WEBVTT - Big Media Fends Off Congress Over Content: SocialFlow CEO 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Kind of Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:21.080 and on Bloomberg dot com. There is a major, major 0:00:21.160 --> 0:00:24.400 hearing on Capitol Hill right now. Some tex CEOs defending 0:00:24.400 --> 0:00:29.400 section to thirty old talk about malignant information, misinformation and 0:00:29.480 --> 0:00:32.479 the spread of that. Twitter CEO Jack Dorsey is talking 0:00:32.600 --> 0:00:35.680 right now. Twitter has been proposing an idea where users 0:00:35.680 --> 0:00:39.599 can choose from a series of algorithms supposedly created by 0:00:39.680 --> 0:00:43.320 groups outside Twitter. It's just an idea right now, but 0:00:43.440 --> 0:00:45.599 you can be sure that all of the CEOs will 0:00:45.640 --> 0:00:47.680 be proposing some sort of ideas so that they don't 0:00:47.680 --> 0:00:53.279 have ideas imposed upon them. So now to talk more 0:00:53.280 --> 0:00:55.840 about what we might hear today and the reaction to it, 0:00:55.920 --> 0:00:59.600 let's bring in Jim Anderson of Social Capital, and just 0:01:00.040 --> 0:01:05.160 for reasons of um disclosure, we should mention that Social 0:01:05.200 --> 0:01:08.600 Flow is used by Bloomberg as well. So Jim explained 0:01:08.560 --> 0:01:11.839 to us, first of all, what social flow actually does. Yeah, 0:01:11.880 --> 0:01:14.120 We're we're the social marketing platform that many of the 0:01:14.160 --> 0:01:16.640 big media companies use to get their content out to 0:01:16.680 --> 0:01:19.320 Facebook and Twitter and other social network so so we're 0:01:19.400 --> 0:01:21.280 very much the conduit through which a lot of that 0:01:21.360 --> 0:01:24.920 information flows. And of course, reputable media companies that you know, 0:01:24.959 --> 0:01:28.160 reputable is I suppose subject to some degree of interpretation. 0:01:28.240 --> 0:01:30.160 You know, your view of what is reputable may be 0:01:30.240 --> 0:01:35.240 different than someone else's. Use these social platforms enormously. You know, 0:01:35.280 --> 0:01:38.039 we see about fifty million posts a year go out. 0:01:38.040 --> 0:01:40.280 They get more than a trillion and annual reach. So 0:01:40.319 --> 0:01:43.640 these are enormously important platforms for media companies, and of 0:01:43.640 --> 0:01:48.200 course they're enormously important platforms for all kinds of messaging. So, 0:01:48.320 --> 0:01:50.000 you know, it's interesting, Jim, I guess one of the 0:01:50.000 --> 0:01:56.400 most fundamental questions is are these companies media companies, specifically 0:01:56.600 --> 0:01:59.680 Facebook and then also Twitter and Alphabet or they just 0:01:59.720 --> 0:02:04.600 simply technology platforms for content. Well, they'll certainly say their 0:02:04.640 --> 0:02:07.080 technology platforms, right, they don't want to be branded as 0:02:07.080 --> 0:02:09.720 media companies because that comes with a whole set of obligations, 0:02:09.880 --> 0:02:13.560 including perhaps not Section two thirty protection, which is what's 0:02:13.560 --> 0:02:15.840 being talked about in his hearing, and so that's been 0:02:15.960 --> 0:02:19.120 sort of a long running debate. And and in fairness 0:02:19.160 --> 0:02:22.480 to their position, uh, you know, they don't generally create 0:02:22.480 --> 0:02:25.440 the content, right, what do media companies do? They create contents. 0:02:25.480 --> 0:02:27.760 They typically take a point of view, they have editorial 0:02:27.840 --> 0:02:30.480 judgment those kinds of things. And what Facebook and Twitter 0:02:30.520 --> 0:02:33.360 and Google will all say is we don't do that, right, 0:02:33.400 --> 0:02:36.000 We largely don't create the content. We try to avoid 0:02:36.080 --> 0:02:39.680 being the editorial voice. You've hurt Mark Zuckerberg say time 0:02:39.720 --> 0:02:41.919 and time again, we don't want to be the arbiter 0:02:42.040 --> 0:02:44.840 of truth. Now, there are certainly counter arguments to that 0:02:44.880 --> 0:02:46.799 and legitimate points on the other side, but at least 0:02:46.800 --> 0:02:48.800 from their