Speaker 1: Hello, and welcome to What Goes Up, a Bloomber weekly
Speaker 1: markets podcast. I'm Sarah Pontac, a reporter on the cross
Speaker 1: As Set team, and I'm Mike Reagan, a senior editor
Speaker 1: on the Markets Team. This week on the show, it's
Speaker 1: the calm before the storm, at least if you're referring
Speaker 1: to next week's Federal Reserve meeting. But in the lead up,
Speaker 1: roughly one and forty companies delivered earning supports. This week,
Speaker 1: we'll break it all down, and of course we'll close
Speaker 1: out the episode with our tradition, the craziest thing I
Speaker 1: saw in markets this week, Sarah, I have a crazy
Speaker 1: thing I saw about both of our guests today. You
Speaker 1: know what it is. Neither one of these guys is
Speaker 1: on Twitter. I think they're the last two financial market
Speaker 1: professionals not on Twitter, which I think probably means that
Speaker 1: they're among the smartest out there. I admire that. I'm
Speaker 1: pretty jealous, exactly. I'd know you could not be on Twitter.
Speaker 1: I'm gonna go delete my account, I know. But let's
Speaker 1: introduce these guys to all our Twitter fans out there. First.
Speaker 1: Sean Snyder, head of investment strategy at City Personal Wealth Management,
Speaker 1: thanks for having me. I appreciate it. Also joining us
Speaker 1: is Bloomberg's Stocks team leader, and he's the author of
Speaker 1: the Taking Stock column. If you don't subscribe to that
Speaker 1: on the terminal, I I highly recommended. It's a great
Speaker 1: way to start your day reading about a lot of
Speaker 1: good color and the equity market. His name is Brad Olson. Brad,
Speaker 1: welcome to the show. Glad to be here. Sean. Let's
Speaker 1: start with you. What are you talking about with clients
Speaker 1: these days? I mean, obviously the stock markets near record highs,
Speaker 1: bond yields are low. Again, where's the opportunity? What are
Speaker 1: people interested right now? You know, sort of what is
Speaker 1: your your elevator pitch if you run into a client,
Speaker 1: uh in the elevator. I think what most clients want
Speaker 1: to know is that they hear a lot about potential recession.
Speaker 1: They also hear record highs, and it's hard for them
Speaker 1: to kind of take those two views and understand what
Speaker 1: it means. So we try and kind of walk them
Speaker 1: through that. It's also one of those times where I
Speaker 1: think it's important to tell people about having a diversified
Speaker 1: portfolio as opposed to trying to time the market. Anytime
Speaker 1: to our word comes out recession. People try and time
Speaker 1: the market, think in and out UM. If you would
Speaker 1: have got out in last December, you would have missed
Speaker 1: out on the plus games this year, right. So those
Speaker 1: are the types of things that we try and talk
Speaker 1: clients through currently. As far as opportunities, there's a lot
Speaker 1: of different UM things out there right now. Maybe U
Speaker 1: S stocks look a little bit expensive, but there are
Speaker 1: certain areas like healthcare, things that have strong earnings growth
Speaker 1: UM even in a downturn. So there are areas of
Speaker 1: pockets that you can diversify into UM. Maybe it's not
Speaker 1: going to be the stock that makes you rich UM,
Speaker 1: but it does help balance your portfolio in these uncertain times.
Speaker 1: So it seems like we've been hearing the R word
Speaker 1: recession much less and less, especially less than we heard
Speaker 1: in the fourth quarter of last year. Sure, we've got
Speaker 1: on some nice economic data. However, this week we did
Speaker 1: get some global p m I s and we saw
Speaker 1: weakness out of the Eurozone. In the US it hit
Speaker 1: fifty on the edge of contraction, lowis since two thousand nine.
Speaker 1: How do you look at the good data and the
Speaker 1: bad data, especially ahead of the FED meeting next week
Speaker 1: and kind of trying to think about what the environment
Speaker 1: is going to look like going forward from here. There's
Speaker 1: not always a clear picture, right, And you can take
Speaker 1: the p m I s and discuss, you know, what's
Speaker 1: a good p m I a bad pm If you
Speaker 1: look at the manufacturing p m I, you would say
Speaker 1: that it's it's bad, right, manufacturing sector is in a slump.
