WEBVTT - Sell the Reopen News? 0:00:12.880 --> 0:00:15.920 Hello, and welcome to What Goes Up, a Bloomberg weekly 0:00:15.960 --> 0:00:20.520 market podcast. I'm Sara Pantzec, reporter on the Cross Asset team, 0:00:20.600 --> 0:00:24.079 and I'm Mike Reagan, a senior editor on the Markets team. 0:00:24.079 --> 0:00:27.000 This week on the show, market swings are making history 0:00:27.120 --> 0:00:29.640 by the day. This time the focus was on the 0:00:29.680 --> 0:00:33.360 oil market, with futures prices turning negative for the first 0:00:33.400 --> 0:00:37.000 time ever. Call it just a technical factor at play 0:00:37.200 --> 0:00:40.800 or a warning for other assets we'll discuss, and of 0:00:40.840 --> 0:00:43.320 course we'll close out the episode with our tradition the 0:00:43.360 --> 0:00:47.080 craziest things we saw in markets this week. Remember, you 0:00:47.120 --> 0:00:49.280 two can contribute to that segment. Just give us a 0:00:49.360 --> 0:00:53.400 call on the podcast hotline at six four six three 0:00:53.479 --> 0:00:57.520 to four three four nine oh, or tweet to us 0:00:58.040 --> 0:01:01.600 at the at podcasts handle and maybe you'll make it 0:01:01.600 --> 0:01:04.160 onto our show sometime. And if you have any other 0:01:04.240 --> 0:01:07.520 questions about the show, or some criticisms of Sarah or 0:01:07.600 --> 0:01:14.559 compliments of me, but I know that by all means, 0:01:14.560 --> 0:01:16.240 give us a call and let us know how we're doing. 0:01:16.319 --> 0:01:20.000 But UH very excited to introduce for the first time 0:01:20.040 --> 0:01:24.440 on this show a guy who I consider UH to 0:01:24.560 --> 0:01:28.080 be the happiest man on Finn Twitter, as as they 0:01:28.080 --> 0:01:30.560 call financial Twitter. I'm sure we have a lot of 0:01:30.560 --> 0:01:33.480 finn Twitters out there, but if you're not UH a 0:01:33.720 --> 0:01:37.840 participant in financial Twitter, I think this guy is the 0:01:37.840 --> 0:01:40.720 the happiest man in finch Wit, which is Sarah not 0:01:40.760 --> 0:01:43.039 necessarily saying a lot because it's mostly a bunch of 0:01:43.080 --> 0:01:47.040 crank pots on financial Twitter. Well, I can tell you 0:01:47.160 --> 0:01:49.680 right now we have a nice zoom conference going. He 0:01:49.720 --> 0:01:53.680 has the nicey virtual backdrop and he's laughing, smiling, So 0:01:53.720 --> 0:01:55.800 he might be the happiest person on the podcast here 0:01:55.880 --> 0:01:58.320 right now. And if you if you're not a participant 0:01:58.360 --> 0:02:01.720 of Twitter, you might remember this guy from a very 0:02:01.760 --> 0:02:06.400 funny Wall Street Journal story last year about how you 0:02:06.440 --> 0:02:10.080 know Patagonia, the company that makes the famous vests that 0:02:10.400 --> 0:02:12.760 a lot of Wall Street firms used to buy the 0:02:12.840 --> 0:02:15.880 vests and put their logo on UH. At some point 0:02:15.960 --> 0:02:19.240 last year, Patagonia pushed back and said they didn't want 0:02:19.240 --> 0:02:22.640 to sort of be really associated with the finance bros anymore. 0:02:22.639 --> 0:02:25.920 They were only gonna allow their vests to be UH 0:02:26.240 --> 0:02:30.440 bought and and logoed by companies they deemed sort of 0:02:30.480 --> 0:02:33.240 worthy of their brand name. So there's a funny story 0:02:33.240 --> 0:02:36.239 in the journal on it, and the guy who ended 0:02:36.320 --> 0:02:40.800 up being the poster child of the Patagonia vest is 0:02:40.840 --> 0:02:43.360 our guest today. Very happy to have him here. I 0:02:43.400 --> 0:02:46.239 think his quote was, I'll die on a hill wearing 0:02:46.280 --> 0:02:49.239 my vest before I give it up. And Sarah, thanks 0:02:49.280 --> 0:02:51.519 to the magic of zoom video, we can confirm he's 0:02:51.520 --> 0:02:54.320 wearing that vest today. He has not yet died on 0:02:54.320 --> 0:02:58.600 that but a really good, great guy, good friend of ours, 0:02:58.680 --> 0:03:03.239 and really smart market strategist at BARED in Milwaukee. His 