Daily Briefing – April 29, 2020

Published on
April 29th, 2020
34 minutes

Daily Briefing – April 29, 2020

Daily Briefing ·
Featuring Nick Correa, Ash Bennington, and Roger Hirst

Published on: April 29th, 2020 • Duration: 34 minutes

Real Vision's Ash Bennington sits down with Roger Hirst to discuss the latest economic data: dismal GDP numbers, consumer spending, as well as other stats in the real economy. Bennington and Hirst analyze the recent technical levels on the S&P, and explore how the new COVID-19 treatments being tested could impact the timing and pace of re-opening the economy.



  • DS
    David S.
    7 May 2020 @ 02:14
    Thanks for putting up the transcript for Mr. Ollari's interview with Mr. Pal. Mr. Ollari is one of our the best thinkers on the European situation. The following quote was one of the most important for me from his interview: "I realized today that I will never buy the euro again, ever. Because in Europe, [INAUDIBLE] just a concept. Since the beginning, we never managed to put a common fiscal policy." In my opinion they never will be able to put a common fiscal policy together for Euroland. The Euro was always a fiat currency dreamed up by politicians for their own purposes. It is a fiat currency without a sovereign. It will dissolve and the Coronavirus may be the tipping point. Macro trades start with currency considerations, be careful with the Euro. DLS
  • TS
    Tamim S.
    30 April 2020 @ 01:06
    The thought of the S&P 500 going to 4000 scares the bajeebus out of me. Reminiscent of late stage capitalism.
    • JD
      Jesse D.
      30 April 2020 @ 02:48
      Capitalism means companies fail. This isn’t capitalism, it’s cronyism. As a capitalist myself, this market angers me.
    • SS
      Shanthi S.
      30 April 2020 @ 07:27
      Agree Jesse D. Free Market Capitalism is just truth. Central banks are jamming price signals left right and centre here. The truth still exists, but it’s getting harder and harder to hear it.
    • SK
      Srisaila K.
      30 April 2020 @ 13:15
      While I am hearing a lot of criticism about central bank actions, I am not hearing much about other better options available. What if central bank don;t print as many are saying and allow the system to sort this out itself. Credit will dry out and liquidity will be gone....what then. I think most impact of such a scenario will be on majority low income groups devastating their livelihoods. If we have to sacrifice theoretical capitalism to avoid that, I am all for it. Having said that, may be most of our anger emanates from the notion of central bank actions resulting in privatising the gains and socialising the losses. I really wonder are there no other options for FED to provide support to main street without involving the BIG team(big corporations doing buybacks, zombie companies paying big bonuses for executives, too big to fail hedge funds etc).
    • SK
      Srisaila K.
      30 April 2020 @ 13:17
      Really keen to hear Roger's take on this. what other options are available for central banks to be able to save the day without throwing price discovery out of the window and artificially propping up asset prices.
    • JV
      Jan V.
      30 April 2020 @ 20:24
      @Srisaila K. What got us here in the first place were central bank actions. Inflating the money supply always leads to bubbles. At this point you can't get out anymore without enduring much pain. As you say, people will lose their jobs, because all these zombie companies need to go bankrupt in order to clean up the system. Wages will fall, prices will fall, but at the same time lots of new companies will be created because labour is cheap again. If you look at the 1920-1921 depression it doesn't always have to be doom and gloom.
    • SK
      Srisaila K.
      1 May 2020 @ 06:37
      @Jan V. I am not debating why we are in this situation in the first place. While I agree with you on that central bank actions are contributing significantly to emergence of bubbles in the economy and it may be the case with recent actions, I am also not able to see, with my limited capability, what other options we have to better react to the current situation of unprecedented massive shock to economy that occurred in a very short span of time. I think, given the enormity of the shock, if not for the massive fiscal and monetary policies from FED and govt to support economy, we will end up in a much worse situation than the great depression, especially with our highly complex intertwined global economy. And I'm afraid, it will not be as simple as coming out of 1920-21 depression then, which was again facilitated by FED's monetary policy actions. I hope some of the debates here at RealVision will be able to shed some light on this aspect as well. Also on another node, I hope many here are also very keen, like me, to hear from likes of Roger and Ash on how actually the money flows from FED's balance sheet into various assets including equities creating bubbles and how and to what extent the passive investing is contributing to this as well. @Ash and @Roger hope you can touch on this in one of your next sessions. Thanks
    • JV
      Jan V.
