk about today's market activity. This is Invest Talk. Luke Guerrero is here taking your calls live. 888-99 chart. Let's talk a little bit about the market today. It was a bit of a mixed bag overall. You have the down-negative, down 36 basis points. The S&P finished the day flat. The NASDAQ up 45 basis points, Russell 2000, up 51 basis points on the day, and things were kind of all over the place. I mean, you had the AI theme extending the Monday's rally. You had some eyes doing well, memory was up, home builders, airlines, home improvement, some of the best performers on the day, and then you had more of the retail-focused names like your credit cards, your entertainment, your communications, some of the worst performers for the session. Inside Treasuries didn't change much. You know, it was pretty choppy trading. Yields were down, less than a basis point at the short end. At the same time, the dollar index was up 10 basis points. Gold finished down 20, silver, up 20, and crude oil settled down another 2% remember yesterday. It was down about 4. Overall, I mean, not really much drivers here. You had oil in the defensive again with some supply dynamics. You had from a geopolitical perspective, some hopes that the UN summit may provide some diplomatic off-ramps for what's going on, and then there's more push and pull surrounding rates. You had some hawkish post-FOMC Fed speak, and then of course that oil move affecting rates as well. From a data perspective, 80P private payrolls estimated weekly at 20,000 a week for the four weeks through September 5th, prior week also revised up to 16.75,000 from 16.25. Wednesday brings flash PMIs for September, initial claims and August new home sales out on Thursday, August durable good orders, and a final university Michigan consumer sentiment for September will be out on Friday. We're going to do another live call, Paul from Walnut Creek. Looks like you got a question on GLW. Yeah, thanks for taking my call. I appreciate it. Yes, I have shares in a balanced portfolio that I was going to hold for long term, but I have a loss in the stock right now, and I just wanted to see your opinion on if it's something you'd hold or I could sell it and take the loss. I have some gains with any docks that anyway, but just wanted to see what you think of that stock going forward. Yeah, I mean, GLWs had a pretty solid time generally since 2023. I mean, momentum has really been strong. Up until about June of this year, we're dropped off from 221 where it now trades at 159. Now, in spite of that, it's still up 82% over the past nine months or so. It's up 101% over the past 52 weeks. When you look at earnings, I mean, core sales was solid. It was up 17% year over year. They guided it higher. EPS was guided higher as well. I'm sorry, actually below the consensus before earnings. So, over the past six months, I mean, despite both of these beats, the share fell from the report. I think one of the reasons why is because valuations are a bit hefty, about 39 to 40 times priced before looking earnings right now. I think if you're looking to harvest some losses, now might be a good time to do it because the next catalyst is likely to be earnings in November, which puts you just outside that wash sale window. So, given we're coming to the end of the year, being a bit more tax conscious, you know, we're seeing from a momentum perspective, this thing start to peter out a little bit, start to range a little bit. So, if you wanted to harvest some losses here, I think now might actually be an opportune time to do. Thanks for the call. I folks were headed to another break. When we come back, more answers to your finance and investment questions here on Invest Talk. Investing can be daunting, and doing it all by yourself can be unmanageable. The best time to get a second opinion is before disaster strikes, not after. If you've built a portfolio over the years, but aren't sure whether it still fits where your headed, KPP Financial can help. Our team can review your current investments, identify potential risks or gaps, and give you a clearer picture of where you stand. Schedule your free portfolio review at investtalk.com. Container freight rates from Shanghai to New York just hit $10,394 per 40-foot equivalent unit. That probably means absolutely nothing to you, but it's important because it's up 7% in a single week. Shanghai to L.A., 7000-712, that is up 5%. I think that makes it a little bit different from the usual noise you see in the shipping market, is that Trans-Pacific rates surged up to 7% in the same week that Asia to Europe rates fell up to 9%. This is a U.S. specific squeeze, and it's being driven by carriers cutting sailings and not by a demand boom. 79 blank sailings have been announced across major east-west trade routes over the next five weeks, 11% of the 721 plant. Trans-Pacific eastbound accounts for 52% of these cancellations, announced blanks are up 56% week over week. Carriers are pulling ships, off routes in order to keep rates elevated, the same playbook they ran during COVID, except this time demands normal, they're just trying to choke supply. The cargo being booked at these prices right now? Your holiday inventory, the gifts on shelves in November and December, the electronics for Black Friday, the apparel for holiday parties, every retailer loading containers at $10,000 of AUX, is making a calculation about what the cost means for their queue for margins and the timing squeeze is about to get worse. Mid-Autumn Festival runs September 25th, 27th in China, gold in a week, October 1st to 7th, Chinese factories shut down or slow down dramatically during both of these time