positioning, they don't want to be viewed as 0:02:48.840 --> 0:02:52.240 media company. Where are they in agreement? I mean obviously there, 0:02:52.480 --> 0:02:54.800 but but in general when it comes to making arguments 0:02:54.840 --> 0:02:58.239 before the committee, where will they all sound like they're 0:02:58.320 --> 0:03:01.120 in agreements and working together pretential even and where will 0:03:01.160 --> 0:03:04.720 they differ and want to be very much obviously distant 0:03:04.760 --> 0:03:07.280 from each other. Well, I think where they're going to 0:03:07.360 --> 0:03:10.360 be together is they all depend on section two thirty. 0:03:10.480 --> 0:03:13.600 Jack Dorsey's initial statement said, you know, section two thirty 0:03:14.080 --> 0:03:17.079 is incredibly important, and that removing section to thirty protections 0:03:17.080 --> 0:03:19.639 will removed content from the Internet. And I think you'll 0:03:19.639 --> 0:03:23.200 see variations of that same theme coming from all three. 0:03:23.760 --> 0:03:26.400 I think where you may differ is in terms of 0:03:26.480 --> 0:03:29.600 algorithmic seed you know. I think Twitter has the opportunity 0:03:29.639 --> 0:03:32.160 to create a little bit of daylight between Facebook and Google, 0:03:32.240 --> 0:03:35.520 because relatively, Twitter tends to be more in the moment, live, 0:03:35.600 --> 0:03:39.400 what's happening right now, whereas Facebook and YouTube, which is 0:03:39.440 --> 0:03:42.880 the most sort of relevant um part of Google to 0:03:42.920 --> 0:03:46.800 this conversation, tends to be more algorithms algorithmically driven. Uh. 0:03:46.840 --> 0:03:49.520 And it may not be as important that it happened 0:03:49.520 --> 0:03:51.840 five minutes ago, it may have happened yesterday. But if 0:03:51.840 --> 0:03:53.720 the oderithm is determined that you might like it it 0:03:53.840 --> 0:03:56.360 is relevant to you, they'll surface it. So I would 0:03:56.360 --> 0:04:01.000 expect Twitter to be somewhat less defensive of algorithms and 0:04:01.080 --> 0:04:03.760 more willing to compromise on Hey, if you want to 0:04:03.760 --> 0:04:08.600 regulate somethings, then regulate the way the algorithms surface content. So, Jim, 0:04:08.800 --> 0:04:12.720 I understand why Facebook is testifying today Twitter. These are 0:04:12.840 --> 0:04:18.440 social network platforms that really traffic in, you know, news 0:04:18.440 --> 0:04:21.560 and content I'm a little unsure why alphabet is involved. 0:04:21.560 --> 0:04:24.080 Why why do you think they're there? Yeah, I think 0:04:24.120 --> 0:04:26.560 it is mostly about YouTube. You think about the way 0:04:26.600 --> 0:04:29.359 people consume YouTube. You know, you you open up and 0:04:29.400 --> 0:04:31.400 watch a video. However you saw it, maybe you saw 0:04:31.400 --> 0:04:33.640 I don't know, social network, or somebody emails or texted 0:04:33.680 --> 0:04:36.279 it to you, or you just discovered it. Well, there's 0:04:36.360 --> 0:04:39.920 a very powerful you know, sort of following videos other 0:04:40.040 --> 0:04:43.080 videos like this pain that shows up. And so what 0:04:43.160 --> 0:04:45.360 happens is you sit down to watch one YouTube video 0:04:45.400 --> 0:04:47.920 and before you know what, you've watched twelve YouTube videos, right, 0:04:48.160 --> 0:04:51.440 and what those other eleven that you watched are very 0:04:51.480 --> 0:04:55.480 powerfully chosen by algorithms that are incredibly similar in concept 0:04:55.800 --> 0:04:58.640 and the scope to what Facebook does. Right, So so 0:04:58.680 --> 0:05:01.800 that hey, if you're interested in I'll just pick something 0:05:01.880 --> 0:05:04.960 law in order, then you may be interested in this 0:05:05.000 --> 0:05:07.320 other type of content. And the problem that Google has 0:05:07.360 --> 0:05:09.440 run into is if this other type of content is 0:05:09.480 --> 0:05:12.760 the white supremacy, you know, they end up having algorithms 0:05:12.800 --> 0:05:16.359 that recommend content, it's highly questionable. And the algorithms don't know, right, 0:05:16.400 --> 0:05:19.680 they don't exercise editorial judgment. So the algorithm just knows 