0:03:03.320 --> 0:03:06.639 name is Michael Antonelli. Michael, Welcome to the show. Yeah, 0:03:06.720 --> 0:03:08.639 I am so excited to be here with you guys. 0:03:08.720 --> 0:03:11.120 It's always great to see some of my friends, both 0:03:11.120 --> 0:03:13.560 at Bloomberg and kind of kind of on Twitter. I'll 0:03:13.560 --> 0:03:15.200 say there's two things I'm gonna rep till the day 0:03:15.200 --> 0:03:17.600 I die. One of them is Chicago style pizza. I 0:03:17.600 --> 0:03:19.600 don't care, you know, I'm gonna rep that all the 0:03:19.600 --> 0:03:22.480 way to the end. And I'll rep Patagonia. I thank 0:03:22.520 --> 0:03:24.600 the Walstree Journal for its great article. It kind of 0:03:24.680 --> 0:03:28.119 vaulted me into the number one status of of Patagonia 0:03:28.200 --> 0:03:31.560 wears across the street. So I'm excited to be here. Great, 0:03:31.600 --> 0:03:33.720 great day for a show. I'm super ready to go 0:03:35.600 --> 0:03:38.080 true fashion model. I think our first fashion model, Sarah 0:03:38.160 --> 0:03:40.080 on the show is as a matter of fact, yeah, 0:03:40.760 --> 0:03:43.600 I'll follow you on the vest I I like a 0:03:43.640 --> 0:03:46.000 good vest myself. But I don't know about the Chicago pizza. 0:03:46.040 --> 0:03:49.160 I don't know. I can't I can't go with you 0:03:49.160 --> 0:03:52.520 on that one. But Michael, I one thing I wanted 0:03:52.560 --> 0:03:55.720 to ask you sort of to start out with is 0:03:55.960 --> 0:03:57.720 and correct me if I'm wrong about any of this. 0:03:57.760 --> 0:03:59.680 But I sort of view you as as like a 0:03:59.720 --> 0:04:03.080 mark get generalists, someone who follows the macro trends, the 0:04:03.120 --> 0:04:06.960 earnings trends. You know, you can pick out an attractive 0:04:07.000 --> 0:04:10.320 stock based on sort of the fundamentals and valuations, that 0:04:10.400 --> 0:04:13.200 sort of thing. What I think is interesting about the 0:04:13.240 --> 0:04:16.719 market right now, though, is there's this whole other segment 0:04:17.240 --> 0:04:21.880 of investors in the world focused on say, biotech and pharma, 0:04:22.200 --> 0:04:25.559 and it's such a different world to me because it's 0:04:25.600 --> 0:04:29.200 not at all about balance sheets or earning statements. It's 0:04:29.200 --> 0:04:32.000 all about sort of reading the tea leaves of those 0:04:32.440 --> 0:04:36.400 drug trials and the chances of a drug being successful, 0:04:36.839 --> 0:04:39.000 whether or not the government will pay for it in 0:04:39.000 --> 0:04:41.880 in Medicare programs that sort of thing. But with the virus. 0:04:41.920 --> 0:04:44.760 What I find is fascinating is that these these worlds 0:04:44.760 --> 0:04:47.320 have collided in a big way, and I feel like 0:04:47.760 --> 0:04:51.320 the market as a whole now is is trading off 0:04:51.520 --> 0:04:55.240 of farma headlines that maybe the rest of us in 0:04:55.320 --> 0:04:59.080 sort of the general space don't necessarily understand. And the 0:04:59.320 --> 0:05:02.840 U the news on Thursday from from Gilead is a 0:05:02.839 --> 0:05:05.360 good example. They had that drug that that people were 0:05:05.400 --> 0:05:08.599 hoping would be a good treatment for the virus. Turns 0:05:08.600 --> 0:05:12.320 out that first trial UH was not as successful as 0:05:12.360 --> 0:05:14.520 people hope, and I was described as a flop. You know. 0:05:14.560 --> 0:05:17.200 I don't know if that's a technical pharmaceutical term, but 0:05:17.600 --> 0:05:19.839 to me, I feel like there's this kind of stress 0:05:19.880 --> 0:05:25.360 in the market right now between UH that general sort 0:05:25.400 --> 0:05:28.440 of your your regular investor who looks at bounce sheets, 0:05:28.520 --> 0:05:32.520 looks at earnings, and that other niche specialist group that 0:05:32.680 --> 0:05:37.440 knows how the the whole biotech and drug development world 0:05:38.120 --> 0:05:41.039 UH goes and and maybe they're you know, a better 0:05:41.080 --> 0:05:44.360 group to to sort of be