1 00:00:00,440 --> 00:00:03,559 Speaker 1: Strap on your parachute. It is time for What Goes 2 00:00:03,680 --> 00:00:14,200 Speaker 1: Up with Sarah Ponzick and Mike Reagan. Hello and welcome 3 00:00:14,240 --> 00:00:17,560 Speaker 1: to What goes Up, a Bloomberg Weekly Markets podcast. I'm 4 00:00:17,600 --> 00:00:21,079 Speaker 1: Sarah Ponzek, a reporter on the Cross Asset team, and 5 00:00:21,120 --> 00:00:24,280 Speaker 1: I'm Mike Reagan, a senior editor on the Markets team 6 00:00:24,320 --> 00:00:28,120 Speaker 1: who is fresh out of wacky dynamic duos for for 7 00:00:28,160 --> 00:00:30,520 Speaker 1: you and I. Sarah, I don't know. I'm I should 8 00:00:30,560 --> 00:00:32,840 Speaker 1: have started this whole gimmick. I'm completely out of out 9 00:00:32,840 --> 00:00:36,599 Speaker 1: of duos now. Honestly, Mike, I was expecting coming into 10 00:00:36,640 --> 00:00:38,480 Speaker 1: this week's show that you weren't even going to bring 11 00:00:38,520 --> 00:00:41,279 Speaker 1: it up. So the fact that you're even admitting it, 12 00:00:42,080 --> 00:00:44,400 Speaker 1: we'll give you something at least. But next week I'm 13 00:00:44,400 --> 00:00:46,440 Speaker 1: holding you to it. We'll have a new one. All right, good, 14 00:00:46,479 --> 00:00:50,040 Speaker 1: good enough. But this week on the show, we've discussed 15 00:00:50,040 --> 00:00:54,480 Speaker 1: it before. Coronavirus cases continue to rise across US hotspots 16 00:00:54,480 --> 00:00:59,120 Speaker 1: and other countries to get financial markets seem relatively unbothered. 17 00:00:59,560 --> 00:01:01,760 Speaker 1: Our guest was on the right side of the stock 18 00:01:01,800 --> 00:01:05,160 Speaker 1: rebound earlier this year, but now she's starting to talk 19 00:01:05,200 --> 00:01:08,919 Speaker 1: about the potential for a market melt up. And as always, 20 00:01:08,920 --> 00:01:11,880 Speaker 1: will close out this week's episode with our tradition the 21 00:01:11,920 --> 00:01:16,040 Speaker 1: craziest thing I saw in markets this week. And of course, 22 00:01:16,080 --> 00:01:18,600 Speaker 1: if you see something crazy, give us a call on 23 00:01:18,640 --> 00:01:22,920 Speaker 1: the Bloomberg Podcast hotline at six four or six three 24 00:01:22,959 --> 00:01:26,679 Speaker 1: to four three four nine, oh, and leave us a 25 00:01:26,880 --> 00:01:29,480 Speaker 1: voicemail and maybe we'll play it on the show. Or 26 00:01:29,520 --> 00:01:32,160 Speaker 1: if you just have a suggestion or some feedback on 27 00:01:32,200 --> 00:01:35,000 Speaker 1: the show, we'd like to hear it. Hear that too, Sarah, 28 00:01:35,000 --> 00:01:37,040 Speaker 1: I hope you came prepared for with the crazy thing. 29 00:01:37,040 --> 00:01:39,000 Speaker 1: I've got a pretty good one. You have a pretty 30 00:01:39,000 --> 00:01:42,200 Speaker 1: good one. I do, I do, I do. It's true, 31 00:01:42,720 --> 00:01:45,880 Speaker 1: It's true most of the time. It's true. It's the 32 00:01:45,920 --> 00:01:48,040 Speaker 1: one the one thing I'm good at. My my career 33 00:01:48,120 --> 00:01:50,840 Speaker 1: highlight is is crazy things. Take take that for what 34 00:01:50,880 --> 00:01:56,040 Speaker 1: it's worth, exactly exactly. So joining us for the first 35 00:01:56,040 --> 00:01:58,680 Speaker 1: time a new guest. Were very excited to have her. 36 00:01:58,720 --> 00:02:02,520 Speaker 1: Her name is Anna and she's an equity strategist at 37 00:02:02,560 --> 00:02:06,560 Speaker 1: Wells Fargo Security and uh again, first time on the show, 38 00:02:06,600 --> 00:02:08,280 Speaker 1: and welcome to the show. I hope you brought a 39 00:02:08,320 --> 00:02:11,880 Speaker 1: crazy thing too. I did. Thanks for having me, Mike 40 00:02:11,919 --> 00:02:15,240 Speaker 1: and Sarah Glad to be here. Okay, good, Well, don't 41 00:02:15,280 --> 00:02:17,320 Speaker 1: give us your crazy thing yet. We'd like to save 42 00:02:17,360 --> 00:02:19,880 Speaker 1: that for the end. It's like the dessert after a 43 00:02:20,160 --> 00:02:22,920 Speaker 1: nice nutritious meal, as I like to say, after you 44 00:02:22,960 --> 00:02:26,280 Speaker 1: eat your vegetables. That's that's right. But and I wanted 45 00:02:26,320 --> 00:02:30,320 Speaker 1: to start by asking you about this whole notion of 46 00:02:30,400 --> 00:02:33,120 Speaker 1: a melt up. Um, you know, the way I would 47 00:02:33,200 --> 00:02:35,239 Speaker 1: think of the definition of a melt up, I'm I 48 00:02:35,480 --> 00:02:38,520 Speaker 1: guess there's not really a textbook sort of definition of 49 00:02:38,560 --> 00:02:41,040 Speaker 1: it as far as what kind of percentage gain and 50 00:02:41,440 --> 00:02:44,560 Speaker 1: then subsequent pullback we'd be talking about. But to me, 51 00:02:44,600 --> 00:02:48,400 Speaker 1: it just means sort of, uh, an irrational sudden lurch 52 00:02:48,520 --> 00:02:51,840 Speaker 1: higher in the equity market that typically would be would 53 00:02:51,840 --> 00:02:54,520 Speaker 1: be followed by a meltdown. I guess, um, uh, you know, 54 00:02:54,600 --> 00:02:57,560 Speaker 1: sort of retracement of a lot of that game. UM, 55 00:02:57,600 --> 00:02:59,600 Speaker 1: So correct me if I'm wrong on any of that 56 00:02:59,680 --> 00:03:02,120 Speaker 1: as far is how you define it. But also what 57 00:03:02,200 --> 00:03:04,760 Speaker 1: would that look like in this scenario. I mean, I 58 00:03:04,800 --> 00:03:07,760 Speaker 1: think the problem with sort of entering what would be 59 00:03:07,760 --> 00:03:11,040 Speaker 1: considered a melt up phase of the market is really 60 00:03:11,120 --> 00:03:13,880 Speaker 1: not having any idea how far it could go or 61 00:03:13,960 --> 00:03:16,480 Speaker 1: when it would reverse. Um, So how would you sort 62 00:03:16,480 --> 00:03:19,480 Speaker 1: of approach that type of scenario that we we we 63 00:03:19,560 --> 00:03:22,639 Speaker 1: seem seems like we very well could be entering. Well, Mike, 64 00:03:22,760 --> 00:03:24,799 Speaker 1: you sort of hit that on the head already. When 65 00:03:24,840 --> 00:03:27,480 Speaker 1: when you get a melt up, it's hard to characterize 66 00:03:27,600 --> 00:03:30,760 Speaker 1: or exactly put your finger on it, but the way 67 00:03:30,919 --> 00:03:34,560 Speaker 1: I would describe it is, it's this exuberance. It's an 68 00:03:34,560 --> 00:03:38,119 Speaker 1: investor risk seeking that sort of gets ahead of itself. 