Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg Weekly
Speaker 1: Markets podcast. I'm Sarah Ponzac, a market supporter on the
Speaker 1: Cross Asset Team, and I am Mike Reagan, a senior
Speaker 1: editor on the Markets Team. This week on the show,
Speaker 1: the much awaited G twenty meeting is finally here and
Speaker 1: President Trump and she J and Ping are set to
Speaker 1: meet to discuss trade. We'll run through what investors are expecting,
Speaker 1: if the outlook is maybe a bit too optimistic, and
Speaker 1: what market reaction could actually look like. And Sarah, I'm excited.
Speaker 1: I know our producer to Fur gets annoyed when I
Speaker 1: say I'm excited because I'm basically excited every every single
Speaker 1: every single week. But it's podcast day, so I'm excited
Speaker 1: for that. But also because our favorite segment, the Craziest
Speaker 1: Thing I Ever saw in Markets this week, has become
Speaker 1: more interactive. We've gotten some crazy market things via Twitter
Speaker 1: and from some people in how so at the end
Speaker 1: of the show will go through them all. But I'm
Speaker 1: excited about that. Also excited about our two guests here
Speaker 1: joining us UH this week, Mark Hackett, chief of investment
Speaker 1: research at Nationwide Funds Group, Mark Does Peyton Manning come
Speaker 1: around your office, so picture one and around you know, Yeah,
Speaker 1: it's it's it's a pretty Uh. He was at the
Speaker 1: Total Company meeting last year, so he comes once in
Speaker 1: a while. But I'm sure it's a pretty big jack.
Speaker 1: He really does come around. He ever goes. That's a
Speaker 1: first rate has to come with Brad Peasley. Alright, I
Speaker 1: promised no more singing, but fortunately we have an accomplished
Speaker 1: vocalist joining us as well, Ye She of Bloomberg Markets Live,
Speaker 1: who made his singing debut last time on the podcast,
Speaker 1: singing the theme song of the Bond Market. I don't
Speaker 1: know you do you have a song for us this week? Now?
Speaker 1: This week? Um, but I'm hoping to publish an album.
Speaker 1: You know, he's just derived an album, and Sarah, it's
Speaker 1: bittersweet because he's going to be leaving us soon for
Speaker 1: a temporary assignment in Hong Kong. So this last time
Speaker 1: I'll get to talk him for a while, so you
Speaker 1: better make it good. Yeah, happy to have you. Always
Speaker 1: count on you. But Mark, why don't we start with
Speaker 1: what is actually expected this week? Of course, this podcast
Speaker 1: comes out on Friday's. The G twenty meeting is extending
Speaker 1: through the weekend. So anyone feel free to make fun
Speaker 1: of Mike and I if we are very off, but
Speaker 1: we want to get your take what you're actually expecting
Speaker 1: going into this meeting as it relates to trade between
Speaker 1: the U S And China. Well, it's funny because if
Speaker 1: you look at the news, the news seems to be
Speaker 1: suggesting that the expectations are pretty modest. You know, there's
Speaker 1: the meeting is gonna go okay as an outcome of that,
Speaker 1: we're going to be leading towards further discussion. I think
Speaker 1: the expectations that we get any meaningful outcome from from
Speaker 1: this weekend's meeting is pretty low. But the market seems
Speaker 1: to be embedding some pretty reasonable, reasonably optimistic expectations. You know,
Speaker 1: when when there's good news, the market goes up a
Speaker 1: little bit, When there's nervousness, the market goes down a
Speaker 1: little bit more So, I think there's a little bit
Speaker 1: of an asymmetri bet with the market on the outcome
Speaker 1: of this meeting. So there's there's perhaps more more risk
Speaker 1: of the downside than there is to the upside. That's
Speaker 1: a great point, you know, I keep asking people how
Speaker 1: would you define success at this meeting? Is it just
Speaker 1: a photo op and a handshake, that sort of thing,
Speaker 1: no angry tweets for for them for eight hours of
Speaker 1: the weekend. I mean, is that is that a fair
Speaker 1: assessment of the best we can hope for? Yeah, I mean,
Speaker 1: the the total breakdown of of discussions and the you know,
Speaker 1: the further threats of tariffs as an outcome of this
Speaker 1: would be a disaster frankly, but I think most people
Speaker 1: are thinking at this point it's gonna be no massive,
Speaker 1: you know, revelations, but also you know, no disaster as well.