0:05:19.720 --> 0:05:21.960 that you watched a piece of content like this. Other 0:05:22.000 --> 0:05:24.600 people who watch content like this would be interested in 0:05:24.920 --> 0:05:27.360 something related, and so they served you up something that 0:05:27.400 --> 0:05:30.919 may be entirely inappropriate and that even Google may ultimately 0:05:31.000 --> 0:05:33.440 decide is inappropriate and removed from YouTube. But it's pretty 0:05:33.480 --> 0:05:35.800 much a cat and mouse game in terms of keeping 0:05:35.839 --> 0:05:40.800 that that questionable content off of the platforms. So this 0:05:40.839 --> 0:05:44.040 is hilarious, Jim. They couldn't make contact with Mark Zuckerberg, 0:05:44.200 --> 0:05:47.919 so now that there's a recess in order to be 0:05:47.960 --> 0:05:51.920 able to continue the hearing on bad behavior shortly. But 0:05:52.800 --> 0:05:56.240 how ironic is that? I mean? How also, how will 0:05:56.240 --> 0:05:58.720 I be read that the committee couldn't get in touch 0:05:58.760 --> 0:06:04.760 with Mark Zuckerberg? He walln't available to speak to the committee? Right? Well, 0:06:04.920 --> 0:06:06.960 I mean, so you know, we all sort of deal 0:06:07.040 --> 0:06:12.280 with zoom. You know, he does run Facebook, I understand. 0:06:12.320 --> 0:06:14.600 So you know, I think your question about how will 0:06:14.600 --> 0:06:15.919 it also want to be perceived. Is it just a 0:06:15.920 --> 0:06:18.760 technical snatt food that's quickly resolved, or is he off 0:06:18.760 --> 0:06:21.400 doing something and he just decided decided to blow off, 0:06:21.480 --> 0:06:24.000 you know, congressional testimony that obviously wouldn't be received. Well, 0:06:24.360 --> 0:06:26.240 I would have to believe that you know, he takes 0:06:26.240 --> 0:06:29.000 this seriously, understands the importance of the Senate and Congress 0:06:29.000 --> 0:06:32.760 and regulations. So my my guess is at the technical issue. 0:06:32.800 --> 0:06:36.560 But you know, I guess we'll have to wait and speake. Yeah, yeah, 0:06:36.560 --> 0:06:39.920 he's back now. I guess they've they've rebooted and he's back, 0:06:39.920 --> 0:06:43.599 so hopefully they get started again. Jiff, just wondering. You know, historically, 0:06:44.360 --> 0:06:48.640 um in the United States, regulators government has taken a 0:06:48.760 --> 0:06:53.560 very light touch to regulating big tech, and arguably that's 0:06:53.600 --> 0:06:56.640 allowed big tech to be what it is in Silicon Valley, 0:06:56.640 --> 0:06:58.480 to be what it is with all the successes. You 0:06:58.640 --> 0:07:02.360 sense it that's changing. I think it's definitely changing. I 0:07:02.360 --> 0:07:05.320 think it's it's true they have taken a light touch, 0:07:05.360 --> 0:07:07.880 and I think it's a very fair statement to say 0:07:07.920 --> 0:07:11.120 that's been allowed for enormous growth, wealth creation. You know, 0:07:11.160 --> 0:07:14.200 these companies are some of the biggest companies in the 0:07:14.240 --> 0:07:17.320 world now as a result in part of that might touch. 0:07:17.640 --> 0:07:19.920 But you know, when a company gets to be you know, 0:07:20.320 --> 0:07:23.200 near a trillion dollars in market gap or in the 0:07:23.200 --> 0:07:25.600 two trillion dollars, I'll throw Apple and this mix, obviously, 0:07:25.640 --> 0:07:27.360 it's a it's a different kind of company, but it's 0:07:27.360 --> 0:07:29.880 sort of certainly falls into big tech. You know, when 0:07:29.920 --> 0:07:33.520 you end up with market capitalizations in the trillion dollar range, 0:07:33.560 --> 0:07:35.679 you know you're you're almost government size at that point. 0:07:35.720 --> 0:07:37.560 And I think, you know, you get to to be 0:07:37.720 --> 0:07:40.160 too big and and have too many issues and too 0:07:40.200 --> 0:07:42.560 many problems and too many enemies, just lantly from a 0:07:42.600 --> 0:07:45.600 political standpoint, so, I think it's clear both Democrats and 0:07:45.640 --> 0:07:50.200 Republicans have a very high degree of anxiety and angst 0:07:50.200 --> 0:07:53.040 and even animosity against the tech platforms. The interesting thing 0:07:53.080 --> 0:07:56.160 is that they're almost diametrically opposed. Right Democrats think that 0:07:56.200 --> 0:07:59.080 the tech platforms are not doing enough to combat misinformation, 0:07:59.400 --> 0:08:02.720 Republicans think that the text platforms are censoring conservative content. 