Speaker 1: Strap on your parachute. It is time for What Goes
Speaker 1: Up with Sarah Ponzick and Mike Reagan. Hello and welcome
Speaker 1: to What goes Up, a Bloomberg Weekly Markets podcast. I'm
Speaker 1: Sarah Ponzek, a reporter on the Cross Asset team, and
Speaker 1: I'm Mike Reagan, a senior editor on the Markets team
Speaker 1: who is fresh out of wacky dynamic duos for for
Speaker 1: you and I. Sarah, I don't know. I'm I should
Speaker 1: have started this whole gimmick. I'm completely out of out
Speaker 1: of duos now. Honestly, Mike, I was expecting coming into
Speaker 1: this week's show that you weren't even going to bring
Speaker 1: it up. So the fact that you're even admitting it,
Speaker 1: we'll give you something at least. But next week I'm
Speaker 1: holding you to it. We'll have a new one. All right, good,
Speaker 1: good enough. But this week on the show, we've discussed
Speaker 1: it before. Coronavirus cases continue to rise across US hotspots
Speaker 1: and other countries to get financial markets seem relatively unbothered.
Speaker 1: Our guest was on the right side of the stock
Speaker 1: rebound earlier this year, but now she's starting to talk
Speaker 1: about the potential for a market melt up. And as always,
Speaker 1: will close out this week's episode with our tradition the
Speaker 1: craziest thing I saw in markets this week. And of course,
Speaker 1: if you see something crazy, give us a call on
Speaker 1: the Bloomberg Podcast hotline at six four or six three
Speaker 1: to four three four nine, oh, and leave us a
Speaker 1: voicemail and maybe we'll play it on the show. Or
Speaker 1: if you just have a suggestion or some feedback on
Speaker 1: the show, we'd like to hear it. Hear that too, Sarah,
Speaker 1: I hope you came prepared for with the crazy thing.
Speaker 1: I've got a pretty good one. You have a pretty
Speaker 1: good one. I do, I do, I do. It's true,
Speaker 1: It's true most of the time. It's true. It's the
Speaker 1: one the one thing I'm good at. My my career
Speaker 1: highlight is is crazy things. Take take that for what
Speaker 1: it's worth, exactly exactly. So joining us for the first
Speaker 1: time a new guest. Were very excited to have her.
Speaker 1: Her name is Anna and she's an equity strategist at
Speaker 1: Wells Fargo Security and uh again, first time on the show,
Speaker 1: and welcome to the show. I hope you brought a
Speaker 1: crazy thing too. I did. Thanks for having me, Mike
Speaker 1: and Sarah Glad to be here. Okay, good, Well, don't
Speaker 1: give us your crazy thing yet. We'd like to save
Speaker 1: that for the end. It's like the dessert after a
Speaker 1: nice nutritious meal, as I like to say, after you
Speaker 1: eat your vegetables. That's that's right. But and I wanted
Speaker 1: to start by asking you about this whole notion of
Speaker 1: a melt up. Um, you know, the way I would
Speaker 1: think of the definition of a melt up, I'm I
Speaker 1: guess there's not really a textbook sort of definition of
Speaker 1: it as far as what kind of percentage gain and
Speaker 1: then subsequent pullback we'd be talking about. But to me,
Speaker 1: it just means sort of, uh, an irrational sudden lurch
Speaker 1: higher in the equity market that typically would be would
Speaker 1: be followed by a meltdown. I guess, um, uh, you know,
Speaker 1: sort of retracement of a lot of that game. UM,
Speaker 1: So correct me if I'm wrong on any of that
Speaker 1: as far is how you define it. But also what
Speaker 1: would that look like in this scenario. I mean, I
Speaker 1: think the problem with sort of entering what would be
Speaker 1: considered a melt up phase of the market is really
Speaker 1: not having any idea how far it could go or
Speaker 1: when it would reverse. Um, So how would you sort
Speaker 1: of approach that type of scenario that we we we
Speaker 1: seem seems like we very well could be entering. Well, Mike,
Speaker 1: you sort of hit that on the head already. When
Speaker 1: when you get a melt up, it's hard to characterize
Speaker 1: or exactly put your finger on it, but the way
Speaker 1: I would describe it is, it's this exuberance. It's an
Speaker 1: investor risk seeking that sort of gets ahead of itself.