Speaker 1: I mean you hear Minutan's discussion earlier this week of
Speaker 1: we're there, Well, we were there, you know, just a
Speaker 1: couple of months ago. So I think those numbers are
Speaker 1: probably a little bit of a of a guestimate at
Speaker 1: this point. So yeah, I think we're probably a little
Speaker 1: bit less towards the finish line than than most people
Speaker 1: probably think. And well, we got the headlines form anution.
Speaker 1: It seemed like there was a little bit of confusion
Speaker 1: in markets because immediately we saw a pop. However, once
Speaker 1: people realized that he had already said this back in May,
Speaker 1: then we saw it start to come off a bit.
Speaker 1: I want to come to you because I've heard a
Speaker 1: lot of people say that, sure, we're probably not going
Speaker 1: to get a deal this week, but it's very possible
Speaker 1: that we get an extension of the next trench of tariffs. Now,
Speaker 1: you wrote a poets this week and it was about
Speaker 1: Chinese state media being less optimistic than market. What is
Speaker 1: the tone actually like over there? So um the notion
Speaker 1: comments he used the past tense when he said like
Speaker 1: a ninetent of deal was down instead of is down.
Speaker 1: So he was talking about before the May breakdown. The
Speaker 1: two sides got very much close. Then the US accused
Speaker 1: the China backsliding on the previously agreed terms. Now the
Speaker 1: state media in China seems to be less optimimistic than
Speaker 1: the official comments from the U s side. Basically China
Speaker 1: seems to digging um say broadcast of the three rail lines? If,
Speaker 1: if you will, um, what makes to make a deal?
Speaker 1: What takes to make a deal for all the tariff
Speaker 1: existing to have have been has to be taken off.
Speaker 1: And secondly, the text of any agreement has to show
Speaker 1: respect and show dignity for both sides, and the demand
Speaker 1: for the Chinese purchase of US goods has to be realistic,
Speaker 1: not asking too much. So the Chinese attitude seems to
Speaker 1: be if there's a deal, they're happy to take it.
Speaker 1: If not, they're happy to fight it all the way down.
Speaker 1: You know, Mark, you're the head of research at Nationwide Funds,
Speaker 1: and I'm picturing you, you know, scrambling a couple of
Speaker 1: weeks ago to get something put something together on Mexican tariffs, say,
Speaker 1: and then ripping it up the next day. I mean,
Speaker 1: how do you approach this sort of very mercurial, fluid situation, uh?
Speaker 1: In some ways do you just step back and let
Speaker 1: it play out? Or or are you trying to chase
Speaker 1: every twist and turn of this drama. Well, Sarah and
Speaker 1: I have talked about this a couple of times, and
Speaker 1: we're in a different paradigm under Trump. I mean, the
Speaker 1: the algorithmic traders or the headline driven traders have been confused,
Speaker 1: you know, since even before he was elected. So at
Speaker 1: this point, I think the incremental tweets that we're getting
Speaker 1: are perhaps having a little bit less of an impact
Speaker 1: on the market than they used to. We try and
Speaker 1: look through any of the noise, obviously have to have
Speaker 1: some sort of an opinion on what you thing is
Speaker 1: gonna happen with trade, considering it other than the FED,
Speaker 1: is is the the big sign post for what's going
Speaker 1: to happen in the markets for the rest of the year.
Speaker 1: But at the same time, we can't be trading based
Speaker 1: on you know, a comment by Minuchin or a tweet
Speaker 1: by Trump or even Chinese state media headlines. We've had
Speaker 1: so many you know, gives and takes over the last
Speaker 1: twelve months almost at this point in this this world,
Speaker 1: it would be foolish to try and trade based on it.
