1 00:00:13,360 --> 00:00:16,200 Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg Weekly 2 00:00:16,280 --> 00:00:19,639 Speaker 1: Markets podcast. I'm Sarah Ponzac, a market supporter on the 3 00:00:19,680 --> 00:00:22,360 Speaker 1: Cross Asset Team, and I am Mike Reagan, a senior 4 00:00:22,480 --> 00:00:24,840 Speaker 1: editor on the Markets Team. This week on the show, 5 00:00:25,079 --> 00:00:28,319 Speaker 1: the much awaited G twenty meeting is finally here and 6 00:00:28,360 --> 00:00:30,560 Speaker 1: President Trump and she J and Ping are set to 7 00:00:30,640 --> 00:00:34,000 Speaker 1: meet to discuss trade. We'll run through what investors are expecting, 8 00:00:34,400 --> 00:00:37,640 Speaker 1: if the outlook is maybe a bit too optimistic, and 9 00:00:37,680 --> 00:00:41,240 Speaker 1: what market reaction could actually look like. And Sarah, I'm excited. 10 00:00:41,240 --> 00:00:43,120 Speaker 1: I know our producer to Fur gets annoyed when I 11 00:00:43,159 --> 00:00:45,520 Speaker 1: say I'm excited because I'm basically excited every every single 12 00:00:45,720 --> 00:00:48,280 Speaker 1: every single week. But it's podcast day, so I'm excited 13 00:00:48,320 --> 00:00:52,320 Speaker 1: for that. But also because our favorite segment, the Craziest 14 00:00:52,360 --> 00:00:54,480 Speaker 1: Thing I Ever saw in Markets this week, has become 15 00:00:54,480 --> 00:00:58,120 Speaker 1: more interactive. We've gotten some crazy market things via Twitter 16 00:00:58,640 --> 00:01:00,600 Speaker 1: and from some people in how so at the end 17 00:01:00,640 --> 00:01:02,160 Speaker 1: of the show will go through them all. But I'm 18 00:01:02,160 --> 00:01:05,480 Speaker 1: excited about that. Also excited about our two guests here 19 00:01:05,600 --> 00:01:09,200 Speaker 1: joining us UH this week, Mark Hackett, chief of investment 20 00:01:09,240 --> 00:01:13,600 Speaker 1: research at Nationwide Funds Group, Mark Does Peyton Manning come 21 00:01:13,600 --> 00:01:17,000 Speaker 1: around your office, so picture one and around you know, Yeah, 22 00:01:17,240 --> 00:01:19,240 Speaker 1: it's it's it's a pretty Uh. He was at the 23 00:01:20,080 --> 00:01:23,240 Speaker 1: Total Company meeting last year, so he comes once in 24 00:01:23,240 --> 00:01:24,880 Speaker 1: a while. But I'm sure it's a pretty big jack. 25 00:01:25,000 --> 00:01:26,760 Speaker 1: He really does come around. He ever goes. That's a 26 00:01:26,840 --> 00:01:33,280 Speaker 1: first rate has to come with Brad Peasley. Alright, I 27 00:01:33,280 --> 00:01:36,880 Speaker 1: promised no more singing, but fortunately we have an accomplished 28 00:01:37,000 --> 00:01:41,000 Speaker 1: vocalist joining us as well, Ye She of Bloomberg Markets Live, 29 00:01:41,080 --> 00:01:43,560 Speaker 1: who made his singing debut last time on the podcast, 30 00:01:43,880 --> 00:01:45,840 Speaker 1: singing the theme song of the Bond Market. I don't 31 00:01:45,880 --> 00:01:47,920 Speaker 1: know you do you have a song for us this week? Now? 32 00:01:48,120 --> 00:01:51,160 Speaker 1: This week? Um, but I'm hoping to publish an album. 33 00:01:51,280 --> 00:01:57,040 Speaker 1: You know, he's just derived an album, and Sarah, it's 34 00:01:57,040 --> 00:02:00,200 Speaker 1: bittersweet because he's going to be leaving us soon for 35 00:02:00,240 --> 00:02:03,960 Speaker 1: a temporary assignment in Hong Kong. So this last time 36 00:02:03,960 --> 00:02:05,600 Speaker 1: I'll get to talk him for a while, so you 37 00:02:05,640 --> 00:02:08,239 Speaker 1: better make it good. Yeah, happy to have you. Always 38 00:02:08,240 --> 00:02:11,920 Speaker 1: count on you. But Mark, why don't we start with 39 00:02:12,320 --> 00:02:15,800 Speaker 1: what is actually expected this week? Of course, this podcast 40 00:02:15,840 --> 00:02:18,520 Speaker 1: comes out on Friday's. The G twenty meeting is extending 41 00:02:18,520 --> 00:02:21,600 Speaker 1: through the weekend. So anyone feel free to make fun 42 00:02:21,800 --> 00:02:24,400 Speaker 1: of Mike and I if we are very off, but 43 00:02:24,720 --> 00:02:26,919 Speaker 1: we want to get your take what you're actually expecting 44 00:02:27,040 --> 00:02:29,760 Speaker 1: going into this meeting as it relates to trade between 45 00:02:29,800 --> 00:02:31,760 Speaker 1: the U S And China. Well, it's funny because if 46 00:02:31,760 --> 00:02:33,320 Speaker 1: you look at the news, the news seems to be 47 00:02:33,360 --> 00:02:36,280 Speaker 1: suggesting that the expectations are pretty modest. You know, there's 48 00:02:36,320 --> 00:02:39,080 Speaker 1: the meeting is gonna go okay as an outcome of that, 49 00:02:39,120 --> 00:02:41,919 Speaker 1: we're going to be leading towards further discussion. I think 50 00:02:41,960 --> 00:02:45,240 Speaker 1: the expectations that we get any meaningful outcome from from 51 00:02:45,320 --> 00:02:48,240 Speaker 1: this weekend's meeting is pretty low. But the market seems 52 00:02:48,280 --> 00:02:53,040 Speaker 1: to be embedding some pretty reasonable, reasonably optimistic expectations. You know, 53 00:02:53,280 --> 00:02:55,360 Speaker 1: when when there's good news, the market goes up a 54 00:02:55,360 --> 00:02:57,320 Speaker 1: little bit, When there's nervousness, the market goes down a 55 00:02:57,360 --> 00:02:59,360 Speaker 1: little bit more So, I think there's a little bit 56 00:02:59,360 --> 00:03:03,280 Speaker 1: of an asymmetri bet with the market on the outcome 57 00:03:03,320 --> 00:03:06,600 Speaker 1: of this meeting. So there's there's perhaps more more risk 58 00:03:06,639 --> 00:03:08,760 Speaker 1: of the downside than there is to the upside. That's 59 00:03:08,760 --> 00:03:10,880 Speaker 1: a great point, you know, I keep asking people how 60 00:03:10,919 --> 00:03:13,280 Speaker 1: would you define success at this meeting? Is it just 61 00:03:13,360 --> 00:03:16,079 Speaker 1: a photo op and a handshake, that sort of thing, 62 00:03:16,120 --> 00:03:18,679 Speaker 1: no angry tweets for for them for eight hours of 63 00:03:18,720 --> 00:03:20,239 Speaker 1: the weekend. I mean, is that is that a fair 64 00:03:20,240 --> 00:03:22,920 Speaker 1: assessment of the best we can hope for? Yeah, I mean, 65 00:03:22,960 --> 00:03:26,800 Speaker 1: the the total breakdown of of discussions and the you know, 66 00:03:26,919 --> 00:03:29,920 Speaker 1: the further threats of tariffs as an outcome of this 67 00:03:29,960 --> 00:03:32,960 Speaker 1: would be a disaster frankly, but I think most people 68 00:03:33,000 --> 00:03:35,960 Speaker 1: are thinking at this point it's gonna be no massive, 69 00:03:36,160 --> 00:03:39,760 Speaker 1: you know, revelations, but also you know, no disaster as well. 70 00:03:39,800 --> 00:03:43,200 Speaker 1: I mean you hear Minutan's discussion earlier this week of 71 00:03:43,480 --> 00:03:47,040 Speaker 1: we're there, Well, we were there, you know, just a 72 00:03:47,040 --> 00:03:49,280 Speaker 1: couple of months ago. So I think those numbers are 73 00:03:49,320 --> 00:03:52,080 Speaker 1: probably a little bit of a of a guestimate at 74 00:03:52,080 --> 00:03:54,920 Speaker 1: this point. So yeah, I think we're probably a little 75 00:03:54,960 --> 00:03:58,640 Speaker 1: bit less towards the finish line than than most people 76 00:03:58,640 --> 00:04:00,880 Speaker 1: probably think. And well, we got the headlines form anution. 