Speaker 1: And when it does, like you said, you're not sure
Speaker 1: exactly how long can it go, but you know that
Speaker 1: it's more of a destabilizing push up higher and equities
Speaker 1: rather than a a positive, you know, encouraging move on
Speaker 1: the equity market. So we've been suspecting that the risk
Speaker 1: of a melt up is getting higher because look, when
Speaker 1: you've got at zero rates, you've got massive accommodation, both
Speaker 1: monetary and fiscal, and you know you have improving sentiment,
Speaker 1: and you're seeing data economically, jobs, manufacturing, not just domestically
Speaker 1: but globally improving. It's gonna spur that sort of risk seeking,
Speaker 1: and we're worried that's getting a little ahead of itself.
Speaker 1: So I remember back in ten, also in twenty nineteen
Speaker 1: hearing people talk about this phrase a melt up, and
Speaker 1: usually when people talk about a melt up, it comes
Speaker 1: with a negative connotation that that people are scared of
Speaker 1: this spooky, spooky melt up and stocks are going to
Speaker 1: be rising for no fundamental reason that people can really pinpoint.
Speaker 1: But the way you look at it is that, I mean,
Speaker 1: you can play this gap. Stocks are going up. That's
Speaker 1: not necessarily a bad thing, right, Absolutely, It's not something
Speaker 1: where you should be so fearful that you feel like
Speaker 1: you need to sit on the sidelines and you know,
Speaker 1: head for the cash. Um. I would put it more
Speaker 1: as you can ride that rally, but know what you're
Speaker 1: getting into and look for those signs and when you
Speaker 1: think that melt up or that rally is really losing steam.
Speaker 1: So for us, we think one of the catalysts that's
Speaker 1: gonna push this melt up higher is probably going to
Speaker 1: be the second quarter earning season. We expect a generally
Speaker 1: constructive tone, and that can make investors a little too
Speaker 1: hopeful that really the worst is over, not just the worst,
Speaker 1: but hey, things are going to get better sooner than expected.
Speaker 1: So if that happens and you see this massive urge
Speaker 1: in equities, we think won't necessarily be followed by a
Speaker 1: full toppling down, perhaps a melt down, like Mike you
Speaker 1: were mentioning, but it could come to an abrupt halt,
Speaker 1: and that could be a concern if it does pull back,
Speaker 1: that can spook investors, because you know, when you go
Speaker 1: from this exuberant high to a sudden, scary exuberant low,
Speaker 1: that shock that can really spook investors. Can I imply
Speaker 1: from that? Or and for from that that have the
Speaker 1: earnings estimates for the second quarter been cut too low?
Speaker 1: Do you think? Is that? Is that what you mean
Speaker 1: by construction constructive earning season? That sort of the hurdle
Speaker 1: is so low now that it will be a pretty
Speaker 1: easy beat for a lot of companies. And where would
Speaker 1: you suspect those beats to to mainly be. Is it
Speaker 1: across the board or were you know, in the growth stocks,
Speaker 1: in sort of the cyclical stocks. Is there any sort
Speaker 1: of sort of way to get ahead of what you
Speaker 1: think is coming in the earning season? You bring up
Speaker 1: a great point, Mike, it's that expectation, because really equities,
Speaker 1: that's a game of expectation and risk perception. So with
Speaker 1: the earning season there are going to be pockets or
Speaker 1: certain sectors in the economy that investors and analysts on
Speaker 1: you know, the cell side, like myself, are going to
Speaker 1: lower their estimates expecting really that they got decimated because
Speaker 1: of the coronavirus um. But as we've seen already, you've
Speaker 1: seen some of this value style resurgence. Some of the
Speaker 1: really beaten down names have recovered quite decently. Now you're
Speaker 1: also seeing the opposite side of the trend, the high growth,
Speaker 1: high momentum names that were steady all through the downturn
Speaker 1: in March and April. They continue to be those outperformers.