0:08:02.760 --> 0:08:06.080 Those are almost exactly diametrically opposed. And so where you 0:08:06.120 --> 0:08:09.040 get into these real interesting questions is, well, what's the remedy? 0:08:09.120 --> 0:08:11.240 Right If if you want to revoke Section two thirty 0:08:11.280 --> 0:08:15.160 protections and make the platforms more liable from a conservative perspective, 0:08:15.160 --> 0:08:17.520 then you're more likely to get somebody like Facebook and 0:08:17.560 --> 0:08:20.800 Twitter removing conservative content because they don't have any legal 0:08:20.840 --> 0:08:23.280 protections if they keep it up. And so I think 0:08:23.320 --> 0:08:26.000 there's a very real risk here that that somebody will 0:08:26.000 --> 0:08:29.440 actually make the situation worse from their standpoint, um, if 0:08:29.640 --> 0:08:32.960 they're not very fontibule about how these regulations are determined 0:08:32.960 --> 0:08:36.079 and enacted. Jim, what would you imagine will be the 0:08:36.160 --> 0:08:40.640 role of Twitter in public life if the presidency turns over? Well, 0:08:40.640 --> 0:08:42.720 I think in Twitter will still be very important. You know, 0:08:42.760 --> 0:08:47.240 I think everybody may take a breath, and the pace 0:08:47.320 --> 0:08:49.600 of tweets coming from the President I would have to 0:08:49.640 --> 0:08:53.000 believe be considerably lower. Um. And in some ways that's 0:08:53.000 --> 0:08:55.160 a negative for Twitter, because you know, you could argue 0:08:55.200 --> 0:08:57.640 that Donald Trump's presidency has done a tremendous amount to 0:08:57.679 --> 0:09:00.560 keep Twitter relevant. But I think Twitter, if if you 0:09:00.720 --> 0:09:02.600 sort of got an honest view from them, might actually 0:09:02.640 --> 0:09:04.440 welcome the rest of it, because it comes with a 0:09:04.480 --> 0:09:06.200 lot of headaches and a lot of anxiety and a 0:09:06.200 --> 0:09:08.640 lot of problems. So I think Twitter will continue to 0:09:08.640 --> 0:09:11.080 be very important. But I don't think you'll see, let's say, 0:09:11.200 --> 0:09:13.920 for instance, President Biden if he wins uh, you know, 0:09:14.000 --> 0:09:17.439 making declarations on Twitter, certainly not at a volume and 0:09:17.480 --> 0:09:20.800 in the way that President Trump does. Jim. I guess 0:09:20.840 --> 0:09:24.319 the ultimate concern for tech investors is perhaps some of 0:09:24.320 --> 0:09:26.760 these companies get broken up. Do you think there's a 0:09:26.800 --> 0:09:30.440 material risk that that could happen. Yeah, I would almost 0:09:30.520 --> 0:09:33.880 call it not just the material risk, but a likelihood. Now, 0:09:33.920 --> 0:09:36.319 I think the real question is how and when and 0:09:36.360 --> 0:09:38.560 how how long does it take? Right that this is 0:09:38.720 --> 0:09:42.199 antitrust is a year's long process. There will be plenty 0:09:42.200 --> 0:09:45.880 of litigation. But going back to the size of these companies, 0:09:45.920 --> 0:09:49.959 it's hard to argue Facebook, Google, certainly. Twitter maybe is 0:09:49.960 --> 0:09:51.480 a little bit of a different story because you know, 0:09:51.480 --> 0:09:54.480 Facebook is sixty times larger than Twitter if you want 0:09:54.480 --> 0:09:56.599 to think about it from a market capitalization standpoint. The 0:09:56.679 --> 0:09:58.880 lands I checked, so you know, it's it's unfair to 0:09:58.960 --> 0:10:02.440 lump Twitter into the antitrust conversation the way you would Facebook, Google, 0:10:02.559 --> 0:10:04.240 or even Amazon or Apple if you want to be 0:10:04.240 --> 0:10:06.880 more expansive. And I think every one of those four 0:10:06.920 --> 0:10:10.719 big tech companies faces a very significant risk of of 0:10:10.760 --> 0:10:13.680 antitrust action and then either ultimately being broken up or 0:10:13.720 --> 0:10:16.959 reaching a settlement where they voluntarily choose to diveet certain 