periods. Bookings are being compressed into this week, and next, the surging price on already elevated rates is likely to be painful. And if you're thinking to yourself who eats this cost, the answer, as you probably guessed, eventually the shopper, freight costs flow into shelf prices, with roughly a 2 to 4 month lag. A container loaded this week at $10,000 shows up and retail pricing around January, so the queue for margin hit lands on retailers and the queue won price increase lands on consumers. For investors, this reinforces this retail margin squeeze that we've been talking about. Companies with strong logistics infrastructure and negotiating power, so your big boys, your Walmart, your Amazon, your Costco, can easily absorb freight increases better than these mid-market retailers that rely on third parties, small and mid-cap consumer discretionary names, with high-import content, those are obviously the most exposed, and shipping stocks, particularly container lines, benefit directly from this rate discipline they are now imposing on the market. What do we slide in another listener question now? We have a question for you on ticker symbol XRP. Just sure it's what you think is going forward looking like. I appreciate it. Thank you. So I'm not sure if this question is about XRP, the cryptocurrency, because I can't find any XRP company. Generally, this is an interesting cryptocurrency because it moved differently than a lot of the market did for quite some time. XRP is Ripple's cross-border payments and settlement cryptocurrency, so it kind of underlines the company Ripple itself. It was for a while as volatile, and actually a little bit more so than the rest of the market because there was a huge legal overhang. The SEC, though, however, has dropped its appeal in this long-running case with courts ruling that XRP trading on secondary markets does not mean it's a security transaction. And so when this happened, this was certainly good for the company. ripple and also therefore cryptocurrency itself. And so there's kind of two issues going on here. The first is this idea that if this new found ETF inflows keep pace, this essentially tokenized payment transaction can be very beneficial for this currency. For me though, you know, this is an interesting one because I think it has a bit more utility than a lot of these other crypto currencies that don't really have a use case here because this is underlying with what's going on with the company itself. There's been a bit of a rally recently that has more mimicked most of the crypto space itself. But the pending issues with the Clarity Act, which was supposed to be about broader crypto market structure legislation kind of remains still unresolved. There's yet to be any floor vote. And that's certainly going to weigh on sentiment as well. So it has and will continue to be as volatile as the crypto asset class itself with a little bit more risk because of what they're trying to accomplish. So for me, I don't know, a little bit too much risk there within the crypto space generally, certainly something like XRP. Thanks for the call. And that next invest talk. We'll look into this story. Investors borrowed 1.45 trillion to buy stocks. Is record margin debt a warning or just noise? That is forward tomorrow. But for now, I'm Luke Guerrero and ready to take your calls anytime at 888-99. At KPP Financial, accountability means more than advice. It means we invest alongside you. Through our parallel investing approach, when we recommend an investment for clients, one or more KPP principles invest their own capital at the same time. Same day, same price, same percentage. If your portfolio moves, ours does too. That is alignment. That is transparency. That is the KPP difference. Visit investtalk.com to get your free portfolio review. Here's a quick heads up for our Southern California listeners. KPP Financial will be hosting an Invest Talk Retirement Summit. It's happening on Saturday, October 24th in Irvine, California. We'll be joined by guest experts in tax and estate planning, financial planning, and real estate. They will appear in person alongside the KPP team. It'll be a focused discussion of five key areas that can shape your financial future. Seeding is limited, attendance is complimentary, and guests are welcome. So, don't delay. Reserve your seat now by visiting investtalk.com. Gallup did a survey in June, and they found that 12.4% of US adults are currently taking a GLP1 drug. That is more than double what was 5.8% in February of 2024, meaning one in eight American adults. So, we're talking about a medication class that has penetrated American life at a speed and scale that really no drug category has matched since antibiotics, and the obesity rate, which peaked in a record 39.9% in 2022, has fallen to 36.4%. That was the first meaningful decline in years, and the drop kind of continues to inversely track with the increased usage of GLP1 medicines nationally. These drugs are actually working at a population level, and we've seen it in the epidemiological data. Global GLP1 sales are at about 130 billion now. 91% of Americans are aware of the drugs as this survey shows, and the market's probably going to get a bit more competitive, which may change how you should think about what position these types of drugs need in your portfolio. The thing that is shifting is that for three years, this was essentially a two-player race. You had a novenorisc with Ozevic and Wigovi, and then you had Eli Lilly with Munjaro and Zepound, and so there's a lot of scarcity there. You only have these two companies producing it, meaning there were shortages, there were