Speaker 1: And then you could take the flip side and you
Speaker 1: could say you look at the services sector and it's
Speaker 1: holding up just fine. And that gives you this mixed picture.
Speaker 1: But you should kind of think about how they both
Speaker 1: interplate together. And the manufacturing sector is not encapsulated into
Speaker 1: its own If you think of a company like a
Speaker 1: auto manufacturer, they make a car, right, but there's more
Speaker 1: to that. You think of the Super Bowl ads related
Speaker 1: to that car, the fact that that company employs an
Speaker 1: accounting service. It can eventually bleed into service sector as well. Um,
Speaker 1: it really hasn't yet. Um. And manufacturing is particularly you know,
Speaker 1: worse in Europe right now, UM, more so in the US.
Speaker 1: But those things can bleed over into other economic activity,
Speaker 1: and that's what you worry about. Yeah, it's a great
Speaker 1: point because you often hear wall services or what's seventy
Speaker 1: some percent of the economy and their consumer you know,
Speaker 1: especially so you're you're thinking, is that that manufacturing weakness
Speaker 1: can actually lead to service sector weakness and and sort
Speaker 1: of be almost a leading indicator, canary in the coal
Speaker 1: mine for the entire economy. Right, I'm not worried yet,
Speaker 1: but I think you have to watch that, and I
Speaker 1: think that that gives the FED some sort of case
Speaker 1: to make when it comes to do an insurance cut.
Speaker 1: So let's bring it to what companies are actually saying
Speaker 1: at the moment. Brad. I know you've had a an
Speaker 1: extremely busy week, the busiest of this earning season. I'm
Speaker 1: sure you've hardly slept. But if you take a step
Speaker 1: back and you look at the executive commentary that we
Speaker 1: have seen so far through this earning season, is anyone
Speaker 1: actually worried about an economic downturn? We're not seeing it yet,
Speaker 1: at least as far as the numbers are concerned. Um,
Speaker 1: just through this week, we're sales are are still surprised
Speaker 1: into the upside. Earnings are surprising even further. Um, we
Speaker 1: heard a lot of crowing leading into this earning season,
Speaker 1: amount of potential earnings recession that is yet to materialize. UM,
Speaker 1: So as far as the executive commentary, we're seeing a
Speaker 1: lot of idiosyncratic circumstances and all the way from you know,
Speaker 1: the maker of these snowmobiles, Polarists, I don't know if
Speaker 1: you know. Earlier this week they reported and their stock
Speaker 1: actually rose after sighting the tariffs and the trade concerns,
Speaker 1: just showing that if companies were you know, strong enough
Speaker 1: and it definitely navigated the circumstances, they could still be successful.
Speaker 1: On the other side, on the flip side, we're still
Speaker 1: seeing some industrial weakness. We saw CSX last last week,
Speaker 1: which is still weighing on some concerns or some the
Speaker 1: cast freight index is lower, So to that extent, there's
Speaker 1: no major thematic uh circumstances that are bleeding through. But
Speaker 1: so far, so good, I would say. I think the
Speaker 1: the interesting thing that jumped out to me just this
Speaker 1: this past week has been how semiconductors have have manned
Speaker 1: is to to navigate the Huahwei blacklisting um utilizing this loophole.
Speaker 1: Bloomberg wrote about it extensively in the last few weeks
Speaker 1: by using some of their overseas subsidiaries to basically allow
Speaker 1: them still sell through them to Hahwei despite those those
Speaker 1: trade war concerns. So we'll see we're seeing that with
Speaker 1: the socks index at the session highs um. That was
Speaker 1: a huge lift to the the SMP this week, and
Speaker 1: you know, with the smp A pushing through three thousand,
Speaker 1: it's hard to make that case, you know, Sean, getting
Speaker 1: back to what what Brad's talking about, I get the
Speaker 1: sense that investors aren't really ready right now to abandon
Speaker 1: the stock market, but it seems like there's a lot
Speaker 1: of confusion, a lot of uncertainty about where that leadership
Speaker 1: should be. You know, we saw this real strong rally
Speaker 1: in defensive stocks that is really made places like utilities
Speaker 1: look sort of like a crowded trade. I mean, a
Speaker 1: utility index in the SMP trading at twenty times earnings
Speaker 1: I think for the first time ever. Basically I saw
Speaker 1: a lot of action real estate companies. But then you'll
Speaker 1: have these days where it's seems like everyone jumps to
Speaker 1: the other side of the ship and says, oh, now
Speaker 1: the you know, everyone's too worried. Let's get back into
Speaker 1: the cyclical the growth stocks that you saw, the bank's
Speaker 1: rebound um is that a fair assessment of sort of
Speaker 1: the mentality right now that people aren't ready to throw
Speaker 1: in the town in the stocks, but there's not really
Speaker 1: much clarity on what is going to be that leadership.