Speaker 1: So the question becomes, as the bar gets higher, can
Speaker 1: you continue to leap over that um? And when you
Speaker 1: have a very low bar, is it enough just to
Speaker 1: kind of, you know, barely hop over that. I'm suspecting
Speaker 1: that really in the value pockets, you're gonna see some
Speaker 1: beaten down expectations. But that's why we actually think that
Speaker 1: that's an opportunity for us, because the bar is lower,
Speaker 1: you can have that kind of positive reaction after you
Speaker 1: get an earning speed. And then on the growth side,
Speaker 1: I just say, you know, again, these growth players, they've
Speaker 1: done very well through the turmoil um, but whether they're
Speaker 1: going to be able to hop over that high hurdle
Speaker 1: and what the expectation is. It's really a next of
Speaker 1: the short term expectation versus our investors perhaps looking already
Speaker 1: to Before we get to talking further about this disparity
Speaker 1: between value and growth, I do want to talk about
Speaker 1: the factors of a melt up just a little bit more,
Speaker 1: because you mentioned earlier on that it's something that you
Speaker 1: can take part in, but you really want to be
Speaker 1: on the lookout for the factors, the signals that might
Speaker 1: point to a blow off top or the end of
Speaker 1: a melt up. I mean, what are those factors that
Speaker 1: you actually look for? And what's to say that maybe
Speaker 1: we haven't seen a melt up already? And I know
Speaker 1: that sounds so crazy because we're in the middle of
Speaker 1: a recession, but some might look at this rally that
Speaker 1: we have seen and say, wait, where are the fundamentals
Speaker 1: behind this? You know, that's a common pushback we've gotten
Speaker 1: from investors and clients is look at this massive rally,
Speaker 1: isn't it too expensive already? Should I really be playing
Speaker 1: in equities? And and has this is this gonna you know,
Speaker 1: run out of steam. When we think about it, it's
Speaker 1: easy to look at where equities and valuations are now
Speaker 1: and to think this is expensive, especially when you don't
Speaker 1: know what that denominator earnings should be given all this turmoil.
Speaker 1: But for us, the situation is different this time because
Speaker 1: you've had so much monetary and fiscal stimulus, and you've
Speaker 1: had it come bigger and badder and faster than we've
Speaker 1: had it ever in history. So we're in an unprecedented
Speaker 1: time of liquidity and stimulus. So that is going to
Speaker 1: make multiples be able to reach higher and be in
Speaker 1: what I would say a different regime really than you've
Speaker 1: seen in the past. That being said, one of the indicators,
Speaker 1: like you said factors to watch out for, we like
Speaker 1: to look at risk really again, equities are the story
Speaker 1: of what investors perceived risk to be in the upcoming
Speaker 1: couple of months. Now. As risk you can measure in
Speaker 1: different ways, but think about the VIX indicator. The index.
Speaker 1: The VIX is telling us what investors believe equities, how
Speaker 1: risky they think they are. And you saw it spike
Speaker 1: massively in March and then rapidly decay, and with that
Speaker 1: decay from the loads of March smp rallied, right, So
Speaker 1: that goes hand in hand. Now we've seen that VIX
Speaker 1: start creeping higher. It was in the low twenties, now
Speaker 1: it's flirting with thirty this Thursday. And with that moving forward,
Speaker 1: as you see this risk creep back in this system
Speaker 1: and yet equities be able to push higher, if not
Speaker 1: leg up significantly, that could be one of the big
Speaker 1: signals that this rally is getting ahead of itself. I'm
Speaker 1: glad you brought up the vix and know you're you
Speaker 1: were a derivatives trader and a former life right is
Speaker 1: that right? Yep, that was a former life for sure, Mike.