69 00:03:38,320 --> 00:03:40,800 Speaker 1: And when it does, like you said, you're not sure 70 00:03:40,880 --> 00:03:43,880 Speaker 1: exactly how long can it go, but you know that 71 00:03:43,960 --> 00:03:47,600 Speaker 1: it's more of a destabilizing push up higher and equities 72 00:03:47,720 --> 00:03:52,800 Speaker 1: rather than a a positive, you know, encouraging move on 73 00:03:52,840 --> 00:03:56,240 Speaker 1: the equity market. So we've been suspecting that the risk 74 00:03:56,280 --> 00:03:59,520 Speaker 1: of a melt up is getting higher because look, when 75 00:03:59,560 --> 00:04:04,400 Speaker 1: you've got at zero rates, you've got massive accommodation, both 76 00:04:04,440 --> 00:04:08,760 Speaker 1: monetary and fiscal, and you know you have improving sentiment, 77 00:04:08,840 --> 00:04:15,160 Speaker 1: and you're seeing data economically, jobs, manufacturing, not just domestically 78 00:04:15,280 --> 00:04:19,919 Speaker 1: but globally improving. It's gonna spur that sort of risk seeking, 79 00:04:20,000 --> 00:04:22,160 Speaker 1: and we're worried that's getting a little ahead of itself. 80 00:04:22,920 --> 00:04:27,120 Speaker 1: So I remember back in ten, also in twenty nineteen 81 00:04:27,600 --> 00:04:30,400 Speaker 1: hearing people talk about this phrase a melt up, and 82 00:04:30,480 --> 00:04:33,640 Speaker 1: usually when people talk about a melt up, it comes 83 00:04:33,640 --> 00:04:37,560 Speaker 1: with a negative connotation that that people are scared of 84 00:04:37,640 --> 00:04:40,720 Speaker 1: this spooky, spooky melt up and stocks are going to 85 00:04:40,800 --> 00:04:44,600 Speaker 1: be rising for no fundamental reason that people can really pinpoint. 86 00:04:45,040 --> 00:04:47,160 Speaker 1: But the way you look at it is that, I mean, 87 00:04:47,160 --> 00:04:49,760 Speaker 1: you can play this gap. Stocks are going up. That's 88 00:04:49,800 --> 00:04:54,160 Speaker 1: not necessarily a bad thing, right, Absolutely, It's not something 89 00:04:54,200 --> 00:04:56,280 Speaker 1: where you should be so fearful that you feel like 90 00:04:56,320 --> 00:04:58,320 Speaker 1: you need to sit on the sidelines and you know, 91 00:04:58,680 --> 00:05:01,599 Speaker 1: head for the cash. Um. I would put it more 92 00:05:01,640 --> 00:05:05,120 Speaker 1: as you can ride that rally, but know what you're 93 00:05:05,120 --> 00:05:07,800 Speaker 1: getting into and look for those signs and when you 94 00:05:07,920 --> 00:05:11,440 Speaker 1: think that melt up or that rally is really losing steam. 95 00:05:11,880 --> 00:05:14,720 Speaker 1: So for us, we think one of the catalysts that's 96 00:05:14,720 --> 00:05:17,480 Speaker 1: gonna push this melt up higher is probably going to 97 00:05:17,600 --> 00:05:21,200 Speaker 1: be the second quarter earning season. We expect a generally 98 00:05:21,200 --> 00:05:24,560 Speaker 1: constructive tone, and that can make investors a little too 99 00:05:24,640 --> 00:05:28,839 Speaker 1: hopeful that really the worst is over, not just the worst, 100 00:05:28,880 --> 00:05:32,000 Speaker 1: but hey, things are going to get better sooner than expected. 101 00:05:32,400 --> 00:05:35,320 Speaker 1: So if that happens and you see this massive urge 102 00:05:35,320 --> 00:05:39,240 Speaker 1: in equities, we think won't necessarily be followed by a 103 00:05:39,279 --> 00:05:42,680 Speaker 1: full toppling down, perhaps a melt down, like Mike you 104 00:05:42,680 --> 00:05:46,599 Speaker 1: were mentioning, but it could come to an abrupt halt, 105 00:05:47,200 --> 00:05:49,919 Speaker 1: and that could be a concern if it does pull back, 106 00:05:50,040 --> 00:05:52,520 Speaker 1: that can spook investors, because you know, when you go 107 00:05:52,640 --> 00:05:56,800 Speaker 1: from this exuberant high to a sudden, scary exuberant low, 108 00:05:56,920 --> 00:06:01,039 Speaker 1: that shock that can really spook investors. Can I imply 109 00:06:01,560 --> 00:06:03,880 Speaker 1: from that? Or and for from that that have the 110 00:06:03,880 --> 00:06:07,600 Speaker 1: earnings estimates for the second quarter been cut too low? 111 00:06:07,640 --> 00:06:09,040 Speaker 1: Do you think? Is that? Is that what you mean 112 00:06:09,080 --> 00:06:12,480 Speaker 1: by construction constructive earning season? That sort of the hurdle 113 00:06:12,560 --> 00:06:14,679 Speaker 1: is so low now that it will be a pretty 114 00:06:14,720 --> 00:06:18,240 Speaker 1: easy beat for a lot of companies. And where would 115 00:06:18,279 --> 00:06:20,880 Speaker 1: you suspect those beats to to mainly be. Is it 116 00:06:20,920 --> 00:06:24,760 Speaker 1: across the board or were you know, in the growth stocks, 117 00:06:25,000 --> 00:06:27,000 Speaker 1: in sort of the cyclical stocks. Is there any sort 118 00:06:27,000 --> 00:06:29,400 Speaker 1: of sort of way to get ahead of what you 119 00:06:29,440 --> 00:06:31,599 Speaker 1: think is coming in the earning season? You bring up 120 00:06:31,640 --> 00:06:35,320 Speaker 1: a great point, Mike, it's that expectation, because really equities, 121 00:06:35,360 --> 00:06:39,359 Speaker 1: that's a game of expectation and risk perception. So with 122 00:06:39,480 --> 00:06:42,159 Speaker 1: the earning season there are going to be pockets or 123 00:06:42,160 --> 00:06:45,680 Speaker 1: certain sectors in the economy that investors and analysts on 124 00:06:45,880 --> 00:06:48,120 Speaker 1: you know, the cell side, like myself, are going to 125 00:06:48,320 --> 00:06:52,440 Speaker 1: lower their estimates expecting really that they got decimated because 126 00:06:52,440 --> 00:06:56,640 Speaker 1: of the coronavirus um. But as we've seen already, you've 127 00:06:56,680 --> 00:06:59,760 Speaker 1: seen some of this value style resurgence. Some of the 128 00:06:59,760 --> 00:07:05,520 Speaker 1: really beaten down names have recovered quite decently. Now you're 129 00:07:05,520 --> 00:07:08,440 Speaker 1: also seeing the opposite side of the trend, the high growth, 130 00:07:08,520 --> 00:07:12,520 Speaker 1: high momentum names that were steady all through the downturn 131 00:07:12,600 --> 00:07:16,440 Speaker 1: in March and April. They continue to be those outperformers. 