77 00:04:00,920 --> 00:04:02,720 Speaker 1: It seemed like there was a little bit of confusion 78 00:04:02,760 --> 00:04:05,880 Speaker 1: in markets because immediately we saw a pop. However, once 79 00:04:05,880 --> 00:04:08,480 Speaker 1: people realized that he had already said this back in May, 80 00:04:08,840 --> 00:04:10,760 Speaker 1: then we saw it start to come off a bit. 81 00:04:11,040 --> 00:04:12,960 Speaker 1: I want to come to you because I've heard a 82 00:04:13,000 --> 00:04:15,880 Speaker 1: lot of people say that, sure, we're probably not going 83 00:04:15,920 --> 00:04:17,919 Speaker 1: to get a deal this week, but it's very possible 84 00:04:18,000 --> 00:04:22,040 Speaker 1: that we get an extension of the next trench of tariffs. Now, 85 00:04:22,080 --> 00:04:24,400 Speaker 1: you wrote a poets this week and it was about 86 00:04:24,480 --> 00:04:28,839 Speaker 1: Chinese state media being less optimistic than market. What is 87 00:04:28,839 --> 00:04:32,400 Speaker 1: the tone actually like over there? So um the notion 88 00:04:32,480 --> 00:04:35,320 Speaker 1: comments he used the past tense when he said like 89 00:04:35,320 --> 00:04:38,599 Speaker 1: a ninetent of deal was down instead of is down. 90 00:04:38,760 --> 00:04:41,960 Speaker 1: So he was talking about before the May breakdown. The 91 00:04:42,040 --> 00:04:44,760 Speaker 1: two sides got very much close. Then the US accused 92 00:04:44,800 --> 00:04:49,359 Speaker 1: the China backsliding on the previously agreed terms. Now the 93 00:04:49,400 --> 00:04:52,599 Speaker 1: state media in China seems to be less optimimistic than 94 00:04:52,680 --> 00:04:56,719 Speaker 1: the official comments from the U s side. Basically China 95 00:04:56,800 --> 00:05:01,120 Speaker 1: seems to digging um say broadcast of the three rail lines? If, 96 00:05:01,320 --> 00:05:04,120 Speaker 1: if you will, um, what makes to make a deal? 97 00:05:04,160 --> 00:05:07,160 Speaker 1: What takes to make a deal for all the tariff 98 00:05:07,240 --> 00:05:10,160 Speaker 1: existing to have have been has to be taken off. 99 00:05:10,279 --> 00:05:15,239 Speaker 1: And secondly, the text of any agreement has to show 100 00:05:15,279 --> 00:05:20,360 Speaker 1: respect and show dignity for both sides, and the demand 101 00:05:20,400 --> 00:05:23,279 Speaker 1: for the Chinese purchase of US goods has to be realistic, 102 00:05:23,800 --> 00:05:27,280 Speaker 1: not asking too much. So the Chinese attitude seems to 103 00:05:27,360 --> 00:05:29,840 Speaker 1: be if there's a deal, they're happy to take it. 104 00:05:29,920 --> 00:05:32,320 Speaker 1: If not, they're happy to fight it all the way down. 105 00:05:32,760 --> 00:05:36,400 Speaker 1: You know, Mark, you're the head of research at Nationwide Funds, 106 00:05:36,440 --> 00:05:39,280 Speaker 1: and I'm picturing you, you know, scrambling a couple of 107 00:05:39,279 --> 00:05:42,760 Speaker 1: weeks ago to get something put something together on Mexican tariffs, say, 108 00:05:42,839 --> 00:05:44,600 Speaker 1: and then ripping it up the next day. I mean, 109 00:05:44,640 --> 00:05:49,599 Speaker 1: how do you approach this sort of very mercurial, fluid situation, uh? 110 00:05:50,200 --> 00:05:52,160 Speaker 1: In some ways do you just step back and let 111 00:05:52,160 --> 00:05:53,840 Speaker 1: it play out? Or or are you trying to chase 112 00:05:54,200 --> 00:05:56,960 Speaker 1: every twist and turn of this drama. Well, Sarah and 113 00:05:57,000 --> 00:05:58,560 Speaker 1: I have talked about this a couple of times, and 114 00:05:59,240 --> 00:06:02,200 Speaker 1: we're in a different paradigm under Trump. I mean, the 115 00:06:02,200 --> 00:06:06,960 Speaker 1: the algorithmic traders or the headline driven traders have been confused, 116 00:06:07,120 --> 00:06:10,360 Speaker 1: you know, since even before he was elected. So at 117 00:06:10,400 --> 00:06:13,440 Speaker 1: this point, I think the incremental tweets that we're getting 118 00:06:13,480 --> 00:06:15,400 Speaker 1: are perhaps having a little bit less of an impact 119 00:06:15,400 --> 00:06:17,240 Speaker 1: on the market than they used to. We try and 120 00:06:17,279 --> 00:06:20,360 Speaker 1: look through any of the noise, obviously have to have 121 00:06:20,520 --> 00:06:22,080 Speaker 1: some sort of an opinion on what you thing is 122 00:06:22,080 --> 00:06:24,520 Speaker 1: gonna happen with trade, considering it other than the FED, 123 00:06:24,640 --> 00:06:27,200 Speaker 1: is is the the big sign post for what's going 124 00:06:27,240 --> 00:06:28,840 Speaker 1: to happen in the markets for the rest of the year. 125 00:06:29,440 --> 00:06:31,320 Speaker 1: But at the same time, we can't be trading based 126 00:06:31,360 --> 00:06:34,760 Speaker 1: on you know, a comment by Minuchin or a tweet 127 00:06:34,800 --> 00:06:38,680 Speaker 1: by Trump or even Chinese state media headlines. We've had 128 00:06:38,760 --> 00:06:42,239 Speaker 1: so many you know, gives and takes over the last 129 00:06:42,279 --> 00:06:45,080 Speaker 1: twelve months almost at this point in this this world, 130 00:06:45,240 --> 00:06:48,279 Speaker 1: it would be foolish to try and trade based on it. 131 00:06:48,520 --> 00:06:50,120 Speaker 1: I want to get your take. I was at a 132 00:06:50,120 --> 00:06:53,200 Speaker 1: dinner this past week put together by Markets Live, and 133 00:06:53,640 --> 00:06:56,080 Speaker 1: they had a lot of readers of the blog, and 134 00:06:56,480 --> 00:06:58,800 Speaker 1: I found it very interesting when we asked how many 135 00:06:58,800 --> 00:07:02,240 Speaker 1: people actually expect did an increase in terrorists and an 136 00:07:02,400 --> 00:07:05,920 Speaker 1: escalation going forwards? The majority of people rose their hands 137 00:07:06,000 --> 00:07:09,200 Speaker 1: and said that they did. And yes, many said that 138 00:07:09,200 --> 00:07:12,160 Speaker 1: we'd probably get a resolution before the election. But say 139 00:07:12,200 --> 00:07:17,160 Speaker 1: we do get tariffs on billion dollars more worth of goods, 140 00:07:17,440 --> 00:07:20,280 Speaker 1: what does that mean for the economy and what does 141 00:07:20,320 --> 00:07:23,760 Speaker 1: that also mean for your investment outlook. It's been a 142 00:07:23,840 --> 00:07:27,280 Speaker 1: bit difficult to to really see how it's come through 143 00:07:27,280 --> 00:07:29,520 Speaker 1: the system, you know, We've already had a fair amount 144 00:07:29,520 --> 00:07:32,000 Speaker 1: of them already through and we haven't seen much inflation 145 00:07:32,040 --> 00:07:34,240 Speaker 1: at all. So at this point it seems like the 146 00:07:34,320 --> 00:07:37,560 Speaker 1: supply chain is absorbing most of it. Can they forever? 