Speaker 1: So there has been a lot of talk about exactly
Speaker 1: what you're talking about. The the VIX has receded, but
Speaker 1: still lingering in that sort of you know, high twenties,
Speaker 1: the thirty level, which, um, you know, when you think back,
Speaker 1: maybe given the vixes lifetime average I think for a
Speaker 1: long time was right around twenty. But wait for a
Speaker 1: while there we were looking at a single digit VIX
Speaker 1: you know, um, you know again another lifetime pre pre
Speaker 1: covid um. But I I wonder if that sort of
Speaker 1: suggests that you know that the professional hedge fund class
Speaker 1: is pretty well hedged against, you know, the meltdown, uh,
Speaker 1: and side of the melt up, you know what I
Speaker 1: mean that the sort of coming back to earth and
Speaker 1: that that might actually provide a bit of a cushion
Speaker 1: that would prevent that, you know, that sort of return
Speaker 1: to the rationality if you will, after a melt up
Speaker 1: from getting out of hand. You know, if if you're
Speaker 1: if you're well hedged, maybe the need to to sell
Speaker 1: out will of your of your long positions will not
Speaker 1: be as strong. I mean, is that a fair way
Speaker 1: to think of a high VIX in this type of environment. Yeah,
Speaker 1: I think that is a fair way. And Mike, you know,
Speaker 1: the one way I would characterize it is fool me once,
Speaker 1: you know, shame on you. Fool me twice. That's on me.
Speaker 1: So after a lot of investors got burned by this
Speaker 1: sudden thirty percent drop in March, they realized, I have
Speaker 1: to have that downside protection. So there are more people
Speaker 1: who are out there prepared for that and better heshed.
Speaker 1: But that's not to say that there isn't also upside
Speaker 1: seeking where people are buying called and taking those wagers
Speaker 1: on the market. So you do see better downside protection
Speaker 1: that may provide some cushion were we to see a
Speaker 1: further slide down. But our view, really we're not too
Speaker 1: fearful of a huge pullback here. We don't think we're
Speaker 1: going to see a massive drop in the SMP hive hundred. Really,
Speaker 1: it's more of a risk to the upside and that
Speaker 1: surge higher. Now that being said, we do have a
Speaker 1: lot of risks on the horizon. And if you look
Speaker 1: again in the options market, what's interesting that I found
Speaker 1: is that it looks like investors are more worried about
Speaker 1: the next six months, so the rest of this year,
Speaker 1: than the first half of next year. And that's odd
Speaker 1: to think. Usually it's the other way around, further out
Speaker 1: more uncertainty. You know, the options are priced with higher uncertainty.
Speaker 1: That's not the case now, and part of that could
Speaker 1: be because of the lingering effects of the coronavirus and
Speaker 1: perhaps maybe that domestic political risk that's getting priced in.
Speaker 1: But it's a bit surprising just considering the fact that, okay,
Speaker 1: the next six months, it is very very difficult to
Speaker 1: understand what's going to come our way. I mean, first,
Speaker 1: we're potentially dealing with the fiscal cliff, this month, we
Speaker 1: have the earning season coming up. We don't know what's
Speaker 1: going to happen with the trajectory of the virus, what
Speaker 1: that means for the economic recovery. Then we've got a
Speaker 1: presidential election. I mean, the list just goes on. But
Speaker 1: with that said, how much do you think the expectations
Speaker 1: for volatility in one being lower than they stand now
Speaker 1: is just people throwing their hands up and saying, I
Speaker 1: have no clue. I mean, if you can't predict the
Speaker 1: next six months, what's to say you can predict the
Speaker 1: following year. Now that's a good point, San, there's a
Speaker 1: lot of focus, and then in short term because so
Speaker 1: much is going on, so much crammed in the next
Speaker 1: six months. But if you think about that, that should
Speaker 1: still make the whole next year be higher up in uncertainty.
Speaker 1: But if you're expecting a drop after the next six months,
Speaker 1: that's telling as well. The shape of the vixed curve,
Speaker 1: as you alluded to, is just very unusual right now. Um,
Speaker 1: you know, you do have this spike sort of in
Speaker 1: October and in the fall. There's always kind of been
Speaker 1: least the last I don't know most of there's been
Speaker 1: that sort of weird kink in the VICS curve where
Speaker 1: there was elevated uh futures in say November October. I wonder,
Speaker 1: you know, I would have thought that would have gotten
Speaker 1: smoothed out when you sort of eliminated the Bernie Sanders
Speaker 1: Elizabeth Warren uh risk from the election. Uh as Biden
Speaker 1: sort of ascended to the point where he's the nominee.