      1 May 2020 @ 08:25
      Some research i found online about the 1920-1921 depression. Seems like an interesting topic to have a RVTV discussion about: "The conventional wisdom holds that in the absence of government countercyclical policy, whether fiscal or monetary (or both), we cannot expect economic recovery — at least, not without an intolerably long delay. Yet the very opposite policies were followed during the depression of 1920–1921, and recovery was in fact not long in coming. The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover — falsely characterized as a supporter of laissez-faire economics — urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored. Instead of "fiscal stimulus," Harding cut the government's budget nearly in half between 1920 and 1922. The rest of Harding's approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third. The Federal Reserve's activity, moreover, was hardly noticeable. As one economic historian puts it, "Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction."2 By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923".
  • RS
    Rob S.
    30 April 2020 @ 13:58
    Related to your comments about EM FX markets; is there an ETF that plays long USD short EM-currency? And does said ETF have a contango issue (similar to USO)? - Thank you
    • AI
      Andras I.
      1 May 2020 @ 02:53
      CEW ? Chilean peso 8.52% Taiwan dollar 8.48% Malaysian ringgit 8.45% Polish zloty 8.43% South Korean won 8.41% Mexican peso 8.38% China renminbi 8.38% Indian rupee 8.36% S. African rand 8.21% Israeli shekel 8.20% Brazilian real 8.10% Turkish lira 8.09%
  • JV
    Jan V.
    30 April 2020 @ 19:52
    As long as you have these ultra low intrest rates people won't make this mindshift towards saving money imo. At least not in a prolonged substantial way. You need to be compensated to do so.
  • GT
    Guillaume T.
    30 April 2020 @ 18:01
    Nice work on the introductions by Nick Correa, pleasant watch, slides, and listening. Clean and simple!
  • AT
    ALAN T.
    30 April 2020 @ 17:31
  • js
    john s.
    30 April 2020 @ 15:51
    Rodger needs his own show! Amazing
  • RK
    Robert K.
    30 April 2020 @ 13:47
    can you guys interview david hunter? he is calling for +4000 in S&P.
  • SK
    Srisaila K.
    30 April 2020 @ 13:22
    Great show Ash and Roger. Roger's analysis is great as always. Related to your point about EM Fx, how you see EM equities performance going to be. Thanks.
  • AW
    Angela W.
    30 April 2020 @ 05:56
    Thanks guys for the awesome job you do. Would love to hear Roger have a conversation with Jeff Snider from Alhambra. He believes the Fed $1.5 Trillion added to the balance sheet is smoke and mirrors, gone to cover losses in the shadow banking industry. The Fed said they would buy IG and HY but have made no purchases yet. Is the Fed faking out the public, who have pushed the S&P through Mike Green’s 2800 mark, doing their job for them on manipulated sentiment?
    • BR
      Ben R.
      30 April 2020 @ 12:42
      Yes, that is a big story that isn’t being widely discussed. Please can we make this happen!?🙏
  • TC
    The C.
    30 April 2020 @ 02:22
    As a long time listener and new commenter... I was just wondering if a Realvision 'forum' would be on the cards at all. I understand that twitter allows for a little bit of interaction between members, but it would be great to see a medium where members can create more lengthy and detailed discourse (examples would be members discussing their current portfolio allocations, macro views, trade ideas backed by charts/research all of which would be a little more difficult to do via twitter given the format, trading style) I can understand that this may potentially be costly and a bit of a risk as there may be limited interest in such discourse... Interested to hear what other ppl think, or if there already is such a medium for such discourse. Cheers
    • AS
      Ash S.
      30 April 2020 @ 12:41
      A slack channel would be brilliant.
  • VK
    Vipin K.
    30 April 2020 @ 12:39
    Bam--Boom----Bam? within a short period. Good analogy explains it all like when something very bad happens to you it takes time to register..
  • AS
    Ash S.
    30 April 2020 @ 12:36
    Roger is brilliant.
  • SP
    Steve P.
    30 April 2020 @ 08:20
    Is anyone surprised meat workers are testing sick? There’s this delusion amongst the working class I’ve studied since befriending several illegal immigrants. You can pay migrant workers $23 / hour and they’ll still behave as if they’re suffering. Half the illegal Russians I’ve “befriended” aka gathering intelligence on them based on their high level FSB connections, use “asylum” simply as a means to work here illegally and defraud the tax payer. The socio economic disparity between actual poverty and the “culture” of poverty is shocking - and has nothing to do with this daily brief. Good night!