147 00:07:38,240 --> 00:07:40,640 Speaker 1: We don't know. But all the math that people through 148 00:07:40,640 --> 00:07:43,280 Speaker 1: out there, which is you know that the consumer is 149 00:07:43,320 --> 00:07:45,640 Speaker 1: going to have this much of a quote unquote tax 150 00:07:45,680 --> 00:07:48,120 Speaker 1: because of the terrorists, we really haven't seen him. We're 151 00:07:48,240 --> 00:07:51,640 Speaker 1: still sitting at sub two percent inflation, so it's difficult 152 00:07:51,680 --> 00:07:54,640 Speaker 1: to make the argument that that we've had a massive 153 00:07:55,000 --> 00:07:57,400 Speaker 1: you know, pain borne by the U. S consumer from 154 00:07:57,440 --> 00:08:00,880 Speaker 1: the tariffs. So I would really be guessing if I said, 155 00:08:00,960 --> 00:08:03,640 Speaker 1: if they're enacted, the consumer is gonna bear this much 156 00:08:03,640 --> 00:08:05,480 Speaker 1: of it at this point, because so far we really 157 00:08:05,520 --> 00:08:07,840 Speaker 1: haven't seen much at all. And that reminds me. There's 158 00:08:07,920 --> 00:08:11,040 Speaker 1: an interesting market call out on Thursday from one of 159 00:08:11,080 --> 00:08:15,960 Speaker 1: the retail analysts at Goldman, Alexandra Wallvice UM, and she 160 00:08:16,040 --> 00:08:19,440 Speaker 1: basically don't she denigraded UH north Stream to sell UH 161 00:08:19,520 --> 00:08:21,480 Speaker 1: maybe a little late on that that stocks down about 162 00:08:22,640 --> 00:08:25,480 Speaker 1: it's November also ross stores. But what she said is 163 00:08:25,720 --> 00:08:30,320 Speaker 1: she spoke directly about the trade tension and saying for 164 00:08:30,320 --> 00:08:33,080 Speaker 1: for most of the universe of stock she covers, and 165 00:08:33,120 --> 00:08:34,439 Speaker 1: I would add that I think this is true of 166 00:08:34,480 --> 00:08:37,560 Speaker 1: the entire market. The forecast from the companies imply quote 167 00:08:37,559 --> 00:08:40,679 Speaker 1: and inflecting earnings growth in the second half of the 168 00:08:40,760 --> 00:08:44,080 Speaker 1: year a common thing where you know, you dial down 169 00:08:44,120 --> 00:08:45,600 Speaker 1: the forecast at the beginning of the year, and then 170 00:08:45,600 --> 00:08:47,600 Speaker 1: you ratchet them up for late in the year and 171 00:08:47,600 --> 00:08:49,960 Speaker 1: and hoping, you know, uh, things catch up in the 172 00:08:50,000 --> 00:08:54,400 Speaker 1: second half. But she's saying this uncertain trade backdrop could 173 00:08:54,440 --> 00:08:57,000 Speaker 1: weigh on companies that don't have pricing power to your point, 174 00:08:57,000 --> 00:08:59,600 Speaker 1: maybe not pass on to the consumer, but really squeezed 175 00:08:59,600 --> 00:09:02,439 Speaker 1: the margin of companies, uh, that are in a hyper 176 00:09:02,480 --> 00:09:06,720 Speaker 1: competitive field like that. I mean, looking out at the 177 00:09:06,720 --> 00:09:10,560 Speaker 1: earnings expectations for the second quarter, are estimates make it 178 00:09:10,600 --> 00:09:12,760 Speaker 1: look like a little bit of a drop, which traditionally 179 00:09:12,800 --> 00:09:15,160 Speaker 1: would probably be flat to maybe a little bit of growth. 180 00:09:15,480 --> 00:09:18,520 Speaker 1: It's considering the way companies beat earnings. But you look 181 00:09:18,559 --> 00:09:21,600 Speaker 1: further out to the third quarter, fourth quarter, it's a 182 00:09:21,679 --> 00:09:24,719 Speaker 1: very optimistic scenario with with a big rebounding growth. I mean, 183 00:09:24,720 --> 00:09:27,319 Speaker 1: it's not a big risk in your opinion, that we're 184 00:09:27,320 --> 00:09:30,040 Speaker 1: gonna be ratching down those expectations. For later in the year. Yeah, 185 00:09:30,080 --> 00:09:32,320 Speaker 1: there were good The good news has been we've seen 186 00:09:32,320 --> 00:09:35,680 Speaker 1: a leveling off of those that those you know, estimate 187 00:09:35,720 --> 00:09:38,320 Speaker 1: revisions in the last couple of months. I mean, the 188 00:09:38,360 --> 00:09:40,720 Speaker 1: third quarter is the one we're starting to see tickdown. 189 00:09:40,800 --> 00:09:43,280 Speaker 1: So the second quarter was already kind of in this world. 190 00:09:43,520 --> 00:09:45,920 Speaker 1: Fourth quarter is a big jump back, but we're also 191 00:09:45,960 --> 00:09:49,360 Speaker 1: seeing you know, double digits for next year. All of 192 00:09:49,360 --> 00:09:52,880 Speaker 1: those seemed to had been pretty optimistic assumptions, you know, 193 00:09:53,040 --> 00:09:55,840 Speaker 1: I think that we're sitting here with the marketing general 194 00:09:55,920 --> 00:09:59,120 Speaker 1: pricing in very high expectations that we get a deal 195 00:09:59,160 --> 00:10:02,560 Speaker 1: with China and we get three FED rate cuts. The 196 00:10:02,600 --> 00:10:06,760 Speaker 1: likelihood that both of those things happen together seems pretty optimistic. 