Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors.
Speaker 1: And of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
Speaker 1: and twenty countries and Jason. You can download Bloomberg Business
Speaker 1: Week on iTunes, SoundCloud, bl Bloomberg dot com. You can
Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. Let's set the Business Week agenda.
Speaker 1: Gina Martin Adams is with US, chief Equity Strategies for
Speaker 1: Bloomberg Intelligence. She joins us from New Jersey, as does
Speaker 1: Dave Wilson, stocks editor for Bloomberg, also in the great
Speaker 1: state of New Jersey. I want to get to Gina
Speaker 1: a second, but before we do that, and we're gonna
Speaker 1: talk about this a couple of times throughout the uh
Speaker 1: of course of the show. Dave Wilson I laid eyes
Speaker 1: on him via NEXTI for the first time in a
Speaker 1: long time, in six seven months because a group of
Speaker 1: us got together virtually to celebrate his thirtieth anniversary at Bloomberg,
Speaker 1: which is so WOA incredible. It's such a woa Dave, congratulations,
Speaker 1: that's a big deal. Thank you. I appreciate that. Yeah,
Speaker 1: I mean, man, you've got those how many blocks on
Speaker 1: your well and your desk at home or desk at work,
Speaker 1: they're all the desk it works. So I haven't seen
Speaker 1: them in six and a half months, and I'm looking
Speaker 1: forward to the fourth block, just so the audience knows.
Speaker 1: You get sort of a big sort of base when
Speaker 1: you get to ten years at Bloomberg LP, and then
Speaker 1: you get another cube, but twenty another one at twenty five,
Speaker 1: and then finally your tower, so to speak, tops out
Speaker 1: at thirty years. And by the way, each the blocks
Speaker 1: is a different color, so it's really hold on a second,
Speaker 1: hold on a second, topped up four now four now,
Speaker 1: Dave Wilson, come on, well I get thirty five, David,
Speaker 1: there's gonna be another five year blocks. It's gonna be Yeah,
Speaker 1: we're gonna we're gonna talk to the powers that be
Speaker 1: about that make sure they do that. All right, let's
Speaker 1: set the Bloomberg Business Week agenda, because you've got Gina
Speaker 1: Martin Adams, also with US chief Equity Strategies at Bloomberg
Speaker 1: Intelligence on the phone from New Jersey. As we mentioned,
Speaker 1: Dave Wilson, our stocks editor, he's also here from New Jersey. Um,
Speaker 1: you know, Gina, let's talk a little bit about this
Speaker 1: market trade because we get it at the top of
Speaker 1: the broadcast. Everything is okay, We've got a rally underway. Yeah,
Speaker 1: everything's okay today. It wasn't okay Friday, it was okay Thursday.
Speaker 1: You know, I think it's a lot of back and forth.
Speaker 1: I feel like I'm playing ping pong the last couple
Speaker 1: of days. But in reality, the stock market's kind of
Speaker 1: gone nowhere. We've been really stuck around our fifty day
Speaker 1: moving average on the SMP five since the beginning of October,
Speaker 1: and I'm not sure we're going to get materially off
Speaker 1: of that moving average considering all of the uncertainty that
Speaker 1: we're currently faced with. You know, until we get a
Speaker 1: fiscal package or get past the election. Even getting past
Speaker 1: the election, will we have some resolution with the election.
Speaker 1: There's just a lot of uncertain tea out there, so
Speaker 1: I think we're going to be somewhat range bound. That's said.
Speaker 1: The couple of things really stand out to us. The
Speaker 1: first is, really, since the beginning of September, our our
Speaker 1: sector strategy had said, prepare for some rotation out of
Speaker 1: the COVID defensive stocks and into more cyclically oriented groups
Speaker 1: in the SNP five. We do appear to be continuing
Speaker 1: to see that. Slowly but surely. Tech stocks have sort
Speaker 1: of deflated from extreme overbought conditions and have now been
Speaker 1: trading somewhat sideways for the last couple of weeks, where
Speaker 1: we're starting to see some incremental improvement in some cyclical groups.