Speaker 1: I think that's true. I think anytime you get the
Speaker 1: record highs, people are gonna be a little bit confused
Speaker 1: about what to move into because they all get to
Speaker 1: be more expensive when you get to record highs, and
Speaker 1: I think people are confused about whether we are headed
Speaker 1: towards the recession or not. There are indicators that point
Speaker 1: towards the recession, right The inverted deal curve is the
Speaker 1: most obvious. Everyone talks about it um that points to
Speaker 1: potential recession in mid twenty twenty, maybe early one. They're
Speaker 1: also some other indicators to the number of businesses saying
Speaker 1: that now is a good time to expand may have
Speaker 1: peeked back in may have two thousand eighteen. The initial
Speaker 1: jobless claims, which is very very timely read on the
Speaker 1: US labor market, might have peeked in the week of
Speaker 1: April nineteen. So there are some signs that maybe you
Speaker 1: could of a recession, and that's why I think the
Speaker 1: FED see some of those they don't mention it specifically,
Speaker 1: but I think they see some of this stuff and
Speaker 1: they worry a little bit about it. And that's why
Speaker 1: I think you see this move back and forth between
Speaker 1: defenses and cyclicals. If you think the economy's botting the
Speaker 1: bottoming out and you're gonna get a soft landing scenario
Speaker 1: where trade wars have subsided, the FED is now easy.
Speaker 1: That argues for cyclicals. If that doesn't happen, trade concerns
Speaker 1: come back to the roost. The FED doesn't cut rates
Speaker 1: the way we want, It's maybe not fifty basis points
Speaker 1: or whatever, then you want defenses. That labor market I
Speaker 1: think is so key. I mean, it doesn't really start
Speaker 1: to feel like a weak economy until you start seeing
Speaker 1: uh nonfarm payrolls moved down closer to zero. You start
Speaker 1: to see that unemployment rate pick up um and yet
Speaker 1: it's very much a not really a leading indicator. It's
Speaker 1: more of a lagging or coincident indicators. So what is
Speaker 1: the is job has claimed? You sort of go to
Speaker 1: way uh to to sort of figure out the outlook
Speaker 1: for for the labor market. And if so, do you
Speaker 1: look at a moving average of of four weeks or
Speaker 1: six weeks or something like that. We're do you look
Speaker 1: at some of the survey labor surveys, which what's sort
Speaker 1: of the best way for investors to wrap their head
Speaker 1: around what's expect for the labor market. By far, the
Speaker 1: easiest way is the Initial Jobless Claimed Teller comes out
Speaker 1: every Thursday at eight thirty am. Now, one week's movement
Speaker 1: is not going to tell you anything, but if you
Speaker 1: continually pay attention to and it tends to trend higher
Speaker 1: over time, and it's been doing that a little bit since,
Speaker 1: like I mentioned April ten, again, super low levels, relatively stable,
Speaker 1: no signs right now that there is a recession. It's
Speaker 1: one of the things that makes me confident that there's
Speaker 1: not a recession right now. But again it leads by
Speaker 1: maybe say twelve months. So if it continues to trend
Speaker 1: higher and higher and higher and higher, and then you
Speaker 1: get to mid two thousand twenty and all of a sudden,
Speaker 1: initial jobs seems right three thousand and you say, oh,
Speaker 1: maybe we're starting recession. So that's one thing you pay
Speaker 1: attention to. The labor surveys are also great as well. Um,
Speaker 1: if you look at the small business surveys n F
Speaker 1: by n F, I b they're a rate leading indicator.