132 00:07:16,480 --> 00:07:19,600 Speaker 1: So the question becomes, as the bar gets higher, can 133 00:07:19,640 --> 00:07:23,200 Speaker 1: you continue to leap over that um? And when you 134 00:07:23,240 --> 00:07:26,080 Speaker 1: have a very low bar, is it enough just to 135 00:07:26,200 --> 00:07:30,400 Speaker 1: kind of, you know, barely hop over that. I'm suspecting 136 00:07:30,520 --> 00:07:33,520 Speaker 1: that really in the value pockets, you're gonna see some 137 00:07:33,680 --> 00:07:37,560 Speaker 1: beaten down expectations. But that's why we actually think that 138 00:07:37,560 --> 00:07:40,840 Speaker 1: that's an opportunity for us, because the bar is lower, 139 00:07:41,240 --> 00:07:44,840 Speaker 1: you can have that kind of positive reaction after you 140 00:07:44,880 --> 00:07:48,000 Speaker 1: get an earning speed. And then on the growth side, 141 00:07:48,000 --> 00:07:51,360 Speaker 1: I just say, you know, again, these growth players, they've 142 00:07:51,520 --> 00:07:55,600 Speaker 1: done very well through the turmoil um, but whether they're 143 00:07:55,640 --> 00:07:58,400 Speaker 1: going to be able to hop over that high hurdle 144 00:07:58,560 --> 00:08:01,560 Speaker 1: and what the expectation is. It's really a next of 145 00:08:02,000 --> 00:08:06,760 Speaker 1: the short term expectation versus our investors perhaps looking already 146 00:08:06,800 --> 00:08:26,560 Speaker 1: to Before we get to talking further about this disparity 147 00:08:26,600 --> 00:08:28,440 Speaker 1: between value and growth, I do want to talk about 148 00:08:28,880 --> 00:08:30,800 Speaker 1: the factors of a melt up just a little bit more, 149 00:08:30,840 --> 00:08:34,440 Speaker 1: because you mentioned earlier on that it's something that you 150 00:08:34,480 --> 00:08:37,080 Speaker 1: can take part in, but you really want to be 151 00:08:37,160 --> 00:08:40,959 Speaker 1: on the lookout for the factors, the signals that might 152 00:08:41,000 --> 00:08:43,880 Speaker 1: point to a blow off top or the end of 153 00:08:43,880 --> 00:08:46,600 Speaker 1: a melt up. I mean, what are those factors that 154 00:08:46,640 --> 00:08:50,240 Speaker 1: you actually look for? And what's to say that maybe 155 00:08:50,280 --> 00:08:53,200 Speaker 1: we haven't seen a melt up already? And I know 156 00:08:53,280 --> 00:08:55,520 Speaker 1: that sounds so crazy because we're in the middle of 157 00:08:55,559 --> 00:08:58,480 Speaker 1: a recession, but some might look at this rally that 158 00:08:58,520 --> 00:09:01,199 Speaker 1: we have seen and say, wait, where are the fundamentals 159 00:09:01,200 --> 00:09:04,199 Speaker 1: behind this? You know, that's a common pushback we've gotten 160 00:09:04,280 --> 00:09:07,320 Speaker 1: from investors and clients is look at this massive rally, 161 00:09:07,480 --> 00:09:11,040 Speaker 1: isn't it too expensive already? Should I really be playing 162 00:09:11,080 --> 00:09:14,360 Speaker 1: in equities? And and has this is this gonna you know, 163 00:09:14,480 --> 00:09:18,240 Speaker 1: run out of steam. When we think about it, it's 164 00:09:18,320 --> 00:09:21,360 Speaker 1: easy to look at where equities and valuations are now 165 00:09:21,760 --> 00:09:24,920 Speaker 1: and to think this is expensive, especially when you don't 166 00:09:25,000 --> 00:09:29,640 Speaker 1: know what that denominator earnings should be given all this turmoil. 167 00:09:30,080 --> 00:09:34,400 Speaker 1: But for us, the situation is different this time because 168 00:09:34,400 --> 00:09:38,160 Speaker 1: you've had so much monetary and fiscal stimulus, and you've 169 00:09:38,200 --> 00:09:42,360 Speaker 1: had it come bigger and badder and faster than we've 170 00:09:42,360 --> 00:09:46,040 Speaker 1: had it ever in history. So we're in an unprecedented 171 00:09:46,080 --> 00:09:49,400 Speaker 1: time of liquidity and stimulus. So that is going to 172 00:09:49,559 --> 00:09:52,959 Speaker 1: make multiples be able to reach higher and be in 173 00:09:53,160 --> 00:09:55,440 Speaker 1: what I would say a different regime really than you've 174 00:09:55,440 --> 00:09:59,719 Speaker 1: seen in the past. That being said, one of the indicators, 175 00:09:59,720 --> 00:10:02,320 Speaker 1: like you said factors to watch out for, we like 176 00:10:02,440 --> 00:10:06,080 Speaker 1: to look at risk really again, equities are the story 177 00:10:06,200 --> 00:10:09,600 Speaker 1: of what investors perceived risk to be in the upcoming 178 00:10:09,640 --> 00:10:13,080 Speaker 1: couple of months. Now. As risk you can measure in 179 00:10:13,080 --> 00:10:16,000 Speaker 1: different ways, but think about the VIX indicator. The index. 180 00:10:16,520 --> 00:10:20,840 Speaker 1: The VIX is telling us what investors believe equities, how 181 00:10:20,960 --> 00:10:23,760 Speaker 1: risky they think they are. And you saw it spike 182 00:10:24,000 --> 00:10:27,800 Speaker 1: massively in March and then rapidly decay, and with that 183 00:10:27,880 --> 00:10:34,240 Speaker 1: decay from the loads of March smp rallied, right, So 184 00:10:34,960 --> 00:10:37,840 Speaker 1: that goes hand in hand. Now we've seen that VIX 185 00:10:37,880 --> 00:10:40,959 Speaker 1: start creeping higher. It was in the low twenties, now 186 00:10:41,000 --> 00:10:45,080 Speaker 1: it's flirting with thirty this Thursday. And with that moving forward, 187 00:10:45,360 --> 00:10:47,840 Speaker 1: as you see this risk creep back in this system 188 00:10:47,960 --> 00:10:50,839 Speaker 1: and yet equities be able to push higher, if not 189 00:10:51,120 --> 00:10:54,560 Speaker 1: leg up significantly, that could be one of the big 190 00:10:54,600 --> 00:10:58,400 Speaker 1: signals that this rally is getting ahead of itself. I'm 191 00:10:58,400 --> 00:11:00,800 Speaker 1: glad you brought up the vix and know you're you 192 00:11:00,840 --> 00:11:03,600 Speaker 1: were a derivatives trader and a former life right is 193 00:11:03,600 --> 00:11:07,320 Speaker 1: that right? Yep, that was a former life for sure, Mike. 194 00:11:09,720 --> 00:11:12,600 Speaker 1: So there has been a lot of talk about exactly 195 00:11:12,600 --> 00:11:14,920 Speaker 1: what you're talking about. The the VIX has receded, but 196 00:11:15,040 --> 00:11:18,360 Speaker 1: still lingering in that sort of you know, high twenties, 197 00:11:18,400 --> 00:11:22,120 Speaker 1: the thirty level, which, um, you know, when you think back, 198 00:11:23,280 --> 00:11:26,160 Speaker 1: maybe given the vixes lifetime average I think for a 199 00:11:26,160 --> 00:11:28,319 Speaker 1: long time was right around twenty. But wait for a 200 00:11:28,360 --> 00:11:30,960 Speaker 1: while there we were looking at a single digit VIX 201 00:11:31,160 --> 00:11:35,079 Speaker 1: you know, um, you know again another lifetime pre pre 202 00:11:35,200 --> 00:11:39,720 Speaker 1: covid um. But I I wonder if that sort of 203 00:11:39,920 --> 00:11:43,840 Speaker 1: suggests that you know that the professional hedge fund class 204 00:11:44,640 --> 00:11:49,480 Speaker 1: is pretty well hedged against, you know, the meltdown, uh, 205 00:11:49,480 --> 00:11:51,480 Speaker 1: and side of the melt up, you know what I 206 00:11:51,480 --> 00:11:53,800 Speaker 1: mean that the sort of coming back to earth and 207 00:11:53,840 --> 00:11:56,640 Speaker 1: that that might actually provide a bit of