Speaker 1: So I think that's important to watch. The other thing is,
Speaker 1: just as much as we were focused on tech in September,
Speaker 1: there was an absolute route in energy. Last week, all
Speaker 1: stocks were up, but energy stocks were down. The month
Speaker 1: of September, energy stocks tripled at the colossis for the
Speaker 1: tech sector. I mean, it's just been absolutely brutal. So
Speaker 1: I think you want to watch the energy sector pretty carefully,
Speaker 1: and it is actually experiencing a little bit of country yeah,
Speaker 1: J And so Dave. As you look at some of
Speaker 1: the specific names. I mean, I look at the biggest
Speaker 1: mover in the SMP right now, and it is very
Speaker 1: much headline driven. Regeneration absolutely because the company's COVID nineteen
Speaker 1: cocktail was used on President Trump, and so you know
Speaker 1: you've got candor raising against rating on the stock when
Speaker 1: they're recommending their clients by for the first time in
Speaker 1: two years, you've got spb Lyrinc talking about how the
Speaker 1: decision to use the cocktail on Trump was quote the
Speaker 1: ultimate validation for their therapy, which hasn't even gotten to
Speaker 1: the point where you can give it to people under
Speaker 1: an emergency used authorization from US regulators, which is a
Speaker 1: lot of the COVID nineteen tests and treatments have been
Speaker 1: made available. Uh, you know, Trump was able to get
Speaker 1: it to what they call a compassionate use. So you
Speaker 1: know the idea is looking ahead. I mean, if you've
Speaker 1: got the president take in your drug, then then maybe
Speaker 1: it's in a position where it will actually move forward
Speaker 1: and more people will be able to do that. Regenera
Speaker 1: it's really been trying to diversify its business in any case. Uh,
Speaker 1: you look at their revenue, it's still primarily from their
Speaker 1: eye treatment a LEAH, which has been around for several years,
Speaker 1: so uh, definitely being seen as a plus. Uh. Actually,
Speaker 1: since late Friday when we found out from that White
Speaker 1: House physician that they had used regeneral therapy, I mean,
Speaker 1: stock has been on the way up. Yeah. Yeah, Gina,
Speaker 1: what's the big thing you're looking at the balance of
Speaker 1: the week here? Um. I think I want to continue
Speaker 1: to watch for this rotation. Obviously, everyone's watching fiscal policy
Speaker 1: as well, So if we get some action on fiscal policy,
Speaker 1: I think that could be a trigger for a little
Speaker 1: bit of improved first tolerance, at least in the short
Speaker 1: run for investors. But I think you want to watch
Speaker 1: really carefully as to where investors actually bit up stock
Speaker 1: prices and that environment. Does it go into COVID defenses
Speaker 1: or do we start really banking on more of an
Speaker 1: economic recovery and suing into anyone. Yeah, big questions, big
Speaker 1: questions out there, all right, Thank you so much, Gina.
Speaker 1: Martin Adams, chief equity strategist for Bloomberg Intelligence, on the
Speaker 1: phone from New Jersey. David Wilson, the anniversary man, celebrating
Speaker 1: thirty years at bloom This is Bloomberg Business Week with
Speaker 1: Carol Masser and Jason Kelly on Bloomberg Radio. Let's check
Speaker 1: in with one of our pals, Dr Joel Bloom, president
Speaker 1: of the New Jersey Institute of Technology, and j I
Speaker 1: t we know it as we've done a lot of
Speaker 1: fun broadcasts from there over the years. But it's a
Speaker 1: different world, that is for sure. Dr Bloom joining us
Speaker 1: on the phone from Newark. So, first of all, how
Speaker 1: are you What are things like on campus? I know
Speaker 1: you started to welcome some students back last month, Jason,
Speaker 1: Things are going well on campus. UM, about two thousand
Speaker 1: students day here. We've got about hundred in residents, so
Speaker 1: and we're doing some converge learning. Some students are learning
Speaker 1: in classroom while at the concurrently tuning in and we
Speaker 1: are doing some remote learning. Our enrollment is held up
Speaker 1: very nicely. Um. We're a little over eleven thousand, six
Speaker 1: hundred students this year in total. And we have been
Speaker 1: managing the virus the spread where I've got to be
Speaker 1: very careful what I say here, but we've had a
Speaker 1: total of nine cases. So we we test everything, uh,
Speaker 1: the air, waste, water, and obviously individuals, so we've been
Speaker 1: able to manage the virus, deliver our education open all
Speaker 1: labs and open much of our campus. Thank you for asking.
Speaker 1: I hope you are well. We're doing okay. You know,
Speaker 1: it's a remote world that we're living in, right Carol, Yeah,
Speaker 1: totally remote. I mean, it sounds good that you've been
Speaker 1: able to at least get, like you said, you know,
Speaker 1: labs are open, get some students on campus, because we
Speaker 1: know that that is so crucial Dr Bloom in terms
Speaker 1: of the learning experience. You can do stuff virtually, no
Speaker 1: doubt about that. We're doing a radio show and I
Speaker 1: think we do it fairly well, you know, virtually. But nonetheless,
Speaker 1: there's nothing like that face to face, especially when it
Speaker 1: comes to academia, and especially when it comes to the
Speaker 1: to the STEM discipline, you know, the Computer Science, Engineering, UM,
Speaker 1: Architecture UM. It's almost unimaginable as to how you can
Speaker 1: teach students, and we know the challenges of these disciplines
Speaker 1: only remotely. So while we have a predominance of freshman
Speaker 1: and sophomores on campus because they're the ones that are
Speaker 1: gonna be most challenged to get into learning in blocks
Speaker 1: of fifteen weeks, we also again have opened all of
Speaker 1: our labs for our juniors and seniors as well. It's
Speaker 1: that lab, hands on, experienced students working in teams, students
Speaker 1: doing the problem solving that makes this kind of education
Speaker 1: a real challenge to only be done online again, particularly
Speaker 1: at the undergraduate level and at the PhD research level.