197 00:10:06,800 --> 00:10:09,080 Speaker 1: You know. If you get rate cuts, maybe we don't 198 00:10:09,400 --> 00:10:11,680 Speaker 1: have this much as much urgency to get a FED 199 00:10:12,160 --> 00:10:13,599 Speaker 1: trying to deal done. If we get a trying to 200 00:10:13,679 --> 00:10:16,199 Speaker 1: deal done, the urgency for the FED to cut becomes 201 00:10:16,200 --> 00:10:19,360 Speaker 1: a little bit less. So the perfect storm, I guess, 202 00:10:19,760 --> 00:10:22,360 Speaker 1: you know, perhaps what Trump's trying to orchestrate is we 203 00:10:22,440 --> 00:10:25,599 Speaker 1: get some cuts earlier, you know, in the process, we 204 00:10:25,679 --> 00:10:28,280 Speaker 1: get a China trade deal through later in the year. 205 00:10:28,800 --> 00:10:31,960 Speaker 1: That leads to a pretty strong acceleration in both earnings 206 00:10:32,000 --> 00:10:35,120 Speaker 1: and economic growth the beginning part of next year, leading 207 00:10:35,120 --> 00:10:37,080 Speaker 1: into the election. You know, that's kind of the but 208 00:10:37,120 --> 00:10:39,400 Speaker 1: there's a lot of things that have to work in 209 00:10:39,559 --> 00:10:42,600 Speaker 1: unison for that that to happen. I think you're probably 210 00:10:42,679 --> 00:10:47,000 Speaker 1: right where we'll start. We'll see continued modest estimate revisions downward, 211 00:10:47,360 --> 00:10:49,520 Speaker 1: particularly for that fourth quarter number. That seems a little 212 00:10:49,520 --> 00:10:52,080 Speaker 1: bit optimistic at this point. So if I'm an investor 213 00:10:52,120 --> 00:10:55,320 Speaker 1: in nationwide funds, I'm listening and I'm thinking, well, Mark, 214 00:10:55,360 --> 00:10:57,160 Speaker 1: what am I supposed to do here? Am I? Should 215 00:10:57,160 --> 00:10:59,520 Speaker 1: I move into bonds? Should I move into money markets? Even? 216 00:10:59,559 --> 00:11:02,600 Speaker 1: I mean where where should we be? Sort of skewing 217 00:11:02,600 --> 00:11:04,880 Speaker 1: our allocations too? Well? We think over the medium in 218 00:11:04,880 --> 00:11:06,560 Speaker 1: the long term, we're still pretty good shape for the 219 00:11:06,559 --> 00:11:08,640 Speaker 1: for equity markets, I mean, the economies. We don't we 220 00:11:08,640 --> 00:11:10,760 Speaker 1: don't see a recession in the near term, and we 221 00:11:10,840 --> 00:11:14,320 Speaker 1: see earnings being okay. There's perhaps downward you know, in 222 00:11:14,360 --> 00:11:17,320 Speaker 1: the near term, but we think we'll see some volatility 223 00:11:17,400 --> 00:11:20,280 Speaker 1: certainly between now and the at the end of the summer. 224 00:11:20,720 --> 00:11:24,480 Speaker 1: There's a lot of positive expectations embedded in the current number. 225 00:11:25,040 --> 00:11:29,000 Speaker 1: The technical look seems awfully fishy with you know, we're 226 00:11:29,040 --> 00:11:31,040 Speaker 1: having a very hard time getting through the current level. 227 00:11:31,760 --> 00:11:34,760 Speaker 1: So there's there's there's perhaps some caution in the near term. 228 00:11:34,800 --> 00:11:38,440 Speaker 1: But I mean, we've seen massive inflows into bonds throughout 229 00:11:38,480 --> 00:11:41,640 Speaker 1: the entire cycle. More so even during this year, we've 230 00:11:41,679 --> 00:11:44,000 Speaker 1: seen outflows from equities in the large part. It's crazy. 231 00:11:44,120 --> 00:11:47,080 Speaker 1: You couldn't paint a more negative sentiment picture. I feel 232 00:11:47,080 --> 00:11:49,600 Speaker 1: like towards equities and here we are near record highs, 233 00:11:49,720 --> 00:11:51,520 Speaker 1: and we're you know, we're we're at record highs, and 234 00:11:51,559 --> 00:11:55,120 Speaker 1: that the AII Bull Bears survey shows more bears than bulls. 235 00:11:55,320 --> 00:11:58,560 Speaker 1: We have the that Merylynch Bank American Merylynch survey of 236 00:11:58,600 --> 00:12:03,120 Speaker 1: fund managers last week that shows that cash levels jumped 237 00:12:03,160 --> 00:12:05,240 Speaker 1: by the most in two thousand eleven in any month, 238 00:12:05,679 --> 00:12:09,040 Speaker 1: and the allocations of equities versus bonds for institutions, you know, 239 00:12:09,080 --> 00:12:11,640 Speaker 1: which you would think would be less emotional, is at 240 00:12:11,679 --> 00:12:16,360 Speaker 1: the lowest level since the financial crisis. So literally, the 241 00:12:16,360 --> 00:12:19,760 Speaker 1: only incremental buyer of equities out there right now is 242 00:12:19,960 --> 00:12:22,760 Speaker 1: company buybacks, and that we don't see ending anytime. So 243 00:12:22,880 --> 00:12:25,679 Speaker 1: we also got the Conference Board data earlier this week, 244 00:12:25,720 --> 00:12:28,480 Speaker 1: which I thought was really interesting because consumer confidence dropped 245 00:12:28,480 --> 00:12:31,480 Speaker 1: to the lowest in September, and we also saw the 246 00:12:31,520 --> 00:12:34,600 Speaker 1: fastest rate of change from bulls to bears, one of 247 00:12:34,600 --> 00:12:37,800 Speaker 1: the fastest ones during this entire bull market. And yeah, 248 00:12:37,840 --> 00:12:40,440 Speaker 1: I want to come to you because it's very interesting 249 00:12:40,480 --> 00:12:42,920 Speaker 1: that the setup we have seen. We have seen a 250 00:12:43,040 --> 00:12:46,400 Speaker 1: risk rally in stocks. You have stocks still near record highs, 251 00:12:46,440 --> 00:12:49,880 Speaker 1: but you also see a bond rally. We still see 252 00:12:49,880 --> 00:12:52,560 Speaker 1: it ten year near two per set. At the same 253 00:12:52,600 --> 00:12:55,360 Speaker 1: time we're seeing gold get a bid as well. Is 254 00:12:55,400 --> 00:12:59,040 Speaker 1: it possible for all these different asset classes, which the 255 00:12:59,160 --> 00:13:02,559 Speaker 1: narrative can be taken to seem very different, are all 256 00:13:02,559 --> 00:13:06,520 Speaker 1: correct at the same time. Actually, Mark mentioned earlier that 257 00:13:06,600 --> 00:13:09,640 Speaker 1: the market is essentially a betting that the Fed is 258 00:13:09,679 --> 00:13:13,559 Speaker 1: going to take action quickly and decisively, and that like 259 00:13:13,800 --> 00:13:16,720 Speaker 1: three or four custs is probably enough to gather us 260 00:13:16,720 --> 00:13:19,760 Speaker 1: through all these soft patch and start a rebound probably 261 00:13:19,840 --> 00:13:22,640 Speaker 1: next year. This is the only way you can reconcile 262 00:13:22,679 --> 00:13:25,559 Speaker 1: all these conflicting signals, because if you look at the 263 00:13:25,600 --> 00:13:28,520 Speaker 1: boundary of curve, three year and the ten years inverted, 264 00:13:28,600 --> 00:13:31,839 Speaker 1: which is a classic recession scenario, but two years of 265 00:13:31,960 --> 00:13:36,199 Speaker 1: ten years is actually positive because people are expecting the 266 00:13:36,280 --> 00:13:38,160 Speaker 1: short term ray cuts is going to lead to some 267 00:13:38,240 --> 00:13:41,360 Speaker 1: sort of recovery down the road. So that's one way 268 00:13:41,440 --> 00:13:45,679 Speaker 1: you can actually um see two to reconcile these different signals. 269 00:13:45,800 --> 00:13:48,320 Speaker 1: But everything has to be in the right place. So 270 00:13:48,360 --> 00:13:50,440 Speaker 1: the focus on the Yelk curve among investors in the 271 00:13:50,440 --> 00:13:52,720 Speaker 1: press has been really interesting over the last couple of months. 