Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg weekly
Speaker 1: market podcast. I'm Sara Pantzec, reporter on the Cross Asset team,
Speaker 1: and I'm Mike Reagan, a senior editor on the Markets team.
Speaker 1: This week on the show, market swings are making history
Speaker 1: by the day. This time the focus was on the
Speaker 1: oil market, with futures prices turning negative for the first
Speaker 1: time ever. Call it just a technical factor at play
Speaker 1: or a warning for other assets we'll discuss, and of
Speaker 1: course we'll close out the episode with our tradition the
Speaker 1: craziest things we saw in markets this week. Remember, you
Speaker 1: two can contribute to that segment. Just give us a
Speaker 1: call on the podcast hotline at six four six three
Speaker 1: to four three four nine oh, or tweet to us
Speaker 1: at the at podcasts handle and maybe you'll make it
Speaker 1: onto our show sometime. And if you have any other
Speaker 1: questions about the show, or some criticisms of Sarah or
Speaker 1: compliments of me, but I know that by all means,
Speaker 1: give us a call and let us know how we're doing.
Speaker 1: But UH very excited to introduce for the first time
Speaker 1: on this show a guy who I consider UH to
Speaker 1: be the happiest man on Finn Twitter, as as they
Speaker 1: call financial Twitter. I'm sure we have a lot of
Speaker 1: finn Twitters out there, but if you're not UH a
Speaker 1: participant in financial Twitter, I think this guy is the
Speaker 1: the happiest man in finch Wit, which is Sarah not
Speaker 1: necessarily saying a lot because it's mostly a bunch of
Speaker 1: crank pots on financial Twitter. Well, I can tell you
Speaker 1: right now we have a nice zoom conference going. He
Speaker 1: has the nicey virtual backdrop and he's laughing, smiling, So
Speaker 1: he might be the happiest person on the podcast here
Speaker 1: right now. And if you if you're not a participant
Speaker 1: of Twitter, you might remember this guy from a very
Speaker 1: funny Wall Street Journal story last year about how you
Speaker 1: know Patagonia, the company that makes the famous vests that
Speaker 1: a lot of Wall Street firms used to buy the
Speaker 1: vests and put their logo on UH. At some point
Speaker 1: last year, Patagonia pushed back and said they didn't want
Speaker 1: to sort of be really associated with the finance bros anymore.
Speaker 1: They were only gonna allow their vests to be UH
Speaker 1: bought and and logoed by companies they deemed sort of
Speaker 1: worthy of their brand name. So there's a funny story
Speaker 1: in the journal on it, and the guy who ended
Speaker 1: up being the poster child of the Patagonia vest is
Speaker 1: our guest today. Very happy to have him here. I
Speaker 1: think his quote was, I'll die on a hill wearing
Speaker 1: my vest before I give it up. And Sarah, thanks
Speaker 1: to the magic of zoom video, we can confirm he's
Speaker 1: wearing that vest today. He has not yet died on
Speaker 1: that but a really good, great guy, good friend of ours,
Speaker 1: and really smart market strategist at BARED in Milwaukee. His
Speaker 1: name is Michael Antonelli. Michael, Welcome to the show. Yeah,
Speaker 1: I am so excited to be here with you guys.
Speaker 1: It's always great to see some of my friends, both
Speaker 1: at Bloomberg and kind of kind of on Twitter. I'll
Speaker 1: say there's two things I'm gonna rep till the day
Speaker 1: I die. One of them is Chicago style pizza. I
Speaker 1: don't care, you know, I'm gonna rep that all the
Speaker 1: way to the end. And I'll rep Patagonia. I thank
Speaker 1: the Walstree Journal for its great article. It kind of
Speaker 1: vaulted me into the number one status of of Patagonia
Speaker 1: wears across the street. So I'm excited to be here. Great,
Speaker 1: great day for a show. I'm super ready to go
Speaker 1: true fashion model. I think our first fashion model, Sarah
Speaker 1: on the show is as a matter of fact, yeah,
Speaker 1: I'll follow you on the vest I I like a
Speaker 1: good vest myself. But I don't know about the Chicago pizza.
Speaker 1: I don't know. I can't I can't go with you
Speaker 1: on that one. But Michael, I one thing I wanted
Speaker 1: to ask you sort of to start out with is
Speaker 1: and correct me if I'm wrong about any of this.