Speaker 1: I want to get your take. I was at a
Speaker 1: dinner this past week put together by Markets Live, and
Speaker 1: they had a lot of readers of the blog, and
Speaker 1: I found it very interesting when we asked how many
Speaker 1: people actually expect did an increase in terrorists and an
Speaker 1: escalation going forwards? The majority of people rose their hands
Speaker 1: and said that they did. And yes, many said that
Speaker 1: we'd probably get a resolution before the election. But say
Speaker 1: we do get tariffs on billion dollars more worth of goods,
Speaker 1: what does that mean for the economy and what does
Speaker 1: that also mean for your investment outlook. It's been a
Speaker 1: bit difficult to to really see how it's come through
Speaker 1: the system, you know, We've already had a fair amount
Speaker 1: of them already through and we haven't seen much inflation
Speaker 1: at all. So at this point it seems like the
Speaker 1: supply chain is absorbing most of it. Can they forever?
Speaker 1: We don't know. But all the math that people through
Speaker 1: out there, which is you know that the consumer is
Speaker 1: going to have this much of a quote unquote tax
Speaker 1: because of the terrorists, we really haven't seen him. We're
Speaker 1: still sitting at sub two percent inflation, so it's difficult
Speaker 1: to make the argument that that we've had a massive
Speaker 1: you know, pain borne by the U. S consumer from
Speaker 1: the tariffs. So I would really be guessing if I said,
Speaker 1: if they're enacted, the consumer is gonna bear this much
Speaker 1: of it at this point, because so far we really
Speaker 1: haven't seen much at all. And that reminds me. There's
Speaker 1: an interesting market call out on Thursday from one of
Speaker 1: the retail analysts at Goldman, Alexandra Wallvice UM, and she
Speaker 1: basically don't she denigraded UH north Stream to sell UH
Speaker 1: maybe a little late on that that stocks down about
Speaker 1: it's November also ross stores. But what she said is
Speaker 1: she spoke directly about the trade tension and saying for
Speaker 1: for most of the universe of stock she covers, and
Speaker 1: I would add that I think this is true of
Speaker 1: the entire market. The forecast from the companies imply quote
Speaker 1: and inflecting earnings growth in the second half of the
Speaker 1: year a common thing where you know, you dial down
Speaker 1: the forecast at the beginning of the year, and then
Speaker 1: you ratchet them up for late in the year and
Speaker 1: and hoping, you know, uh, things catch up in the
Speaker 1: second half. But she's saying this uncertain trade backdrop could
Speaker 1: weigh on companies that don't have pricing power to your point,
Speaker 1: maybe not pass on to the consumer, but really squeezed
Speaker 1: the margin of companies, uh, that are in a hyper
Speaker 1: competitive field like that. I mean, looking out at the
Speaker 1: earnings expectations for the second quarter, are estimates make it
Speaker 1: look like a little bit of a drop, which traditionally
Speaker 1: would probably be flat to maybe a little bit of growth.
Speaker 1: It's considering the way companies beat earnings. But you look
Speaker 1: further out to the third quarter, fourth quarter, it's a
Speaker 1: very optimistic scenario with with a big rebounding growth. I mean,
Speaker 1: it's not a big risk in your opinion, that we're
Speaker 1: gonna be ratching down those expectations. For later in the year. Yeah,
Speaker 1: there were good The good news has been we've seen
Speaker 1: a leveling off of those that those you know, estimate
Speaker 1: revisions in the last couple of months. I mean, the
Speaker 1: third quarter is the one we're starting to see tickdown.
Speaker 1: So the second quarter was already kind of in this world.
Speaker 1: Fourth quarter is a big jump back, but we're also
Speaker 1: seeing you know, double digits for next year. All of
Speaker 1: those seemed to had been pretty optimistic assumptions, you know,
Speaker 1: I think that we're sitting here with the marketing general
Speaker 1: pricing in very high expectations that we get a deal
Speaker 1: with China and we get three FED rate cuts. The
Speaker 1: likelihood that both of those things happen together seems pretty optimistic.
Speaker 1: You know. If you get rate cuts, maybe we don't
Speaker 1: have this much as much urgency to get a FED
Speaker 1: trying to deal done. If we get a trying to
Speaker 1: deal done, the urgency for the FED to cut becomes
Speaker 1: a little bit less. So the perfect storm, I guess,
Speaker 1: you know, perhaps what Trump's trying to orchestrate is we
Speaker 1: get some cuts earlier, you know, in the process, we
Speaker 1: get a China trade deal through later in the year.