a cushion 208 00:11:57,200 --> 00:11:59,920 Speaker 1: that would prevent that, you know, that sort of return 209 00:12:00,080 --> 00:12:03,640 Speaker 1: to the rationality if you will, after a melt up 210 00:12:03,720 --> 00:12:05,680 Speaker 1: from getting out of hand. You know, if if you're 211 00:12:05,920 --> 00:12:08,839 Speaker 1: if you're well hedged, maybe the need to to sell 212 00:12:08,840 --> 00:12:11,760 Speaker 1: out will of your of your long positions will not 213 00:12:11,800 --> 00:12:14,040 Speaker 1: be as strong. I mean, is that a fair way 214 00:12:14,080 --> 00:12:17,920 Speaker 1: to think of a high VIX in this type of environment. Yeah, 215 00:12:18,000 --> 00:12:19,960 Speaker 1: I think that is a fair way. And Mike, you know, 216 00:12:20,040 --> 00:12:22,720 Speaker 1: the one way I would characterize it is fool me once, 217 00:12:23,040 --> 00:12:26,920 Speaker 1: you know, shame on you. Fool me twice. That's on me. 218 00:12:27,080 --> 00:12:30,120 Speaker 1: So after a lot of investors got burned by this 219 00:12:30,360 --> 00:12:35,280 Speaker 1: sudden thirty percent drop in March, they realized, I have 220 00:12:35,440 --> 00:12:39,360 Speaker 1: to have that downside protection. So there are more people 221 00:12:39,640 --> 00:12:42,720 Speaker 1: who are out there prepared for that and better heshed. 222 00:12:43,000 --> 00:12:46,480 Speaker 1: But that's not to say that there isn't also upside 223 00:12:46,520 --> 00:12:50,360 Speaker 1: seeking where people are buying called and taking those wagers 224 00:12:50,360 --> 00:12:54,000 Speaker 1: on the market. So you do see better downside protection 225 00:12:54,120 --> 00:12:56,720 Speaker 1: that may provide some cushion were we to see a 226 00:12:56,760 --> 00:13:00,200 Speaker 1: further slide down. But our view, really we're not too 227 00:13:00,240 --> 00:13:03,840 Speaker 1: fearful of a huge pullback here. We don't think we're 228 00:13:03,840 --> 00:13:07,079 Speaker 1: going to see a massive drop in the SMP hive hundred. Really, 229 00:13:07,120 --> 00:13:09,680 Speaker 1: it's more of a risk to the upside and that 230 00:13:09,880 --> 00:13:13,400 Speaker 1: surge higher. Now that being said, we do have a 231 00:13:13,440 --> 00:13:16,080 Speaker 1: lot of risks on the horizon. And if you look 232 00:13:16,120 --> 00:13:19,840 Speaker 1: again in the options market, what's interesting that I found 233 00:13:19,920 --> 00:13:23,760 Speaker 1: is that it looks like investors are more worried about 234 00:13:23,840 --> 00:13:27,040 Speaker 1: the next six months, so the rest of this year, 235 00:13:27,600 --> 00:13:31,079 Speaker 1: than the first half of next year. And that's odd 236 00:13:31,120 --> 00:13:33,959 Speaker 1: to think. Usually it's the other way around, further out 237 00:13:34,040 --> 00:13:38,280 Speaker 1: more uncertainty. You know, the options are priced with higher uncertainty. 238 00:13:38,800 --> 00:13:40,920 Speaker 1: That's not the case now, and part of that could 239 00:13:41,000 --> 00:13:44,720 Speaker 1: be because of the lingering effects of the coronavirus and 240 00:13:45,000 --> 00:13:48,400 Speaker 1: perhaps maybe that domestic political risk that's getting priced in. 241 00:13:49,080 --> 00:13:51,680 Speaker 1: But it's a bit surprising just considering the fact that, okay, 242 00:13:51,720 --> 00:13:54,720 Speaker 1: the next six months, it is very very difficult to 243 00:13:54,880 --> 00:13:57,240 Speaker 1: understand what's going to come our way. I mean, first, 244 00:13:57,600 --> 00:14:00,400 Speaker 1: we're potentially dealing with the fiscal cliff, this month, we 245 00:14:00,440 --> 00:14:02,640 Speaker 1: have the earning season coming up. We don't know what's 246 00:14:02,640 --> 00:14:05,400 Speaker 1: going to happen with the trajectory of the virus, what 247 00:14:05,520 --> 00:14:07,959 Speaker 1: that means for the economic recovery. Then we've got a 248 00:14:08,000 --> 00:14:11,160 Speaker 1: presidential election. I mean, the list just goes on. But 249 00:14:11,480 --> 00:14:15,760 Speaker 1: with that said, how much do you think the expectations 250 00:14:15,760 --> 00:14:19,320 Speaker 1: for volatility in one being lower than they stand now 251 00:14:19,440 --> 00:14:21,840 Speaker 1: is just people throwing their hands up and saying, I 252 00:14:21,920 --> 00:14:23,960 Speaker 1: have no clue. I mean, if you can't predict the 253 00:14:24,000 --> 00:14:27,240 Speaker 1: next six months, what's to say you can predict the 254 00:14:27,320 --> 00:14:30,360 Speaker 1: following year. Now that's a good point, San, there's a 255 00:14:30,360 --> 00:14:33,520 Speaker 1: lot of focus, and then in short term because so 256 00:14:33,640 --> 00:14:35,800 Speaker 1: much is going on, so much crammed in the next 257 00:14:35,840 --> 00:14:38,800 Speaker 1: six months. But if you think about that, that should 258 00:14:38,800 --> 00:14:43,720 Speaker 1: still make the whole next year be higher up in uncertainty. 259 00:14:43,760 --> 00:14:47,120 Speaker 1: But if you're expecting a drop after the next six months, 260 00:14:47,160 --> 00:14:50,480 Speaker 1: that's telling as well. The shape of the vixed curve, 261 00:14:50,520 --> 00:14:54,000 Speaker 1: as you alluded to, is just very unusual right now. Um, 262 00:14:54,040 --> 00:14:56,000 Speaker 1: you know, you do have this spike sort of in 263 00:14:56,080 --> 00:14:59,760 Speaker 1: October and in the fall. There's always kind of been 264 00:15:00,080 --> 00:15:04,320 Speaker 1: least the last I don't know most of there's been 265 00:15:04,360 --> 00:15:06,400 Speaker 1: that sort of weird kink in the VICS curve where 266 00:15:06,440 --> 00:15:12,640 Speaker 1: there was elevated uh futures in say November October. I wonder, 267 00:15:12,760 --> 00:15:14,440 Speaker 1: you know, I would have thought that would have gotten 268 00:15:14,480 --> 00:15:17,880 Speaker 1: smoothed out when you sort of eliminated the Bernie Sanders 269 00:15:18,320 --> 00:15:23,760 Speaker 1: Elizabeth Warren uh risk from the election. Uh as Biden 270 00:15:23,840 --> 00:15:27,359 Speaker 1: sort of ascended to the point where he's the nominee. 