272 00:13:52,760 --> 00:13:55,760 Speaker 1: You know, we hear about the inversion consistently, but it's 273 00:13:55,880 --> 00:13:57,960 Speaker 1: it has been a very good predictor of recessions in 274 00:13:58,000 --> 00:14:00,000 Speaker 1: the past, but this one seems a little bit differ 275 00:14:00,320 --> 00:14:03,280 Speaker 1: and that it's much more technical than fundamental. We're not 276 00:14:03,600 --> 00:14:06,600 Speaker 1: it's not the traditional, you know way we got to 277 00:14:06,640 --> 00:14:08,960 Speaker 1: be inverted. As you said, the two and tent isn't 278 00:14:08,960 --> 00:14:12,640 Speaker 1: even inverted. But the fact that there's just an insatiable 279 00:14:12,679 --> 00:14:17,160 Speaker 1: demand for bond yield of investors both domestically and internationally 280 00:14:17,240 --> 00:14:20,640 Speaker 1: flooding into long treasuries that's pushed rates down to a 281 00:14:20,720 --> 00:14:24,320 Speaker 1: somewhat artificial level. Uh. That isn't an outcome of the 282 00:14:24,400 --> 00:14:27,920 Speaker 1: views of the economy. It's really more supply and demand driven, 283 00:14:28,160 --> 00:14:31,440 Speaker 1: which could give a false signal about the future and 284 00:14:31,680 --> 00:14:36,160 Speaker 1: recessionary possibilities. Even with this massive supply of treasuries coming online. 285 00:14:36,160 --> 00:14:38,840 Speaker 1: That demand is overwhelming, I guess. And it's interesting that 286 00:14:38,880 --> 00:14:40,880 Speaker 1: the Treasury continues to issue in the kind of six 287 00:14:40,920 --> 00:14:43,440 Speaker 1: months a two year range even though the Yolker is 288 00:14:43,440 --> 00:14:46,720 Speaker 1: flat inverted. You think they'd be extending duration at this point. 289 00:14:47,200 --> 00:14:49,440 Speaker 1: So maybe they know something we don't know about. What's 290 00:14:49,560 --> 00:14:51,800 Speaker 1: what they outlook for rates are over the next two 291 00:14:51,800 --> 00:15:10,920 Speaker 1: to five years? Are you getting back to the China situation? 292 00:15:10,920 --> 00:15:12,440 Speaker 1: And Mark waydd on this too, if you if you 293 00:15:12,440 --> 00:15:14,760 Speaker 1: have any thoughts, uh, you know. President Trump this week 294 00:15:14,800 --> 00:15:18,360 Speaker 1: gave a very long interview with Fox Business Boy. He 295 00:15:18,720 --> 00:15:20,800 Speaker 1: got a lot of words and on that that one 296 00:15:21,760 --> 00:15:24,080 Speaker 1: one thing that I'm not sure everyone picked up on 297 00:15:24,360 --> 00:15:27,920 Speaker 1: that I found interesting is he said, well, maybe the 298 00:15:27,920 --> 00:15:30,680 Speaker 1: tart the next batch of tariffs on Chinese gids will 299 00:15:30,680 --> 00:15:34,120 Speaker 1: be ten percent rather than that. Seems to me like 300 00:15:34,440 --> 00:15:38,080 Speaker 1: subtle de escalation of the tensions. I mean, do you 301 00:15:38,120 --> 00:15:39,840 Speaker 1: think do you agree with that? Do you think China 302 00:15:39,880 --> 00:15:42,400 Speaker 1: could have picked up on that? Um? I do think 303 00:15:42,520 --> 00:15:46,640 Speaker 1: there's a sort of a subbody change here because the 304 00:15:46,720 --> 00:15:50,160 Speaker 1: next round, next round of tariffs, all the goods affect 305 00:15:50,720 --> 00:15:56,160 Speaker 1: essentially consumer goods, closing smartphones, toys. Well, the previous round 306 00:15:56,200 --> 00:16:00,760 Speaker 1: of tariffs affecting the goods only intermedia goods, so the 307 00:16:00,880 --> 00:16:04,160 Speaker 1: consumer will be directly impact by the next batch of 308 00:16:04,240 --> 00:16:07,560 Speaker 1: the tariffs more so than the previous one. That's why 309 00:16:07,600 --> 00:16:09,400 Speaker 1: I think one of the reason you want to take 310 00:16:09,560 --> 00:16:13,080 Speaker 1: more like an a step by step approach instead of 311 00:16:13,120 --> 00:16:16,400 Speaker 1: all the maximum, all the tariffs all the way at 312 00:16:16,480 --> 00:16:19,520 Speaker 1: once or at once. So I do think that, um, 313 00:16:19,560 --> 00:16:22,240 Speaker 1: this shows some sort of like cautiousness from the U. 314 00:16:22,320 --> 00:16:25,120 Speaker 1: S side. Mark. We heard from some other politicians this week, 315 00:16:25,160 --> 00:16:27,640 Speaker 1: to other than President Trump, and that is all the 316 00:16:27,680 --> 00:16:31,680 Speaker 1: Democratic presidential candidates with the debates, and as we start 317 00:16:31,760 --> 00:16:35,360 Speaker 1: getting closer and closer to presidential election, it feels like 318 00:16:35,400 --> 00:16:39,960 Speaker 1: it's all starting. How do you actually think about the 319 00:16:40,000 --> 00:16:44,400 Speaker 1: presidential election and anything that any of these candidates may 320 00:16:44,600 --> 00:16:47,960 Speaker 1: say or may have said already in debates when thinking 321 00:16:48,000 --> 00:16:51,040 Speaker 1: about how to position going forwards. This is very similar 322 00:16:51,080 --> 00:16:53,480 Speaker 1: to the thought process on the tweeting, which is you 323 00:16:53,520 --> 00:16:55,840 Speaker 1: have to pay attention to what's said, but you can't 324 00:16:55,840 --> 00:16:59,400 Speaker 1: necessarily react to it. I mean, reacting to on emotion 325 00:17:00,000 --> 00:17:03,200 Speaker 1: and investing is almost always a bad idea, right. Reacting 326 00:17:03,200 --> 00:17:06,800 Speaker 1: on political emotion is even worse than that. Frankly, I mean, 327 00:17:06,840 --> 00:17:11,520 Speaker 1: we saw a massive decline in consumer confidence among Democrats 328 00:17:11,560 --> 00:17:15,119 Speaker 1: between August and December of two thousands and sixteen, so 329 00:17:15,240 --> 00:17:19,000 Speaker 1: a massive rise in consumer confidence for Republicans at the 330 00:17:19,040 --> 00:17:22,440 Speaker 1: same time frame. Neither us right, you know, So we've 331 00:17:22,480 --> 00:17:24,760 Speaker 1: become you know, all the studies show that we were 332 00:17:24,800 --> 00:17:27,639 Speaker 1: becoming increasingly partisan in the way that we view the world. 