Speaker 1: And so Dr Bloom, you know, we get new guidance,
Speaker 1: it feels like fairly frequently in a big set of
Speaker 1: new guidance from from the c d C today, How
Speaker 1: do you where do you take your cues from? Obviously
Speaker 1: you are very well read in and very familiar with
Speaker 1: science at its core, but who are you looking toward
Speaker 1: more or less, who has really come through for you
Speaker 1: in terms of you feel like providing the sort of
Speaker 1: information that is actionable and that you trust as you
Speaker 1: make some pretty big decisions around student and staff and
Speaker 1: faculty safety. Well, here in Newark were very fortunate. We've
Speaker 1: got another number of hospitals. We have one on one
Speaker 1: corner of our campus St. Michael's, and one a little
Speaker 1: further on the opposite corner You're Diversity Hospital, and they,
Speaker 1: in fact our health care providers St. Michael's for our
Speaker 1: students and for our faculty and staff. University hospitals, they
Speaker 1: have outstanding epidemiologists, outstanding lab and lab access um. So
Speaker 1: we have been relying on their expertise on the opposite
Speaker 1: corners of our campus to engage to talk with the
Speaker 1: test and and again to keep us up to date,
Speaker 1: very timely turn around, if you will, on our testing
Speaker 1: and our test results. And we've used other consultants again,
Speaker 1: particularly in the area of waste water testing for our
Speaker 1: residence soils. Can I just say that is such a
Speaker 1: cool thing, Like we have a great cover story in
Speaker 1: the magazine, you know that's looking at the things as
Speaker 1: we all wait for a vaccine, what else can be
Speaker 1: done kind of before that, and we talk about you know,
Speaker 1: quick testing where if we can all take a test
Speaker 1: every day and get an idea whether not we have
Speaker 1: the virus. If you could do that every day every person,
Speaker 1: it would be much more easy er to open up
Speaker 1: our economy. But wastewater that has turned out to be
Speaker 1: something that it's a right. It shows up early on
Speaker 1: if somebody has the virus, it absolutely does, and we
Speaker 1: did have and we have four we're using five of
Speaker 1: our residence halls and one of them one of our
Speaker 1: law just one that has three hundred students. We did
Speaker 1: get a positive sample. Again that's perceived generally as a predictor.
Speaker 1: We quarantined all three hundred students. We did now individual
Speaker 1: testing beyond the surveillance testing that we do with four
Speaker 1: individuals every week, and ultimately we believe there was one
Speaker 1: case that we somewhat already knew about that in that
Speaker 1: residin hole that was quarantine. That turned out to be
Speaker 1: the indicator. But the two hundred and eight plus students
Speaker 1: all tested negative. As a tested negative, we put them
Speaker 1: back into the flow of the regular student population. So again,
Speaker 1: it's it's being thoughtful, it's being prepared, it's being intentional,
Speaker 1: and it's being in pought as you know, smart and lucky.
Speaker 1: So Dr Bloom, I do wonder with so many people
Speaker 1: on campus, I do wonder too about how you do
Speaker 1: impose restrictions about what everyone does. And I bring it
Speaker 1: up considering the last week and we saw out of Washington,
Speaker 1: you know, the last couple of weeks, whether it's for
Speaker 1: Supreme Court nomination, we saw people gathered even in an
Speaker 1: open setting, and yet we are now realizing or whether
Speaker 1: it's on the campaign, realizing how these things can be
Speaker 1: problematic and cause those virus numbers to go higher. How
Speaker 1: do you basically keep college students under control. Well, we
Speaker 1: have outstanding students. They're smart, their STEM receiving STEM education.
Speaker 1: They know what their future looks like, and why would
Speaker 1: they jeopardize it by either violating what we've asked them
Speaker 1: to follow, which is remain masked, remain socially distant. We
Speaker 1: have a pledge that every time they open up their
Speaker 1: computer or their devices that they have the pledge they've
Speaker 1: done the following and followed the rules, including handwashing, etcetera.