271 00:15:28,120 --> 00:15:30,520 Speaker 1: It really hasn't smoothed out though, So I wonder is 272 00:15:30,840 --> 00:15:34,640 Speaker 1: how much of of that hedging for that time frame 273 00:15:35,040 --> 00:15:38,240 Speaker 1: is political risk as far as maybe not even Biden, 274 00:15:38,360 --> 00:15:42,560 Speaker 1: but um, the idea of a blue sweep, you know, 275 00:15:42,720 --> 00:15:46,960 Speaker 1: uh Senate and House and White House controlled by the 276 00:15:47,000 --> 00:15:50,600 Speaker 1: Democrats and sort of the roll rollback of the massive 277 00:15:50,680 --> 00:15:54,320 Speaker 1: Trump tax cuts or is some of it that and 278 00:15:54,400 --> 00:15:56,680 Speaker 1: some of it the worry about that second wave of 279 00:15:56,720 --> 00:15:58,960 Speaker 1: the virus? I mean, is it you know, from someone 280 00:15:58,960 --> 00:16:01,080 Speaker 1: who's traded this type of stuff, is it? Is it 281 00:16:01,120 --> 00:16:03,960 Speaker 1: possible to sort of suss out and talking to clients, 282 00:16:04,080 --> 00:16:06,840 Speaker 1: what is you know, what is causing that odd shape 283 00:16:06,840 --> 00:16:09,760 Speaker 1: in the VIX curve. It's hard to really pick it 284 00:16:09,920 --> 00:16:13,120 Speaker 1: apart just from looking at just the VIX curve or 285 00:16:13,160 --> 00:16:16,920 Speaker 1: just SNP options market, but you talk to investors, and 286 00:16:17,240 --> 00:16:20,520 Speaker 1: I think there really is the growing threat of what's 287 00:16:20,520 --> 00:16:24,200 Speaker 1: going to happen this uh, this presidential election. Like you mentioned, 288 00:16:24,480 --> 00:16:27,520 Speaker 1: let's say we get a blue sweep, but you have 289 00:16:27,640 --> 00:16:31,560 Speaker 1: to realize that the platforms and the economic proposals that 290 00:16:31,640 --> 00:16:34,440 Speaker 1: candidates have been running on, what we thought they were 291 00:16:34,600 --> 00:16:38,280 Speaker 1: back in January and February, they're not the case anymore. 292 00:16:38,320 --> 00:16:41,840 Speaker 1: You're seeing them adapt to the situation given the economic 293 00:16:41,880 --> 00:16:45,240 Speaker 1: recession we're in, and right now we're not sure what 294 00:16:45,400 --> 00:16:49,160 Speaker 1: form they're gonna take. So even as you see one 295 00:16:49,200 --> 00:16:53,320 Speaker 1: party or another gaining momentum, we know that perhaps were 296 00:16:53,320 --> 00:16:55,960 Speaker 1: you to see a sweep, you might see changes enacting 297 00:16:56,080 --> 00:16:59,720 Speaker 1: much faster. But what are those changes? That's what is 298 00:16:59,760 --> 00:17:03,280 Speaker 1: that big uncertainty that people are still fuzzy on, and 299 00:17:03,280 --> 00:17:05,840 Speaker 1: I think that's why you're seeing that that kink in 300 00:17:05,880 --> 00:17:25,000 Speaker 1: the curve. Like you said, m alright, so Anna, bringing 301 00:17:25,040 --> 00:17:27,960 Speaker 1: it back to how you and your team are advising 302 00:17:28,040 --> 00:17:32,160 Speaker 1: client's position. It was back on March that you guys 303 00:17:32,240 --> 00:17:35,800 Speaker 1: said you believe that seven was the market low, which 304 00:17:35,840 --> 00:17:38,960 Speaker 1: it has been, but at that time you still favored 305 00:17:39,119 --> 00:17:43,040 Speaker 1: high quality um names also growth. But then it was 306 00:17:43,160 --> 00:17:45,639 Speaker 1: mid April that you guys shifted and you started to 307 00:17:45,680 --> 00:17:48,440 Speaker 1: say that you wanted to pick up on this rotation, 308 00:17:48,560 --> 00:17:52,360 Speaker 1: particularly into value and cyclicals, and that really did pay 309 00:17:52,359 --> 00:17:56,919 Speaker 1: off through May and early June. But lately it's unbelievable 310 00:17:57,160 --> 00:18:00,639 Speaker 1: the resurgence that we have seen in growth names, mega 311 00:18:00,680 --> 00:18:05,240 Speaker 1: cap technology, the things. I mean, many at record highs 312 00:18:05,800 --> 00:18:09,960 Speaker 1: since June eighth. I believe the NASDAC is beating the 313 00:18:10,200 --> 00:18:15,440 Speaker 1: SNP by ten percentage points or so are a hefty margin. 314 00:18:16,320 --> 00:18:18,880 Speaker 1: Are you guys sticking with this call that you believe 315 00:18:19,440 --> 00:18:23,080 Speaker 1: that value with cyclicals are a good opportunity right now 316 00:18:23,119 --> 00:18:26,440 Speaker 1: and what would it take for that to turn back around? Yeah? 317 00:18:26,480 --> 00:18:29,560 Speaker 1: So far, Sarah, we are still on that value camp 318 00:18:29,680 --> 00:18:32,280 Speaker 1: and we are on that risk on play. And that's 319 00:18:32,320 --> 00:18:35,840 Speaker 1: not to say that this growth and momentum don't work. 320 00:18:36,320 --> 00:18:39,200 Speaker 1: We do think that's one trend you've seen through the markets. 321 00:18:39,200 --> 00:18:43,600 Speaker 1: But where the opportunity is is really where the value is. 322 00:18:43,680 --> 00:18:45,960 Speaker 1: Where is the where is the I wouldn't say bang 323 00:18:46,000 --> 00:18:48,600 Speaker 1: for your buck, but where's the trade where you can 324 00:18:48,720 --> 00:18:52,119 Speaker 1: see a bigger multiple expansion than you would get with 325 00:18:52,160 --> 00:18:55,080 Speaker 1: these growth names. And that's really in the value camp 326 00:18:55,480 --> 00:18:59,160 Speaker 1: because that opportunity came when you had that massive sell 327 00:18:59,200 --> 00:19:01,919 Speaker 1: off the value names, A lot of them got really 328 00:19:02,000 --> 00:19:05,919 Speaker 1: destroyed because the higher risk. Naturally, when you have stress 329 00:19:06,000 --> 00:19:09,680 Speaker 1: in the economic environment inequities, those higher risk names are 330 00:19:09,720 --> 00:19:12,040 Speaker 1: going to be the first to go. But we take 331 00:19:12,080 --> 00:19:15,040 Speaker 1: sort of a first and first out approach that those 332 00:19:15,160 --> 00:19:18,439 Speaker 1: names that got really beaten down, if they are able 333 00:19:18,520 --> 00:19:22,160 Speaker 1: to continue accessing capital, which, thank you to the FED, 334 00:19:22,320 --> 00:19:27,199 Speaker 1: they are because of that credit liquidity, then that discounting 335 00:19:27,600 --> 00:19:31,120 Speaker 1: should actually in a way get reversed as they're able 336 00:19:31,160 --> 00:19:35,080 Speaker 1: to access capital and continue to take advantage of the 337 00:19:35,240 --> 00:19:38,600 Speaker 1: opportunities in liquid markets. We think that these companies have 338 00:19:38,640 --> 00:19:40,960 Speaker 1: a chance of coming back. Now we are seeing that 339 00:19:41,080 --> 00:19:44,320 Speaker 1: rally back. We saw a lot of that action. We 340 00:19:44,440 --> 00:19:47,720 Speaker 1: think there's more left to it. But again, what we're 341 00:19:47,760 --> 00:19:50,240 Speaker 1: watching carefully is to make sure that trade doesn't get 342 00:19:50,240 --> 00:19:53,960 Speaker 1: too heated. Yeah, if I think of a rotation from 343 00:19:54,000 --> 00:19:57,399 Speaker 1: growth to value, I'm thinking of a pretty messy market, 344 00:19:57,440 --> 00:20:00,639 Speaker 1: you know, given the dominance of the big oath names. 