333 00:17:28,200 --> 00:17:30,440 Speaker 1: That's probably gonna lead to some volatility. You know, we're 334 00:17:30,440 --> 00:17:33,680 Speaker 1: going to see your healthcare names, for example, trading violently 335 00:17:33,720 --> 00:17:36,800 Speaker 1: based on the expectation that they think Elizabeth Warren would 336 00:17:36,880 --> 00:17:40,000 Speaker 1: would would win the presidency for example. I think two 337 00:17:40,040 --> 00:17:41,760 Speaker 1: thousand and sixteen should have taught us a lesson that 338 00:17:43,280 --> 00:17:45,919 Speaker 1: betting ahead of time is probably not that great an idea, 339 00:17:46,040 --> 00:17:51,119 Speaker 1: and over waiting the impact of the president has also 340 00:17:51,240 --> 00:17:53,760 Speaker 1: been a pretty bad way to invest historically. So would 341 00:17:53,760 --> 00:17:56,720 Speaker 1: you say it's hard to invest based on what you 342 00:17:56,760 --> 00:17:58,800 Speaker 1: think is going to happen, even if you truly do 343 00:17:58,960 --> 00:18:01,760 Speaker 1: believe that maybe a Democratic candidate is going to win 344 00:18:01,800 --> 00:18:04,359 Speaker 1: the president action and that's going to completely shake up 345 00:18:04,400 --> 00:18:08,080 Speaker 1: the health care industry, or say one candidate is running 346 00:18:08,440 --> 00:18:11,639 Speaker 1: saying that they may take down defense spending for aerospace 347 00:18:11,680 --> 00:18:15,560 Speaker 1: and defense. I mean, can you truly ignore these statements 348 00:18:15,760 --> 00:18:18,760 Speaker 1: if it is something that's possible that will eventually affect 349 00:18:18,760 --> 00:18:22,399 Speaker 1: how companies are operating going forwards, The overwhelming likelihood is 350 00:18:22,400 --> 00:18:24,919 Speaker 1: we end up with display Congress anyway. If that happens, 351 00:18:24,960 --> 00:18:27,600 Speaker 1: the likelihood of transformational change on any of those things 352 00:18:27,600 --> 00:18:30,000 Speaker 1: are pretty limited, So I would take the under in 353 00:18:30,119 --> 00:18:34,760 Speaker 1: terms of impact from presidential politics. We obviously saw Obamacare 354 00:18:34,880 --> 00:18:37,760 Speaker 1: through that was you know, pretty disruptive at least for 355 00:18:37,800 --> 00:18:39,040 Speaker 1: you know, some of the names is very good for 356 00:18:39,080 --> 00:18:41,040 Speaker 1: some of the other health care names. The health care 357 00:18:41,080 --> 00:18:43,200 Speaker 1: area in the defense area would be would be areas 358 00:18:43,200 --> 00:18:46,760 Speaker 1: to obviously pay the most attention to. But again we're 359 00:18:46,800 --> 00:18:50,200 Speaker 1: way too early to make any definitive conclusions about what's 360 00:18:50,200 --> 00:18:53,000 Speaker 1: going to happen in November two. Thowyah. I think it 361 00:18:53,040 --> 00:18:55,240 Speaker 1: was interesting in the debate they asked, well, who on 362 00:18:55,280 --> 00:18:59,160 Speaker 1: the stage wants to see medicare for all? And only 363 00:18:59,200 --> 00:19:01,840 Speaker 1: two hands? When might think what was it? It was, uh, 364 00:19:02,080 --> 00:19:06,120 Speaker 1: Elizabeth Warren and Blasio. So that kind of signals that 365 00:19:06,440 --> 00:19:09,879 Speaker 1: she has a very ambitious platform. I mean, when we 366 00:19:09,920 --> 00:19:12,080 Speaker 1: could s break up the fangs, break up the banks, 367 00:19:12,640 --> 00:19:16,120 Speaker 1: get rid of private student loan debt, student loan debt. Yeah. So, 368 00:19:16,440 --> 00:19:18,880 Speaker 1: I mean, I guess you have to sort of handicap 369 00:19:18,920 --> 00:19:20,800 Speaker 1: the fact that she's not gonna get all that if 370 00:19:20,840 --> 00:19:23,480 Speaker 1: she gets any of it, if she wins. Right, I think. 371 00:19:23,600 --> 00:19:26,199 Speaker 1: I think we have a very long history Republican and 372 00:19:26,240 --> 00:19:30,399 Speaker 1: Democrat of you know, prob well, perhaps running on a 373 00:19:30,400 --> 00:19:34,760 Speaker 1: certain campaign and then enacting because you know, the reality 374 00:19:34,880 --> 00:19:36,320 Speaker 1: is you're not going to get everything you want done, 375 00:19:36,359 --> 00:19:39,160 Speaker 1: particularly if you have a Republican Senate. So, like I said, 376 00:19:39,160 --> 00:19:41,879 Speaker 1: I would, I would, I would weigh on this side 377 00:19:41,880 --> 00:19:44,840 Speaker 1: of not overreacting at least between now and let's say 378 00:19:45,040 --> 00:19:52,119 Speaker 1: next fall. I like Mark. He's nice and calm. He 379 00:19:52,160 --> 00:19:57,680 Speaker 1: should talk to my wife. All right, Well, I think 380 00:19:57,760 --> 00:20:00,920 Speaker 1: it's time for the our every part of the week. Mark. 381 00:20:00,960 --> 00:20:02,640 Speaker 1: I don't know if they warned you about this. Uh, 382 00:20:02,680 --> 00:20:05,159 Speaker 1: this little gimmick of ours. The craziest thing I ever 383 00:20:05,320 --> 00:20:08,720 Speaker 1: saw in markets this week? Ye she I want to 384 00:20:08,720 --> 00:20:11,360 Speaker 1: start with you. You see anything crazy this week? How 385 00:20:11,359 --> 00:20:16,720 Speaker 1: about bitcoin? That's crazy? O? What great Tracy Alloy, she's 386 00:20:16,800 --> 00:20:21,560 Speaker 1: our exactive editor. She found a small way to predict 387 00:20:21,600 --> 00:20:25,480 Speaker 1: the crypto currency moves. She found out that the bigcoin 388 00:20:25,600 --> 00:20:30,720 Speaker 1: has highly coorated with avocado prices in Mexico. Both has 389 00:20:30,720 --> 00:20:33,919 Speaker 1: more than double the since April. Um. I know she 390 00:20:34,000 --> 00:20:37,280 Speaker 1: meant this as a joke. Definitely a real correlation, but 391 00:20:37,480 --> 00:20:41,280 Speaker 1: for anything like as volatile as bitcoin, it's good indicator 392 00:20:41,280 --> 00:20:46,280 Speaker 1: as anyone. That's right, the fable of spurious correlations on this, Sara, 393 00:20:46,320 --> 00:20:49,639 Speaker 1: how about you you got anything the top Bitcoin avocado correlations. 394 00:20:49,680 --> 00:20:51,399 Speaker 1: That's a tough one. You read my mind. I was 395 00:20:51,400 --> 00:20:54,199 Speaker 1: actually going to take the avocado side of it. I mean, 396 00:20:54,240 --> 00:20:58,280 Speaker 1: avocado prices are this week, and I've got to say, 397 00:20:58,440 --> 00:21:01,159 Speaker 1: for those of us who are are large consumers of 398 00:21:01,200 --> 00:21:04,760 Speaker 1: guacamole and avocado toast or whatever you might say, it's 399 00:21:04,800 --> 00:21:08,080 Speaker 1: really worrisome. What is it with you millennials market? It's 400 00:21:08,119 --> 00:21:09,800 Speaker 1: like they passed a law that they all have to 401 00:21:09,840 --> 00:21:13,800 Speaker 1: eat avocado toast for breakfast. What is going on? There's um, 402 00:21:13,840 --> 00:21:16,960 Speaker 1: there's an avocado restaurant now that I think there's actually 403 00:21:17,000 --> 00:21:19,040 Speaker 1: a couple of them, and all these cells avocado products. 