gauging the outcome of 0:05:44.400 --> 0:05:46.360 these things. Do you am I write about that? Do 0:05:46.400 --> 0:05:49.240 you do you get a sense that you know, sort 0:05:49.240 --> 0:05:51.880 of the general market practitioner now is forced to be 0:05:51.920 --> 0:05:55.800 a tourist into the pharma space. Yeah, I think you're 0:05:55.800 --> 0:05:57.880 spot on. And what you're talking about is kind of 0:05:57.920 --> 0:06:01.120 this notion that people are going through various levels of 0:06:01.160 --> 0:06:03.600 expertise with almost no background in and I think I 0:06:03.839 --> 0:06:06.240 tweeted or said the other day that you know, everybody 0:06:06.240 --> 0:06:09.400 has gone from being a doctor to a virologist, onto 0:06:09.520 --> 0:06:12.960 being a statistician looking at bell curves, and and you 0:06:12.960 --> 0:06:15.960 know we're ending up in places like commodity expert now 0:06:16.040 --> 0:06:19.839 and and biotech expert even with no expertise in that category. 0:06:20.400 --> 0:06:22.800 Baird has a really good biotech analyst named Brian Scorney. 0:06:22.839 --> 0:06:24.600 He was kind of on top of the Romans of 0:06:24.600 --> 0:06:28.720 your drug kind of data when it came out, and 0:06:28.839 --> 0:06:30.719 he was a little skeptical on it. I think most 0:06:31.080 --> 0:06:35.200 biotech investors analysts have a kind of a healthy notion 0:06:35.240 --> 0:06:38.120 of skepticism about them. I think that's really at their 0:06:38.160 --> 0:06:41.320 core what makes them good. But but we're in a 0:06:41.400 --> 0:06:45.440 situation now where the average investors, say, people who are 0:06:45.480 --> 0:06:47.080 just at home, or people who might be looking at 0:06:47.120 --> 0:06:50.560 the headlines, we're all looking for a quick fix. Everybody 0:06:50.640 --> 0:06:53.960 wants out of this mess. In a hurry. So when 0:06:54.000 --> 0:06:55.760 we see any sort of light at the end of 0:06:55.800 --> 0:06:57.640 the tunnel, whether it be romeds of your data that 0:06:58.000 --> 0:07:02.719 is kind of uh arnished, or whether it be hydroxychloroquin, 0:07:02.800 --> 0:07:05.880 we're all looking for this quick fix and and we're 0:07:05.920 --> 0:07:09.040 hoping for it where we're wanting it to happen. And 0:07:09.080 --> 0:07:11.640 I think smart investors, like biotech analysts, say just hold 0:07:11.680 --> 0:07:14.120 the hold, hold your horses. You're not you're not a 0:07:14.120 --> 0:07:17.520 biotech expert. Just just wait. You have to wait, even 0:07:17.520 --> 0:07:20.840 though we want this kind of quick answer. So we 0:07:20.920 --> 0:07:23.640 mentioned these biotech headlines, but there's also been a huge 0:07:23.680 --> 0:07:28.720 discussion lately of the reopening of economies county to county, 0:07:28.920 --> 0:07:32.160 state to state. I'm interested in how you kind of 0:07:32.240 --> 0:07:34.720 grasp onto that and think about that. Say, we do 0:07:34.880 --> 0:07:39.280 see economies start to reopen. Sure, that sounds great to some. 0:07:39.280 --> 0:07:41.440 Some are still nervous it's too soon. But I mean, 0:07:41.480 --> 0:07:44.160 what next, especially as it relates to investments in the 0:07:44.160 --> 0:07:47.720 Market's like, sure, the economy reopens, but does everything just 0:07:47.840 --> 0:07:50.520 snap back? Are their worries of a second wave? You 0:07:50.600 --> 0:07:53.440 having to shut down again? I mean what then? Yeah, 0:07:53.640 --> 0:07:55.520 I'll put this take out there. I think that the 0:07:55.560 --> 0:07:57.400 reopen is to sell the news event. I don't. I 0:07:57.440 --> 0:08:00.960 don't think it's the answer that the markets looking for. Say. Um, 0:08:01.000 --> 0:08:03.160 I think it's the right step to kind of see 0:08:03.840 --> 0:08:06.920 what what what kind of next things we can open 0:08:06.920 --> 0:08:08.520 with kind of next things that can come back online. 0:08:08.520 --> 0:08:09.960 But I do think it's to sell the news event 0:08:09.960 --> 0:08:12.320 for the following reason. You know a lot of your 0:08:12.360 --> 0:08:16.000 listeners will be uh study, I have studied normalized bell curves. 