Speaker 1: It's cooled off a little bit too, haven't they have?
Speaker 1: Small business confidence has come down now again it's still
Speaker 1: at elevated levels, but you know that's what happens when
Speaker 1: you have a peak, right and before the recession, it
Speaker 1: starts to decline. So it maybe the beginning of that decline.
Speaker 1: It doesn't mean that we're there, doesn't mean we are
Speaker 1: at our recessions. Just like those initial jobless names. Maybe
Speaker 1: botting Mountain April doesn't mean we're at a recession, but
Speaker 1: those maybe signs that you're headed towards the recession. And
Speaker 1: I will add that initial jobless GLAMs did fall this
Speaker 1: Thursday shirts just one week, but that does underpin that
Speaker 1: the case that we have a pretty strong labor market.
Speaker 1: I want to come back to the earning season as
Speaker 1: a whole sean because if you look at a benchmark level,
Speaker 1: shure companies are beating. The majority are, but they pretty
Speaker 1: much always do because they come in with low expectations.
Speaker 1: But if you look further out, if you look at
Speaker 1: the third quarter, in the fourth quarter, we're now starting
Speaker 1: to see those estimates come down. Also full your nineteen
Speaker 1: estimates and also next year's estimates as well. Can the
Speaker 1: market continue to trend higher if we continue to see
Speaker 1: the at least at this point slight deterioration in earnings
Speaker 1: estimates for the rest of the year and for the
Speaker 1: two years ahead. It's a bit of a tricky question.
Speaker 1: I guess it's my job to answer that. Sorry. I
Speaker 1: think the answer is they can go higher just based
Speaker 1: on the idea of all this stimulus coming into the market.
Speaker 1: It's not just the Fed cutting rates, but you're getting
Speaker 1: some monetary stimulus through that avenue through a rate cut
Speaker 1: which is almost guaranteed to happen next Wednesday. But you're
Speaker 1: also seeing increased fiscal spending by the government, right so
Speaker 1: that the new budget deal, if it passes, I think
Speaker 1: contributes maybe. And you'd have to fact check me on this,
Speaker 1: don't please, don't quote it's an exact thing, but I
Speaker 1: think it's about forty four billion dollars of increased federal
Speaker 1: spending next year. Those types of things canned into the
Speaker 1: market and increase asset prices. And the one thing you
Speaker 1: might see from the Fed cutting rates is not necessarily
Speaker 1: boost the economy, but you might see a boost of
Speaker 1: risk assets, which is essentially what we've seen since two
Speaker 1: thousand nine, right, the stock market has done better than
Speaker 1: the economy in general. I mean, now we're getting to
Speaker 1: the point where maybe the economy astro stock market. But
Speaker 1: and from what I've read cities sort of house view
Speaker 1: is that you're expecting a quitter point cut next week
Speaker 1: at the end of July when the Fed meets. Everyone
Speaker 1: is using the catchphrase insurance cut, you know, meaning, uh,
Speaker 1: this might be one and done, maybe two cuts. What
Speaker 1: you're thinking on that, I mean is the market's going
Speaker 1: to sort of have a temper tensionum almost for you know,
Speaker 1: more than that for a continued using cycle. Where will
Speaker 1: one cut satisfy people, do you think or two cuts? Say,
Speaker 1: I think two cuts would probably satisfy the market. I
Speaker 1: think they might even be looking deeper than that. But
Speaker 1: I think our expectations July and September, you know, I
Speaker 1: think you call it an insurance cut. In the idea
Speaker 1: of insurance is a great thing. We all have it.
Speaker 1: But sometimes you get in an accident and the fact
Speaker 1: that you have insurance doesn't uh, you know, negate the
Speaker 1: fact that you've got a horrible accident that changed your life.