Speaker 1: But I sort of view you as as like a
Speaker 1: mark get generalists, someone who follows the macro trends, the
Speaker 1: earnings trends. You know, you can pick out an attractive
Speaker 1: stock based on sort of the fundamentals and valuations, that
Speaker 1: sort of thing. What I think is interesting about the
Speaker 1: market right now, though, is there's this whole other segment
Speaker 1: of investors in the world focused on say, biotech and pharma,
Speaker 1: and it's such a different world to me because it's
Speaker 1: not at all about balance sheets or earning statements. It's
Speaker 1: all about sort of reading the tea leaves of those
Speaker 1: drug trials and the chances of a drug being successful,
Speaker 1: whether or not the government will pay for it in
Speaker 1: in Medicare programs that sort of thing. But with the virus.
Speaker 1: What I find is fascinating is that these these worlds
Speaker 1: have collided in a big way, and I feel like
Speaker 1: the market as a whole now is is trading off
Speaker 1: of farma headlines that maybe the rest of us in
Speaker 1: sort of the general space don't necessarily understand. And the
Speaker 1: U the news on Thursday from from Gilead is a
Speaker 1: good example. They had that drug that that people were
Speaker 1: hoping would be a good treatment for the virus. Turns
Speaker 1: out that first trial UH was not as successful as
Speaker 1: people hope, and I was described as a flop. You know.
Speaker 1: I don't know if that's a technical pharmaceutical term, but
Speaker 1: to me, I feel like there's this kind of stress
Speaker 1: in the market right now between UH that general sort
Speaker 1: of your your regular investor who looks at bounce sheets,
Speaker 1: looks at earnings, and that other niche specialist group that
Speaker 1: knows how the the whole biotech and drug development world
Speaker 1: UH goes and and maybe they're you know, a better
Speaker 1: group to to sort of be gauging the outcome of
Speaker 1: these things. Do you am I write about that? Do
Speaker 1: you do you get a sense that you know, sort
Speaker 1: of the general market practitioner now is forced to be
Speaker 1: a tourist into the pharma space. Yeah, I think you're
Speaker 1: spot on. And what you're talking about is kind of
Speaker 1: this notion that people are going through various levels of
Speaker 1: expertise with almost no background in and I think I
Speaker 1: tweeted or said the other day that you know, everybody
Speaker 1: has gone from being a doctor to a virologist, onto
Speaker 1: being a statistician looking at bell curves, and and you
Speaker 1: know we're ending up in places like commodity expert now
Speaker 1: and and biotech expert even with no expertise in that category.
Speaker 1: Baird has a really good biotech analyst named Brian Scorney.
Speaker 1: He was kind of on top of the Romans of
Speaker 1: your drug kind of data when it came out, and
Speaker 1: he was a little skeptical on it. I think most
Speaker 1: biotech investors analysts have a kind of a healthy notion
Speaker 1: of skepticism about them. I think that's really at their
Speaker 1: core what makes them good. But but we're in a
Speaker 1: situation now where the average investors, say, people who are
Speaker 1: just at home, or people who might be looking at
Speaker 1: the headlines, we're all looking for a quick fix. Everybody
Speaker 1: wants out of this mess. In a hurry. So when
Speaker 1: we see any sort of light at the end of
Speaker 1: the tunnel, whether it be romeds of your data that
Speaker 1: is kind of uh arnished, or whether it be hydroxychloroquin,
Speaker 1: we're all looking for this quick fix and and we're
Speaker 1: hoping for it where we're wanting it to happen. And
Speaker 1: I think smart investors, like biotech analysts, say just hold
Speaker 1: the hold, hold your horses. You're not you're not a
Speaker 1: biotech expert. Just just wait. You have to wait, even
Speaker 1: though we want this kind of quick answer. So we
Speaker 1: mentioned these biotech headlines, but there's also been a huge
Speaker 1: discussion lately of the reopening of economies county to county,
Speaker 1: state to state. I'm interested in how you kind of
Speaker 1: grasp onto that and think about that. Say, we do
Speaker 1: see economies start to reopen. Sure, that sounds great to some.
Speaker 1: Some are still nervous it's too soon. But I mean,
Speaker 1: what next, especially as it relates to investments in the
Speaker 1: Market's like, sure, the economy reopens, but does everything just
Speaker 1: snap back? Are their worries of a second wave? You
Speaker 1: having to shut down again? I mean what then? Yeah,
Speaker 1: I'll put this take out there. I think that the
Speaker 1: reopen is to sell the news event. I don't. I
Speaker 1: don't think it's the answer that the markets looking for. Say. Um,
Speaker 1: I think it's the right step to kind of see
Speaker 1: what what what kind of next things we can open
Speaker 1: with kind of next things that can come back online.
Speaker 1: But I do think it's to sell the news event
Speaker 1: for the following reason. You know a lot of your
Speaker 1: listeners will be uh study, I have studied normalized bell curves.
