WEBVTT - Single Best Idea with Tom Keene: Andrew Sheets & Julian Emanuel

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, Single.

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<v Speaker 2>Best Idea, the single best idea Today were really interesting

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<v Speaker 2>conversations John Farrow with the former Vice President of the

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<v Speaker 2>United States, mister Pence on his boss, mister Trump of

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<v Speaker 2>a few years ago. In a lengthy conversation with the

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<v Speaker 2>Mayor of New York that was just electric about the

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<v Speaker 2>tensions of the nation, the tension of New York City

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<v Speaker 2>with the Trump administration. We did look at the equity

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<v Speaker 2>markets and the cross asset markets. Jeffrey U of B

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<v Speaker 2>and Y really quite good visiting from London was Ender

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<v Speaker 2>Sheets of Brown University and Morgan Stanley Ander Sheets on

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<v Speaker 2>the moment at hand.

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<v Speaker 3>I think what is challenging is that if we look

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<v Speaker 3>at trying to quantify that question, can we come up

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<v Speaker 3>with indicators to give us a better than average odds

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<v Speaker 3>of thinking about short term direction. I think what you find,

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<v Speaker 3>or what we found, is that those indicators work well

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<v Speaker 3>or better under fear. Under extreme fear, you just your

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<v Speaker 3>previous guests referred to kind of April second, you can

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<v Speaker 3>find signals that work on average more often than not

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<v Speaker 3>under extreme fear to give you short term buy signals.

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<v Speaker 3>It is very hard we have been unsuccessful, much less

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<v Speaker 3>successful to give you sell signals. It's much harder to

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<v Speaker 3>call tops. It's much harder to find indicators that successfully

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<v Speaker 3>do that.

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<v Speaker 2>To link the mathematics of Wall Street in the moment,

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<v Speaker 2>that was absolutely brilliant, folks. I can't say enough about

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<v Speaker 2>how systems function and bets and probabilities function better with

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<v Speaker 2>fear in the market. We're not there now, the Vicks

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<v Speaker 2>under sixteen, it's just not there. And the answer is

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<v Speaker 2>it's way harder to do the prediction game right now.

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<v Speaker 2>Inder sheets of Morgan Stanley, Julian Emmanuel have evercore Isi

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<v Speaker 2>looking at these equity markets that refuse to go down.

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<v Speaker 4>None of them are out there at the moment, which

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<v Speaker 4>is why again it's such a challenge here and why frankly,

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<v Speaker 4>stocks have become as expensive as they are the rebound

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<v Speaker 4>from that sentiment trough in April because we knew there

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<v Speaker 4>wasn't going to be recession. We still don't think there's

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<v Speaker 4>a recession. We do think that there's a slowdown that

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<v Speaker 4>continues in the second half. The second is what we

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<v Speaker 4>would call them uncooperative. Fed by uncooperative, we mean hiking. Look,

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<v Speaker 4>they're not going to hike. There's no inflation reading we

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<v Speaker 4>can see in the next several months, however high where

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<v Speaker 4>they will hike. They may cut less, but they're not hiking.

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<v Speaker 4>The third would be longer term yield spiking. Let's face it,

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<v Speaker 4>the ten year yield, it's four thirty every day of

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<v Speaker 4>the week for the last two years, and that's how

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<v Speaker 4>it is. And that's a good thing, and that's part

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<v Speaker 4>of why investors have had enough confidence to bid up stocks.

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<v Speaker 4>And then the last one is the one that we

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<v Speaker 4>think that eventually will end the bullmarket cycle, and that's

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<v Speaker 4>a period of fomo and capital markets activity. Every single

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<v Speaker 4>bullmarket has that in the late stages, and.

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<v Speaker 2>We saw that again today with Kellogg's. We learned that

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<v Speaker 2>John Tucker liked apple jacks as a child. I never

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<v Speaker 2>liked you like it. I never liked ap you liked

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<v Speaker 2>apple jacks. I never liked apple jacks. It was a

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<v Speaker 2>tortured childhood. My sister liked tricks. I don't think Kellogg's.

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<v Speaker 2>I don't think owns tricks. It is single best idea.

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<v Speaker 2>Thank you for listening across the nation on Apple podcasts,

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<v Speaker 2>Spotify as well and on YouTube podcasts. This is single

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<v Speaker 2>best I do