Speaker 1: It really hasn't smoothed out though, So I wonder is
Speaker 1: how much of of that hedging for that time frame
Speaker 1: is political risk as far as maybe not even Biden,
Speaker 1: but um, the idea of a blue sweep, you know,
Speaker 1: uh Senate and House and White House controlled by the
Speaker 1: Democrats and sort of the roll rollback of the massive
Speaker 1: Trump tax cuts or is some of it that and
Speaker 1: some of it the worry about that second wave of
Speaker 1: the virus? I mean, is it you know, from someone
Speaker 1: who's traded this type of stuff, is it? Is it
Speaker 1: possible to sort of suss out and talking to clients,
Speaker 1: what is you know, what is causing that odd shape
Speaker 1: in the VIX curve. It's hard to really pick it
Speaker 1: apart just from looking at just the VIX curve or
Speaker 1: just SNP options market, but you talk to investors, and
Speaker 1: I think there really is the growing threat of what's
Speaker 1: going to happen this uh, this presidential election. Like you mentioned,
Speaker 1: let's say we get a blue sweep, but you have
Speaker 1: to realize that the platforms and the economic proposals that
Speaker 1: candidates have been running on, what we thought they were
Speaker 1: back in January and February, they're not the case anymore.
Speaker 1: You're seeing them adapt to the situation given the economic
Speaker 1: recession we're in, and right now we're not sure what
Speaker 1: form they're gonna take. So even as you see one
Speaker 1: party or another gaining momentum, we know that perhaps were
Speaker 1: you to see a sweep, you might see changes enacting
Speaker 1: much faster. But what are those changes? That's what is
Speaker 1: that big uncertainty that people are still fuzzy on, and
Speaker 1: I think that's why you're seeing that that kink in
Speaker 1: the curve. Like you said, m alright, so Anna, bringing
Speaker 1: it back to how you and your team are advising
Speaker 1: client's position. It was back on March that you guys
Speaker 1: said you believe that seven was the market low, which
Speaker 1: it has been, but at that time you still favored
Speaker 1: high quality um names also growth. But then it was
Speaker 1: mid April that you guys shifted and you started to
Speaker 1: say that you wanted to pick up on this rotation,
Speaker 1: particularly into value and cyclicals, and that really did pay
Speaker 1: off through May and early June. But lately it's unbelievable
Speaker 1: the resurgence that we have seen in growth names, mega
Speaker 1: cap technology, the things. I mean, many at record highs
Speaker 1: since June eighth. I believe the NASDAC is beating the
Speaker 1: SNP by ten percentage points or so are a hefty margin.
Speaker 1: Are you guys sticking with this call that you believe
Speaker 1: that value with cyclicals are a good opportunity right now
Speaker 1: and what would it take for that to turn back around? Yeah?
Speaker 1: So far, Sarah, we are still on that value camp
Speaker 1: and we are on that risk on play. And that's
Speaker 1: not to say that this growth and momentum don't work.
Speaker 1: We do think that's one trend you've seen through the markets.
Speaker 1: But where the opportunity is is really where the value is.
Speaker 1: Where is the where is the I wouldn't say bang
Speaker 1: for your buck, but where's the trade where you can
Speaker 1: see a bigger multiple expansion than you would get with
Speaker 1: these growth names. And that's really in the value camp
Speaker 1: because that opportunity came when you had that massive sell
Speaker 1: off the value names, A lot of them got really
Speaker 1: destroyed because the higher risk. Naturally, when you have stress
Speaker 1: in the economic environment inequities, those higher risk names are
Speaker 1: going to be the first to go. But we take
Speaker 1: sort of a first and first out approach that those
Speaker 1: names that got really beaten down, if they are able
Speaker 1: to continue accessing capital, which, thank you to the FED,
Speaker 1: they are because of that credit liquidity, then that discounting
Speaker 1: should actually in a way get reversed as they're able
Speaker 1: to access capital and continue to take advantage of the
Speaker 1: opportunities in liquid markets. We think that these companies have
Speaker 1: a chance of coming back. Now we are seeing that
Speaker 1: rally back. We saw a lot of that action. We
Speaker 1: think there's more left to it. But again, what we're
Speaker 1: watching carefully is to make sure that trade doesn't get
Speaker 1: too heated. Yeah, if I think of a rotation from
Speaker 1: growth to value, I'm thinking of a pretty messy market,
Speaker 1: you know, given the dominance of the big oath names.