0:08:16.120 --> 0:08:19.360 Will think about bell curves is kind of the traditional shape. Um, 0:08:19.400 --> 0:08:21.240 A lot of the models out there assume that the 0:08:21.280 --> 0:08:23.320 coronavirus gets worse and then just gets better in a 0:08:23.360 --> 0:08:25.960 bell shaped I think that it's gonna get kind of 0:08:26.000 --> 0:08:28.480 better in a really long tail. Think about instead of 0:08:28.480 --> 0:08:30.640 a perfectly symmetrical bell, the right side of the bell 0:08:30.680 --> 0:08:33.079 is just this really long tail. So if we if 0:08:33.120 --> 0:08:35.720 if someonere to say I'm reopening Wisconsin, tor, I'm reopening 0:08:35.720 --> 0:08:38.120 New York tomorrow, Florida tomorrow, you know how many people 0:08:38.120 --> 0:08:40.760 are still gonna be consumers? How many people are gonna say, 0:08:41.440 --> 0:08:44.080 I'll go to an outdoor restaurant, but not an indoor restaurant. 0:08:44.080 --> 0:08:47.040 So I'm I'm only a partial consumer for at least 0:08:47.120 --> 0:08:48.800 a while. So That's why I think it's to sell 0:08:48.840 --> 0:08:50.800 the news event. I just don't want people to think 0:08:50.800 --> 0:08:52.760 that once we hit the reopen button that you know, 0:08:52.800 --> 0:08:55.800 people are gonna be going to eighty thou seat stadiums 0:08:55.840 --> 0:08:58.000 right away. I just think it's gonna be the slow slog. 0:08:58.320 --> 0:08:59.920 Let's talk a little bit about that note in that 0:09:00.080 --> 0:09:02.040 it could be a sell the news event, and Mike, 0:09:02.080 --> 0:09:04.760 as is my custom, I'll pack about five questions into 0:09:04.840 --> 0:09:09.320 one right here for you now. Right. So, so I 0:09:09.360 --> 0:09:13.560 wonder if there's a danger that that retail capitulation is 0:09:13.600 --> 0:09:17.679 inevitable and that could be part of that sell the news. Uh, 0:09:17.720 --> 0:09:21.120 if we do see a reopening um and we do 0:09:21.200 --> 0:09:23.400 see a little bit of all or not that volatility 0:09:23.440 --> 0:09:25.079 has gone anywhere, But if we do see a pick 0:09:25.120 --> 0:09:28.360 up and another sort of really scary dip in the 0:09:28.400 --> 0:09:31.960 market happen, could that trigger that sort of main street 0:09:32.000 --> 0:09:35.440 capitulation that we haven't really seen yet, but I think 0:09:35.679 --> 0:09:38.880 which most people expect. You kind of need to really 0:09:38.920 --> 0:09:43.120 form a solid bottom. So in part twelve of my question, 0:09:43.320 --> 0:09:46.960 I would say, where does that sell the news take us? 0:09:47.040 --> 0:09:49.000 Does it take us back down to that bottom we 0:09:49.040 --> 0:09:52.000 saw in March or possibly even worse. You know, how 0:09:52.040 --> 0:09:55.200 how bad could it get? Yeah, there's there's been a 0:09:55.200 --> 0:09:57.280 lot of good studies on the bounce and what does 0:09:57.280 --> 0:09:59.440 a bounce mean? What does a retest mean? You know, 0:09:59.480 --> 0:10:01.760 guys that we follow, like Ben Carlson, like back Nick. 0:10:01.800 --> 0:10:04.880 There's also NDR research again named Clisshold. You know, I'm 0:10:04.920 --> 0:10:06.599 kind of consuming all this in my basement, you know, 0:10:06.640 --> 0:10:08.400 on top of your guys and stuff, I'm consuming everybody 0:10:08.440 --> 0:10:11.199 else's stuff. But you know, Ed Clisshold said that kind 0:10:11.200 --> 0:10:13.040 of the sharp the sharp nature of the bounce, the 0:10:13.080 --> 0:10:15.040 sharp nature of how far we've come off the low, 0:10:15.520 --> 0:10:18.320 it doesn't necessarily mean we won't retest the low, right, 0:10:18.360 --> 0:10:20.640 there's no there's no hard and fast we won't retest, 0:10:21.000 --> 0:10:23.960 but the retests tend to be shallower. Um, this is 0:10:24.000 --> 0:10:27.280 something NDR looks after a waterfall decline ends. You know, 0:10:27.360 --> 0:10:29.120 what we went through in March was was basically a 0:10:29.160 --> 0:10:32.280 waterfall decline. You know, I remember seeing back on March 0:10:32.360 --> 0:10:34.800 twenty three a lot of a lot of really scary headlines. 