weightless, there were black market compounding pharmacies, and in a lot of ways the pricing reflected what was this. Duopoly, you had over $1,000 a month before the TrumpRx agreements brought these branded injections down to about $245 for eligible patients. What is changing is, well, the delivery system. Now pills are arriving. You have novenorisc's orno Wigovi, which launched this year. It's $149 a month for cash pay patients. You have Eli Lilly's oral version that's expected to win FDA approval within months, and pills don't require more refrigeration for one. They don't require needles, and they don't require doctors' offices. They open the market to patients who were never going to inject themselves weekly, which is honestly most people. And the pipeline behind them, absolutely enormous. There are 190 obesity-related products currently in development. You have different types of drugs. These triple-ite antagonists like Reddit 2Tried from Eli Lilly, they delivered average weight loss of 71.2 pounds in phase 2 trials. It's the most dramatic pharmaceutical weight loss result ever recorded. Pfizer paid 10 billion for Met Sarah in a bidding war against seven other companies. And on the patent side, I mean foundational molecules like Lerglutide are already facing generic competition in international markets. You have China, India, Brazil, Canada, and Turkey 40% of the global population, and roughly a third of adults considered obese. And so these markets for generics, it is entering at a fraction of current prices. So what this means for everybody, I would say, is a bit multifaceted. You obviously have the effect on the healthcare sector. Competition is typically bullish, right? It's bullish for the category, but it's bearish for the companies that were already seeing massive margins that were essentially printing money because it was a dual-oppily. So the question is whether volume growth at these lower prices for these companies, for Nomenortis, for Eli Lilly, can outweigh margin compression. Then you have effects on food and beverage. This is where you have these secondary effects. If GLP1s are suppressing appetites, people eat less. They eat differently. Snack food companies, alcohol producers, fast food chains, they're all seeing consumption patterns, changing specifically amongst these users. And now they're talking about it. Mondalez, Coca-Cola, they flagged it in earnings calls. Some analysts are estimating a 5% to 10% reduction in Chloric intake among GLP1 users. So you sustain that over years at 30 million users by 2030. That's a pretty measurable drag on food industry volumes. Beneve apparel, sizing is changing. I think this is something I mentioned months ago when we were talking about GLP1s as maybe a secondary effect here. You have retailers that are reporting an increased demand for smaller sizes. That's going to be a cost. There's a supply chain adjustment there. It costs money in the near term. But in the long term, because of material inputs, might be beneficial here. You have employer health costs. That's something that really isn't discussed much. And probably is the most important angle because employer health plans are the ones primarily paying for GLP1s. And so costs go down as more entrance enter the market. But you're also seeing a lot of employers actually dropping GLP1 coverage in general because the costs are just too high. For your portfolio, I think that GLP1s and what the transition has been into this post GLP1 economy isn't really a single trade. It's a thief that touches not just health care, but consumer staples, retail insurance, cost structures. So owning the drug makers makes sense if you believe the volume story offsets the price in compression. If you think that this is a meaningful trend, maybe underweighting food and beverage companies with heavy exposure to categories most affected by this appetite suppression. But also watch the employer health cost data because if GLP1s spending starts showing up as a meaningful line item in corporate earnings, it becomes a bit more of a margin story for companies that have absolutely nothing to do with the drug in the first place. When we drop another listener question in now. Again, that was a couple of years ago. And I'm looking at it again now. The numbers still look good, the chart looks okay. I was wondering if you can take a look. If you can go right now, just pull back a little time to get in and you hold it for a year, maybe two. Thank you very much, have a good day, bye. - Taker, C-R-O-X is a company that we kind of looked at intermittently for some time. It's also a company whose products I own. I think they're very comfortable. I think they look a little weird, but they're certainly comfortable. It is a footwear company. So they have those Crocs C-R-O-C-S brand clogs as well as more casual footwear from their Haydude brand. One thing that I think really benefits them is that they sell direct to consumer. And so this company has really in the past couple of years, it's absolutely taken off. I mean, revenue has grown from 1.3 billion in 2020, projected 4.1 billion this year. It has slowed down a bit in terms of growth over the past couple of years. It hasn't really grown much in terms of top line revenue. But net income has grown from about 313 million, a couple of years ago to nearly 700 million this upcoming year, and at the same time, my cat is very vocal today. Now he's right by the microphone. And at the same time, margins have really been falling. And so you're seeing what had been huge growth from 2022 in terms of pricing. Training from $47 a shared an hour, it trades at $1.24. You're seeing a little bit of