Speaker 1: That leads to a pretty strong acceleration in both earnings
Speaker 1: and economic growth the beginning part of next year, leading
Speaker 1: into the election. You know, that's kind of the but
Speaker 1: there's a lot of things that have to work in
Speaker 1: unison for that that to happen. I think you're probably
Speaker 1: right where we'll start. We'll see continued modest estimate revisions downward,
Speaker 1: particularly for that fourth quarter number. That seems a little
Speaker 1: bit optimistic at this point. So if I'm an investor
Speaker 1: in nationwide funds, I'm listening and I'm thinking, well, Mark,
Speaker 1: what am I supposed to do here? Am I? Should
Speaker 1: I move into bonds? Should I move into money markets? Even?
Speaker 1: I mean where where should we be? Sort of skewing
Speaker 1: our allocations too? Well? We think over the medium in
Speaker 1: the long term, we're still pretty good shape for the
Speaker 1: for equity markets, I mean, the economies. We don't we
Speaker 1: don't see a recession in the near term, and we
Speaker 1: see earnings being okay. There's perhaps downward you know, in
Speaker 1: the near term, but we think we'll see some volatility
Speaker 1: certainly between now and the at the end of the summer.
Speaker 1: There's a lot of positive expectations embedded in the current number.
Speaker 1: The technical look seems awfully fishy with you know, we're
Speaker 1: having a very hard time getting through the current level.
Speaker 1: So there's there's there's perhaps some caution in the near term.
Speaker 1: But I mean, we've seen massive inflows into bonds throughout
Speaker 1: the entire cycle. More so even during this year, we've
Speaker 1: seen outflows from equities in the large part. It's crazy.
Speaker 1: You couldn't paint a more negative sentiment picture. I feel
Speaker 1: like towards equities and here we are near record highs,
Speaker 1: and we're you know, we're we're at record highs, and
Speaker 1: that the AII Bull Bears survey shows more bears than bulls.
Speaker 1: We have the that Merylynch Bank American Merylynch survey of
Speaker 1: fund managers last week that shows that cash levels jumped
Speaker 1: by the most in two thousand eleven in any month,
Speaker 1: and the allocations of equities versus bonds for institutions, you know,
Speaker 1: which you would think would be less emotional, is at
Speaker 1: the lowest level since the financial crisis. So literally, the
Speaker 1: only incremental buyer of equities out there right now is
Speaker 1: company buybacks, and that we don't see ending anytime. So
Speaker 1: we also got the Conference Board data earlier this week,
Speaker 1: which I thought was really interesting because consumer confidence dropped
Speaker 1: to the lowest in September, and we also saw the
Speaker 1: fastest rate of change from bulls to bears, one of
Speaker 1: the fastest ones during this entire bull market. And yeah,
Speaker 1: I want to come to you because it's very interesting
Speaker 1: that the setup we have seen. We have seen a
Speaker 1: risk rally in stocks. You have stocks still near record highs,
Speaker 1: but you also see a bond rally. We still see
Speaker 1: it ten year near two per set. At the same
Speaker 1: time we're seeing gold get a bid as well. Is
Speaker 1: it possible for all these different asset classes, which the
Speaker 1: narrative can be taken to seem very different, are all
Speaker 1: correct at the same time. Actually, Mark mentioned earlier that
Speaker 1: the market is essentially a betting that the Fed is
Speaker 1: going to take action quickly and decisively, and that like
Speaker 1: three or four custs is probably enough to gather us
Speaker 1: through all these soft patch and start a rebound probably
Speaker 1: next year. This is the only way you can reconcile
Speaker 1: all these conflicting signals, because if you look at the
Speaker 1: boundary of curve, three year and the ten years inverted,
Speaker 1: which is a classic recession scenario, but two years of
Speaker 1: ten years is actually positive because people are expecting the
Speaker 1: short term ray cuts is going to lead to some
Speaker 1: sort of recovery down the road. So that's one way
Speaker 1: you can actually um see two to reconcile these different signals.
Speaker 1: But everything has to be in the right place. So
Speaker 1: the focus on the Yelk curve among investors in the
Speaker 1: press has been really interesting over the last couple of months.