    • JC
      John C.
      30 April 2020 @ 11:51
      Chinese 'students' even worse than Russians. All are either tacit supporters of the CCP (and fully vetted by them) or full on party members. Essentially many are spies. Meanwwhile they are up to 30% of the international student component at most US universities
  • JL
    Joel L.
    30 April 2020 @ 10:54
    How to play this market? "Look to FX for countries that can not print their way out of this" -Roger
  • PJ
    Peter J.
    30 April 2020 @ 10:26
    Roger on his game, excellent update
  • OT
    Omar T.
    30 April 2020 @ 10:18
    What is transmission mechanism of fed money to stock market if there is no buybacks?
    • OT
      Omar T.
      30 April 2020 @ 10:24
      Also didn’t it fail in Japan since 1989 to drive up stocks
  • PC
    Peter C.
    30 April 2020 @ 09:48
    Great briefing! I am a big fan of Roger's balanced view of the market dynamics.
  • PB
    Patrick B.
    30 April 2020 @ 07:29
    Shout out to Ipswich, UK!
    • RH
      Roger H. | Real Vision
      30 April 2020 @ 09:24
      Thanks Patrick - staying safe in deepest, darkest Suffolk!
  • AM
    Aaron M.
    30 April 2020 @ 09:17
    Guys, thank you for the above. Super, as always. Given how technically driven the market is at the moment, is there any chance we can get a regular (weekly, not daily!) segment on the Daily Briefing from a quant to help us mere humans to gain an appreciation of the world without emotions? Thx and keep up the good work!
  • SK
    Shiu K.
    30 April 2020 @ 04:17
    Funny to see how the commentary is changing from Great Depression to "I wouldn't be surprised if S&P 500 went to 4000"
    • RH
      Roger H. | Real Vision
      30 April 2020 @ 09:12
      Hi Shiu – the big question is whether we can have a Great Depression AND the S&P500 at 4000. I outlined this central bank dynamic in an episode of The Big Conversation for Refinitiv: “Do Corporate Earnings Matter Anymore” on Real Vision’s Youtube channel on 13th November 2019. https://www.youtube.com/watch?v=W579JGw2eko&list=PL2-78gs9nRfOw_IyF802Pg9UeuwZ-UMed&index=4&t=16s In the second part (The Chatter) I further outlined why I thought this dynamic would drive equity markets higher into year end and the beginning of 2020, when many analysts were bearish of equities. This was obviously pre-COVID, but this dynamic may now be on steroids today, due to the scale of the central bank response. This is why I am torn between the historical perspective in which an economic bust of this magnitude has historically always led to a major sell off, then a 50%-62% rebound and then a fall back below the initial lows, versus the potential today for central banks/the Fed to now drive equity prices higher.
  • AW
    Abigail W.
    30 April 2020 @ 08:59
    I always watch the daily briefing with Roger more than once, such valuable insights! For me it’s much higher value adding! Thanks
  • SB
    Simon B.
    29 April 2020 @ 23:59
    Thoughts on AUD ? It has had a tremendous breakout, though as Roger alluded to the RBA has no printing press to get them out of trouble !
    • TC
      The C.
      30 April 2020 @ 01:25
      Also curious as an Australian as to RV's macro perspective. My humble opinion from an ultra long term charting perspective is still very bearish due to a massive multi decade top despite the substantial rally from 0.55 to 0.65. From a boots on the ground perspective, there appears to be a bit of optimism that we will come out of this lockdown earlier than initially thought. I work in mining and there's optimism that we'll be able to get people back on site soon, and people in Perth are saying things are starting to get back to normal a bit more in the CBD (they can even have an entire 10 person maximum on gatherings now!) General attitude seems to be that once we are out of lockdown, we don't have to worry too much about a second wave; I have no idea why given there's no vaccine/treatment and we are entering winter, would have thought this would be a bigger issue. Not to mention probably only 10% of people are wearing masks... Would love to hear everybody's thoughts...
    • NL
      Nicholas L.
      30 April 2020 @ 01:55
      Thomas I agree. I think people are believing what they want to believe and not what might be the reality. Not that I know anything about viruses but people said it might get better in summer but would we know since the entire world shut down? Best to hope for the best and prepare for the worst it seems but nobody seems to be thinking logically. Except in some areas like Singapore and Vietnam it seems. Our country (USA) seems more concerned about its inept and unacceptable leader. I wish we had more direction in a time like this.