Speaker 1: Will think about bell curves is kind of the traditional shape. Um,
Speaker 1: A lot of the models out there assume that the
Speaker 1: coronavirus gets worse and then just gets better in a
Speaker 1: bell shaped I think that it's gonna get kind of
Speaker 1: better in a really long tail. Think about instead of
Speaker 1: a perfectly symmetrical bell, the right side of the bell
Speaker 1: is just this really long tail. So if we if
Speaker 1: if someonere to say I'm reopening Wisconsin, tor, I'm reopening
Speaker 1: New York tomorrow, Florida tomorrow, you know how many people
Speaker 1: are still gonna be consumers? How many people are gonna say,
Speaker 1: I'll go to an outdoor restaurant, but not an indoor restaurant.
Speaker 1: So I'm I'm only a partial consumer for at least
Speaker 1: a while. So That's why I think it's to sell
Speaker 1: the news event. I just don't want people to think
Speaker 1: that once we hit the reopen button that you know,
Speaker 1: people are gonna be going to eighty thou seat stadiums
Speaker 1: right away. I just think it's gonna be the slow slog.
Speaker 1: Let's talk a little bit about that note in that
Speaker 1: it could be a sell the news event, and Mike,
Speaker 1: as is my custom, I'll pack about five questions into
Speaker 1: one right here for you now. Right. So, so I
Speaker 1: wonder if there's a danger that that retail capitulation is
Speaker 1: inevitable and that could be part of that sell the news. Uh,
Speaker 1: if we do see a reopening um and we do
Speaker 1: see a little bit of all or not that volatility
Speaker 1: has gone anywhere, But if we do see a pick
Speaker 1: up and another sort of really scary dip in the
Speaker 1: market happen, could that trigger that sort of main street
Speaker 1: capitulation that we haven't really seen yet, but I think
Speaker 1: which most people expect. You kind of need to really
Speaker 1: form a solid bottom. So in part twelve of my question,
Speaker 1: I would say, where does that sell the news take us?
Speaker 1: Does it take us back down to that bottom we
Speaker 1: saw in March or possibly even worse. You know, how
Speaker 1: how bad could it get? Yeah, there's there's been a
Speaker 1: lot of good studies on the bounce and what does
Speaker 1: a bounce mean? What does a retest mean? You know,
Speaker 1: guys that we follow, like Ben Carlson, like back Nick.
Speaker 1: There's also NDR research again named Clisshold. You know, I'm
Speaker 1: kind of consuming all this in my basement, you know,
Speaker 1: on top of your guys and stuff, I'm consuming everybody
Speaker 1: else's stuff. But you know, Ed Clisshold said that kind
Speaker 1: of the sharp the sharp nature of the bounce, the
Speaker 1: sharp nature of how far we've come off the low,
Speaker 1: it doesn't necessarily mean we won't retest the low, right,
Speaker 1: there's no there's no hard and fast we won't retest,
Speaker 1: but the retests tend to be shallower. Um, this is
Speaker 1: something NDR looks after a waterfall decline ends. You know,
Speaker 1: what we went through in March was was basically a
Speaker 1: waterfall decline. You know, I remember seeing back on March
Speaker 1: twenty three a lot of a lot of really scary headlines.
Speaker 1: I remember seeing something I think it might have been
Speaker 1: from Bank of America Mary Lynch saying that that was
Speaker 1: their biggest day of retail selling. We might have seen
Speaker 1: some of that at the March twenty three lie. I
Speaker 1: keep trying to go back to find that that tweet
Speaker 1: or that that data point, but I remember seeing it
Speaker 1: back then. And I always kind of go back to
Speaker 1: Vangar because they kind of have the stickiest amount of
Speaker 1: people in their in their kind of service. They They've
Speaker 1: done studies about previous volatility. They did a study and
Speaker 1: they found that, you know, during the European financial crisis
Speaker 1: about their accounts did nothing and that's still bottomed, right,
Speaker 1: that still had an end to the volatility, end to
Speaker 1: the event. Uh. You know, I think the notion that
Speaker 1: retail is in what it used to be in or
Speaker 1: two thousand and one. I think that retail is kind
Speaker 1: of morphed through either behavioral coaching, use of more advisors.
Speaker 1: I think the nature of them is traded, uh not
Speaker 1: traded has changed, um for the better, honestly for the better. Um.
Speaker 1: I you know, we can talk about this about that low, um,
Speaker 1: but but I do think that that was a really
Speaker 1: panicky low. I think there was a lot of stuff
Speaker 1: that you would expect in the low that happened on Marche.