Speaker 1: You know, we hear about the inversion consistently, but it's
Speaker 1: it has been a very good predictor of recessions in
Speaker 1: the past, but this one seems a little bit differ
Speaker 1: and that it's much more technical than fundamental. We're not
Speaker 1: it's not the traditional, you know way we got to
Speaker 1: be inverted. As you said, the two and tent isn't
Speaker 1: even inverted. But the fact that there's just an insatiable
Speaker 1: demand for bond yield of investors both domestically and internationally
Speaker 1: flooding into long treasuries that's pushed rates down to a
Speaker 1: somewhat artificial level. Uh. That isn't an outcome of the
Speaker 1: views of the economy. It's really more supply and demand driven,
Speaker 1: which could give a false signal about the future and
Speaker 1: recessionary possibilities. Even with this massive supply of treasuries coming online.
Speaker 1: That demand is overwhelming, I guess. And it's interesting that
Speaker 1: the Treasury continues to issue in the kind of six
Speaker 1: months a two year range even though the Yolker is
Speaker 1: flat inverted. You think they'd be extending duration at this point.
Speaker 1: So maybe they know something we don't know about. What's
Speaker 1: what they outlook for rates are over the next two
Speaker 1: to five years? Are you getting back to the China situation?
Speaker 1: And Mark waydd on this too, if you if you
Speaker 1: have any thoughts, uh, you know. President Trump this week
Speaker 1: gave a very long interview with Fox Business Boy. He
Speaker 1: got a lot of words and on that that one
Speaker 1: one thing that I'm not sure everyone picked up on
Speaker 1: that I found interesting is he said, well, maybe the
Speaker 1: tart the next batch of tariffs on Chinese gids will
Speaker 1: be ten percent rather than that. Seems to me like
Speaker 1: subtle de escalation of the tensions. I mean, do you
Speaker 1: think do you agree with that? Do you think China
Speaker 1: could have picked up on that? Um? I do think
Speaker 1: there's a sort of a subbody change here because the
Speaker 1: next round, next round of tariffs, all the goods affect
Speaker 1: essentially consumer goods, closing smartphones, toys. Well, the previous round
Speaker 1: of tariffs affecting the goods only intermedia goods, so the
Speaker 1: consumer will be directly impact by the next batch of
Speaker 1: the tariffs more so than the previous one. That's why
Speaker 1: I think one of the reason you want to take
Speaker 1: more like an a step by step approach instead of
Speaker 1: all the maximum, all the tariffs all the way at
Speaker 1: once or at once. So I do think that, um,
Speaker 1: this shows some sort of like cautiousness from the U.
Speaker 1: S side. Mark. We heard from some other politicians this week,
Speaker 1: to other than President Trump, and that is all the
Speaker 1: Democratic presidential candidates with the debates, and as we start
Speaker 1: getting closer and closer to presidential election, it feels like
Speaker 1: it's all starting. How do you actually think about the
Speaker 1: presidential election and anything that any of these candidates may
Speaker 1: say or may have said already in debates when thinking
Speaker 1: about how to position going forwards. This is very similar
Speaker 1: to the thought process on the tweeting, which is you
Speaker 1: have to pay attention to what's said, but you can't
Speaker 1: necessarily react to it. I mean, reacting to on emotion
Speaker 1: and investing is almost always a bad idea, right. Reacting
Speaker 1: on political emotion is even worse than that. Frankly, I mean,
Speaker 1: we saw a massive decline in consumer confidence among Democrats
Speaker 1: between August and December of two thousands and sixteen, so
Speaker 1: a massive rise in consumer confidence for Republicans at the
Speaker 1: same time frame. Neither us right, you know, So we've
Speaker 1: become you know, all the studies show that we were
Speaker 1: becoming increasingly partisan in the way that we view the world.