0:10:17.000 --> 0:10:20.560 components to satisfy regulatory concerns. And by the way, not 0:10:20.600 --> 0:10:22.719 just in the United States. These are global companies that 0:10:22.840 --> 0:10:25.040 you have to start thinking about the EU and other 0:10:25.200 --> 0:10:27.720 jurisdictions as well, if you're the CEO of one of 0:10:27.760 --> 0:10:29.760 these companies, and in my mind it at least to 0:10:29.840 --> 0:10:32.920 some degree or another, some degree of antitrust impact is 0:10:32.920 --> 0:10:37.240 inevitable on all four of those big, big giant tech platforms. Yeah, 0:10:37.320 --> 0:10:39.560 I mean, the EU is way far ahead in many ways, 0:10:39.760 --> 0:10:42.840 and you notice it when you you you you browse 0:10:42.880 --> 0:10:45.840 around on European websites, you get asked a whole range 0:10:45.880 --> 0:10:48.680 of questions about you know, what, what what? What information 0:10:48.720 --> 0:10:50.440 you want to give away? How many people can you 0:10:50.480 --> 0:10:52.080 know can use it and pass it on and so on. 0:10:52.120 --> 0:10:54.760 So it is interesting. But so we know that Mark 0:10:54.840 --> 0:10:56.760 Zuckerberg had the year of President Trump. We know he 0:10:56.840 --> 0:10:58.960 wasn't going to tell us what was said in that room. 0:10:59.440 --> 0:11:02.640 Would he us the same kind of relationship with a 0:11:02.679 --> 0:11:06.960 different president, Uh, you know that's a great question. I'm 0:11:07.000 --> 0:11:09.160 not sure he will, right, I mean, you know, President 0:11:09.160 --> 0:11:12.040 Trump is a unique president at a unique moment in time. 0:11:12.520 --> 0:11:15.520 I think, if nothing else, for reasons of optics, President 0:11:15.559 --> 0:11:18.400 Biden isn't necessarily going to want to be perceived as 0:11:18.440 --> 0:11:21.120 cozying up the big tech and and then you know, 0:11:21.200 --> 0:11:24.960 never mind what the specific personal conversations were in private. 0:11:25.000 --> 0:11:27.280 I think all you know, big tech platforms have given 0:11:27.320 --> 0:11:29.600 the opportunity to have an audience with the president, would 0:11:29.679 --> 0:11:32.439 choose to say yes, Why why would you not do that? Uh? 0:11:32.520 --> 0:11:34.680 You know, I think any anytime you have the ability 0:11:34.679 --> 0:11:37.200 to advance your cause and how people understand your business 0:11:37.240 --> 0:11:40.080 and your position, you're probably going to want to take it. 0:11:40.160 --> 0:11:42.840 So I would not be at all surprised again as 0:11:42.880 --> 0:11:45.920 president if if Joe Biden does win and become president, 0:11:46.160 --> 0:11:48.880 that you'll see as somewhat of a distance put between 0:11:48.960 --> 0:11:51.840 him and big tech in general. And then you ultimately 0:11:51.840 --> 0:11:54.200 we'll have to see how the Congress shakes out as well. Uh. 0:11:54.240 --> 0:11:56.800 You know what, what their appetite is a lot of 0:11:56.880 --> 0:11:59.480 you know, what we see now is certainly inflamed by 0:11:59.559 --> 0:12:02.600 the election in season. Um, once the election results are 0:12:02.640 --> 0:12:04.600 decided and we're past that, then we'll find out what 0:12:04.640 --> 0:12:07.760 the real appetite is for for real heavy lifting of 0:12:08.160 --> 0:12:12.920 legislation and regulatory reform. You know, Jim, this seems to this, 0:12:13.040 --> 0:12:15.920 maybe even this hearing seems to have really come about 0:12:15.920 --> 0:12:18.280 in the wake of that New York Post Hunter Biden story. 0:12:19.040 --> 0:12:20.680 Why do you why do you think that got so 0:12:20.760 --> 0:12:25.400 much traction. Well, I think it's a Twitter you know, 0:12:25.480 --> 0:12:28.840 handled that in a very aggressive way. Some people would 0:12:28.880 --> 0:12:31.880 say mishandled that, right, I mean that's a matter of perspective. 