Speaker 1: But in your opinion, it sounds like you think it
Speaker 1: could sort of just be a rotation that doesn't really
Speaker 1: hurt the growth growth names as much as just sort
Speaker 1: of prop up up the value end of things. Um.
Speaker 1: And what I keep going back to I've been drowning
Speaker 1: on and on a lot about is the bank stocks. Uh.
Speaker 1: If you look at the KBW Bank Index, I mean
Speaker 1: the p is like single digits, I think it's like
Speaker 1: nine points something. Uh, dividend yield is like four and
Speaker 1: a half and above percent. I mean pretty amazing. Is
Speaker 1: the assumption? Um, do you think just that these dividends
Speaker 1: aren't going to survive given the the sort of uh
Speaker 1: strenuousness of this year's stress tests and the mandates that
Speaker 1: that came with it about cap You know, obviously they
Speaker 1: have to cap their dividends, but you know, I think
Speaker 1: there's a suspicion that we might see some dividend cuts.
Speaker 1: Um boy, if that happens, I I that seems like
Speaker 1: it's gonna be a weird day on the stock market
Speaker 1: if we start to see a big bank dividend cut. Um.
Speaker 1: Maybe I'm just shell shocked from the two thousand and
Speaker 1: eight experience, But how do you look at the bank
Speaker 1: sector as far as a value play, um, as well
Speaker 1: as sort of you know, being integral to to the
Speaker 1: financial system as a whole. Well, banks certainly are integrals
Speaker 1: to the financial system. And like you said, you know,
Speaker 1: in the Great Financial Crisis, bank dividends and banks were
Speaker 1: the problem. They were what broke. And now today and
Speaker 1: the virus crisis, it's a different story. The banks are
Speaker 1: not the source of the problem, but they are one
Speaker 1: of the hardest hit, especially when you bring rates to zero.
Speaker 1: You know, the net interest margins on banks, they just
Speaker 1: get decimated. It's hard for banks right now. So they
Speaker 1: our value play and the question is are they a
Speaker 1: value trap? Now regarding dividends, you realize that they are
Speaker 1: already paid their first two quarters of dividends and many
Speaker 1: banks are approved to pay their third quarter as expected.
Speaker 1: Like you mentioned their caps, but that was expected. I
Speaker 1: don't want to I don't think cell side analysts were
Speaker 1: expecting a raise this year given the environment. And mind
Speaker 1: you that they actually stopped all their buy back repurchasing,
Speaker 1: so with that they have extra cash on hand to
Speaker 1: handle dividends and also any other potential bank growth sea
Speaker 1: crisis that come around. But going forward, it's not that
Speaker 1: they had to cancel the rest of their dividends. They
Speaker 1: were asked by the FED to revalue by quarter and
Speaker 1: so far it's our view that they will be able
Speaker 1: to pay out the rest of their dividends, but as
Speaker 1: an investment, as a whole of the financial sector, it's
Speaker 1: certainly taken a beating. Well. Lucky for you, Mike, the
Speaker 1: banks kickoff second quarter earning season next week, so I'm
Speaker 1: sure there will be plenty of fodder for you to
Speaker 1: obsess over, right. You know, I like a good earnings
Speaker 1: conference called from the bank CEOs, but it really isn't
Speaker 1: you know? It's interesting. I think a lot of people
Speaker 1: are waiting to hear what the bank CEOs are obviously
Speaker 1: in a position to know more about the consumer and
Speaker 1: credit trends than anyone else, so it should be interesting,
Speaker 1: to say the least. But you know what else is interesting? Sarah?
Speaker 1: What's interesting? Mike? Well's let Charlie Pellett tell us stand
Speaker 1: clear of the craziest things we saw in markets this week.
Speaker 1: That's right, it's time for the craziest thing. And since
Speaker 1: I hyped mine up so much, Sarah, I'll start with mine. Uh,
Speaker 1: if you don't mind, don't mind at all. It's once
Speaker 1: again making appearance in this segment is none other than
Speaker 1: Elon Musk. Now, obviously, Tesla and Elot have been tormented
Speaker 1: for years by the short sellers of the world out
Speaker 1: to get him. Um, and he had for a long time, Sarah.