Speaker 1: So our students have been very, very compliant. Again, I
Speaker 1: think it has to do with their intelligence, their drive,
Speaker 1: what they want to achieve, and they see what's at
Speaker 1: the end of this education free and four job offers
Speaker 1: um and very often uh they will be working in
Speaker 1: the professions. They are going to help not only this economy,
Speaker 1: but help treat and prevent future pandemics. These are our science, technology,
Speaker 1: engineering mathematicians. And we know we are in the in
Speaker 1: the tech economy. Every company is a tech company today.
Speaker 1: So I think they see the vision, their moth, They
Speaker 1: understand what they need to do, and again they are
Speaker 1: following the rules. And again we are very fortunate and
Speaker 1: and Dr bloom along those lines. I mean, I have
Speaker 1: to say, having spent some time on your campus and
Speaker 1: having spent some time with you and a lot of
Speaker 1: your students and faculty, there is this sort of sense
Speaker 1: of purpose and a sense of mission that I feel
Speaker 1: like sometimes candidly as we look across the higher education
Speaker 1: landscape maybe doesn't exist across the board, and it does
Speaker 1: feel like we are at this moment of it's almost
Speaker 1: like this existential inflection point right for higher education where
Speaker 1: people are asking a lot of big questions about why
Speaker 1: should I go, Where should I go? What am I
Speaker 1: going to get out of it? What do you do
Speaker 1: as someone who's ultimately responsible for this institution to ensure
Speaker 1: that you're essentially continuing to be a step ahead of
Speaker 1: that debate. Well, first and foremost, we've got by we
Speaker 1: lead by example the exam couple of our alumni, what
Speaker 1: they are doing professionally, how they are succeeding, the example
Speaker 1: of the companies that come to campus that recruit here.
Speaker 1: We could just go up and down the alphabet from
Speaker 1: Alphabet to Amazon, to Apple to Microsoft. So they come
Speaker 1: here with a strong sense of conviction. Again, a predominant
Speaker 1: student coming to ng I t is middle to lower income,
Speaker 1: very often economically at the bottom quintile of family income.
Speaker 1: So again there are very often self motivated. We constantly
Speaker 1: keep them in a context which they are mentored. They
Speaker 1: get an opportunity to apply early on what they are learning.
Speaker 1: That comes back to what Carol was mentioning about the
Speaker 1: lab environment. We have them work in teams, We have
Speaker 1: them in front of faculty who make the theoretical very
Speaker 1: lie and make it very real. So see the goal
Speaker 1: of employment, how they contribute, how they can improve the
Speaker 1: quality of life. They see the research that's going on here.
Speaker 1: We've got some of the NSF money to do rapid
Speaker 1: research in the environmental spread of the COVID nineteen virus.
Speaker 1: So it's it's all very real. It's very applied, very hungry,
Speaker 1: very motivated students. And again we try to lead by
Speaker 1: example of what the lungs have achieved the companies that
Speaker 1: we partner with, and how they can be innovators, entrepreneurs
Speaker 1: and have a very significant impact on the careers and
Speaker 1: in the professions that they choose. All right, we're gonna
Speaker 1: have to leave it there. Um, Dr Joel Bloom. We
Speaker 1: always enjoy time with you. President of the New Jersey
Speaker 1: Institute of Technology on the phone from New York, New Jersey.
Speaker 1: Was it Um Longstone who that we talked to Palenteer
Speaker 1: about the need for more engineer right, we were talking,
Speaker 1: you're lawyers, more engineers. Yeah, I fewer lawyers, more into
Speaker 1: the world to be better with more engineers. Yeah, totally
Speaker 1: totally sell out in a heart beat. It would, especially
Speaker 1: at NJ I T because we've seen them and I
Speaker 1: do think that you know, that sense of purpose is real,
Speaker 1: you know that he's basically, look, these guys are going
Speaker 1: to mess this up, right. They get it. They get
Speaker 1: if they understand right, the dangers in place if you
Speaker 1: don't kind of do the right thing. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: Among the celebrities, by the way, Carol who showed up
Speaker 1: at Dave Wilson's thirtieth anniversary little virtual gathering earlier. Mike
Speaker 1: Reagan of course, of course, paying homage, paying his respects
Speaker 1: to the goat when it comes to markets coverage, exactly exactly.
Speaker 1: He of course is one of the senior editors looking
Speaker 1: after our markets coverage. It's got a great story that
Speaker 1: I read this weekend about what the markets were looking
Speaker 1: at ahead of last Friday and then everything that ensued,
Speaker 1: and that's been quite a doozy, to say the least,
Speaker 1: and to use a technical market term. Joel Weber also
Speaker 1: joins us the editor of Bloomberg Business Week. So this, Joel,
Speaker 1: I have to say, as I always, as I often do,
Speaker 1: hats off to you because this was one of these
Speaker 1: stories that I knew I wanted to read and then
Speaker 1: like I woke up Saturday morning and there it was,
Speaker 1: so thank you. Yeah, you can give me new credit
Speaker 1: for that. Goes ult Mike, who I think you know,
Speaker 1: we had tasked sort of with a earlier in the week.