0:12:32.120 --> 0:12:34.040 I think what you see, though, is that the tech 0:12:34.040 --> 0:12:38.000 platforms Twitter in this case, are are super sensitive to 0:12:38.200 --> 0:12:41.400 the idea that there's an October surprise that will come out, 0:12:41.440 --> 0:12:45.360 there's an information dump of unverified information. Uh, there's an 0:12:45.400 --> 0:12:48.200 impact on the election, and before anybody has a chance 0:12:48.240 --> 0:12:50.520 to really that what was going on, you know, it's 0:12:50.520 --> 0:12:53.720 affected the election, and and you know, the tech platform 0:12:53.720 --> 0:12:55.480 towards the center of it. I think that's the concern 0:12:56.280 --> 0:12:58.600 of what happened, at least in the view of some 0:12:58.679 --> 0:13:01.080 back in two thousand sixteen, and so they were super 0:13:01.160 --> 0:13:03.640 primed for this, and so they acted very quickly, but 0:13:03.720 --> 0:13:06.360 in many ways they overreached, right. They they suspended the 0:13:06.360 --> 0:13:08.560 Twitter account of the New York Post. And whether you 0:13:08.559 --> 0:13:10.800 agree with the New York Post and editorial view or not, 0:13:11.160 --> 0:13:13.200 they are the New York Post. They are generally considered 0:13:13.240 --> 0:13:15.920 to be a reputable news source. And so when you 0:13:15.920 --> 0:13:20.320 haven't platforms blocking the Twitter Twitter handle of a news outlet, 0:13:20.400 --> 0:13:23.520 that's a pretty significant move. Yeah, Jim, We're gonna have 0:13:23.559 --> 0:13:27.960 to leave there. Jim Honderson, CEO of Social Flow. Yeah, 0:13:30.120 --> 0:13:33.079 markets selling off, the excelling as accelerated. We have the 0:13:33.200 --> 0:13:37.240 SMP that Dow and NASAC all off about three cent. 0:13:37.320 --> 0:13:40.760 Let's bring in Sarah Posic Bloomberg across asset reporters. Sarah, 0:13:40.920 --> 0:13:44.040 it seems like this selling has accelerated here. Uh, we're 0:13:44.040 --> 0:13:47.640 seeing bigger losses. Selling has accelerated. If you look across 0:13:47.679 --> 0:13:51.199 the major averages right now towards the loads of the days, 0:13:51.559 --> 0:13:54.400 a couple of technical levels that some investors are watching. 0:13:54.440 --> 0:13:56.320 For example, if you were to look at the SMP 0:13:56.480 --> 0:13:58.800 five hundred, take a look at its one hundred day 0:13:58.800 --> 0:14:01.320 moving average. We broke through the fifty day not too 0:14:01.360 --> 0:14:03.080 long ago, just a couple of days ago till today, 0:14:03.120 --> 0:14:05.560 we broke through that one day moving average, which stands 0:14:05.679 --> 0:14:08.760 just at thirty three oh six or so. So we're 0:14:08.920 --> 0:14:12.360 still trading below it as some investors, including Matt Maillie 0:14:12.440 --> 0:14:15.440 over at Miller's Havoc, are looking closer to the thirty 0:14:15.520 --> 0:14:19.360 two thirty level or so, uh for support should we 0:14:19.440 --> 0:14:21.760 need it. We still are a ways away from that level. 0:14:22.040 --> 0:14:24.120 But if we were to break that level there would 0:14:24.120 --> 0:14:27.080 be concerned because we would then break the trend line 0:14:27.520 --> 0:14:29.560 since March. But as you mentioned, you look at the 0:14:29.560 --> 0:14:31.840 major averages, the DOUBT, the SMP, at the NAZAC, they 0:14:31.880 --> 0:14:35.360 are all down more than three at the moment. The 0:14:35.400 --> 0:14:38.160 worst thing for the SMP since early September when the 0:14:38.200 --> 0:14:41.480 correction really first began, which was really led by tech 0:14:41.520 --> 0:14:45.480 stocks at the time. But well, equity selling has really 0:14:46.200 --> 0:14:49.440 picking up. You could say, what's interesting is that we 0:14:49.600 --> 0:14:53.800 still see pretty moderate gains in treasuries. We're not seeing 0:14:53.920 --> 0:14:56.200 a huge rust to safety and assets. You look at 0:14:56.240 --> 0:14:59.680 the tenure for example right now at seventy six basis points, 0:15:00.240 --> 0:15:02.480 not flat on the day, but not seeing too much movement. 