that momentum slow down. Now they did have a revenue beat, they did have an earnings beat, but there's been a kind of wild net income swings on this name, it's one of the reasons why that we were kind of hesitant to enter a position. In spite of that, I mean, it's up 45% this year. It's up 61% over the past 52 weeks. I think the fact that they have crossed the $1 billion in quarterly revenue threshold is certainly great for them. I think they have really, really strong free cash flow generation, they've got about 669 million in free cash flows or they're projected to be this year. But they're other brand, hey dude. I mean, it's a bit of a drag, it's down 6%. It's still shrinking. The tariff costs have certainly hurt this company there. And so in spite of this genuine beat and raise on full year numbers, I think you have a bit of overshadow from their soft next quarter guidance and issues with kind of their secondary, hey dude brand that led us to really not want to be entering a position. Now in spite of this or because of this rather, it's trading at 8.4 times price to forelook earnings. So maybe the downside risk is a little bit lower. But until I see consistent growth or spinning off a what has been a week, the division, I would hesitate to enter into this name right now. That is CROX CROX Inc. Thanks for the call. Let's go with 2 in a row from 888, 99 chart. - Hello, this is David. I'm calling you guys in the 11LU, LU. Wanna get your thoughts on it? It's a good stock to hold on to or buy more or sell. Looking forward to your thoughts. Thank you. - Lulu lemon. Lulu lemon is the kind of the pioneer in a lot of ways of a scaled up premium athletic apparel brand. So they became famous back in the day from their yoga pants. And then they kind of started to expand in running apparel footwear as well as accessories. You know, I think they've had a bit of a turnaround in their business. And frankly, I actually do like their products, but I kind of have been concerned and I have been concerned for quite some time about where this market has been going. So for context, this thing was trading at over $400 per share. The beginning of 2025, it has a sense absolutely cratered. Year to date, it is down to 50%. It's trading $100 per share. It's down 40.18% over the past 52 weeks. Revenue, which has grown at 20% on an annualized basis going back to 2021. Look is great until you realize that it's kind of fallen off a cliff in terms of growth. I mean, it's actually projected to be lower in terms of revenue this year than it was not just in 2026, but also in 2025. You have net income, which has fallen. You have margins, which has compressed, I mean, in the most recent quarter, net revenue is down 4% year over year, earnings per share, or though it did beat, was down year over year. And so you have a lot of issues and concerns here. They had, as well as rough earnings, they had the second consecutive quarter of guidance cuts following what was already a pretty reduced outlook for this company. Now it's not all bad. I got 1.4 billion in cash. That certainly is good. Their net debt is pretty much zero at this point. They have Boback shares through the downturn. The balance sheet, I think, gives the company a lot of runway because you don't put yourself in a huge financial distress scenario. But I think they just face too many headwinds. This is something we talk about a lot of times in the office. I think it's something that applies to a company like Nike as well, is you can have strong brand awareness. You can have good products. But specifically in this space, there are just so many alternatives now that even if this is a bit of a turnaround story, does it get back to where it was? I really can't see that happening. And so for me, while the entire space has been down, I think there are structural reasons why a company like Lulu Leman has underperformed the industry by about 22% the past two years. And the bigger question is, is now the time to buy it? I certainly don't see that being the case. So for now, I would stay away from Lulu Leman, ticker LU, LU. Thanks for the call. Why don't we see if we can fit in one more quick question. - Hi, in this talk, I wanted to see if you guys could take a look at who's Alan Hamilton. Tickers B-A-H, I bought it at the end of last year. And by the minute of call and ask, what you guys thought about it in the sector that it's in. And if it's a good company to hold on to for a long term hold. I'll listen on the show. Thanks, as always, guys, bye. - Booz Alan Hamilton is another one that's chart looks pretty poor coming out of 2024. Momentum's been pretty weak. It's down 23% over the past year, down about 10% year to date, down another 1.42% today. What they are is a management consulting firm. So they primarily are serving the US federal government. And in a lot of ways, this is a similar story. Growth has dried up here. Margens are really starting to compress a bit. Return on equity has fallen from 80.2 to 54.6. Net margins have fallen from 7.8 in 2025 to 6.3 here. You had in most recent earnings. Didn't really look great. I mean, net income was down 26% year over year. So in this specifically, I think the issue is you have a defense and government services name and a bit of a bifurcation because you have this real national security demand. It's remained pretty resilient, but the civil business kind of faces pretty tough funding environment for years. Anytime you see a company that has revenue, growth, drying up, and margins falling, I tend to think I'd want to stay away. In spite of it being near the low end of its valuation over the past five years, that is BH, thanks for the