345 00:20:01,200 --> 00:20:03,240 Speaker 1: But in your opinion, it sounds like you think it 346 00:20:03,280 --> 00:20:06,359 Speaker 1: could sort of just be a rotation that doesn't really 347 00:20:06,920 --> 00:20:09,400 Speaker 1: hurt the growth growth names as much as just sort 348 00:20:09,400 --> 00:20:12,760 Speaker 1: of prop up up the value end of things. Um. 349 00:20:13,040 --> 00:20:15,520 Speaker 1: And what I keep going back to I've been drowning 350 00:20:15,560 --> 00:20:18,200 Speaker 1: on and on a lot about is the bank stocks. Uh. 351 00:20:18,359 --> 00:20:21,080 Speaker 1: If you look at the KBW Bank Index, I mean 352 00:20:21,080 --> 00:20:23,840 Speaker 1: the p is like single digits, I think it's like 353 00:20:23,920 --> 00:20:27,879 Speaker 1: nine points something. Uh, dividend yield is like four and 354 00:20:27,880 --> 00:20:31,840 Speaker 1: a half and above percent. I mean pretty amazing. Is 355 00:20:31,880 --> 00:20:35,280 Speaker 1: the assumption? Um, do you think just that these dividends 356 00:20:35,280 --> 00:20:38,359 Speaker 1: aren't going to survive given the the sort of uh 357 00:20:38,600 --> 00:20:42,160 Speaker 1: strenuousness of this year's stress tests and the mandates that 358 00:20:42,160 --> 00:20:44,919 Speaker 1: that came with it about cap You know, obviously they 359 00:20:44,920 --> 00:20:47,080 Speaker 1: have to cap their dividends, but you know, I think 360 00:20:47,080 --> 00:20:50,800 Speaker 1: there's a suspicion that we might see some dividend cuts. 361 00:20:50,920 --> 00:20:54,439 Speaker 1: Um boy, if that happens, I I that seems like 362 00:20:54,480 --> 00:20:56,640 Speaker 1: it's gonna be a weird day on the stock market 363 00:20:56,680 --> 00:20:59,080 Speaker 1: if we start to see a big bank dividend cut. Um. 364 00:20:59,240 --> 00:21:01,600 Speaker 1: Maybe I'm just shell shocked from the two thousand and 365 00:21:01,600 --> 00:21:04,160 Speaker 1: eight experience, But how do you look at the bank 366 00:21:04,280 --> 00:21:08,000 Speaker 1: sector as far as a value play, um, as well 367 00:21:08,040 --> 00:21:11,040 Speaker 1: as sort of you know, being integral to to the 368 00:21:11,080 --> 00:21:14,960 Speaker 1: financial system as a whole. Well, banks certainly are integrals 369 00:21:14,960 --> 00:21:17,560 Speaker 1: to the financial system. And like you said, you know, 370 00:21:17,800 --> 00:21:21,240 Speaker 1: in the Great Financial Crisis, bank dividends and banks were 371 00:21:21,320 --> 00:21:25,359 Speaker 1: the problem. They were what broke. And now today and 372 00:21:25,480 --> 00:21:29,120 Speaker 1: the virus crisis, it's a different story. The banks are 373 00:21:29,160 --> 00:21:32,199 Speaker 1: not the source of the problem, but they are one 374 00:21:32,280 --> 00:21:35,000 Speaker 1: of the hardest hit, especially when you bring rates to zero. 375 00:21:35,240 --> 00:21:38,199 Speaker 1: You know, the net interest margins on banks, they just 376 00:21:38,560 --> 00:21:41,960 Speaker 1: get decimated. It's hard for banks right now. So they 377 00:21:42,000 --> 00:21:44,560 Speaker 1: our value play and the question is are they a 378 00:21:44,720 --> 00:21:49,720 Speaker 1: value trap? Now regarding dividends, you realize that they are 379 00:21:49,760 --> 00:21:53,480 Speaker 1: already paid their first two quarters of dividends and many 380 00:21:53,560 --> 00:21:57,600 Speaker 1: banks are approved to pay their third quarter as expected. 381 00:21:57,720 --> 00:22:01,399 Speaker 1: Like you mentioned their caps, but that was expected. I 382 00:22:01,480 --> 00:22:04,040 Speaker 1: don't want to I don't think cell side analysts were 383 00:22:04,040 --> 00:22:07,720 Speaker 1: expecting a raise this year given the environment. And mind 384 00:22:07,800 --> 00:22:11,159 Speaker 1: you that they actually stopped all their buy back repurchasing, 385 00:22:11,280 --> 00:22:13,800 Speaker 1: so with that they have extra cash on hand to 386 00:22:13,960 --> 00:22:18,160 Speaker 1: handle dividends and also any other potential bank growth sea 387 00:22:18,200 --> 00:22:21,760 Speaker 1: crisis that come around. But going forward, it's not that 388 00:22:21,800 --> 00:22:23,959 Speaker 1: they had to cancel the rest of their dividends. They 389 00:22:24,000 --> 00:22:27,159 Speaker 1: were asked by the FED to revalue by quarter and 390 00:22:27,240 --> 00:22:29,720 Speaker 1: so far it's our view that they will be able 391 00:22:29,760 --> 00:22:32,200 Speaker 1: to pay out the rest of their dividends, but as 392 00:22:32,200 --> 00:22:35,080 Speaker 1: an investment, as a whole of the financial sector, it's 393 00:22:35,119 --> 00:22:39,119 Speaker 1: certainly taken a beating. Well. Lucky for you, Mike, the 394 00:22:39,200 --> 00:22:42,240 Speaker 1: banks kickoff second quarter earning season next week, so I'm 395 00:22:42,240 --> 00:22:44,280 Speaker 1: sure there will be plenty of fodder for you to 396 00:22:44,280 --> 00:22:47,440 Speaker 1: obsess over, right. You know, I like a good earnings 397 00:22:47,480 --> 00:22:50,200 Speaker 1: conference called from the bank CEOs, but it really isn't 398 00:22:50,240 --> 00:22:51,920 Speaker 1: you know? It's interesting. I think a lot of people 399 00:22:51,960 --> 00:22:54,720 Speaker 1: are waiting to hear what the bank CEOs are obviously 400 00:22:54,800 --> 00:22:58,600 Speaker 1: in a position to know more about the consumer and 401 00:22:58,640 --> 00:23:02,240 Speaker 1: credit trends than anyone else, so it should be interesting, 402 00:23:02,320 --> 00:23:05,560 Speaker 1: to say the least. But you know what else is interesting? Sarah? 403 00:23:05,800 --> 00:23:10,280 Speaker 1: What's interesting? Mike? Well's let Charlie Pellett tell us stand 404 00:23:10,320 --> 00:23:14,160 Speaker 1: clear of the craziest things we saw in markets this week. 405 00:23:14,840 --> 00:23:17,560 Speaker 1: That's right, it's time for the craziest thing. And since 406 00:23:17,560 --> 00:23:21,760 Speaker 1: I hyped mine up so much, Sarah, I'll start with mine. Uh, 407 00:23:21,800 --> 00:23:24,520 Speaker 1: if you don't mind, don't mind at all. It's once 408 00:23:24,560 --> 00:23:28,160 Speaker 1: again making appearance in this segment is none other than 409 00:23:28,240 --> 00:23:32,679 Speaker 1: Elon Musk. Now, obviously, Tesla and Elot have been tormented 410 00:23:32,720 --> 00:23:35,720 Speaker 1: for years by the short sellers of the world out 411 00:23:35,720 --> 00:23:38,719 Speaker 1: to get him. Um, and he had for a long time, Sarah. 