Speaker 1: I think the FED is somewhat the same way. I
Speaker 1: think there has been historical examples where they did an
Speaker 1: insurance cup and we had a soft landing and we
Speaker 1: moved on and we avoided resas and things were fine
Speaker 1: right exactly. But in two thousand one, two seven, we
Speaker 1: didn't avoid the accident and we when it fell into
Speaker 1: recession anyways. Um, And that's the type of scenario we
Speaker 1: are clearly hoping to avoid. And I think that's also
Speaker 1: adding to the confusion that you're talking about people moving
Speaker 1: in between defenses and cyclicals and that kind of stuff.
Speaker 1: What really matters is what happens from here on out
Speaker 1: after the FED cuts. Do the data continue to deteriorate
Speaker 1: or do they stabilize and start to pick up a
Speaker 1: little bit. Brad, I want to come back to you
Speaker 1: because not only does your team look at every single
Speaker 1: company that reports earnings, you guys also read every single
Speaker 1: Street note that comes out essentially, and I want to
Speaker 1: get your sense when you look into aggregate at the
Speaker 1: Wall Street chatter, just notes that are coming out, do
Speaker 1: they get the sense that the markets are getting fatigued
Speaker 1: at these levels? And is an insurance cut if we
Speaker 1: want to call it that? At this point in time
Speaker 1: enough to help ease any fatigue that may be settling
Speaker 1: in Well, I think it's absolutely paramount that I kind
Speaker 1: of or just from what I'm just from when I'm reading,
Speaker 1: I think there's an interesting some interesting research about how
Speaker 1: credit credit sweez actually is taking this to the the
Speaker 1: Devil's Advocate view where they they've actually said every time
Speaker 1: the rates actually fall the tenure. For example, I think
Speaker 1: in the song as yields full shares actually aren't responding
Speaker 1: and kind they actually there is no one to one
Speaker 1: corollary there, which I thought was an interesting view. I mean,
Speaker 1: the market needs the cut and it has to have
Speaker 1: the cut to continue to move any higher um, as
Speaker 1: Sean indicated. But at the same time, there is some
Speaker 1: research to show, at least on the short term basis,
Speaker 1: it's not always as cut and dry as it seems.
Speaker 1: And you know, with S and PD around three thousand,
Speaker 1: that's either at or above a lot of the streets forecasts.
Speaker 1: I mean, are we any idea and Sean maybe you
Speaker 1: have ideas on this or we're gonna start seeing that,
Speaker 1: uh those forecasts go up, get get them in before
Speaker 1: the end of the year, I guess, or you know,
Speaker 1: I know, Sean, you don't have to, you're not responsible
Speaker 1: for an official forecast, but would you you know, if
Speaker 1: you where would you be itching to move it up
Speaker 1: right now or would you be holding firm. What's interesting
Speaker 1: is our SMP five hundred target for a year end
Speaker 1: this year, and I don't set that. It's set by
Speaker 1: your chief US equity strategist, Bias Lefkovichift so we're so
Speaker 1: we're below that, So you could argue that it should
Speaker 1: be raised. But at the same time you mentioned this
Speaker 1: potential earnings we set where earnings for two twenty or
Speaker 1: potentially too high. UM consensus is looking for ten percent
Speaker 1: earnings growth next year. We're looking for five percent. So
Speaker 1: we think eventually the market kind of realizes that and
Speaker 1: it kind of comes back down to we are that
Speaker 1: that's our view for now. That said, we did start
Speaker 1: the year with a target of thirty and lowered it
Speaker 1: after November December time frame win markets, So to get
Speaker 1: the thirty one clearly not out of the realm possibility.