0:10:34.840 --> 0:10:36.440 I remember seeing something I think it might have been 0:10:36.440 --> 0:10:38.760 from Bank of America Mary Lynch saying that that was 0:10:38.800 --> 0:10:41.160 their biggest day of retail selling. We might have seen 0:10:41.440 --> 0:10:43.520 some of that at the March twenty three lie. I 0:10:43.880 --> 0:10:45.800 keep trying to go back to find that that tweet 0:10:45.840 --> 0:10:47.520 or that that data point, but I remember seeing it 0:10:47.559 --> 0:10:49.400 back then. And I always kind of go back to 0:10:49.440 --> 0:10:51.200 Vangar because they kind of have the stickiest amount of 0:10:51.200 --> 0:10:54.440 people in their in their kind of service. They They've 0:10:54.440 --> 0:10:58.000 done studies about previous volatility. They did a study and 0:10:58.000 --> 0:11:00.319 they found that, you know, during the European financial crisis 0:11:00.360 --> 0:11:03.600 about their accounts did nothing and that's still bottomed, right, 0:11:03.600 --> 0:11:06.160 that still had an end to the volatility, end to 0:11:06.200 --> 0:11:09.240 the event. Uh. You know, I think the notion that 0:11:09.320 --> 0:11:13.200 retail is in what it used to be in or 0:11:13.240 --> 0:11:16.120 two thousand and one. I think that retail is kind 0:11:16.120 --> 0:11:19.559 of morphed through either behavioral coaching, use of more advisors. 0:11:20.000 --> 0:11:22.320 I think the nature of them is traded, uh not 0:11:22.400 --> 0:11:26.400 traded has changed, um for the better, honestly for the better. Um. 0:11:26.480 --> 0:11:29.920 I you know, we can talk about this about that low, um, 0:11:30.000 --> 0:11:32.200 but but I do think that that was a really 0:11:32.200 --> 0:11:34.400 panicky low. I think there was a lot of stuff 0:11:34.440 --> 0:11:37.840 that you would expect in the low that happened on Marche. 0:11:37.880 --> 0:11:40.280 But my my notion of sell the news, I think 0:11:40.280 --> 0:11:41.960 you can you can sell the news could be a 0:11:41.960 --> 0:11:44.559 grind sideways. Uh, it could be you know, another pull 0:11:44.600 --> 0:11:46.240 back towards the low. I just, I just I'm not 0:11:46.280 --> 0:11:48.200 in the camp that we're going to retest that that 0:11:48.240 --> 0:11:52.080 march fully, I guess so along those lines, and what 0:11:52.120 --> 0:11:55.520 could potentially happen, whether that's capitulation or something else to 0:11:56.200 --> 0:11:58.240 bring back a little bit of panic or bring back 0:11:58.280 --> 0:12:01.880 some selling. Next week, we have earnings from the likes 0:12:01.880 --> 0:12:06.840 of Google Parent Alphabet, Amazon, Facebook, Google, And something that's 0:12:06.840 --> 0:12:10.240 really stood out to me throughout this market resilience has 0:12:10.360 --> 0:12:13.679 just been this performance of mega cap large cap companies. 0:12:13.720 --> 0:12:16.640 Amazon short has its own reasons. Microsoft, you could say 0:12:16.679 --> 0:12:20.200 use of its cloud services as really in vogue right now. 0:12:20.640 --> 0:12:23.040 But someone said to me at some point over the 0:12:23.080 --> 0:12:26.200 past week or so that to him, he thinks that 0:12:26.240 --> 0:12:29.960 these megacap earnings, surprising to the downside and not standing 0:12:30.040 --> 0:12:31.880 up as much as people hope or think they will, 0:12:32.320 --> 0:12:35.560 could actually be a larger risk at this point than 0:12:35.800 --> 0:12:39.160 some of the coronavirus news coming out in the weeks 0:12:39.160 --> 0:12:41.200 to come. Would you agree with that? Are are you 0:12:41.240 --> 0:12:43.679 a little bit worried at all over the strength of 0:12:43.720 --> 0:12:46.440 the mega cap companies. Yeah, that really, it's it's a 0:12:46.440 --> 0:12:48.160 really relevant point. There's been a lot of stuff on 0:12:48.160 --> 0:12:51.640 this recently too that if we maybe we'll talk about 0:12:51.640 --> 0:12:54.240 oil later. We should probably talk about oil. But you know, 0:12:54.840 --> 0:12:57.320 for the market to retest the lows, you have to 0:12:57.559 --> 0:13:00.679 have a big hit to the biggest compas because they 0:13:00.679 --> 0:13:03.320 are such a huge weight to the SMP five hunter. 