    • SS
      Shanthi S.
      30 April 2020 @ 07:34
      It feels to me like Australia’s not dissimilar to an EM economy, sans the cheap, eager labour force & zest to improve... I’m uber bearish too. I hope we don’t slide into some kind of socialist UBI induced economic coma. Everyone (left and right) seems enamoured with the idea that a government, any government, will save us.
  • SS
    Shanthi S.
    30 April 2020 @ 07:21
    Awesome show! Thank you guys. Can’t wait for the next one.
  • PC
    Paul C.
    30 April 2020 @ 07:13
    Blimey...who'd have thought we'd ever consider EM fx as the safer way to play the markets?
  • DL
    Dustin L.
    30 April 2020 @ 07:11
    Who and why would anyone be investing into these fundamentally weakened equity markets. Are buy-backs, once again, and algorithms responsible for the recent buying, with the markets in a clear bull mode!
  • BD
    Bryan D.
    30 April 2020 @ 07:10
    Agree there could be potential upside for the longer term economy here in that some companies go under and we have creative destruction for companies that were just surviving due to low rates but really should have gone under in the last decade. I am not trying to diminish the pain those individuals effected would go through but low rates in a benign credit environment creates zombie companies that a sharp contraction of cashflow may allocate resources better from a longer term perspective and extend the economies potential. Hopefully the rebound will be enough to reallocate resources effectively though I wouldn't bet too much on it.
  • SK
    Shiu K.
    30 April 2020 @ 04:28
    Re EM FX, any word on why there is no more talk of Yuan devaluation ? Wasn't that suppose to be the next big thing?
    • IP
      IDA P.
      30 April 2020 @ 06:06
      on https://www.eri-c.com/ there is an article on how China may peg the Hong Kong dollar to the CNY and no longer to the USD and in this way avoid devaluation for a bit
  • mr
    matteo r.
    30 April 2020 @ 05:24
    Russel 2000 +4.8%, Q1 GDP -4,8%. No way the see macroeconomics in the real economy with the FED doing QE infinity.
  • SN
    Shmuel N.
    29 April 2020 @ 22:44
    It is refreshing that the tune changed from full bullish to natural. I do think that you miss quite a lot on that crazy move up.....
    • SN
      Shmuel N.
      29 April 2020 @ 22:46
      ***from full Bearish to natural***
    • RC
      Ron C.
      30 April 2020 @ 04:42
      “Full bearish to neutral”
  • RG
    Richard G.
    30 April 2020 @ 04:23
    Another great episode from the RV team. I’d like to hear Roger dig deeper into the weeds in regards to how the Fed may end up succeeding in taking control of the equity markets compared to the BOJ efforts? Seeing the S&P go to 4000 and the implications of what it would basically mean would spook a lot of people out I think.
  • MT
    Matthew T.
    30 April 2020 @ 01:54
    Ash: It sort of reminds me of the Saturday night after a big night at the bar on Friday, you kind of pare back the spending a little. Roger: Maybe you do Roger is a legend
    • AB
      Ash B. | Real Vision
      30 April 2020 @ 03:54
      Epic. And totally unplanned. Very challenging to keep a straight face and continue the show...
  • AA
    Alberto A.
    30 April 2020 @ 03:16
    Thank you guys! always a delight to listen to Roger and his financial historic depth and Ash asking the clever and intelligent questions! 2 to tango!
  • jR
    james R.
    30 April 2020 @ 01:25
    Is it me or has the exhaustive focus of FX, Bitcoin, and Gold over the past two months come at the expense of, “hey, buy Intel or MSFT” 3 weeks ago. I like all u guys but i think you’re missing a Kuppy style voice in the rotation.
    • AN
      Andrew N.
      30 April 2020 @ 01:48
      Isn't RealVision a macro investing channel?
    • jR
      james R.
      30 April 2020 @ 02:01
      u call a 30-40% move in all the major indexes what u want, but to me, that’s Macro my man.
    • SG
      Sebastian G.
      30 April 2020 @ 03:12
      I think this is an interesting point. I love Real Vision's content - it is the best out there without doubt. But I appreciated Roger's comments today that he can't rule out the Fed's unprecedented stimulus (and potentially more of it in the future) as being sufficient to prop the market up, however artificial that may appear from a historical or fundamental point of view. I think Real Vision have made an effort in recent weeks to have guests on various programs for a diverse range of opinions and it always frustrates me when people down vote those presenters or scream from the rooftops about the quality of them. I personally would have liked to have seen a bit more of it early on. I believe a skill to investing is being able to juggle competing ideas in your mind, without absolutely dismissing either. Roger's example above demonstrates that point. Cheers.
