Daily Briefing – June 4, 2020

Published on
June 4th, 2020
36 minutes

Daily Briefing – June 4, 2020

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

Published on: June 4th, 2020 • Duration: 36 minutes

Senior editor Ash Bennington joins managing editor Roger Hirst to discuss the latest developments in macro, markets, and coronavirus. Bennington and Hirst talk about the trajectory of the global recovery and growth—specifically, they explore the exponential increase in the savings rate, the vicious cycle the Fed might find itself in as they continue to support asset prices, and the potential for "zombification" of corporations through misallocated capital. They also dive into how sentiment is currently driving financial markets, why passive investors may not be prepared for the air pockets of potential drawdowns, and how easy monetary policy actually encourages growth deflation. In the intro, Nick Correa analyzes today's ECB announcement to expand its Pandemic Emergency Purchase Program (PEPP).



  • TC
    Thomas C.
    5 June 2020 @ 18:31
    Yep just keep going with the sceptical and bearish views snuggly thinking you're correct. Well you will right one day but in the interim you miss lots off moves. Being too attached to either side is a bad idea and shoes lack of knowledge
    • RG
      Ryan G.
      8 June 2020 @ 21:00
      Thanks for the input, smarty pants....
  • CN
    Charles N.
    5 June 2020 @ 01:34
    Thanks, guys. A quick reaction to your touchpoint about emotional markets driven a lot by the new players as evidenced by 3 million new brokerage accounts in the last couple of months. My take is that most of them are looking at the markets in the same ways that they look at video games or internet poker, et al. Used to sitting at keyboards, watching screens intently and playing and winning constantly (with no consequence) is a mighty strong brew to swallow. As I understand it,the same parts of the brain are lighted in video games as are lighted in gambling as are lighted in the brains of cocaine addicts. Add in the group-think in the Robinhood world or stimulated by high pitched, emotionally charged "news" on financial channels (save for RV, of course) and we should, as you point out, expect irrationality to continue for a while. McKay and Kindleberger are still worth reviewing. Cheers to All.
    • BB
      Bob B.
      7 June 2020 @ 02:33
      Only addition would be that trading is always irrational just sometimes trading aligns with our beliefs.
  • BS
    Bevyn S.
    4 June 2020 @ 23:40
    What does it take for you guy to change your bearish outlook? Some good indicators: .618 retracement? Check Breadth? Check Decelerating unemployment? Yes Dollar backing off? Check The only thing the confounds me is the yield curve, which appears like it wants to break out. But is still pretty low.
    • BS
      Bevyn S.
      4 June 2020 @ 23:47
      I think it's important to lay out the conditions for when you believe your thesis will be proven wrong. Otherwise you guys come off as perma-bears.
    • KA
      Kevin A.
      5 June 2020 @ 00:38
      RV was selling the bottom in equities. I have no problem with that at all. I’d love to see them do a deep dive on what they missed. They have made plenty of good calls over time, especially on USD interest rates.
    • AN
      Andrew N.
      5 June 2020 @ 00:42
      High retracement and market breath are just symptom of an irrational "market" that is disconnected from the fundamentals. That's been discussed at length. Decelerating unemployment is great, but just that - a slowing of the worsening, and the first step on a long road to recovery with ongoing pressure on corporate profits. I agree that the dollar weakening is curious. Could be we're sliding down the "smile" (discussed yesterday), or could be party due to uncertainty over US domestic security/future.
    • BS
      Bevyn S.
      5 June 2020 @ 01:28
      Lack of breadth is hallmark of a bear market bounce. The rotation out of the big name "defensive" tech stocks is a big deal The US stock market has been overvalued for the last ten years because we've become the piggy bank for world savings... This hasn't changed (yet)!!!
    • GF
      Gordon F.
      5 June 2020 @ 01:53
      When we consider what is likely to happen to earnings over the next quarter or two, it seems like the P/E ratio is likely to hit all-time highs, assuming prices stay where they are or continue to rise. I tend to agree with RV that the stock market at present is overpriced and fragile. Doesn't mean it's about to break, just that the risk is high.
    • BS
      Bevyn S.