0:13:03.400 --> 0:13:07.120 Right now, the the the energy sectors three of the spire, 0:13:07.200 --> 0:13:10.040 and it has crashed, right the energy sector is basically crashed. 0:13:10.400 --> 0:13:12.800 You know, you wouldn't look to a three weight to 0:13:12.840 --> 0:13:14.719 be more of the downside, you know what I mean. 0:13:14.840 --> 0:13:17.960 So yeah, in order for the downside to be retested, 0:13:18.240 --> 0:13:20.880 the big big megacap tech have to be hit, which 0:13:20.880 --> 0:13:25.160 means that investors views of they're they're both you know, 0:13:25.240 --> 0:13:27.319 six months to twelve months to one to one and 0:13:27.360 --> 0:13:30.319 a half year performance has to be ratcheted lower. UM. 0:13:30.400 --> 0:13:32.800 You need the Apples and the Amazons and the facebooks 0:13:32.800 --> 0:13:36.440 and the Googles to all lead the way lower UM, 0:13:36.480 --> 0:13:38.440 which right now we're just not seen that they tend 0:13:38.480 --> 0:13:41.160 to be UM places people hide out in at least 0:13:41.200 --> 0:13:43.880 for now. So yeah, he's right, You're right, there has 0:13:43.920 --> 0:13:46.560 to be a change in expectations around it's called the 0:13:46.600 --> 0:13:50.000 top fifteen companies in the sp order for that retest 0:13:50.040 --> 0:13:52.840 to really accelerate. Like, I also wonder, you know, like 0:13:52.880 --> 0:13:55.640 you said that the big fang stocks UM at least 0:13:55.640 --> 0:13:59.839 it definitely Amazon, Netflix, um, you know the others to 0:14:00.040 --> 0:14:02.240 some degree. There there's certainly a haven out a time 0:14:02.280 --> 0:14:04.560 like this, which which makes sense. Now everyone's buying more 0:14:04.600 --> 0:14:08.920 on Amazon, You're we're watching more Netflix. Their subscriber numbers 0:14:08.920 --> 0:14:12.640 were crazy good this week. But I wonder if if 0:14:12.679 --> 0:14:17.559 the sentiment does turn to uh, putting the virus behind 0:14:17.679 --> 0:14:20.320 us and and getting back to those cyclical stocks, could 0:14:20.360 --> 0:14:24.360 we have like a really nasty value growth rotation that 0:14:24.360 --> 0:14:27.280 would see those mega cap stocks really take it on 0:14:27.360 --> 0:14:30.160 the chin. If people start piling into the value in 0:14:30.240 --> 0:14:33.000 the banks and the energy. Yeah, you'd have to see 0:14:33.040 --> 0:14:35.880 just a massive ramp and growth expectations for that. I 0:14:35.880 --> 0:14:38.120 think that trade to play out. Um. I always said, 0:14:38.160 --> 0:14:40.760 you know, small cap starts out performing when the yield 0:14:40.760 --> 0:14:45.120 curve really steepens, when people's growth expectations really start to rise. H. 0:14:45.200 --> 0:14:47.720 You know one of my partners, uh, Willie Delwitz, who 0:14:47.760 --> 0:14:49.800 kind of we kind of work together, He's looking at 0:14:50.040 --> 0:14:51.880 h copper and he's looking at ten ure yields for 0:14:52.080 --> 0:14:54.400 for what you're saying, right if in order for this 0:14:54.480 --> 0:14:57.840 to be a meaningful bounce, you want bigger breadth, and 0:14:57.880 --> 0:15:00.640 then you want to see some of the cyclicals do better. Um, 0:15:00.680 --> 0:15:02.600 you know, the people hiding out in the in the 0:15:02.640 --> 0:15:05.320 mega cap tech stocks. You know, I think even going 0:15:05.360 --> 0:15:08.440 back to the pre Corona to days, you know, I'm 0:15:08.480 --> 0:15:10.440 sure I've read pretty articles from you guys saying what 0:15:10.480 --> 0:15:12.960 happens if this gets hit and this and small caps go? Yeah, 0:15:13.040 --> 0:15:15.360 that's one of those, Like you know, we always kind 0:15:15.360 --> 0:15:17.720 