Speaker 1: Given we thought that back in January yoked kind of
Speaker 1: kind of bullish. It looked very it looked very aggressive
Speaker 1: when they put it out, and we've made it there
Speaker 1: a little bit over halfway through the year, and I
Speaker 1: think only in a couple more strategists. I think maybe
Speaker 1: maybe three strategists or so that still have to have
Speaker 1: targets above where we are, but it's not that we're
Speaker 1: very close at the top. I don't think people expected
Speaker 1: the FED to pivot like this. That is, that is
Speaker 1: why their targets are due well right. No one seemed
Speaker 1: like they were ready for the FED to pivot as
Speaker 1: they did. Something that people were coming into maybe a
Speaker 1: little bit more prepared for this week was we also
Speaker 1: heard from the European Central Bank, we heard from Mario Draggy,
Speaker 1: and a lot of people actually thought that they could
Speaker 1: potentially cut rates this week. That didn't happen. They very
Speaker 1: much set up the case for September. Also the restart
Speaker 1: of QUI, also their tearing system, but it seems like
Speaker 1: it's still didn't live up to the expectations. Why not
Speaker 1: Seohn I think that in outline the details the way
Speaker 1: some were hoping for. And then I think primarily the
Speaker 1: fact that he said um dragging in particular said that
Speaker 1: the odds of a recession in that region are still low,
Speaker 1: and I think that set the expectation that may be
Speaker 1: expectations for UM what my comment September is too high,
Speaker 1: and I think that is also kind of playing through
Speaker 1: to people's expectations for the Federal Reserve, thinking that maybe
Speaker 1: we were going to get a fifty basis point cut
Speaker 1: next week. But if Mario Drogg is not that concerned
Speaker 1: about Europe, which is looking worse than here, then maybe
Speaker 1: the Fed's not as concerned as they were hoping for.
Speaker 1: It sounds bad, right, you should be hoping pretty bad situation,
Speaker 1: but market different. Before we get to the craziest thing
Speaker 1: that we all saw in markets this week, Brad, I
Speaker 1: want to put the spotlight on you. If you look
Speaker 1: back at earning season so far, what would you say
Speaker 1: have been the big standouts, whether that means a good
Speaker 1: standout or pretty bad standout. Boeing jumps out to me,
Speaker 1: it's still a story. We thought it was gonna pass
Speaker 1: for a while, UM, and then there was that surprise
Speaker 1: charge that we saw that they came out with right
Speaker 1: ahead of their earnings, which led analysts to scramble to
Speaker 1: adjust their their estimates. When their earnings came out. There
Speaker 1: was a little bit of indecision, you know from the
Speaker 1: from investors alike. You know, where we expecting this, where
Speaker 1: we're not expecting this. The estimates hadn't caught up yet. Um.
Speaker 1: I think even with some of the airline's results and
Speaker 1: some of the I guess provisions that American Airlines has
Speaker 1: made and and Southwest, which is the largest user I
Speaker 1: believe of the seven thirty seven max. Um. You know,
Speaker 1: there we're seeing some some various impacts there. I think
Speaker 1: American Airlines is on the on the on the down
Speaker 1: side of that, I think the Southwest is actually recovered. Um.
Speaker 1: They're making the special provisions to account for some of
Speaker 1: the seven thirty seven max grounding. That's the that's still
Speaker 1: a big story, huge impact there. That's you know, we
Speaker 1: thought that was gonna kind of subside. UM. I think
Speaker 1: another interesting story was was was three M you know
Speaker 1: that one of the largest losses and investor capital in
Speaker 1: that name in thirty some odd years last quarter and
Speaker 1: you know, results on on Thursday actually sways some of
Speaker 1: those concerns. But nevertheless, you know, share still came under pressure.
Speaker 1: So there's a lot still you know, three M makes
Speaker 1: everything in the economy, right, So if we're talking about
Speaker 1: the recessionary outlook. They have their their finger on the
Speaker 1: on the pulse of just about everything from post It's
Speaker 1: to the automotive market um to healthcare diverse? Does that
Speaker 1: mean we can get to the craziest thing I saw? Market?
Speaker 1: I think you missed it. What was the craziest thing
Speaker 1: last week? Did your anoint a winner? Did an annoint winter?
Speaker 1: That leaves the road wide open for you guys? Sehan?
Speaker 1: Did they tell you about our gimmick here that I
Speaker 1: didn't know you could win? Sometimes we have Sometimes everyone's
Speaker 1: a winner, everyone gets a participation trophy. That's right, Sarah
Speaker 1: is a millennial after all. Yeah, it's true. All right,
Speaker 1: let's start with you, Sarah, What do you got so?