412 00:23:38,720 --> 00:23:41,280 Speaker 1: He had joked that he was gonna buy a bunch 413 00:23:41,280 --> 00:23:44,200 Speaker 1: of short shorts. You know, remember the old hot pants 414 00:23:44,280 --> 00:23:45,800 Speaker 1: we used to call him in the seventies, that the 415 00:23:45,920 --> 00:23:49,639 Speaker 1: very short short shorts, like you know what I'm talking about. 416 00:23:49,680 --> 00:23:52,040 Speaker 1: I know you're talking about. Okay, right, he was gonna, 417 00:23:52,080 --> 00:23:53,960 Speaker 1: he said, he's gonna buy some and send them as 418 00:23:54,000 --> 00:23:58,280 Speaker 1: gifts to two short sellers. Um. Sure enough, he went 419 00:23:58,359 --> 00:24:01,520 Speaker 1: one for further than that, and he actually had a 420 00:24:01,600 --> 00:24:07,760 Speaker 1: line of Tesla short shorts produced. They are super skimpy 421 00:24:08,119 --> 00:24:11,680 Speaker 1: red satin shorts. On the front, they have the Tesla 422 00:24:11,760 --> 00:24:15,480 Speaker 1: logo and then on the back it says s three 423 00:24:15,760 --> 00:24:18,159 Speaker 1: x y, which if you sort of glance at it 424 00:24:18,200 --> 00:24:22,760 Speaker 1: looks like sexy but the right but the short say 425 00:24:22,840 --> 00:24:26,200 Speaker 1: that they do. But obviously that is also the four 426 00:24:26,240 --> 00:24:30,000 Speaker 1: models of Tesla's available on the market. Let me just 427 00:24:30,040 --> 00:24:33,960 Speaker 1: reado the description of these shorts. Celebrate summer with Tesla 428 00:24:34,000 --> 00:24:37,359 Speaker 1: Short Shorts, run like the winder, entertained like Liberacci with 429 00:24:37,400 --> 00:24:41,119 Speaker 1: our red satin and gold trim design. Relax poolsider Lounge 430 00:24:41,119 --> 00:24:44,199 Speaker 1: indoors year round with the limited edition Tesla short shorts 431 00:24:44,800 --> 00:24:49,160 Speaker 1: featuring our logo blah blah blah, enjoy exceptional comfort from 432 00:24:49,200 --> 00:24:52,680 Speaker 1: the closing bell. So he we have we have any 433 00:24:52,720 --> 00:24:55,920 Speaker 1: idea what sales for these Tesla short shorts are looking like? Well, 434 00:24:55,960 --> 00:24:59,000 Speaker 1: they are sold out. They are sold out, So I think, um, 435 00:24:59,040 --> 00:25:01,399 Speaker 1: I think, yeah, well how too? And hey the stock 436 00:25:01,480 --> 00:25:04,720 Speaker 1: spent up since he introduced them, So, um, I don't 437 00:25:04,760 --> 00:25:07,679 Speaker 1: know what the factor them into your Tesla Valt evaluation 438 00:25:07,720 --> 00:25:10,360 Speaker 1: models going forward. I think he should he should restock 439 00:25:10,440 --> 00:25:13,560 Speaker 1: there selling like hotcakes. Well, do we know how many 440 00:25:13,680 --> 00:25:15,840 Speaker 1: they made in the first place? What they made? Five 441 00:25:15,880 --> 00:25:20,399 Speaker 1: and they're sold out? Kid could be could be sixty 442 00:25:20,480 --> 00:25:25,560 Speaker 1: nine dollars and forty two cents listed as six nine 443 00:25:25,600 --> 00:25:28,840 Speaker 1: point four to zero on the website. So to sort 444 00:25:28,840 --> 00:25:33,160 Speaker 1: of uh juvenile numeric jokes, they're in the price of 445 00:25:33,280 --> 00:25:37,359 Speaker 1: the shorts. You're telling me that these shorts self for 446 00:25:37,640 --> 00:25:41,560 Speaker 1: nearly seventy dollars. That's right, that's right. It's higher than 447 00:25:41,680 --> 00:25:46,080 Speaker 1: uh Lulu Lemon price tag workout shorts. Sounds we can 448 00:25:46,080 --> 00:25:52,320 Speaker 1: get away with a lot these days, or they'll get 449 00:25:52,320 --> 00:25:55,160 Speaker 1: a lot of blowback that I forgot about the big 450 00:25:55,160 --> 00:25:57,919 Speaker 1: Sea through Lulu Lemon scandal that was that was that 451 00:25:58,000 --> 00:26:00,120 Speaker 1: was a big one. That was a big one. I've 452 00:26:00,200 --> 00:26:02,840 Speaker 1: they've gotten past that now they fixed their products up. 453 00:26:04,359 --> 00:26:06,360 Speaker 1: But Mike, I'm gonna I'm gonna have to piggyback off 454 00:26:06,400 --> 00:26:09,480 Speaker 1: of you because Tesla has just been on a terror 455 00:26:09,880 --> 00:26:13,800 Speaker 1: this week. And I know we constantly come back to 456 00:26:13,880 --> 00:26:16,800 Speaker 1: the likes of Tesla or Nicola on this show for 457 00:26:16,880 --> 00:26:19,560 Speaker 1: our crazy things that we see in markets, but sometimes 458 00:26:19,560 --> 00:26:22,240 Speaker 1: you just really can't avoid it. I mean, in the 459 00:26:22,359 --> 00:26:27,120 Speaker 1: six days through July seven, Tesla was up, so so 460 00:26:27,200 --> 00:26:31,240 Speaker 1: maybe we'll attribute that to sold out Tesla short shorts 461 00:26:31,320 --> 00:26:34,199 Speaker 1: now that we know that that that is going on 462 00:26:34,320 --> 00:26:36,040 Speaker 1: in the world. But I mean, this is a stock 463 00:26:36,080 --> 00:26:38,879 Speaker 1: that's up two percent year to date and over the 464 00:26:38,960 --> 00:26:42,800 Speaker 1: last twelve months up close to five. Uh. And we 465 00:26:42,840 --> 00:26:46,239 Speaker 1: know the company has a lot of haters, uh, but 466 00:26:46,280 --> 00:26:50,000 Speaker 1: it's still pretty amazing to see it, really is, Anna, 467 00:26:50,160 --> 00:26:52,040 Speaker 1: what what do you come with? This is more on 468 00:26:52,080 --> 00:26:56,520 Speaker 1: the economics side. I was thinking about the influence of 469 00:26:56,880 --> 00:27:00,200 Speaker 1: how testing and knowing whether you're sick or not is 470 00:27:00,240 --> 00:27:04,280 Speaker 1: on consumer spending. So when you look at testing, availability, 471 00:27:04,320 --> 00:27:08,120 Speaker 1: across the states. I was shocked. I just read today 472 00:27:08,160 --> 00:27:12,840 Speaker 1: that in Arizona, one of the nation's biggest drive through 473 00:27:12,880 --> 00:27:17,360 Speaker 1: testing centers, guess how long it takes people to get tested. 474 00:27:17,440 --> 00:27:20,560 Speaker 1: Their cars are lined up, I kid you not for 475 00:27:20,720 --> 00:27:25,600 Speaker 1: eight hours, eight hours in over a hundred degree he 476 00:27:25,800 --> 00:27:29,480 Speaker 1: cooking like a rotisserie chicken in line while you're waiting 477 00:27:29,520 --> 00:27:33,560 Speaker 1: for this test. So that compared to my buddy in 478 00:27:33,640 --> 00:27:36,359 Speaker 1: New York City told me he hopped in and out 479 00:27:36,359 --> 00:27:40,160 Speaker 1: of the of the next door emergency care testing down 480 00:27:40,480 --> 00:27:44,640 Speaker 1: thirty minutes. So that disparity to me, you know, while 481 00:27:44,680 --> 00:27:47,480 Speaker 1: I you know, make light of it, is also extremely 482 00:27:47,520 --> 00:27:51,040 Speaker 1: concerning when it comes to how will this way on 483 00:27:51,160 --> 00:27:55,480 Speaker 1: consumers spending in sentiment, even if we don't have official 484 00:27:55,560 --> 00:27:58,879 Speaker 1: lockdown orders on a state and federal level, just that 485 00:27:59,240 --> 00:28:02,280 Speaker 1: that meant whole you know, weight of it. That could 486 00:28:02,320 --> 00:28:06,120 Speaker 1: actually be a big factor going forward. It's a great point. 