call. All right, folks, we're headed into our final break. If you got to get your burning question in, now is the time, pick up that phone and dial 888-99 chart. (upbeat music) (upbeat music) (upbeat music) Every investor is working to build a secure financial future. How they get there and when they get there, that depends on many factors. The more you learn about how the market works, the better your chances for success. So don't forget to call Invest Talk, 888-99 chart. There was a study called the 2026 Pulse Study from the Financial Health Network. And what it did was it took a look at 7600 households. It was nationally representative. And the headline finding is that the share of America American households classified as quote, "financially vulnerable," it's 17%, which is a record in the study's history. The reason why this study matters, I would say more than the studies you see and the surveys you see that are more sentiment-based is because it's not consumer confidence, right? It's more important than credit card data as well. It measures something different. It measures whether people can absorb a shock, not whether they're spending, whether they can survive an unexpected expense without going into crisis, and by that measure things are worse than they've ever been in the nearly 10 years of this survey has existed. Roughly 30 million households, so that's 23% of the country, change financial tiers in a single year. And that direction was overwhelmingly to the downside. 16 and a half million households moved to a lower tier versus 13.8 million who moved up. 7.8 million fell from quote, "coping" to quote, "vonable," which is the bottom category. The specific metrics that I think were most important, unmanageable debt rose from 29 to 31%. That's an 8-year high. Everything all bills on time fell from 71 to 68. Spending less than income dropped from 49 to 47. High financial stress jumped from 13 to 16. The most ground was unsurprisingly lost in low income households. Among the lowest earners, spending less than income fell from 35% to 31%. Having all bills on time dropped from 54 to 49. In a lot of ways, lower income people are being the most affected by the rise of costs. That makes sense. And deeper in the study, something that I think means to rather matters to most people. As an insurance coverage, whether people believe their health, life, and property insurance would actually protect them in an emergency, fell to 54%, that is the lowest since the survey began. Being underinsured is the quiet way a household goes from coping to vulnerable overnight. You get one car accident, you get one medical event, you get one wildfire, and the insurance that was supposed to prevent financial catastrophe doesn't cover enough to matter. I think this data probably reframes the consumer spending picture. The top line numbers look okay because absolute households are carrying the aggregate, but 30 million households got worse. The middle is eroding, and the K-shaped economy, with a top 20% drive 60% of the spending while the bottom struggles. That's showing up in the most granular household level data. The three-year framework in this study is actually a useful self-check for everybody. Savings buffered do you have three months of expenses in liquid savings, bill timeliness are you paying everything on time, or are you juggling, debt, manageability? Could you pay off your non-mortgage debt within three years at your current rate? And insurance confidence, if the worst happened, would your coverage actually cover it? If you can't answer yes to all four of these questions, you may be closer to the vulnerable tier than you think. I mentioned it at the top of the show, but I do want to mention one more time, the upcoming KPP retirement summit. It'll be August 24th in Irvine, California. It is free to attend, but spots are limited, so head over to investtalk.com to learn more, and sorry, October 24th, and grab your spot today. That does it for another episode of InvestTalk. I'm Luke Guerrero, and I want to thank you for listening and encourage you to tell your friends and family members about our free podcast downloads, as well as check out our YouTube channel. Just head over to YouTube and search InvestTalk with two teas. Additionally, I wanted to mention our practice of parallel investing. At KPP Financial, we make the same trade for our clients that we make for ourselves, the same day, same price, same percentage, no front running, no special treatment. It is a way that we can share and invest, share in the same risks and potential for success alongside our clients. If that is a quality you want to near advisor, it all starts by heading to investtalk.com and scheduling your free portfolio review. Independent thinking, shared success. This is InvestTalk. Goodnight. InvestTalk is a trademark of KPP Financial. Because of the nature of the interactive dialogue inherent in the format of this program, it's important for the listener to understand that not all comments made will apply to them. Specifically, nothing said she'll be taken to be investment advice, or shall statements on this program be considered an offer to buy or sell security. Because such advice is rendered solely on an individual basis, and at times will require that the investor review a prospectus before investing. InvestTalk is a copyrighted program of client, Pavless, and Peasley Financial, a registered investment advisor firm, which retains all rights. For more information regarding KPP's investment advisors, call 1-800-557-5461. Thank you for listening, and your comments and questions are welcome on our 24-hour listener line at 888-99-Chart.