Speaker 1: Full disclaimer not for the vegetarians for vegans out there, possibly,
Speaker 1: but I thought this was pretty crazy. Supposedly because it
Speaker 1: has been so hot over the past couple of weeks,
Speaker 1: or really just unseasonably hot, pigs across the country have
Speaker 1: been getting skinnier and skinnier, which means that if you
Speaker 1: look at hog prices, they've actually been rising. Um. Really
Speaker 1: weird to see a headline like that across the Bloomberg terminal,
Speaker 1: across the website, on the Bloomberg, but still something I
Speaker 1: hadn't thought of, and I thought that was a pretty
Speaker 1: crazy that's the most alarming thing. Yeah, it's really alarming.
Speaker 1: Extra time in the mud. Yeah, I guess so, I
Speaker 1: guess so alright, Brad, that's that's tough to the top.
Speaker 1: What do you got? Yeah, that is that is challenging.
Speaker 1: I don't usually follow the hog market, so that's a
Speaker 1: little outside my my lane. Um, I guess to me,
Speaker 1: the big story was Aligned Technology today. You know, given
Speaker 1: my given my position here in the markets team, we're
Speaker 1: looking for big moves in the in the in the
Speaker 1: market where shares are moving, and a Line Technology lost
Speaker 1: about a third of its of its market cap. It's
Speaker 1: a big move and it's a big company. I mean,
Speaker 1: I think they were worth about twenty billion dollars setting
Speaker 1: in the results. They're the maker of these, uh you know,
Speaker 1: the invisible braces that that you see so heavily advertised.
Speaker 1: I think you could say the rutting was on the wall.
Speaker 1: You know, you're seeing some of these retail locations open
Speaker 1: up the Smile Direct club, heavy competition in that space.
Speaker 1: Not not I'm not going to say it is necessarily
Speaker 1: a client, but it was definitely surprising. I know it's
Speaker 1: worked for many many other people. UM, right, So you know,
Speaker 1: I think there are a lot of underlying issues their competition.
Speaker 1: I think they're embroiled in a lawsuit as well. But
Speaker 1: I thought that was the leader in the space taking
Speaker 1: a huge hit out of nowhere. So I thought that
Speaker 1: was pretty interesting. And that's kind of been a sort
Speaker 1: of a sub theme of the starning season, hasn't it
Speaker 1: been that really big moves one one direction or the other,
Speaker 1: especially big, And I guess that's what we you know,
Speaker 1: that's what happens when we're at the highs, right, You're
Speaker 1: always going to get some of these huge down drafts
Speaker 1: that kind of take a lot of people by by surprise.
Speaker 1: So you can argue that's not a surprise, but this
Speaker 1: was still a surprise to me anyway. That's pretty good. Alright, Sehn,
Speaker 1: We've got invisible braces and skinny hogs. I may have
Speaker 1: two craziest things. I'll start with one that ties in
Speaker 1: with there is a certain vegetarian meatless burger maker talking about.
Speaker 1: I can't mention specific stock names, but may be able
Speaker 1: to I cannot mention the names. I'm making that up
Speaker 1: that crossed two d a share this week, which is
Speaker 1: seven plus return from its I po in May, which
Speaker 1: to me is absolutely crazy. And I do not believe
Speaker 1: that there's a plant based substitute for bacon. It is
Speaker 1: extremely crazy to me. The other thing I think is
Speaker 1: crazy is something I believe I saw on Bloomberg Television
Speaker 1: this week. May have happened little last week, but it
Speaker 1: is going around on Wall Street this week. Was a
Speaker 1: Wall Street kind of analyst or veteran saying that the
Speaker 1: tenure treasury you could go to zero in the next
Speaker 1: couple of And I've gotten a lot of questions about that,
Speaker 1: and I think that is a very interesting thing to
Speaker 1: think about, because if you'd have told me back in
Speaker 1: two thirteen that German boon could go to negative zero
Speaker 1: point three seven percent or whatever today, I would have said,
Speaker 1: now when when skinny pigs fly right exactly, but now
Speaker 1: here were talking about it happening in the United States.
Speaker 1: I too have two crazy things, uh. The first one
Speaker 1: that was one of the rules, that's right. That one,
Speaker 1: I'll make it up for last week. One being that
Speaker 1: we now have Greece Greek tenure yields, uh, if not lower,
Speaker 1: pretty close to treasury yields. I'm not gonna make that
Speaker 1: my official crazy thing because then every currency guy on
Speaker 1: Twitter will point out that you gotta just for the currency.