Speaker 1: That's probably gonna lead to some volatility. You know, we're
Speaker 1: going to see your healthcare names, for example, trading violently
Speaker 1: based on the expectation that they think Elizabeth Warren would
Speaker 1: would would win the presidency for example. I think two
Speaker 1: thousand and sixteen should have taught us a lesson that
Speaker 1: betting ahead of time is probably not that great an idea,
Speaker 1: and over waiting the impact of the president has also
Speaker 1: been a pretty bad way to invest historically. So would
Speaker 1: you say it's hard to invest based on what you
Speaker 1: think is going to happen, even if you truly do
Speaker 1: believe that maybe a Democratic candidate is going to win
Speaker 1: the president action and that's going to completely shake up
Speaker 1: the health care industry, or say one candidate is running
Speaker 1: saying that they may take down defense spending for aerospace
Speaker 1: and defense. I mean, can you truly ignore these statements
Speaker 1: if it is something that's possible that will eventually affect
Speaker 1: how companies are operating going forwards, The overwhelming likelihood is
Speaker 1: we end up with display Congress anyway. If that happens,
Speaker 1: the likelihood of transformational change on any of those things
Speaker 1: are pretty limited, So I would take the under in
Speaker 1: terms of impact from presidential politics. We obviously saw Obamacare
Speaker 1: through that was you know, pretty disruptive at least for
Speaker 1: you know, some of the names is very good for
Speaker 1: some of the other health care names. The health care
Speaker 1: area in the defense area would be would be areas
Speaker 1: to obviously pay the most attention to. But again we're
Speaker 1: way too early to make any definitive conclusions about what's
Speaker 1: going to happen in November two. Thowyah. I think it
Speaker 1: was interesting in the debate they asked, well, who on
Speaker 1: the stage wants to see medicare for all? And only
Speaker 1: two hands? When might think what was it? It was, uh,
Speaker 1: Elizabeth Warren and Blasio. So that kind of signals that
Speaker 1: she has a very ambitious platform. I mean, when we
Speaker 1: could s break up the fangs, break up the banks,
Speaker 1: get rid of private student loan debt, student loan debt. Yeah. So,
Speaker 1: I mean, I guess you have to sort of handicap
Speaker 1: the fact that she's not gonna get all that if
Speaker 1: she gets any of it, if she wins. Right, I think.
Speaker 1: I think we have a very long history Republican and
Speaker 1: Democrat of you know, prob well, perhaps running on a
Speaker 1: certain campaign and then enacting because you know, the reality
Speaker 1: is you're not going to get everything you want done,
Speaker 1: particularly if you have a Republican Senate. So, like I said,
Speaker 1: I would, I would, I would weigh on this side
Speaker 1: of not overreacting at least between now and let's say
Speaker 1: next fall. I like Mark. He's nice and calm. He
Speaker 1: should talk to my wife. All right, Well, I think
Speaker 1: it's time for the our every part of the week. Mark.
Speaker 1: I don't know if they warned you about this. Uh,
Speaker 1: this little gimmick of ours. The craziest thing I ever
Speaker 1: saw in markets this week? Ye she I want to
Speaker 1: start with you. You see anything crazy this week? How
Speaker 1: about bitcoin? That's crazy? O? What great Tracy Alloy, she's
Speaker 1: our exactive editor. She found a small way to predict
Speaker 1: the crypto currency moves. She found out that the bigcoin
Speaker 1: has highly coorated with avocado prices in Mexico. Both has
Speaker 1: more than double the since April. Um. I know she
Speaker 1: meant this as a joke. Definitely a real correlation, but
Speaker 1: for anything like as volatile as bitcoin, it's good indicator
Speaker 1: as anyone. That's right, the fable of spurious correlations on this, Sara,
Speaker 1: how about you you got anything the top Bitcoin avocado correlations.
Speaker 1: That's a tough one. You read my mind. I was
Speaker 1: actually going to take the avocado side of it. I mean,
Speaker 1: avocado prices are this week, and I've got to say,
Speaker 1: for those of us who are are large consumers of
Speaker 1: guacamole and avocado toast or whatever you might say, it's
Speaker 1: really worrisome. What is it with you millennials market? It's
Speaker 1: like they passed a law that they all have to
Speaker 1: eat avocado toast for breakfast. What is going on? There's um,
Speaker 1: there's an avocado restaurant now that I think there's actually
Speaker 1: a couple of them, and all these cells avocado products.
Speaker 1: I've never ordered from it, I will say, but d
Speaker 1: s right got to infuse it with all Right, bark,
Speaker 1: you're in the hot seat. Have you seen anything crazy? Well,
Speaker 1: I guess, I guess if you're talking about politics, you
Speaker 1: might as well talk about the other third rail, which
Speaker 1: is crypto. You know, it's a good way to get
Speaker 1: clicks and and hate from them. But you know, the
Speaker 1: the ethereum. You know, trust e t F that came
Speaker 1: out on Friday, traded a seven hundred bucks on Monday, Uh,
Speaker 1: the n E V and that is twenty seven bucks.