Speaker 1: He was planning on doing a story um that was
Speaker 1: sort of future minded, and then basically the biggest news
Speaker 1: event of the year, which is hard to believe. What's
Speaker 1: just saying something exactly, Um, it happened, so uh he
Speaker 1: had basically had to sort of rework everything, um uh
Speaker 1: you know, starting on Friday morning. But I think the
Speaker 1: thing that um, you know makes it the story that
Speaker 1: it is is ultimately about like how how the markets
Speaker 1: are trying to anticipate these next few weeks ahead of
Speaker 1: the election. Um, and the thing that I've done was
Speaker 1: so interesting. And the thing that I'll hope that he'll
Speaker 1: talk about a little bit here is this idea of
Speaker 1: just how how much of this was already kind of
Speaker 1: baked in and that's sort of you know, built into
Speaker 1: today's pop if you will, um, so, Mike, when you
Speaker 1: talk a little bit about that. Uh yeah, Joel, thanks
Speaker 1: for having me on. Guys, Uh yeah, Save Wilson. I
Speaker 1: don't know if I was a celebrity, but I i
Speaker 1: he was one of the guys who interviewed me in
Speaker 1: my first uh job interview at Bloomberg. So uh thought
Speaker 1: applies to shop for that happy anniversary, Dave. He's uh
Speaker 1: one of the legends of the newsroom. But yeah, so
Speaker 1: said the story looked a lot at the implied volatility
Speaker 1: in the market through the lens of Dick's futures. And
Speaker 1: if you're not familiar with what's that is it basically
Speaker 1: treated as insurance policies against a drop in stocks. Um.
Speaker 1: And you can buy Vick's futures all the way out
Speaker 1: to say, June of next year, and the way he
Speaker 1: usually works is those far out in the future, your
Speaker 1: contracts are usually more expensive because uh, you know, you're
Speaker 1: kind of buying a longer term insurance policy and you
Speaker 1: know you're protecting against swings in the market between now
Speaker 1: in June, as opposed to say, if you buy one
Speaker 1: that expires in October, you're only protected uh through the
Speaker 1: life of that futures contract. But what's been interesting all
Speaker 1: year is that those are October contracts, which the way
Speaker 1: the VIX is set up, they actually reflect the implied
Speaker 1: volatility through November. UM, they've been the most at least
Speaker 1: it's more expensive than the others uh contracts around them
Speaker 1: all year, and the traders call a kink in the
Speaker 1: VIX curve because it's not really what you normally see
Speaker 1: when you chart them all out on a on a
Speaker 1: graph for a curve. UM. What's that even worth fascinating
Speaker 1: is that October, November and December futures are all elevated,
Speaker 1: so you have the shape of the VIX curve is
Speaker 1: not what it normally is. You have the most expensive
Speaker 1: mixed futures right near the front of the curve, so,
Speaker 1: in other words, protecting against folcilty through the end of
Speaker 1: the year. And what everyone is basically attributing that too
Speaker 1: is concerned that there will be a big legal fight
Speaker 1: over the results of the election. Uh and possibly even
Speaker 1: you know, not to get too dramatic, but even a
Speaker 1: constitutional crisis at President Trump, as he has indicated, does
Speaker 1: not accept the results of the election. Um. So uh,
Speaker 1: then I don't top about Well wait a minute, Mike,
Speaker 1: that's where I wanted to jump in. All right. You know,
Speaker 1: we talked about, especially in presidential election years, we talked
Speaker 1: about October surprises. We've had actually several, so I'm guessing
Speaker 1: it was not completely a surprise when you probably got
Speaker 1: the call from Joel that said, hey, we've got this
Speaker 1: thing called that you know, the president's got the virus.
Speaker 1: So we've got to think of, you know, maybe potentially
Speaker 1: rethink your story, like how does that impact But you
Speaker 1: just kind of laid out for us. Well, I think
Speaker 1: everyone scrambled this sort of wrap their heads around that
Speaker 1: the various possible scenarios in which it could affect fault
Speaker 1: so he I think one of the more interesting ones
Speaker 1: to me is that obviously Biden's whole lead in the
Speaker 1: polls has widened pretty significantly since the debate. UM, and
Speaker 1: I think a lot of people expected to continue to
Speaker 1: widen UM because of President Trump getting sick, this outbreak
Speaker 1: among his staffers at the White House sort of reinforcing
Speaker 1: the idea that um, he didn't take the virus seriously enough,
Speaker 1: wasn't taking uh, you know, enough precautions at least that's
Speaker 1: the impression. You know, who knows where he got it
Speaker 1: and it uh you know, was avoidable, but that certainly
Speaker 1: is the impression. So with Biden sort of taking a
Speaker 1: more commanding lead in the polls, a lot of people
Speaker 1: are saying, well, this sort of reduces the potential and
Speaker 1: the possibility for a contested election because if he is
Speaker 1: further out ahead, uh, the avenues to challenge it to
Speaker 1: finish somewhat. So that removes some of the uh you know,
Speaker 1: concerned about ball Toby uh for the rest of the
Speaker 1: year that that was motivated by worries about a contested election.