404 00:21:19,040 --> 00:21:22,720 Speaker 1: I've never ordered from it, I will say, but d 405 00:21:22,840 --> 00:21:26,680 Speaker 1: s right got to infuse it with all Right, bark, 406 00:21:26,800 --> 00:21:28,720 Speaker 1: you're in the hot seat. Have you seen anything crazy? Well, 407 00:21:28,760 --> 00:21:30,520 Speaker 1: I guess, I guess if you're talking about politics, you 408 00:21:30,560 --> 00:21:32,480 Speaker 1: might as well talk about the other third rail, which 409 00:21:32,560 --> 00:21:34,160 Speaker 1: is crypto. You know, it's a good way to get 410 00:21:34,160 --> 00:21:37,640 Speaker 1: clicks and and hate from them. But you know, the 411 00:21:37,640 --> 00:21:40,600 Speaker 1: the ethereum. You know, trust e t F that came 412 00:21:40,640 --> 00:21:43,840 Speaker 1: out on Friday, traded a seven hundred bucks on Monday, Uh, 413 00:21:43,920 --> 00:21:45,879 Speaker 1: the n E V and that is twenty seven bucks. 414 00:21:46,760 --> 00:21:50,119 Speaker 1: You're paying four times thirty times at the peak. You're 415 00:21:50,240 --> 00:21:52,160 Speaker 1: right now it's down to I think a hundred thirty bucks, 416 00:21:52,200 --> 00:21:54,600 Speaker 1: so you're in the forest, you know, times range at 417 00:21:54,600 --> 00:21:57,879 Speaker 1: this point. Uh. You know that that shows how sometimes 418 00:21:57,960 --> 00:22:03,360 Speaker 1: emotion can really damage investor returns. There's really no justification 419 00:22:03,480 --> 00:22:06,119 Speaker 1: for that gap. I'm not saying anything about whether or 420 00:22:06,160 --> 00:22:08,040 Speaker 1: not etheroryum is going up or down from here. It 421 00:22:08,040 --> 00:22:10,719 Speaker 1: doesn't really matter. The point is is you're you cannot 422 00:22:10,800 --> 00:22:14,440 Speaker 1: pay a d thirty bucks for dollars with about Yeah. 423 00:22:14,520 --> 00:22:16,760 Speaker 1: I was that people just afraid to have their money 424 00:22:16,760 --> 00:22:19,440 Speaker 1: in one of these exchanges that gets happened. I think 425 00:22:19,440 --> 00:22:21,199 Speaker 1: part of it is your cousin made a lot of 426 00:22:21,240 --> 00:22:23,840 Speaker 1: money and trading on this, so you're gonna you're gonna 427 00:22:24,080 --> 00:22:27,000 Speaker 1: you don't necessarily know what you're buying. That's that's probably 428 00:22:27,040 --> 00:22:30,680 Speaker 1: the most dangerous where invest Some people were saying also, 429 00:22:30,760 --> 00:22:33,520 Speaker 1: which is worth diving into. Now, the volume is pretty 430 00:22:33,560 --> 00:22:36,879 Speaker 1: low in this stuff, so this unlikely, but institutions that 431 00:22:36,920 --> 00:22:40,080 Speaker 1: are limited in their ability to own crypto maybe using 432 00:22:40,080 --> 00:22:43,240 Speaker 1: this as to proxy seem I would hope that's not 433 00:22:43,320 --> 00:22:45,240 Speaker 1: the case, and like I said, the trading training volume 434 00:22:45,280 --> 00:22:48,840 Speaker 1: probably suggests that's not. But that would be pretty disappointing 435 00:22:48,840 --> 00:22:51,959 Speaker 1: if institutions we're playing that game. These are these are 436 00:22:52,000 --> 00:22:53,920 Speaker 1: all pretty good crazy things. I gotta say, I got, 437 00:22:53,920 --> 00:22:55,760 Speaker 1: I'll give you mine, and then we'll go to the 438 00:22:55,760 --> 00:22:58,880 Speaker 1: ones we got at a twitter um, Sarah, I don't 439 00:22:58,880 --> 00:23:00,159 Speaker 1: know if you realize this. I used to play lot 440 00:23:00,200 --> 00:23:05,080 Speaker 1: of basketball before I became old and out of shape. 441 00:23:06,240 --> 00:23:09,800 Speaker 1: So in my closet there are several pairs of sweaty 442 00:23:09,840 --> 00:23:12,960 Speaker 1: old air. Jordan's just just sitting there collecting us, trying 443 00:23:13,000 --> 00:23:14,399 Speaker 1: to wait to see where you're going with this. What 444 00:23:14,480 --> 00:23:16,479 Speaker 1: if I were to tell you that those sweaty old 445 00:23:16,520 --> 00:23:20,360 Speaker 1: sneakers are actually a tradeable commodity, that that people are 446 00:23:20,480 --> 00:23:25,280 Speaker 1: literally trading on something known as the stock X sneaker exchange, 447 00:23:26,080 --> 00:23:27,680 Speaker 1: and this is based on it. The New York Times, 448 00:23:27,680 --> 00:23:29,960 Speaker 1: i gotta say, has really been the paper of record 449 00:23:30,000 --> 00:23:31,879 Speaker 1: for crazy market stories, and this is the second or 450 00:23:31,920 --> 00:23:34,440 Speaker 1: third one I've found it there. Yeah, this guy who 451 00:23:34,720 --> 00:23:38,359 Speaker 1: sold his old sneakers started this exchange. It's called stock ax. 452 00:23:38,960 --> 00:23:43,280 Speaker 1: They trade sneakers and there's a bunch of other ones. Uh. Collectively, 453 00:23:43,320 --> 00:23:47,000 Speaker 1: they've raised more than two hundred million in venture capital. Uh. 454 00:23:47,560 --> 00:23:49,720 Speaker 1: And Nike's not exactly thrilled with this. I'm kind of 455 00:23:49,800 --> 00:23:54,600 Speaker 1: joking about my sweaty knockoff. Well, now these are real, 456 00:23:54,840 --> 00:23:56,680 Speaker 1: but it's just you. You buy him at retail for 457 00:23:56,760 --> 00:23:59,040 Speaker 1: say a hundred bucks, you stick up in your closet 458 00:23:59,040 --> 00:24:00,680 Speaker 1: for a couple of years, and he's some for three 459 00:24:00,720 --> 00:24:03,760 Speaker 1: hundred bucks. Nike's getting a little ticked off. They're starting 460 00:24:03,800 --> 00:24:07,800 Speaker 1: to print not for resale, and some shop owners are 461 00:24:07,840 --> 00:24:09,600 Speaker 1: making people put them on and wear them out of 462 00:24:09,600 --> 00:24:11,600 Speaker 1: the store so that they're they're not in Christine condition. 463 00:24:12,040 --> 00:24:14,400 Speaker 1: So I don't know, that's my craziest thing. Well there 464 00:24:14,400 --> 00:24:16,360 Speaker 1: there is a site called posh Mark and I actually 465 00:24:16,400 --> 00:24:18,399 Speaker 1: just recently started using it. And so you do you 466 00:24:18,560 --> 00:24:20,359 Speaker 1: sell your old clothing, you sell your old shoes. I 467 00:24:20,400 --> 00:24:22,240 Speaker 1: got my first sale this week. It was really exciting. 468 00:24:22,840 --> 00:24:25,199 Speaker 1: So you're way ahead of me. I didn't know there 469 00:24:25,280 --> 00:24:27,800 Speaker 1: was actually a shoe stock exchange. But how much would 470 00:24:27,800 --> 00:24:31,119 Speaker 1: you from my air? Jordan's there like two thousand and 471 00:24:31,200 --> 00:24:37,720 Speaker 1: two vintage? Give you ten bucks? Not bad to look 472 00:24:37,720 --> 00:24:39,280 Speaker 1: out of buy. I mean, they don't fit me, but 473 00:24:39,560 --> 00:24:42,400 Speaker 1: I'll take them on all right, I'll sorry walk us through. 474 00:24:42,520 --> 00:24:45,080 Speaker 1: Did we get We got some crazy market stories from Twitter? 