Speaker 1: But my my notion of sell the news, I think
Speaker 1: you can you can sell the news could be a
Speaker 1: grind sideways. Uh, it could be you know, another pull
Speaker 1: back towards the low. I just, I just I'm not
Speaker 1: in the camp that we're going to retest that that
Speaker 1: march fully, I guess so along those lines, and what
Speaker 1: could potentially happen, whether that's capitulation or something else to
Speaker 1: bring back a little bit of panic or bring back
Speaker 1: some selling. Next week, we have earnings from the likes
Speaker 1: of Google Parent Alphabet, Amazon, Facebook, Google, And something that's
Speaker 1: really stood out to me throughout this market resilience has
Speaker 1: just been this performance of mega cap large cap companies.
Speaker 1: Amazon short has its own reasons. Microsoft, you could say
Speaker 1: use of its cloud services as really in vogue right now.
Speaker 1: But someone said to me at some point over the
Speaker 1: past week or so that to him, he thinks that
Speaker 1: these megacap earnings, surprising to the downside and not standing
Speaker 1: up as much as people hope or think they will,
Speaker 1: could actually be a larger risk at this point than
Speaker 1: some of the coronavirus news coming out in the weeks
Speaker 1: to come. Would you agree with that? Are are you
Speaker 1: a little bit worried at all over the strength of
Speaker 1: the mega cap companies. Yeah, that really, it's it's a
Speaker 1: really relevant point. There's been a lot of stuff on
Speaker 1: this recently too that if we maybe we'll talk about
Speaker 1: oil later. We should probably talk about oil. But you know,
Speaker 1: for the market to retest the lows, you have to
Speaker 1: have a big hit to the biggest compas because they
Speaker 1: are such a huge weight to the SMP five hunter.
Speaker 1: Right now, the the the energy sectors three of the spire,
Speaker 1: and it has crashed, right the energy sector is basically crashed.
Speaker 1: You know, you wouldn't look to a three weight to
Speaker 1: be more of the downside, you know what I mean.
Speaker 1: So yeah, in order for the downside to be retested,
Speaker 1: the big big megacap tech have to be hit, which
Speaker 1: means that investors views of they're they're both you know,
Speaker 1: six months to twelve months to one to one and
Speaker 1: a half year performance has to be ratcheted lower. UM.
Speaker 1: You need the Apples and the Amazons and the facebooks
Speaker 1: and the Googles to all lead the way lower UM,
Speaker 1: which right now we're just not seen that they tend
Speaker 1: to be UM places people hide out in at least
Speaker 1: for now. So yeah, he's right, You're right, there has
Speaker 1: to be a change in expectations around it's called the
Speaker 1: top fifteen companies in the sp order for that retest
Speaker 1: to really accelerate. Like, I also wonder, you know, like
Speaker 1: you said that the big fang stocks UM at least
Speaker 1: it definitely Amazon, Netflix, um, you know the others to
Speaker 1: some degree. There there's certainly a haven out a time
Speaker 1: like this, which which makes sense. Now everyone's buying more
Speaker 1: on Amazon, You're we're watching more Netflix. Their subscriber numbers
Speaker 1: were crazy good this week. But I wonder if if
Speaker 1: the sentiment does turn to uh, putting the virus behind
Speaker 1: us and and getting back to those cyclical stocks, could
Speaker 1: we have like a really nasty value growth rotation that
Speaker 1: would see those mega cap stocks really take it on
Speaker 1: the chin. If people start piling into the value in
Speaker 1: the banks and the energy. Yeah, you'd have to see
Speaker 1: just a massive ramp and growth expectations for that. I
Speaker 1: think that trade to play out. Um. I always said,
Speaker 1: you know, small cap starts out performing when the yield
Speaker 1: curve really steepens, when people's growth expectations really start to rise. H.
Speaker 1: You know one of my partners, uh, Willie Delwitz, who
Speaker 1: kind of we kind of work together, He's looking at
Speaker 1: h copper and he's looking at ten ure yields for
Speaker 1: for what you're saying, right if in order for this
Speaker 1: to be a meaningful bounce, you want bigger breadth, and
Speaker 1: then you want to see some of the cyclicals do better. Um,
Speaker 1: you know, the people hiding out in the in the
Speaker 1: mega cap tech stocks. You know, I think even going
Speaker 1: back to the pre Corona to days, you know, I'm
Speaker 1: sure I've read pretty articles from you guys saying what
Speaker 1: happens if this gets hit and this and small caps go? Yeah,
Speaker 1: that's one of those, Like you know, we always kind
Speaker 1: of circles around us. What happens when small does well
Speaker 1: in Apple and Amazon? Don't you know you need this
Speaker 1: massive surge and growth expectations and you'd want to look
Speaker 1: towards copper and tenure to sniff that out. And that's
Speaker 1: just not happening yet. Um. But but yes, people are
Speaker 1: crowded into that space, crowded into that Yeah, as you say,
Speaker 1: crowded trades can can last a lot lot longer than
Speaker 1: people expect. I guess, Sarah, you know, uh as Michael
Speaker 1: alluded to, when you alluded to at the beginning, Um,
Speaker 1: you know, every week we talked about the craziest things
Speaker 1: we've seen in markets this week. I think this week
Speaker 1: we all saw the craziest thing anyone's ever seen in
Speaker 1: any of our lifetime. Uh so let's skip ahead of that.