Speaker 1: And if you look at the vixed futures now today,
Speaker 1: they are they're all down across the board, but especially
Speaker 1: those October, November, December UM contracts are all down pretty significantly. So,
Speaker 1: you know, I think there's some truth to that angle
Speaker 1: of the story of that opinion from people in the
Speaker 1: markets that UM as Biden's full lead widens. It reduces
Speaker 1: that worry and anxiety about a contested election between November
Speaker 1: and January. Mike, do you get a sense of what,
Speaker 1: if anything is fundamentally changed by all of this drama,
Speaker 1: And by drama, I mean the election and the pandemic
Speaker 1: and everything like, are there structural things or even almost
Speaker 1: like sentimental things that have changed about this market owing
Speaker 1: to all of this. Well, you know, obviously he saw
Speaker 1: this tremendous hit the sentiment early on in the spread
Speaker 1: of the virus, and then it was counteracted by this
Speaker 1: aggressive response from the federal reserved and Congress, So, you know,
Speaker 1: sentiments of a fragile thing. One of the big concerns
Speaker 1: obviously now is will Congress UH finally get together and
Speaker 1: agree on a stimulus package that and that's another angle
Speaker 1: of the Trump getting U six stories that people think
Speaker 1: it will sort of you know, a slap in the
Speaker 1: face to Congress UH, to you know how a reminder
Speaker 1: of how serious of this viruses and how there are
Speaker 1: still a lot of individuals, companies, municipalities and states that
Speaker 1: have kind of been left behind, UH and not really
Speaker 1: helped by the previous stimulus and more is needed. Um, so,
Speaker 1: I you know, I think that is another sort of
Speaker 1: market reactions to the sort of diagnosis. Alright, Mike Reagan,
Speaker 1: you're the best, Thank you so much. Check out his story.
Speaker 1: Markets were already raised for chass then came the diagnosis.
Speaker 1: Check out at Bloomberg dot com and of course on
Speaker 1: the Bloomberg term, there's one strategist that wraps up the
Speaker 1: piece and it says, um, this is ever barings having.
Speaker 1: We're truly an uncharted territory. And if a week is
Speaker 1: a lifetime in politics, we have at least five lifetimes
Speaker 1: between him collection day. I mean, that's the point, Like,
Speaker 1: who would have thought what happened last week? Happened? And
Speaker 1: it did? It did? It did big time. It's Craig
Speaker 1: brom journal Now. But you let me drive? Oh no, no, no,
Speaker 1: drive home, honey, leave, I'll do the riding drivel. I
Speaker 1: want to drive, just drive, baby, the questions trying. This
Speaker 1: is the drive to the globe. Thanks, we'll try us
Speaker 1: down on Bloomberg Radio. Right, it is time for the
Speaker 1: drive to the closes. Gonna check in with Vance Howard.
Speaker 1: He is the CEO and portfolio manager of Howard Capital Management.
Speaker 1: They look after about two point eight billion dollars. Who
Speaker 1: joins us on the phone from the great state of Texas.
Speaker 1: Vance really nice to have you with us. How are
Speaker 1: things down in Texas? What's it like? Man? It is
Speaker 1: beautiful day here and here in hospital of Texas. Markets
Speaker 1: going up and the weather is terrific. So if you
Speaker 1: can't ask for much more. So, there's no problems out there, right, fans,
Speaker 1: everything's fine. Sorry about my sarcasm, large family that it
Speaker 1: does it to you, Yes, no, but how do you
Speaker 1: see it? I mean to be fair, and Jason and
Speaker 1: I have kind of kidded about this over the last
Speaker 1: couple of weeks, but it does feel like the markets
Speaker 1: certainly move on whether or not there's the likelihood of
Speaker 1: another stimulus package because of the virus um. It does
Speaker 1: seem like markets move on that specifically. There are still
Speaker 1: a lot of problems out there. Well, there's plenty of problems,
Speaker 1: but you know, we live in a world where there's
Speaker 1: plenty of problems each and every day. Um so you
Speaker 1: just got sort of gotten trade through them. And if
Speaker 1: you feel it hinder you, it's going to cause you
Speaker 1: a lot of a lot of grief and a lot
Speaker 1: of issues. When you might be missing a wonderful market.