Speaker 1: He had joked that he was gonna buy a bunch
Speaker 1: of short shorts. You know, remember the old hot pants
Speaker 1: we used to call him in the seventies, that the
Speaker 1: very short short shorts, like you know what I'm talking about.
Speaker 1: I know you're talking about. Okay, right, he was gonna,
Speaker 1: he said, he's gonna buy some and send them as
Speaker 1: gifts to two short sellers. Um. Sure enough, he went
Speaker 1: one for further than that, and he actually had a
Speaker 1: line of Tesla short shorts produced. They are super skimpy
Speaker 1: red satin shorts. On the front, they have the Tesla
Speaker 1: logo and then on the back it says s three
Speaker 1: x y, which if you sort of glance at it
Speaker 1: looks like sexy but the right but the short say
Speaker 1: that they do. But obviously that is also the four
Speaker 1: models of Tesla's available on the market. Let me just
Speaker 1: reado the description of these shorts. Celebrate summer with Tesla
Speaker 1: Short Shorts, run like the winder, entertained like Liberacci with
Speaker 1: our red satin and gold trim design. Relax poolsider Lounge
Speaker 1: indoors year round with the limited edition Tesla short shorts
Speaker 1: featuring our logo blah blah blah, enjoy exceptional comfort from
Speaker 1: the closing bell. So he we have we have any
Speaker 1: idea what sales for these Tesla short shorts are looking like? Well,
Speaker 1: they are sold out. They are sold out, So I think, um,
Speaker 1: I think, yeah, well how too? And hey the stock
Speaker 1: spent up since he introduced them, So, um, I don't
Speaker 1: know what the factor them into your Tesla Valt evaluation
Speaker 1: models going forward. I think he should he should restock
Speaker 1: there selling like hotcakes. Well, do we know how many
Speaker 1: they made in the first place? What they made? Five
Speaker 1: and they're sold out? Kid could be could be sixty
Speaker 1: nine dollars and forty two cents listed as six nine
Speaker 1: point four to zero on the website. So to sort
Speaker 1: of uh juvenile numeric jokes, they're in the price of
Speaker 1: the shorts. You're telling me that these shorts self for
Speaker 1: nearly seventy dollars. That's right, that's right. It's higher than
Speaker 1: uh Lulu Lemon price tag workout shorts. Sounds we can
Speaker 1: get away with a lot these days, or they'll get
Speaker 1: a lot of blowback that I forgot about the big
Speaker 1: Sea through Lulu Lemon scandal that was that was that
Speaker 1: was a big one. That was a big one. I've
Speaker 1: they've gotten past that now they fixed their products up.
Speaker 1: But Mike, I'm gonna I'm gonna have to piggyback off
Speaker 1: of you because Tesla has just been on a terror
Speaker 1: this week. And I know we constantly come back to
Speaker 1: the likes of Tesla or Nicola on this show for
Speaker 1: our crazy things that we see in markets, but sometimes
Speaker 1: you just really can't avoid it. I mean, in the
Speaker 1: six days through July seven, Tesla was up, so so
Speaker 1: maybe we'll attribute that to sold out Tesla short shorts
Speaker 1: now that we know that that that is going on
Speaker 1: in the world. But I mean, this is a stock
Speaker 1: that's up two percent year to date and over the
Speaker 1: last twelve months up close to five. Uh. And we
Speaker 1: know the company has a lot of haters, uh, but
Speaker 1: it's still pretty amazing to see it, really is, Anna,
Speaker 1: what what do you come with? This is more on
Speaker 1: the economics side. I was thinking about the influence of
Speaker 1: how testing and knowing whether you're sick or not is
Speaker 1: on consumer spending. So when you look at testing, availability,
Speaker 1: across the states. I was shocked. I just read today
Speaker 1: that in Arizona, one of the nation's biggest drive through
Speaker 1: testing centers, guess how long it takes people to get tested.