Speaker 1: You're paying four times thirty times at the peak. You're
Speaker 1: right now it's down to I think a hundred thirty bucks,
Speaker 1: so you're in the forest, you know, times range at
Speaker 1: this point. Uh. You know that that shows how sometimes
Speaker 1: emotion can really damage investor returns. There's really no justification
Speaker 1: for that gap. I'm not saying anything about whether or
Speaker 1: not etheroryum is going up or down from here. It
Speaker 1: doesn't really matter. The point is is you're you cannot
Speaker 1: pay a d thirty bucks for dollars with about Yeah.
Speaker 1: I was that people just afraid to have their money
Speaker 1: in one of these exchanges that gets happened. I think
Speaker 1: part of it is your cousin made a lot of
Speaker 1: money and trading on this, so you're gonna you're gonna
Speaker 1: you don't necessarily know what you're buying. That's that's probably
Speaker 1: the most dangerous where invest Some people were saying also,
Speaker 1: which is worth diving into. Now, the volume is pretty
Speaker 1: low in this stuff, so this unlikely, but institutions that
Speaker 1: are limited in their ability to own crypto maybe using
Speaker 1: this as to proxy seem I would hope that's not
Speaker 1: the case, and like I said, the trading training volume
Speaker 1: probably suggests that's not. But that would be pretty disappointing
Speaker 1: if institutions we're playing that game. These are these are
Speaker 1: all pretty good crazy things. I gotta say, I got,
Speaker 1: I'll give you mine, and then we'll go to the
Speaker 1: ones we got at a twitter um, Sarah, I don't
Speaker 1: know if you realize this. I used to play lot
Speaker 1: of basketball before I became old and out of shape.
Speaker 1: So in my closet there are several pairs of sweaty
Speaker 1: old air. Jordan's just just sitting there collecting us, trying
Speaker 1: to wait to see where you're going with this. What
Speaker 1: if I were to tell you that those sweaty old
Speaker 1: sneakers are actually a tradeable commodity, that that people are
Speaker 1: literally trading on something known as the stock X sneaker exchange,
Speaker 1: and this is based on it. The New York Times,
Speaker 1: i gotta say, has really been the paper of record
Speaker 1: for crazy market stories, and this is the second or
Speaker 1: third one I've found it there. Yeah, this guy who
Speaker 1: sold his old sneakers started this exchange. It's called stock ax.
Speaker 1: They trade sneakers and there's a bunch of other ones. Uh. Collectively,
Speaker 1: they've raised more than two hundred million in venture capital. Uh.
Speaker 1: And Nike's not exactly thrilled with this. I'm kind of
Speaker 1: joking about my sweaty knockoff. Well, now these are real,
Speaker 1: but it's just you. You buy him at retail for
Speaker 1: say a hundred bucks, you stick up in your closet
Speaker 1: for a couple of years, and he's some for three
Speaker 1: hundred bucks. Nike's getting a little ticked off. They're starting
Speaker 1: to print not for resale, and some shop owners are
Speaker 1: making people put them on and wear them out of
Speaker 1: the store so that they're they're not in Christine condition.
Speaker 1: So I don't know, that's my craziest thing. Well there
Speaker 1: there is a site called posh Mark and I actually
Speaker 1: just recently started using it. And so you do you
Speaker 1: sell your old clothing, you sell your old shoes. I
Speaker 1: got my first sale this week. It was really exciting.
Speaker 1: So you're way ahead of me. I didn't know there
Speaker 1: was actually a shoe stock exchange. But how much would
Speaker 1: you from my air? Jordan's there like two thousand and
Speaker 1: two vintage? Give you ten bucks? Not bad to look
Speaker 1: out of buy. I mean, they don't fit me, but
Speaker 1: I'll take them on all right, I'll sorry walk us through.
Speaker 1: Did we get We got some crazy market stories from Twitter?
Speaker 1: Let's uh, I'm excited about the interactivity of this podcast.