Speaker 1: And of course, uh listener kind of front ran us
Speaker 1: on all of it, and and phoned in a voicemail
Speaker 1: to tell us exactly what happened in case you missed it.
Speaker 1: I don't know who missed this. I think even someone
Speaker 1: who hasn't thought of stock since since nine probably probably
Speaker 1: read about this. But let's listen to that voicemail to
Speaker 1: to clear it up. Hi, this is Charlie Ford. Craziest
Speaker 1: thing a son on Wall Street. Looking at the terminal here,
Speaker 1: the um spot crude is at uh negative thirty five
Speaker 1: bucks or some negative thirty seven point six three and
Speaker 1: the front month contract is a negative two dollars and
Speaker 1: forty seven cents. Now that's pretty crazy. Thank you. You
Speaker 1: know what. I love of Mike that we got a
Speaker 1: call in real time too as this was happening. He decided,
Speaker 1: you know what, I've gotta pick up the phone, call
Speaker 1: Mike and Sarah and let them know how crazy I
Speaker 1: think spot crude at negative forty of barrel. That's right.
Speaker 1: I like that instinct. I also like the guy's name,
Speaker 1: Charlie Ford. Uh, that's the guy who killed Jesse James
Speaker 1: if I'm not mistaken back in the in the wild West.
Speaker 1: So we'll assuming that's this guy's real name. You never know,
Speaker 1: But Mike, I mean, were you did your eyes pop
Speaker 1: out of your head watching that all go down? I
Speaker 1: can't imagine. Was the phone ringing off the hook with
Speaker 1: with clients? How do you how do you handle a
Speaker 1: day like that? Yeah, you guys have awesome listeners. I
Speaker 1: love that they're calling in real time watching watching crude
Speaker 1: oil get absolutely pummeled. You know, I I treated commodities
Speaker 1: for a couple of years. I've traded equities, I've treated
Speaker 1: all sorts of products. I never thought I would see
Speaker 1: anything like that day. There's just really no words. I
Speaker 1: think I tweeted that the thing that was taking Somebody said,
Speaker 1: what's gonna take the biggest hit due to negative crude prices?
Speaker 1: And I said, literally every of these productivity on finton,
Speaker 1: I think all it's it's it's definitely due to the
Speaker 1: kind of nature of futures contracts, how how futures contracts expire,
Speaker 1: what delivery means. It's definitely a quirk of how oil works.
Speaker 1: You know, we we probably need to talk about why
Speaker 1: oil is doing what it's doing from a spy demand perspective,
Speaker 1: but I'd love to hear from you guys what you
Speaker 1: were thinking. I was just staring at my screen. No stop. Yeah,
Speaker 1: it was like once we hit zero, the dam just
Speaker 1: broke and it was really hard to just stop watching.
Speaker 1: And I feel like there was so much discussion about
Speaker 1: this being a technical issue that's really being due to
Speaker 1: the fact that there's nowhere to store oil right now.
Speaker 1: But you bring up the point, Mike, I mean, what's
Speaker 1: actually driving this supply demand and balance? And I wonder,
Speaker 1: what's to say that this isn't going to happen again.
Speaker 1: I mean, what's going to happen to the demand picture
Speaker 1: or the supply picture in the next month or the
Speaker 1: next two months, or whatever it may be, to say
Speaker 1: that this can't repeat itself right? Well, you know what
Speaker 1: I found amazing about it is, Uh, it was in
Speaker 1: one of our chat rooms or work chat rooms. Uh.
Speaker 1: And I think the price had gotten to like, I
Speaker 1: don't know, four or three dollars, and I typed in
Speaker 1: there I was like, is it allowed to trade negative?