Speaker 1: Their cars are lined up, I kid you not for
Speaker 1: eight hours, eight hours in over a hundred degree he
Speaker 1: cooking like a rotisserie chicken in line while you're waiting
Speaker 1: for this test. So that compared to my buddy in
Speaker 1: New York City told me he hopped in and out
Speaker 1: of the of the next door emergency care testing down
Speaker 1: thirty minutes. So that disparity to me, you know, while
Speaker 1: I you know, make light of it, is also extremely
Speaker 1: concerning when it comes to how will this way on
Speaker 1: consumers spending in sentiment, even if we don't have official
Speaker 1: lockdown orders on a state and federal level, just that
Speaker 1: that meant whole you know, weight of it. That could
Speaker 1: actually be a big factor going forward. It's a great point.
Speaker 1: I've heard similar stories down here in Florida, people waiting
Speaker 1: in extremely long lines in Miami to get tested. At
Speaker 1: the same time, I know someone who recently got tested
Speaker 1: and didn't get his results back for eight days. So
Speaker 1: the wait time, at least from that picture doesn't seem
Speaker 1: to be getting shorter because there's just so much volume
Speaker 1: right now, right right. Yeah, And you know, you wonder
Speaker 1: how many people actually catch it from waiting in line
Speaker 1: in these things to stay in your car, keep your
Speaker 1: mask on, keep I guess the drive throughs probably are
Speaker 1: the safest, safest way. I've seen some long foot lines
Speaker 1: around here. I went for a bike ride last weekend
Speaker 1: and uh decent distance from my house. I passed two
Speaker 1: testing sites with just enormous foot lines at like I
Speaker 1: was like eight thirty nine in the morning. So um, yeah,
Speaker 1: it's a good it's a good one. And that's uh
Speaker 1: got away on your mind. I think just wait waiting
Speaker 1: out those results and then you know, you go out
Speaker 1: to the store again, and then you're worried if you
Speaker 1: have to get tested again after that. Yeah, what a
Speaker 1: world we're living. And actually have a bonus one to share,
Speaker 1: but this one, this one, because it was hyped on Twitter,
Speaker 1: I have to bring it up because yeah, it's crazy
Speaker 1: over the weekends. This last weekend Kanye going on Twitter
Speaker 1: and saying that he is announcing his official presidential bid.
Speaker 1: And I'm bringing this up because one of our listeners
Speaker 1: at Jordan Rutner said, this better be featured on the
Speaker 1: Craziest Things I saw this week. You know, Anna, I'm
Speaker 1: just waiting um for the Wells Fargo note to hit
Speaker 1: my inbox that lays out what markets are going to
Speaker 1: do should Kanye West win the presidency in I'm hoping
Speaker 1: that boost they are are are waiting on the consumer
Speaker 1: discretionary sector. Now, the Birthday Party. I do like his
Speaker 1: party name, the Birthday Party. It is a good one,
Speaker 1: like it, But I wonder if he'll even be able
Speaker 1: to get on the ballot. You know, he's run up
Speaker 1: against the deadlines on the ballot on getting on the ballots.
Speaker 1: But well, you know that's twenty I think that's for
Speaker 1: you in a nutshell, right, there is the surprise entrance
Speaker 1: of Kanye West into the into the presidential race. I'm
Speaker 1: waiting for something more not I am surprised every time
Speaker 1: something like this happens in but it is beginning to
Speaker 1: be very difficult to become surprised by anything anymore. Yeah,
Speaker 1: I will say, among my daughters who were teenagers and preteens,
Speaker 1: that was the biggest political news of the year to them.
Speaker 1: That and Trump possibly banning TikTok if they banned TikTok.
Speaker 1: The preteens and the teens of the world are gonna riot.
Speaker 1: It's gonna be starting in my house. Yep, starting in
Speaker 1: my house. All right. Well, with that said, Annahn, it
Speaker 1: was so great having you on the show this week,
Speaker 1: and we would love to have you on again. Thanks
Speaker 1: so much, Sarah, Mike What Goes Up. We'll be back
Speaker 1: next week. Until then, you can find us on the
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Speaker 1: System as well. What Goes Up is produced by Jordan Gospore.
Speaker 1: The head of Bloomberg Podcast is Francesca Levie. Thanks for listening.
Speaker 1: See you next time.