475 00:24:45,160 --> 00:24:48,480 Speaker 1: Let's uh, I'm excited about the interactivity of this podcast. 476 00:24:48,480 --> 00:24:50,600 Speaker 1: Now what did we hear on Twitter? We did so 477 00:24:50,920 --> 00:24:53,880 Speaker 1: as we may expect. We heard a lot about bitcoin, 478 00:24:54,200 --> 00:24:56,879 Speaker 1: but I will run through a couple. So one is 479 00:24:57,240 --> 00:24:59,800 Speaker 1: from Keion. He's at s l h z d H 480 00:24:59,840 --> 00:25:02,439 Speaker 1: and said, I feel like there isn't much that's actually 481 00:25:02,440 --> 00:25:06,639 Speaker 1: truly crazy anymore. That yeah, we can find ourself. But 482 00:25:06,640 --> 00:25:09,080 Speaker 1: he said that being said, the sudden surges in both 483 00:25:09,119 --> 00:25:12,480 Speaker 1: bitcoin and gold have got a lot of people by surprise. 484 00:25:12,600 --> 00:25:16,200 Speaker 1: In my opinion, it's a telling and potentially ominous sign 485 00:25:16,520 --> 00:25:19,399 Speaker 1: for what's to come with equities. So we'll see if 486 00:25:19,480 --> 00:25:23,399 Speaker 1: that has any fortune telling power. Um. We also heard 487 00:25:23,440 --> 00:25:27,320 Speaker 1: from at Rocking Finance, who said, probably not as crazy 488 00:25:27,359 --> 00:25:29,560 Speaker 1: as what you would like, but at the Allergan that 489 00:25:29,680 --> 00:25:32,760 Speaker 1: was a really big deal, sixty three billion dollars with 490 00:25:32,800 --> 00:25:37,320 Speaker 1: equity value this week. And Bitcoin of course are easy examples. 491 00:25:37,600 --> 00:25:39,480 Speaker 1: And if you do look at Allergan, it was up 492 00:25:40,240 --> 00:25:42,600 Speaker 1: this week roughly, So that's some crazy stuff are We 493 00:25:42,600 --> 00:25:46,560 Speaker 1: also got some contributions from people within Bloomberg. I'll go 494 00:25:46,600 --> 00:25:49,119 Speaker 1: through a few of them. Joe Wisenhall, the host of 495 00:25:49,440 --> 00:25:51,560 Speaker 1: What You miss Uh, I don't know where he even 496 00:25:51,560 --> 00:25:53,679 Speaker 1: saw this. He said, how about that jump in the 497 00:25:53,760 --> 00:25:55,960 Speaker 1: check two year rates? And he's right that the two 498 00:25:56,040 --> 00:25:59,480 Speaker 1: year check yield jumped eleven basis points on I think 499 00:25:59,480 --> 00:26:01,040 Speaker 1: it was Wen's day. He missed the best part of 500 00:26:01,040 --> 00:26:06,280 Speaker 1: the tweet. Here's something crazy about it, though. That two 501 00:26:06,320 --> 00:26:09,800 Speaker 1: year check yield is UH one point four six that's 502 00:26:09,800 --> 00:26:12,640 Speaker 1: about thirty basis points below the two year treasury yield. 503 00:26:12,680 --> 00:26:15,959 Speaker 1: So mark to your point about you know this unquenchable 504 00:26:15,960 --> 00:26:19,080 Speaker 1: appetite for bonds, which brings us to another crazy thing. 505 00:26:19,080 --> 00:26:22,199 Speaker 1: Sebastian Boyd of the Markets Live team pointed out a 506 00:26:22,200 --> 00:26:25,879 Speaker 1: perpetual I n G bond. It's a floating rate bond, 507 00:26:26,600 --> 00:26:29,880 Speaker 1: current coupon zero percent. It's floated all the way down 508 00:26:29,880 --> 00:26:32,040 Speaker 1: to zero percent. I mean it's trading at seventy dollars 509 00:26:32,440 --> 00:26:35,640 Speaker 1: seventy percent apart, so there is some potential return there, 510 00:26:35,640 --> 00:26:39,040 Speaker 1: but a zero percent coupon And Sarah, I'm gonna nominate 511 00:26:39,080 --> 00:26:41,320 Speaker 1: this is the best craziest thing of the week, uh 512 00:26:41,400 --> 00:26:45,320 Speaker 1: that I've seen. Christina Queeno on the Markets Live team 513 00:26:45,640 --> 00:26:51,520 Speaker 1: in London points out a hundred year Austrian bond sold 514 00:26:51,800 --> 00:26:56,560 Speaker 1: and the five point three billion euros of orders for 515 00:26:56,680 --> 00:26:59,960 Speaker 1: a one point to five billion euro offers, so four 516 00:27:00,080 --> 00:27:05,199 Speaker 1: times five times almost oversubscribed yield have one less than 517 00:27:05,240 --> 00:27:08,280 Speaker 1: one point two percent mark. I don't know. I hate 518 00:27:08,280 --> 00:27:10,160 Speaker 1: to say it, but I think only insurance companies would 519 00:27:10,240 --> 00:27:13,000 Speaker 1: uh by like that fair well. I mean, if you're 520 00:27:13,040 --> 00:27:15,000 Speaker 1: if you're a German, and that's why our rates of 521 00:27:15,040 --> 00:27:17,240 Speaker 1: two percent, right, if you're a German insurance company, what 522 00:27:17,240 --> 00:27:19,080 Speaker 1: do you do? You got to buy something? Just what 523 00:27:20,160 --> 00:27:23,160 Speaker 1: of global sovereign debt right now? Thirteen and a half 524 00:27:23,160 --> 00:27:27,119 Speaker 1: trillion dollars is trading negative? I mean, personally I'd buy 525 00:27:27,160 --> 00:27:31,560 Speaker 1: a bunch of Ed Jordan's for few years. And that 526 00:27:31,640 --> 00:27:34,080 Speaker 1: was our last one for today. But thank you everyone 527 00:27:34,119 --> 00:27:38,040 Speaker 1: who did contribute their ideas. Please continue to going forwards 528 00:27:38,040 --> 00:27:40,359 Speaker 1: because every week we will pick a few that we 529 00:27:40,400 --> 00:27:42,720 Speaker 1: really like and we'll make sure that we read them 530 00:27:42,800 --> 00:27:46,160 Speaker 1: on the show. But of course Mark Hacketty she thanks 531 00:27:46,160 --> 00:27:49,080 Speaker 1: for participating on the show and also thanks for joining today. 532 00:27:49,320 --> 00:27:58,960 Speaker 1: Thank you what those up? Will be back next week. 533 00:27:59,160 --> 00:28:01,320 Speaker 1: Until then, you can find us on the Bloomberg Terminal, 534 00:28:01,600 --> 00:28:05,440 Speaker 1: website and app, or wherever you get your podcasts. We'd 535 00:28:05,480 --> 00:28:07,359 Speaker 1: love it if you took the time to rate interview 536 00:28:07,440 --> 00:28:10,720 Speaker 1: the show on Apple Podcasts so more listeners can find us. 537 00:28:11,040 --> 00:28:13,800 Speaker 1: And you can also find us on Twitter. Follow me 538 00:28:13,960 --> 00:28:18,200 Speaker 1: at at Sarah Pontack, Mike is at Reunonymous, Our guest, 539 00:28:18,320 --> 00:28:22,200 Speaker 1: Mark Hackett or Nationwide Funds is at n W Financial, 540 00:28:22,640 --> 00:28:26,560 Speaker 1: and yes she is at she Ye Bloomberg. You can 541 00:28:26,560 --> 00:28:30,639 Speaker 1: also follow Bloomberg podcast at podcasts. What Goes Up is 542 00:28:30,640 --> 00:28:33,560 Speaker 1: produced by tober Foreheads. The head of Bloomberg Podcasts is 543 00:28:33,600 --> 00:28:36,680 Speaker 1: Francesco Levie. Thanks for listening. See you next time.