487 00:28:06,119 --> 00:28:08,840 Speaker 1: I've heard similar stories down here in Florida, people waiting 488 00:28:08,880 --> 00:28:12,000 Speaker 1: in extremely long lines in Miami to get tested. At 489 00:28:12,000 --> 00:28:14,240 Speaker 1: the same time, I know someone who recently got tested 490 00:28:14,280 --> 00:28:18,560 Speaker 1: and didn't get his results back for eight days. So 491 00:28:18,920 --> 00:28:22,960 Speaker 1: the wait time, at least from that picture doesn't seem 492 00:28:23,000 --> 00:28:25,840 Speaker 1: to be getting shorter because there's just so much volume 493 00:28:25,960 --> 00:28:30,040 Speaker 1: right now, right right. Yeah, And you know, you wonder 494 00:28:30,040 --> 00:28:32,040 Speaker 1: how many people actually catch it from waiting in line 495 00:28:32,320 --> 00:28:34,959 Speaker 1: in these things to stay in your car, keep your 496 00:28:34,960 --> 00:28:38,600 Speaker 1: mask on, keep I guess the drive throughs probably are 497 00:28:38,640 --> 00:28:42,000 Speaker 1: the safest, safest way. I've seen some long foot lines 498 00:28:42,080 --> 00:28:44,080 Speaker 1: around here. I went for a bike ride last weekend 499 00:28:44,120 --> 00:28:48,040 Speaker 1: and uh decent distance from my house. I passed two 500 00:28:48,320 --> 00:28:52,720 Speaker 1: testing sites with just enormous foot lines at like I 501 00:28:52,800 --> 00:28:55,960 Speaker 1: was like eight thirty nine in the morning. So um, yeah, 502 00:28:55,960 --> 00:28:58,640 Speaker 1: it's a good it's a good one. And that's uh 503 00:28:59,280 --> 00:29:01,360 Speaker 1: got away on your mind. I think just wait waiting 504 00:29:01,360 --> 00:29:03,840 Speaker 1: out those results and then you know, you go out 505 00:29:03,880 --> 00:29:05,320 Speaker 1: to the store again, and then you're worried if you 506 00:29:05,320 --> 00:29:08,240 Speaker 1: have to get tested again after that. Yeah, what a 507 00:29:08,280 --> 00:29:10,800 Speaker 1: world we're living. And actually have a bonus one to share, 508 00:29:11,160 --> 00:29:15,040 Speaker 1: but this one, this one, because it was hyped on Twitter, 509 00:29:15,680 --> 00:29:19,080 Speaker 1: I have to bring it up because yeah, it's crazy 510 00:29:19,120 --> 00:29:24,479 Speaker 1: over the weekends. This last weekend Kanye going on Twitter 511 00:29:24,600 --> 00:29:30,440 Speaker 1: and saying that he is announcing his official presidential bid. 512 00:29:30,560 --> 00:29:33,480 Speaker 1: And I'm bringing this up because one of our listeners 513 00:29:33,520 --> 00:29:36,440 Speaker 1: at Jordan Rutner said, this better be featured on the 514 00:29:36,440 --> 00:29:38,880 Speaker 1: Craziest Things I saw this week. You know, Anna, I'm 515 00:29:38,920 --> 00:29:41,840 Speaker 1: just waiting um for the Wells Fargo note to hit 516 00:29:41,920 --> 00:29:44,400 Speaker 1: my inbox that lays out what markets are going to 517 00:29:44,520 --> 00:29:48,520 Speaker 1: do should Kanye West win the presidency in I'm hoping 518 00:29:48,520 --> 00:29:51,480 Speaker 1: that boost they are are are waiting on the consumer 519 00:29:51,680 --> 00:29:56,960 Speaker 1: discretionary sector. Now, the Birthday Party. I do like his 520 00:29:57,000 --> 00:30:00,600 Speaker 1: party name, the Birthday Party. It is a good one, 521 00:30:00,640 --> 00:30:03,440 Speaker 1: like it, But I wonder if he'll even be able 522 00:30:03,480 --> 00:30:05,959 Speaker 1: to get on the ballot. You know, he's run up 523 00:30:05,960 --> 00:30:08,160 Speaker 1: against the deadlines on the ballot on getting on the ballots. 524 00:30:08,240 --> 00:30:12,040 Speaker 1: But well, you know that's twenty I think that's for 525 00:30:12,160 --> 00:30:14,280 Speaker 1: you in a nutshell, right, there is the surprise entrance 526 00:30:14,320 --> 00:30:18,000 Speaker 1: of Kanye West into the into the presidential race. I'm 527 00:30:18,000 --> 00:30:21,200 Speaker 1: waiting for something more not I am surprised every time 528 00:30:21,280 --> 00:30:24,920 Speaker 1: something like this happens in but it is beginning to 529 00:30:25,000 --> 00:30:30,320 Speaker 1: be very difficult to become surprised by anything anymore. Yeah, 530 00:30:30,520 --> 00:30:34,080 Speaker 1: I will say, among my daughters who were teenagers and preteens, 531 00:30:34,120 --> 00:30:37,160 Speaker 1: that was the biggest political news of the year to them. 532 00:30:37,240 --> 00:30:40,360 Speaker 1: That and Trump possibly banning TikTok if they banned TikTok. 533 00:30:40,960 --> 00:30:44,480 Speaker 1: The preteens and the teens of the world are gonna riot. 534 00:30:44,560 --> 00:30:51,240 Speaker 1: It's gonna be starting in my house. Yep, starting in 535 00:30:51,320 --> 00:30:55,600 Speaker 1: my house. All right. Well, with that said, Annahn, it 536 00:30:55,720 --> 00:30:58,360 Speaker 1: was so great having you on the show this week, 537 00:30:58,400 --> 00:31:00,400 Speaker 1: and we would love to have you on again. Thanks 538 00:31:00,400 --> 00:31:12,040 Speaker 1: so much, Sarah, Mike What Goes Up. We'll be back 539 00:31:12,120 --> 00:31:14,640 Speaker 1: next week. Until then, you can find us on the 540 00:31:14,640 --> 00:31:18,600 Speaker 1: Bloomberg Terminal website and app, or wherever you get your podcasts. 541 00:31:19,000 --> 00:31:20,800 Speaker 1: We'd love it if you took the time to rate 542 00:31:20,920 --> 00:31:23,760 Speaker 1: and review the show on Apple podcast so more listeners 543 00:31:23,760 --> 00:31:25,960 Speaker 1: can find us, and you can find us on Twitter, 544 00:31:26,280 --> 00:31:29,280 Speaker 1: follow me at at Sarah pan Sec Mike is that 545 00:31:29,480 --> 00:31:33,800 Speaker 1: ygan Aonymous and you can also follow Bloomberg Podcast at podcasts. 546 00:31:34,160 --> 00:31:36,760 Speaker 1: Of course, another thank you to Charlie Pellett of Bloomberg 547 00:31:36,880 --> 00:31:39,240 Speaker 1: Radio and the voice of the New York City Subway 548 00:31:39,240 --> 00:31:42,720 Speaker 1: System as well. What Goes Up is produced by Jordan Gospore. 549 00:31:43,080 --> 00:31:46,520 Speaker 1: The head of Bloomberg Podcast is Francesca Levie. Thanks for listening. 550 00:31:46,600 --> 00:31:47,440 Speaker 1: See you next time.