Speaker 1: You know, I didn't know if the the CME would
Speaker 1: actually allow the contract to trade negative. UM. Probably about
Speaker 1: five minutes later, I think someone on the OURT Commodities
Speaker 1: team had the same question and emailed the CMME and said,
Speaker 1: are you gonna let this thing go negative? And then
Speaker 1: we had that hot sticky head on the terminal saying
Speaker 1: Sime says, we'll let it go negative, and almost instantly
Speaker 1: is when it actually went negative. So traders, I think
Speaker 1: didn't know if they could put in a negative bid
Speaker 1: or a negative offer, and it's almost like they got
Speaker 1: that permission to do it and it went negative. And
Speaker 1: I'm not sure every brokerage house out there, uh or
Speaker 1: every you know, the trading platform that trades futures was
Speaker 1: even prepared for this, to be honest, It's it's such
Speaker 1: an unbelievable scenario. You know. One of the things we
Speaker 1: had we had a lot of advisors calling us, we
Speaker 1: had a lot of clients calling us. UM. I think
Speaker 1: one of the things that you guys probably talk about
Speaker 1: or we need to talk about more is you know
Speaker 1: USO the E t F. I don't think retail investors
Speaker 1: understand how it works, Uh, why it did does what
Speaker 1: it does. I think a lot of the e t
Speaker 1: s that have to deal with future's curves, whether it's
Speaker 1: volatility or crude, um, people just don't understand them. They
Speaker 1: just I just don't understand them. I think it's important
Speaker 1: for for advisors and people to get educated on them
Speaker 1: before they use them. Um. But look, I'm measuring my
Speaker 1: car usage in miles per week right now, you know,
Speaker 1: gallons per week, So I get what crud is doing.
Speaker 1: What it's doing. It's you know, there's there's so much
Speaker 1: of it. Saudi started a price war, which just it's
Speaker 1: like a worst case scenario here. You know, Like I
Speaker 1: keep hearing that old phrase the tipping point again, you know,
Speaker 1: the old Malcolm Gladwell concept about how certain events in
Speaker 1: history can really just trigger a permanent change in the
Speaker 1: white things work and crude going negative to me, you know,
Speaker 1: seems like it blows up basically every risk model ever written.
Speaker 1: So so that's one another tipping point I keep thinking about.
Speaker 1: Is the the commercial real estate. You know, every company,
Speaker 1: major corporation out there has uh basically discovered that they
Speaker 1: can get away pretty well with a lot of their
Speaker 1: couple you know, employees working at home. Maybe we don't
Speaker 1: need all that real estate. I'm curious, you know how
Speaker 1: you're viewing this whole event in through the prism of
Speaker 1: permanent changes and sort of winners and losers on the
Speaker 1: other side of this. I mean, do you agree like
Speaker 1: those two things are tipping points? Are there any other
Speaker 1: sort of permanent changes you could see coming out of this? Yeah,
Speaker 1: I I talk about it. I talked about this with
Speaker 1: our clients all the time. I kind of put a
Speaker 1: slide deck together recently where I talk about things that
Speaker 1: I think will be the same, things that I think
Speaker 1: will be different. You're right, there's there's lots of things
Speaker 1: that have probably hit tipping points. Uh. You know, the
Speaker 1: optimists and me thinks when you're when you're talking about
Speaker 1: this work from home, that that companies going forward will
Speaker 1: be able to hire people anywhere much more so than
Speaker 1: they used to in the past. I think smart, thoughtful
Speaker 1: companies always knew they could hire talent kind of outside
Speaker 1: of their geographic area. But um, the the optimist in me,
Speaker 1: the long term optimist, says, maybe this solves a lot
Speaker 1: of our housing issues where you don't need to crowd
Speaker 1: into the Bay Area to work for a tech company.
Speaker 1: Maybe you know, I could be a Bloomberg reporter from Wisconsin,
Speaker 1: or I could be a Bloomberg reporter from anywhere. I think,
Speaker 1: uh that that mobility of talent, I think is probably
Speaker 1: hit a tipping point and that's a good thing. Uh
Speaker 1: what else has changed? I'd want to be along suburban
Speaker 1: real estate right now, to be honest. You know, you're
Speaker 1: in an apartment in in a big city, and the
Speaker 1: hospitals are kind of crowded. You have a you have
Speaker 1: a kid, and you have no balcony. You can't go
Speaker 1: to the park because you're kind of afraid. I think
Speaker 1: people's views about urban living versus suburban living. We're not
Speaker 1: gonna completely online, but maybe at the margin you kick
Speaker 1: a few more people into the suburbs that maybe thought
Speaker 1: they were never gonna leave. Um. I think investing probably
Speaker 1: is one of those things that might change. Pre COVID,
Speaker 1: I think we were in a tenure bowl market. There
Speaker 1: might have been people have thought I could handle yne
Speaker 1: equity portfolio and they learned that they can't. I think
Speaker 1: the reason we invest will always stay the same, which
Speaker 1: is to kind of grow, uh grow our our life
Speaker 1: and to say for things that will stay the same.
Speaker 1: But the way we invest, how many equities we hold,
Speaker 1: might might have hit a tipping point that takes a
Speaker 1: long time to recover. Um, there's there's lots of trends
Speaker 1: out there at the Globalization is obviously one that may
Speaker 1: have hit a tipping point. We we can't have of
Speaker 1: our core components for generic drugs come from abroad. Um.