0:15:02.720 --> 0:15:04.760 So at least in the bond market, you haven't seen 0:15:05.080 --> 0:15:07.680 the safe haven rush pick up as we have seen 0:15:07.960 --> 0:15:11.040 equity losses accelerate throughout the morning. Let's also bring in 0:15:11.080 --> 0:15:14.920 Gina Martin Adams, chief equity strategist for Bloomberg Intelligence. Gina, 0:15:15.160 --> 0:15:17.560 you know, we we thought that the tech hearring would 0:15:17.560 --> 0:15:18.960 be the big event of the day, but it turns 0:15:19.000 --> 0:15:21.040 out the markets are becoming the major event of the day. 0:15:21.480 --> 0:15:24.880 Is this something that we should start getting concerned about? Well, 0:15:25.000 --> 0:15:27.120 I think that they're actually related issues. I mean, the 0:15:27.200 --> 0:15:30.680 market is weakest in the tech base, um, the communication 0:15:30.720 --> 0:15:33.800 stocks and tech stocks sort of leading to clines along 0:15:33.880 --> 0:15:36.440 with energy. So I think that the two issues are 0:15:36.520 --> 0:15:40.480 somewhat related. Um. You know, as Sarah mentioned back in 0:15:40.880 --> 0:15:43.280 September is the start of this correction, and it all 0:15:43.360 --> 0:15:46.160 started with tech stocks starting to sell off. And we 0:15:46.240 --> 0:15:49.360 have seen a tremendous amount of rotation since September. Even 0:15:49.440 --> 0:15:53.240 the early October rally was certainly suspicious given that it 0:15:53.320 --> 0:15:56.800 was led by utility stocks. So you know, I think 0:15:56.840 --> 0:15:59.600 that what you have here is a case of tech 0:15:59.600 --> 0:16:02.120 stocks losing a little bit of their luster. They're expected 0:16:02.160 --> 0:16:05.880 to be relatively weak in the third quarter. Uh, You've 0:16:05.920 --> 0:16:10.080 got um some serious regulatory pressures dampening the outlook for 0:16:10.280 --> 0:16:13.520 some of the communications stuck, some of those big bell 0:16:13.600 --> 0:16:17.840 weathers that are related to tech. And at the same time, 0:16:17.920 --> 0:16:20.240 we've got a little bit of loss of macro momentum 0:16:20.360 --> 0:16:22.040 that is weighing on the market, and a lot of 0:16:22.080 --> 0:16:24.560 election jitters. So it's kind of a confluence of events. 0:16:24.640 --> 0:16:26.440 But I do think the tech is still at the 0:16:26.560 --> 0:16:29.880 center of the market weakness and has been since early 0:16:29.960 --> 0:16:33.040 September Gene. How much of this is just kind of 0:16:33.560 --> 0:16:38.880 the pandemic numbers globally going the wrong direction. Ah, I 0:16:38.960 --> 0:16:41.040 don't know how much of it honestly is a pandemic. 0:16:41.160 --> 0:16:43.880 I know that that's an easy sort of culprit to 0:16:44.080 --> 0:16:46.920 point to, and certainly the fact that the pandemic is 0:16:47.480 --> 0:16:51.040 re accelerating case counts re accelerating once again does have 0:16:51.800 --> 0:16:54.200 some people nervous about what that may mean for the 0:16:54.280 --> 0:16:57.080 economic outlook. But I do think that for the most part, 0:16:57.160 --> 0:17:00.920 it's unlikely that global economy shut down like they did 0:17:00.960 --> 0:17:05.359 in March. Um. Instead, there do appear to be alternative 0:17:05.440 --> 0:17:09.080 measures for dealing with the virus case count load moving higher, 0:17:09.119 --> 0:17:12.760 and they don't all um necessarily results in a massive 0:17:12.880 --> 0:17:16.399 economic shutdown. I think instead it may be related to 0:17:16.480 --> 0:17:18.920 the fact that case counts are moving higher. We don't 0:17:18.960 --> 0:17:23.200 have a vaccine yet, and fiscal policy seems to have stalled, 0:17:23.280 --> 0:17:25.320 so we don't have a fiscal policy package to sort 0:17:25.320 --> 0:17:27.720 of back stop the economy and help us re accelerate 0:17:27.800 --> 0:17:31.320 that macro momentum in the face of case counts going higher. 0:17:31.440 --> 0:17:34.560 We're not likely to reopen more in the face of 0:17:34.640 --> 0:17:36.320 case counts going higher so it is. It is a 0:17:36.400 --> 0:17:39.280 peripheral a fact, but I think it's more about the 0:17:39.359 --> 0:17:42.160 fact that, you know, the global economy did recover pretty 0:17:42.200 --> 0:17:47.240 substantially from March into college September, and that recovery has 0:17:47.320 --> 0:17:51.000 slowed in the weeks since um and that slowdown has 0:17:51.040 --> 0:17:54.080 investors a little bit nervous, particularly without any sign of 0:17:54.200 --> 0:18:00.200 support coming from the fiscal policymakers. Sarah, We're looking across said, 0:18:00.280 --> 0:18:03.000 and you know it, it's pretty cost the board today. 