of circles around us. What happens when small does well 0:15:17.760 --> 0:15:20.080 in Apple and Amazon? Don't you know you need this 0:15:20.240 --> 0:15:23.160 massive surge and growth expectations and you'd want to look 0:15:23.200 --> 0:15:26.040 towards copper and tenure to sniff that out. And that's 0:15:26.080 --> 0:15:29.800 just not happening yet. Um. But but yes, people are 0:15:29.840 --> 0:15:32.480 crowded into that space, crowded into that Yeah, as you say, 0:15:32.480 --> 0:15:34.840 crowded trades can can last a lot lot longer than 0:15:34.840 --> 0:15:53.120 people expect. I guess, Sarah, you know, uh as Michael 0:15:53.120 --> 0:15:56.920 alluded to, when you alluded to at the beginning, Um, 0:15:56.960 --> 0:15:59.400 you know, every week we talked about the craziest things 0:15:59.440 --> 0:16:02.520 we've seen in markets this week. I think this week 0:16:02.560 --> 0:16:05.000 we all saw the craziest thing anyone's ever seen in 0:16:05.040 --> 0:16:08.480 any of our lifetime. Uh so let's skip ahead of that. 0:16:08.560 --> 0:16:11.360 And of course, uh listener kind of front ran us 0:16:11.360 --> 0:16:14.720 on all of it, and and phoned in a voicemail 0:16:15.200 --> 0:16:17.840 to tell us exactly what happened in case you missed it. 0:16:17.880 --> 0:16:21.200 I don't know who missed this. I think even someone 0:16:21.200 --> 0:16:24.720 who hasn't thought of stock since since nine probably probably 0:16:25.080 --> 0:16:28.360 read about this. But let's listen to that voicemail to 0:16:28.360 --> 0:16:32.800 to clear it up. Hi, this is Charlie Ford. Craziest 0:16:32.840 --> 0:16:36.440 thing a son on Wall Street. Looking at the terminal here, 0:16:37.080 --> 0:16:45.800 the um spot crude is at uh negative thirty five 0:16:45.920 --> 0:16:50.280 bucks or some negative thirty seven point six three and 0:16:50.440 --> 0:16:54.200 the front month contract is a negative two dollars and 0:16:54.280 --> 0:16:59.440 forty seven cents. Now that's pretty crazy. Thank you. You 0:16:59.480 --> 0:17:00.800 know what. I love of Mike that we got a 0:17:00.880 --> 0:17:04.840 call in real time too as this was happening. He decided, 0:17:04.880 --> 0:17:07.360 you know what, I've gotta pick up the phone, call 0:17:07.480 --> 0:17:09.919 Mike and Sarah and let them know how crazy I 0:17:09.960 --> 0:17:13.199 think spot crude at negative forty of barrel. That's right. 0:17:13.240 --> 0:17:15.360 I like that instinct. I also like the guy's name, 0:17:15.440 --> 0:17:18.639 Charlie Ford. Uh, that's the guy who killed Jesse James 0:17:18.640 --> 0:17:21.200 if I'm not mistaken back in the in the wild West. 0:17:21.240 --> 0:17:24.200 So we'll assuming that's this guy's real name. You never know, 0:17:24.760 --> 0:17:28.680 But Mike, I mean, were you did your eyes pop 0:17:28.720 --> 0:17:30.440 out of your head watching that all go down? I 0:17:30.880 --> 0:17:33.640 can't imagine. Was the phone ringing off the hook with 0:17:33.640 --> 0:17:36.080 with clients? How do you how do you handle a 0:17:36.160 --> 0:17:39.159 day like that? Yeah, you guys have awesome listeners. I 0:17:39.200 --> 0:17:41.879 love that they're calling in real time watching watching crude 0:17:41.960 --> 0:17:46.320 oil get absolutely pummeled. You know, I I treated commodities 0:17:46.359 --> 0:17:48.359 for a couple of years. I've traded equities, I've treated 0:17:48.359 --> 0:17:50.760 all sorts of products. I never thought I would see 0:17:50.760 --> 0:17:53.159 anything like that day. There's just really no words. I 0:17:53.359 --> 0:17:56.240 think I tweeted that the thing that was taking Somebody said, 0:17:56.240 --> 0:17:58.560 what's gonna take the biggest hit due to negative crude prices? 0:17:58.560 --> 0:18:01.280 And I said, literally every of these productivity on finton, 0:18:01.920 --> 0:18:05.560 I think all it's it's it's definitely due to the 0:18:05.640 --> 0:18:09.640 kind of nature of futures contracts, how how futures contracts expire, 0:18:09.720 --> 0:18:13.600 what delivery means. It's definitely a quirk of how oil works. 