Speaker 1: That's why you gotta get rid of Twitter, right exactly.
Speaker 1: That's why I'm the leading it tonight. But my official
Speaker 1: craziest thing this week is I'm sure we're all familiar there.
Speaker 1: There's very handful of sort of legendary investors out there.
Speaker 1: I think we'd all agree Bill Miller is one of them.
Speaker 1: Uh beat the SMP five D for like fifteen years straight,
Speaker 1: running a very plain vanilla mutual fund Big one. Though
Speaker 1: the leg Mason Value Fund considered one of the most
Speaker 1: famous value investors in the world. This hedge fund he's
Speaker 1: running now is a different animal. Um It rose forty
Speaker 1: six percent in the first half of the year, and
Speaker 1: they're attributing it to from one thing Bitcoin and the
Speaker 1: other thing Amazon. So here the world's you know, one
Speaker 1: of the world's most famous value investors is loading up
Speaker 1: on Amazon, which I've I've found it be colle crazy
Speaker 1: and Bitcoin. And he also this is a fund that
Speaker 1: can be as much as triple levered, so he can't
Speaker 1: say that Bill Miller is going quietly into the sunset
Speaker 1: as he as he ages he's he's going big levering
Speaker 1: up triple levered, uh potentially triple levered Bitcoin and uh
Speaker 1: high flighting tech stock funds. So I think, you know,
Speaker 1: maybe this is a good example of how, um, the
Speaker 1: notion of what value investing is really changing dramatically. Is
Speaker 1: Amazon and value stock? I know you can't single thing
Speaker 1: that's fair, um, but before we go, I have to
Speaker 1: read our favorite Twitter as well. This one is pretty good. Yeah.
Speaker 1: So we had Jeff Hancock right in he is at
Speaker 1: experts with two U s is ninety seven, underscored Jeff,
Speaker 1: and then he said Ford came out with an all
Speaker 1: electric F one fifty and the stock declined. Brad have
Speaker 1: to come to you. Was it just the fact that
Speaker 1: earnings were not very great and maybe overshadowed this? Yeah?
Speaker 1: I think the yes, the F one fifty is the
Speaker 1: main driver of that stock. If you think, if you
Speaker 1: looked at deliveries over the past you know, decade or so,
Speaker 1: the F one fifty is always where you know your
Speaker 1: eyes first glanced, you know, are they are they on
Speaker 1: deliveries up. I wouldn't say that's the reason why the
Speaker 1: stock is down, so I'm gonna I'm gonna go I'm
Speaker 1: gonna go on the limb there, um and and and
Speaker 1: say that I think that mistake, and they actually beat
Speaker 1: on sales. I think it was just their their earnings
Speaker 1: and other things. I think full year out the disappointing
Speaker 1: interesting one. Um, it was a Nissan profit was down
Speaker 1: nine year every year, which I thought was as far
Speaker 1: as the automakers went a bunch of Although I will say, uh, Sarah,
Speaker 1: if I were to make a Venn diagram of electric
Speaker 1: car drivers Tesla types and Ford F one fifty drivers,
Speaker 1: I don't think I'd see a lot of overlap in
Speaker 1: those two circles. They'd they'd be several inches apart. Maybe
Speaker 1: not necessarily. Maybe our Twitter guys on this stuff the
Speaker 1: next Yeah, maybe so. But with that said, Brad Sean,
Speaker 1: thank you both so much for joining the show today.
Speaker 1: Thank you, thank you for having me what goes out.
Speaker 1: We'll be back next week. Until then, you can find
Speaker 1: us on the Bloomberg Terminal website and app or wherever
Speaker 1: you get your podcasts. We'd love it if you took
Speaker 1: the time to rate and review the show on Apple
Speaker 1: podcast so more listeners can find us and you can
Speaker 1: find us on Twitter, follow me at at Sara Panzac
Speaker 1: and Mike is at Reaganonymous. You can also follow bloomber
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Speaker 1: Foreheads ahead of Bloomberg. Podcast is Princess the Leavie. Thanks
Speaker 1: for listening to you. Next time