Speaker 1: So so there there are things that I think we'll
Speaker 1: change for the better and there are things that, um,
Speaker 1: we'll stay the same. That there's no way we're doing
Speaker 1: Kadell schooling online anymore. I promise you. Every parent is like,
Speaker 1: get out of my house. There's no way is going online.
Speaker 1: You know, it never occurred to me. I could do
Speaker 1: my job from Wisconsin. Mike, find me a nice for
Speaker 1: bedroom on the lakefront somewhere, and uh, yeah, you'll get
Speaker 1: out there might be there. Yeah yeah, cost of living
Speaker 1: cut in half. I probably exactly exactly gotta wake up
Speaker 1: earlier though, So I don't know about that. It might
Speaker 1: be worth the extra cost living, But Sara me, going
Speaker 1: to Wisconsin might be the craziest thing to come out
Speaker 1: of this. I don't know. But but what there's a
Speaker 1: lot of crazy things coming out of this podcast. But
Speaker 1: we all know that none of us are off the hook.
Speaker 1: We're sharing. Charlie shared, even though Charlie Ford scooped us
Speaker 1: in front, front, round us on the Craziest Thing, Sarah,
Speaker 1: what what do you have to offer to the Craziest
Speaker 1: Thing discussion? Alright? So, so mine's related and it's related
Speaker 1: to the U s O et F discussion as well,
Speaker 1: just to the point that retail investors are actually gravitating
Speaker 1: to this instrument. So a couple of our colleagues had
Speaker 1: a story out on the Bloomberg looking at robin tracks data,
Speaker 1: so tracking data from Robin Hood, and what they found
Speaker 1: was actually that while all of this was going on,
Speaker 1: while USO was shuffling it's holdings, while crude was falling
Speaker 1: below zero uh, it was actually the one of the
Speaker 1: most actively traded securities and it was the most added
Speaker 1: security when it comes to trading volumes. So even though
Speaker 1: there's so many people who don't know what this thing
Speaker 1: is actually doing, they look at the price action on
Speaker 1: their screen and they're like, you know what, I want
Speaker 1: a piece of that. Hopefully they didn't use that infinite
Speaker 1: leverage that Robin Hood is famous for to pile in
Speaker 1: the US, so that could be all right, Mike, what's
Speaker 1: the craziest thing you saw this week? All right, I'm
Speaker 1: gonna top both of you guys. Topping topping topping negative
Speaker 1: oil might be kind of hard. I'm glad I got
Speaker 1: to be on for an absolute historic moment, but I'm
Speaker 1: gonna top it with this, which is a very popular
Speaker 1: topic over the past week or so. Initial Claims comes
Speaker 1: out every Thursday. It's something that all of us strategists
Speaker 1: look at. I'm sure you guys look at it. Initial
Speaker 1: Claims has always been most strategist desert island indicator. If
Speaker 1: you could take one indicator with you, you're taking weekly
Speaker 1: jobs claims. How many people are filing for unemployment? Okay,
Speaker 1: so we know that they have been soaring over the
Speaker 1: past up to up to April, you've seen at least
Speaker 1: three million every week. So three million, six million, six million,
Speaker 1: four point nine four point two in April. Incredible numbers. Historic,
Speaker 1: It's cumulative over four million Americans. Absolute tragedy in terms
Speaker 1: of job loss is something that we've never seen before.
Speaker 1: Here's my craziest thing of all of those days in
Speaker 1: a row up to April, the sp close positive all
Speaker 1: of them, which means anytime initial jobs claims has been
Speaker 1: at least three million, the market has closed that day positive. Um.
Speaker 1: I will give it to Mike though. That was a
Speaker 1: pretty good one. I think we gotta get give him
Speaker 1: the honorary win this week is as painful as it
Speaker 1: is for me as the judge before he even shares
Speaker 1: his own. Yeah, yeah, it's pretty good too. Though. You know,
Speaker 1: we we've often probably all heard of this phenomenon where
Speaker 1: most of the market's gains come overnight, you know, the
Speaker 1: futures rally and off hours, and then cash index catches
Speaker 1: up with it in the morning. It's kind of a
Speaker 1: phenomenon that's persisted for a while, but it seems to
Speaker 1: have really gone on steroids during this uh last couple
Speaker 1: of months. And I'll quote a Macroman calm from our
Speaker 1: own Cameron christ who was looking into this in a
Speaker 1: little bit of detail. He's said, while the SPI is
Speaker 1: still down some nine since February nine, by my calculations,
Speaker 1: futures are up a cumulative between midnight and three three
Speaker 1: am Eastern time. Over the same time frame, so between
Speaker 1: midnight and three am, if you're in at midnight and
Speaker 1: out at three am. You're up, and not just since
Speaker 1: the rebounds since the peak in February, including the bear
Speaker 1: market and the and the rebound. I I don't I've
Speaker 1: try to wrap my head around a million different explanations
Speaker 1: for this, Mike, you know, I don't know. You always think,
Speaker 1: you know, maybe it's the delta one desks on on
Speaker 1: working the night shift somewhere, or what I got. Is
Speaker 1: there any theory I'll take, I'll take. I'll take your
Speaker 1: wildest I'll take the wildest conspiracy theory you got on that.