  • MF
    Mike F.
    30 April 2020 @ 03:06
    I’d just like to commend Nick’s front end section. The roundup of key events with the odd comment thrown in where appropriate is excellent. Quick, interesting, and thought provoking. Well done.
  • TS
    Tom S.
    30 April 2020 @ 00:02
    Great! Can't believe the number of balls Roger keeps in the air at once. Should have been a juggler.
    • DS
      David S.
      30 April 2020 @ 02:03
      Great comment. I think he started with wine bottles and worked up, DLS
  • LS
    Lemony S.
    30 April 2020 @ 00:04
    What's with questions like "Does this feel hopeless ...?" Ash, this virus does not cause substantial symptoms in 99.9% of people!
    • DS
      David S.
      30 April 2020 @ 02:01
      We need to wait until 100% of the population is infected to be sure. I hope you are right. As we end lockdown, we may get a better handle on this. DLS
  • MH
    Martin H.
    30 April 2020 @ 01:24
    This has scared the crap out of the free spending boomers on all fronts, health, investment, income. I doubt that they will bound back hard even if the younger folk do. They alone will be enough to keep it slow for quite a while IMO.
    • DS
      David S.
      30 April 2020 @ 01:55
      The boomers from all over the world were spending money all over the world. I agree with you that this does not look good on many fronts with the virus stalking the earth. As Mr. Harrison said a couple of days ago, he and his family will be vacationing closer to home. Hopefully, boomers will do the same and put some money back into the economy. DLS
  • WB
    William B.
    30 April 2020 @ 00:48
    I have one of those geography degrees. Undervalued and misunderstood program that can be applied in so many career fields.
  • MC
    Michael C.
    30 April 2020 @ 00:03
    Thanks Roger and Ash. Together you have a great synchronicity. On Rogers point about rules based systems and passive investing driving markets (as opposed to active management) can you do a segment on the rebuildining of leverage driving returns in the current reflation?
    • LS
      Lemony S.
      30 April 2020 @ 00:27
      Yes, this segment got interesting in the last 3rd, especially. Well done.
  • LS
    Lemony S.
    30 April 2020 @ 00:17
    At about 18 and a half, I love Roger's recap on history and what he thinks ... is he still staying put until it bounces back to the pre-crash highs? It seems so and almost that he believes the real problem is in FX, just like Johnson, Green, Pal and the gang.
  • DS
    David S.
    29 April 2020 @ 23:57
    If the American consumer is in trouble, the world economy is in trouble! When the dust settles some companies will do well during and/or after the crisis. Other companies are sick, on ventilators, dying or bankrupted. I will hold cash until I see some chance for a recovery in the economy, not just hopeful bidding up of stocks passively. The other option is Mr. Green is correct and valuation will not matter He would prefer valuations matter, but he is also a realist. In that case I will lose out. I even expect gold to go down during the pullback for normal reasons. I am hopeful that new therapeutics will help treat the virus. Therapeutics, however, are not a cure. The virus will be with us until the vaccine is effective. Since I am in the high-risk category, I hope my life will be back to normal in the Summer of 2021. I still consider myself one of the lucky ones. DLS
  • ns
    niall s.
    29 April 2020 @ 23:50
    I enjoyed tonight’s show Roger certainly has no need of Ambrose Evans - Pritchard.
  • JS
    John S.
    29 April 2020 @ 23:33
    Excellent as usual
  • CB
    Clifford B.
    29 April 2020 @ 23:21
    I too have cut spending in certain areas however my rum budget has exploded somehow....
  • ER
    Ernesto R.
    29 April 2020 @ 23:08
    excellent view thanks to all the team
    • AB
      Ash B. | Real Vision
      29 April 2020 @ 23:12
      Thanks, Ernesto.
  • AJ
    Adam J.
    29 April 2020 @ 23:11
    "Maybe you do" - LOL!
  • pa
    philip a.
    29 April 2020 @ 22:40
    Enjoyed this discussion. Roger are you looking to go short? Maybe we'll actually have a "Sell in May and Go Away."
  • SH
    Si H.
    29 April 2020 @ 22:37
    Thought this was very insightful. Roger knows his stuff.
  • TL
    Tom L.
    29 April 2020 @ 22:21
    Loving your work guys!