0:18:03.040 --> 0:18:05.879 It's just a general feeling of mal is you know, 0:18:06.240 --> 0:18:09.359 given everything that Gena Martinas said right. I mentioned that 0:18:09.400 --> 0:18:11.520 we aren't really seeing a huge shift in the bond market. 0:18:11.520 --> 0:18:13.760 But if you look at currency markets, for example, we 0:18:13.840 --> 0:18:16.240 see the dollar higher today, we see the Japanese yenn 0:18:16.320 --> 0:18:19.560 higher today. Those are the two best performing G ten currencies, 0:18:19.560 --> 0:18:21.679 and the end is the only major currency that it's 0:18:21.760 --> 0:18:24.800 higher against the U S dollars. So we are seeing 0:18:24.920 --> 0:18:28.399 this flock to safety across FX market's a little bit 0:18:28.480 --> 0:18:31.680 more so, even if we're not seeing it completely reflected 0:18:32.080 --> 0:18:34.720 in the bond market. Granted, when we look at the 0:18:34.720 --> 0:18:36.960 bond market, you look at the ten year around seventy 0:18:37.000 --> 0:18:39.560 six basis points or so, I mean these are still extremely, 0:18:39.640 --> 0:18:43.000 extremely low bond yield. There had been some talk about 0:18:43.080 --> 0:18:45.680 movement back up towards one percent just last week. So 0:18:45.800 --> 0:18:49.520 it's amazing to see how quickly this narrative has really flipped, 0:18:49.640 --> 0:18:52.920 how quickly it has changed. And now we just see 0:18:53.040 --> 0:18:55.320 yields stuck back in the range that we've almost been 0:18:55.359 --> 0:18:59.359 stuck in all year long, with uncertainty as ahead. Gina 0:18:59.440 --> 0:19:02.560 laid out many of them, including the election, including the 0:19:02.640 --> 0:19:05.639 macro tailwinds kind of coming to a head at the moment. 0:19:05.880 --> 0:19:08.800 And when we think about rising COVID case counts, yes, 0:19:09.040 --> 0:19:11.240 we likely won't see a lockdown like we saw earlier 0:19:11.280 --> 0:19:14.040 in the year, but there is a question about one. 0:19:14.080 --> 0:19:15.520 We think about the rebound that we saw in the 0:19:15.560 --> 0:19:19.159 equity markets, how many investors were looking to one and 0:19:19.240 --> 0:19:21.720 saying the market is a forward looking mechanism, things will 0:19:21.800 --> 0:19:24.840 get better. Well, how much better can they get if 0:19:24.880 --> 0:19:28.119 we don't see total improvement, if we don't see treatments, vaccines, 0:19:28.640 --> 0:19:32.200 whatever you need or deemed necessary to see a full 0:19:32.320 --> 0:19:35.480 economic recovery. And Sarah just looking at the it's not 0:19:35.600 --> 0:19:38.800 just the equities here and bonds and currencies. I'm just 0:19:38.840 --> 0:19:41.359 looking at oil right here, off over six percent. Today 0:19:41.480 --> 0:19:43.560 w t I crew trading about thirty seven dollars and 0:19:43.600 --> 0:19:46.159 ten dollars thirty seven dollars and ten cents of barrel 0:19:46.680 --> 0:19:48.920 to me, I guess that suggests that that market is 0:19:48.960 --> 0:19:52.399 saying future demand it's not as good as we thought. Right, 0:19:52.480 --> 0:19:55.240 that's exactly right. We have seen oil just lodged around 0:19:55.280 --> 0:19:58.280 that forty dollar a barrel barrel mark, not all year long, 0:19:58.359 --> 0:20:01.040 but ever since that catastrophe. When we prices go negative, 0:20:01.240 --> 0:20:02.840 shoot back up, and we have since kind of just 0:20:02.920 --> 0:20:05.520 been hovering around that level. If you look at w 0:20:05.680 --> 0:20:07.480 t I crude oil right now, down more than six 0:20:07.920 --> 0:20:10.639 that's the worst day since September eight. That day we 0:20:10.720 --> 0:20:12.920 did see crude oil down more than seven and a 0:20:13.000 --> 0:20:15.879 half percent. But like you said, it doesn't seem as 0:20:15.920 --> 0:20:19.159 though the global demand picture is improving at least and 0:20:19.280 --> 0:20:21.680 on that front, for example, if you bring it back 0:20:21.760 --> 0:20:25.640 to stocks that do require plenty of gasoline, for example, 0:20:26.040 --> 0:20:28.800 you look at airlines, you look at cruise lines, you 0:20:28.840 --> 0:20:31.200