Speaker 1: So let's talk about the market, because it felt like
Speaker 1: last week it was a little more worried. Today feels
Speaker 1: less worried. What do you owe the change in sentiment
Speaker 1: to even in the short term. Well, you know, I
Speaker 1: think that we were pretty much over bought on a
Speaker 1: technical basis into September. So I think sort of what
Speaker 1: you saw, you know, we've seen over you know, I'm
Speaker 1: sorry we got up to the beginning of September it
Speaker 1: was overbought, and we've had sort of a mild correction.
Speaker 1: I just think it's sort of an unwinding of that
Speaker 1: over technical overbought process. I think as far as the
Speaker 1: market goes, think the markets firming up and looking pretty
Speaker 1: strong again. And we all know that there's issues out there.
Speaker 1: We know there's a lot of head winds, but there's
Speaker 1: a tremendous amount of cash on the sidelines, and I
Speaker 1: think that's being deployed now. I'm looking at the twenty
Speaker 1: year treasuries t l T and s h Y, the
Speaker 1: shorter duration treasuries, they're starting to sell off quite a
Speaker 1: bit today, so a lot of that money is coming
Speaker 1: back into equities. Yeah, does that make sense to you,
Speaker 1: Is that's how you would play it. It's absolutely how
Speaker 1: we're playing it. We've been playing you know. We we've
Speaker 1: got the HC M byline which pulled us out of
Speaker 1: the market towards the middle of February, and it rob
Speaker 1: have been almost sixty in cash. In March, it went
Speaker 1: positive and we went sent back in the first two
Speaker 1: weeks of April. We've been a hundred percent long since April.
Speaker 1: And we told our clients and people that listen to
Speaker 1: look read our newsletter that any pullbacks of buying opportunity,
Speaker 1: and we felt the same way with what happened in September.
Speaker 1: We think as a buying opportunity. We've been adding to
Speaker 1: positions on every you know, days that are fit are down,
Speaker 1: and so how do you look at the big tech
Speaker 1: names vance, because you know, we've seen them really lead
Speaker 1: all the way up here, you know, to the point
Speaker 1: where you know, some folks are looking at the valuations
Speaker 1: around and Amazon especially, or an Apple or a Microsoft
Speaker 1: and and maybe getting a little concerned. Are you you know, No,
Speaker 1: we're not, you know, because we're quant driven, we're math driven.
Speaker 1: And you know, when we went back into the market
Speaker 1: in April, the strongest quantitative sector out there was technology,
Speaker 1: and we've been long technology, you know, since the you know,
Speaker 1: the first couple of weeks of April, and that's clearly
Speaker 1: been the right trade to take. You know, when you
Speaker 1: look at the value stocks or high divot in paying stocks,
Speaker 1: they've done virtually nothing. Now the past couple of days,
Speaker 1: they've actually started to pick up a little bit of momentum,
Speaker 1: which is interesting to see. So maybe we're starting to
Speaker 1: see a little bit of a cycle out of the
Speaker 1: tech maybe into more value and high divotend paying stocks.
Speaker 1: But again, you look at the amount of money that
Speaker 1: some of these companies are making and it's it's very attractive.
Speaker 1: So Microsoft, Amazon, just continue to plow new money into
Speaker 1: it and if there's a pullback, plowing even more. I'd
Speaker 1: be buying more. Yes, So what are you avoiding at
Speaker 1: this point then, Benson, Well, I think you need to
Speaker 1: avoid certain sectors, like we're not too very keen on
Speaker 1: energy UM. That's that's been a sector that we've not
Speaker 1: played very heavy in at all over the past two
Speaker 1: or three years. Gotten extremely volatile, very unpredictable UM. So
Speaker 1: that's one sector we're really not looking at too very hard.
Speaker 1: Biotech is actually starting to firm up just a little bit.
Speaker 1: Consumer discretionaries firm enough quite a bit. But again, you know,
Speaker 1: go back to our theme since April this year with
Speaker 1: Howard capitalist technology, technology, technology, go where the money is going.
Speaker 1: So talk to me about the election, because you know,
Speaker 1: we're roughly thirty days out. I mean, the election day
Speaker 1: is literally four weeks from tomorrow. We're in the final
Speaker 1: stretch here, even setting aside the president's you know, COVID
Speaker 1: diagnosis of late last week and everything we saw over
Speaker 1: the weekend. What what role does the election play? How
Speaker 1: does it factor into your algorithms? How do you figure
Speaker 1: it out, especially at a time where we don't know
Speaker 1: if history is a really good guide here. Yeah, I
Speaker 1: think that's a great, great question because they you know,
Speaker 1: like I said, we trade completely math driven, So we
Speaker 1: try to take the emotion completely out of the equation
Speaker 1: to builine our proprietary indicators positive. As long as it
Speaker 1: stays positive, we're gonna stay long this market no matter
Speaker 1: what happens in the election, no matter what the day
Speaker 1: to day news feed is about the election. That's a
Speaker 1: that's a key component. Guys. You've got to take the
Speaker 1: emotion out of this thing. If not, you know, it'll it'll,
Speaker 1: it'll drive you crazy. And the more emotion you put
Speaker 1: into your trading, the worst your returns are going to
Speaker 1: because you make mistakes. They just aren't rational and they
Speaker 1: don't add up mathematically. So the more you can take
Speaker 1: the emotion of the equation, the better off your bos
Speaker 1: its stands. Right now, the h C on bioline is positive.