Speaker 1: All right, here's my here's my uh, here's my wild take,
Speaker 1: my spicy take. It's really boils down to the be
Speaker 1: one of the most ridiculous things I've ever say. It's
Speaker 1: just total number of hours. The markets only open for
Speaker 1: six and a half hours during the day, and there's
Speaker 1: more non market hours than there are hours market hours.
Speaker 1: So I just think there's you know, there's only so
Speaker 1: much news that can come out while we're open. Let's
Speaker 1: say that you know, earnings, earnings, by the way, earnings
Speaker 1: come out after the clothes. Usually they'll come out pre
Speaker 1: the open, So you incorporate all the earnings you you
Speaker 1: incorporate all the company data drops that are usually happened
Speaker 1: when the markets closed. Um, there's only so much that
Speaker 1: kind of comes out during the day, So I think
Speaker 1: the markets better at processing things post closed pre open uh.
Speaker 1: And it's it's more liquid, it gets priced in quicker.
Speaker 1: There's not as much emotion in the market during the
Speaker 1: future's hours because frankly, most people aren't even trading it.
Speaker 1: But I think it's just a sheer. I think it's
Speaker 1: just a function of when news it's released, how many
Speaker 1: total hours there are both while the markets open and closed. Uh,
Speaker 1: And then just people's reactions are are a little a
Speaker 1: little faster to be priced in th futures markets. I
Speaker 1: wonder too if trading limits maybe have anything to do
Speaker 1: with it, because consider the amount of times that we've
Speaker 1: seen futures fall down five percent immediately five minutes after
Speaker 1: future is open, and then either there lodged there the
Speaker 1: rest of the time or they have nowhere to go
Speaker 1: but up once they become dislodged. So if you start
Speaker 1: looking at midnight, maybe you can't go any lower. So
Speaker 1: you and so you know that it's the hardest thing
Speaker 1: for retail people to understand what future trading is it's
Speaker 1: a question I kind of field all the time from
Speaker 1: from individual investors. What are futures? What is pajama trators?
Speaker 1: Why does Kramer called pajama trators? What's going on? And
Speaker 1: and I operated in that world for at least four
Speaker 1: or five years, a couple of jobs ago. And it's,
Speaker 1: you know, it's it's very very thin, it's very liquid.
Speaker 1: There's very few players. You're right, it's a lot of
Speaker 1: Delta one desks. Uh, it's a lot of hedge funds.
Speaker 1: It's just it's it's it's hard to put a broad
Speaker 1: stroke on futures and say this is the opinion of
Speaker 1: a lot of people. It's really the opinion of a
Speaker 1: few people. And then we wake up and say, oh,
Speaker 1: they must have been right, and it's just d of
Speaker 1: it kind of sits, you know, it kind of sits
Speaker 1: in place. Mike, I have no idea who this Cramer
Speaker 1: fellow you're talking about. Is obscure somebody else. I was
Speaker 1: hoping for something more conspiratle maybe you know, Plunge Protection
Speaker 1: Team Carl Icons in the futures overnight. But we'll accept
Speaker 1: Mike's answer. I guess, Sarah, honestly, if there's a Plunge
Speaker 1: Protection team. They can we get a new round of it.
Speaker 1: They didn't stink in. Somebody go out to Harvard or
Speaker 1: Princetoner's hires some new people. I don't know what. Well,
Speaker 1: a lot to think about. This was a lot of
Speaker 1: fun both Mike's um so Michael Antonelli. We really appreciate
Speaker 1: you coming on the show this week. Thank you guys.
Speaker 1: It's a blast anytime I'm around What Goes Up. We'll
Speaker 1: be back next week. Until then, you can find us
Speaker 1: on the Bloomberg Terminal website and or wherever you get
Speaker 1: your podcasts. We'd love it if you took the time
Speaker 1: to rate, interview the show on Apple Podcasts so more
Speaker 1: listeners can find us. And you can find us on Twitter,
Speaker 1: follow me at Sarah Ponzack. Mike is a reaganonymous our guest,
Speaker 1: Michael Antonelli is at Bowl and Beard, and you can
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Speaker 1: produced by tober Porheas the head of Bloomberg podcast is
Speaker 1: Francesca Levie. Thanks for listening, See you next time.