Speaker 1: Now what did we hear on Twitter? We did so
Speaker 1: as we may expect. We heard a lot about bitcoin,
Speaker 1: but I will run through a couple. So one is
Speaker 1: from Keion. He's at s l h z d H
Speaker 1: and said, I feel like there isn't much that's actually
Speaker 1: truly crazy anymore. That yeah, we can find ourself. But
Speaker 1: he said that being said, the sudden surges in both
Speaker 1: bitcoin and gold have got a lot of people by surprise.
Speaker 1: In my opinion, it's a telling and potentially ominous sign
Speaker 1: for what's to come with equities. So we'll see if
Speaker 1: that has any fortune telling power. Um. We also heard
Speaker 1: from at Rocking Finance, who said, probably not as crazy
Speaker 1: as what you would like, but at the Allergan that
Speaker 1: was a really big deal, sixty three billion dollars with
Speaker 1: equity value this week. And Bitcoin of course are easy examples.
Speaker 1: And if you do look at Allergan, it was up
Speaker 1: this week roughly, So that's some crazy stuff are We
Speaker 1: also got some contributions from people within Bloomberg. I'll go
Speaker 1: through a few of them. Joe Wisenhall, the host of
Speaker 1: What You miss Uh, I don't know where he even
Speaker 1: saw this. He said, how about that jump in the
Speaker 1: check two year rates? And he's right that the two
Speaker 1: year check yield jumped eleven basis points on I think
Speaker 1: it was Wen's day. He missed the best part of
Speaker 1: the tweet. Here's something crazy about it, though. That two
Speaker 1: year check yield is UH one point four six that's
Speaker 1: about thirty basis points below the two year treasury yield.
Speaker 1: So mark to your point about you know this unquenchable
Speaker 1: appetite for bonds, which brings us to another crazy thing.
Speaker 1: Sebastian Boyd of the Markets Live team pointed out a
Speaker 1: perpetual I n G bond. It's a floating rate bond,
Speaker 1: current coupon zero percent. It's floated all the way down
Speaker 1: to zero percent. I mean it's trading at seventy dollars
Speaker 1: seventy percent apart, so there is some potential return there,
Speaker 1: but a zero percent coupon And Sarah, I'm gonna nominate
Speaker 1: this is the best craziest thing of the week, uh
Speaker 1: that I've seen. Christina Queeno on the Markets Live team
Speaker 1: in London points out a hundred year Austrian bond sold
Speaker 1: and the five point three billion euros of orders for
Speaker 1: a one point to five billion euro offers, so four
Speaker 1: times five times almost oversubscribed yield have one less than
Speaker 1: one point two percent mark. I don't know. I hate
Speaker 1: to say it, but I think only insurance companies would
Speaker 1: uh by like that fair well. I mean, if you're
Speaker 1: if you're a German, and that's why our rates of
Speaker 1: two percent, right, if you're a German insurance company, what
Speaker 1: do you do? You got to buy something? Just what
Speaker 1: of global sovereign debt right now? Thirteen and a half
Speaker 1: trillion dollars is trading negative? I mean, personally I'd buy
Speaker 1: a bunch of Ed Jordan's for few years. And that
Speaker 1: was our last one for today. But thank you everyone
Speaker 1: who did contribute their ideas. Please continue to going forwards
Speaker 1: because every week we will pick a few that we
Speaker 1: really like and we'll make sure that we read them
Speaker 1: on the show. But of course Mark Hacketty she thanks
Speaker 1: for participating on the show and also thanks for joining today.
Speaker 1: Thank you what those up? Will be back next week.
Speaker 1: Until then, you can find us on the Bloomberg Terminal,
Speaker 1: website and app, or wherever you get your podcasts. We'd
Speaker 1: love it if you took the time to rate interview
Speaker 1: the show on Apple Podcasts so more listeners can find us.
Speaker 1: And you can also find us on Twitter. Follow me
Speaker 1: at at Sarah Pontack, Mike is at Reunonymous, Our guest,
Speaker 1: Mark Hackett or Nationwide Funds is at n W Financial,
Speaker 1: and yes she is at she Ye Bloomberg. You can
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Speaker 1: produced by tober Foreheads. The head of Bloomberg Podcasts is
Speaker 1: Francesco Levie. Thanks for listening. See you next time.