Speaker 1: As long as it stays positive, we're staying long in
Speaker 1: this market. Well you mentioned okay, so safe to say
Speaker 1: you're bullis um, But I do wonder um, you know,
Speaker 1: Vans in terms of your quant model, what is it
Speaker 1: that you guys? Obviously you can't give us all of
Speaker 1: your proprietary you know, algorithms and your formulas here, but
Speaker 1: what is it that you prioritize? Is it earnings? Is
Speaker 1: it economic outlook? Is it just you know, valuations that
Speaker 1: are low? What is it? Well, I think that you
Speaker 1: have to look at it in the way the direction
Speaker 1: of the market. And I think that's what's been really
Speaker 1: key to the h C M biolo and it's pointing
Speaker 1: in the direction of the market. And a lot of
Speaker 1: times we can overthink things in life, we can sit
Speaker 1: there and say, if this happened, the world's gonna fall apart.
Speaker 1: If this happens, know the world's gonna be great. Well,
Speaker 1: that's really not how things work. You have to trade
Speaker 1: in the now. For me to tell you what the elections,
Speaker 1: how the elections are going to affect the market thirty
Speaker 1: days from now, I don't know. Nobody knows. It's an
Speaker 1: unknown quantity. But what I do know, as of this
Speaker 1: day on Monday, the h cems byline is long. We're
Speaker 1: staying along this market. If it changes, will change our
Speaker 1: direction how we allocate to our clients accounts. You know
Speaker 1: it's gonna be volatile, There's no doubt about it. And
Speaker 1: I think this is critical. And I know you're being
Speaker 1: a news media. I keep telling clients all the time.
Speaker 1: One of the best thing you can do you probably
Speaker 1: want to hear this is is to be quite canned,
Speaker 1: tod turn off the news. It's uh, it'll, it'll. It
Speaker 1: creates emotional distress and it makes you make decisions that
Speaker 1: maybe aren't the best and your best interest long term
Speaker 1: as far as playing this market and making money. So,
Speaker 1: just as we wrap up here, Van's I want to
Speaker 1: pick up on that, because we also know that in
Speaker 1: your background, you've been a public servant. You you served
Speaker 1: on the Huntsville City Council, and so you understand sort
Speaker 1: of pocketbook economics in many ways. And I would argue that,
Speaker 1: you know, some folks they're not reading, you know, the newspaper,
Speaker 1: they're not listening to the radio, but they're just looking
Speaker 1: at their job or their lack thereof, or sort of
Speaker 1: the local economy, and and they're still worried. How do
Speaker 1: you sort of synthesize all that? And unfortunately, you've got
Speaker 1: to do it in a minute. I think everybody's worried,
Speaker 1: there's no doubt about it. And you know, if you're unemployed,
Speaker 1: you're even more worried than somebody who might be employed.
Speaker 1: But I can't change that, and you guys can't change that.
Speaker 1: As a as a money manager, I've got to take
Speaker 1: that out of the equation. I'm not hired to feel.
Speaker 1: I'm tired to make people money. And that's what we do.
Speaker 1: We keep it down to a mathematical equation. We trade
Speaker 1: the math, take the the emotions out of the equation
Speaker 1: best that we possibly can, and we trade in the
Speaker 1: now and right now, the h C M biolines positive
Speaker 1: be long all right, Well, really interesting to catch up
Speaker 1: with you get your perspective. Thank you so much. Vans Howard, CEO,
Speaker 1: portfolio manager of Howard Capital Management. Johnny's on the phone
Speaker 1: from lovely Huntsville, Texas. Thank You's like listen on the
Speaker 1: market a little bit, a little bit, but I mean listen.
Speaker 1: He's got the math to prove it. Yeah, he's got
Speaker 1: the courage of his convictions with the numbers. So interesting.
Speaker 1: Interesting to see that and interesting to hear someone who
Speaker 1: is so straight ahead, uh, such a straight ahead bowl.
Speaker 1: Yeah exactly. Well, he's got those algorithms in place, and
Speaker 1: that's what they're telling them to do. Thanks so much
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