0:18:14.160 --> 0:18:16.160 You know, we we probably need to talk about why 0:18:16.200 --> 0:18:18.600 oil is doing what it's doing from a spy demand perspective, 0:18:18.600 --> 0:18:20.000 but I'd love to hear from you guys what you 0:18:20.040 --> 0:18:22.800 were thinking. I was just staring at my screen. No stop. Yeah, 0:18:22.880 --> 0:18:25.560 it was like once we hit zero, the dam just 0:18:25.640 --> 0:18:28.840 broke and it was really hard to just stop watching. 0:18:28.880 --> 0:18:31.280 And I feel like there was so much discussion about 0:18:31.320 --> 0:18:33.680 this being a technical issue that's really being due to 0:18:33.720 --> 0:18:37.080 the fact that there's nowhere to store oil right now. 0:18:37.080 --> 0:18:39.160 But you bring up the point, Mike, I mean, what's 0:18:39.200 --> 0:18:42.520 actually driving this supply demand and balance? And I wonder, 0:18:43.040 --> 0:18:45.440 what's to say that this isn't going to happen again. 0:18:45.520 --> 0:18:47.919 I mean, what's going to happen to the demand picture 0:18:48.119 --> 0:18:50.040 or the supply picture in the next month or the 0:18:50.080 --> 0:18:52.680 next two months, or whatever it may be, to say 0:18:52.720 --> 0:18:55.679 that this can't repeat itself right? Well, you know what 0:18:55.480 --> 0:18:58.399 I found amazing about it is, Uh, it was in 0:18:58.440 --> 0:19:01.640 one of our chat rooms or work chat rooms. Uh. 0:19:01.720 --> 0:19:04.320 And I think the price had gotten to like, I 0:19:04.320 --> 0:19:06.920 don't know, four or three dollars, and I typed in 0:19:06.960 --> 0:19:09.320 there I was like, is it allowed to trade negative? 0:19:09.320 --> 0:19:11.000 You know, I didn't know if the the CME would 0:19:11.040 --> 0:19:15.520 actually allow the contract to trade negative. UM. Probably about 0:19:15.800 --> 0:19:19.320 five minutes later, I think someone on the OURT Commodities 0:19:19.320 --> 0:19:22.560 team had the same question and emailed the CMME and said, 0:19:22.560 --> 0:19:24.679 are you gonna let this thing go negative? And then 0:19:24.720 --> 0:19:26.920 we had that hot sticky head on the terminal saying 0:19:26.960 --> 0:19:30.600 Sime says, we'll let it go negative, and almost instantly 0:19:30.760 --> 0:19:33.160 is when it actually went negative. So traders, I think 0:19:33.200 --> 0:19:35.120 didn't know if they could put in a negative bid 0:19:35.200 --> 0:19:38.320 or a negative offer, and it's almost like they got 0:19:38.320 --> 0:19:41.359 that permission to do it and it went negative. And 0:19:41.400 --> 0:19:45.159 I'm not sure every brokerage house out there, uh or 0:19:45.200 --> 0:19:49.320 every you know, the trading platform that trades futures was 0:19:49.359 --> 0:19:51.800 even prepared for this, to be honest, It's it's such 0:19:51.800 --> 0:19:54.960 an unbelievable scenario. You know. One of the things we 0:19:54.960 --> 0:19:56.399 had we had a lot of advisors calling us, we 0:19:56.440 --> 0:19:58.680 had a lot of clients calling us. UM. I think 0:19:58.880 --> 0:20:00.760 one of the things that you guys probably talk about 0:20:00.800 --> 0:20:02.359 or we need to talk about more is you know 0:20:02.480 --> 0:20:04.959 USO the E t F. I don't think retail investors 0:20:05.040 --> 0:20:08.199 understand how it works, Uh, why it did does what 0:20:08.280 --> 0:20:09.480 it does. I think a lot of the e t 0:20:09.800 --> 0:20:12.560 s that have to deal with future's curves, whether it's 0:20:12.600 --> 0:20:16.439 volatility or crude, um, people just don't understand them. They 0:20:16.480 --> 0:20:18.720 just I just don't understand them. I think it's important 0:20:18.760 --> 0:20:21.119 for for advisors and people to get educated on them 0:20:21.119 --> 0:20:23.600 before they use them. Um. But look, I'm measuring my 0:20:23.640 --> 0:20:25.359 car usage in miles per week right now, you know, 0:20:25.400 --> 0:20:27.640 gallons per week, So I get what crud is doing. 0:20:27.680 --> 0:20:30.240