      5 June 2020 @ 02:01
      So what? The S&P 500 P/E ratio peaked > 120 in June 2009, just after the bottom
    • DS
      David S.
      5 June 2020 @ 02:14
      Bevyn S. - There are always Bulls and Bears. All I ask of RVTV is honesty. You have made up your mind. Be happy. DLS
    • BS
      Bevyn S.
      5 June 2020 @ 02:23
      Hey I'm just playing devil's advocate here. Don't silo yourself. Listen to both sides.
    • BS
      Bevyn S.
      5 June 2020 @ 02:30
      Also, it's pretty clear that there are massive income imbalances across the entire globe (capital is favored over labor) which imo is causing insane valuations (savings glut). I just think this gets duked out in the political arena before financial markets structurally change and revert to more historic 'sane' levels. We have not seen structural changes yet, and CB / governments are doing everything they can to prevent that (knowingly or not)
    • TN
      Tim N.
      5 June 2020 @ 04:58
      Good comments. I think we need to keep our minds open. At the moment its not clear to me whether this is just a bear market rally or the real recovery. Too many uncertainties in relation to the Virus reappearing for a second act, and the speed /extent of any economic recovery. I am hedging with a small equity position in oil and gold miners, but mainly in cash, with some gold and bitcoin. Patience and caution are needed in the current climate IMO.
    • SK
      Shiu K.
      5 June 2020 @ 05:07
      Roger said it's "time to lighten up" but if one followed Real Vision, they already sold at S&P 500 2200.
    • RH
      Roger H. | Real Vision
      5 June 2020 @ 08:37
      Hi Shiu and Bevyn - please see my comments lower down
    • SB
      Stewart B.
      5 June 2020 @ 13:01
      I'm a perma-bear who is trading bullishly. Central bank QE purchases are likely to continue for years, and scaled up for even the slightest crisis. Eg, there has been flooding in Texas, hence the Fed should step up the amount of corporate bonds it is buying. Each $1 of central bank purchases assets creates significantly more than $1 of indirect asset purchases as each asset holder shuffles out the risk curve. I hate this market, but the only way to trade it is with the trend. I would not be surprised to see 4000 on the SPX by year end (not a prediction, just possibility). Our politburos won't see this as a bubble, they will be patting themselves on the back instead. Keep the wind at your back, until you're sure that the tide has turned.
    • BS
      Bevyn S.
      5 June 2020 @ 19:10
      Hey I get it. We're at a unstable point in the private sector credit cycle, almost a hundred years in the making. However, until we start consuming more capital via closing income gap, the Fed chooses not to provide liquidity and not to reflate the bubbles (and thus allow deleveraging/collapse of the system), or politics (domestic or global) change the structure of the market that reduces foreign capital and manufactured goods flowing into the US, it'll just get more crazy as the liquidity continues to trickle up to high income savers / speculators / investors. Bubbles will continue to form and pop. We'll probably continue to see these crazy vol spikes, no doubt about that
  • GC
    Gino C.
    5 June 2020 @ 18:01
    I just want to reiterate… We really need to have a technical analyst expert on the show at least once a week. The problem is that there often is not a difference between being early and being wrong. While the RV consensus view may ultimately pan out we could all lose a generation worth of wealth while we wait. Look at Peter Schiff for example; he’s been singing the same song for 11 years now, and eventually he’ll be right but his audience will be broke. Let’s not go down the same road. Thanks to the RV staff for your excellence.
    • DR
      Derrick R.
      5 June 2020 @ 18:25
      This is what I was trying to communicate in my comment earlier as well. So far I have been more or less doubling down on the macro bets as they have edged down, I feel I’d rather be churning through successful trades while we wait for indications these macro ideas are coming to light.
  • DR
    Derrick R.
    5 June 2020 @ 17:54
    Is insolvency not even a concern anymore? What’s to stop the debt binging and fake recovery when the administration and fed only care about STONKS GO UP? https://finance.yahoo.com/news/hertz-possibly-worthless-equity-soars-125820858.html?.tsrc=rss
  • MC
    Michael C.
    5 June 2020 @ 07:08
    Something you didn't mention Roger is how the market structure (passive/rules trading) makes leverage increase as VIX drops. Central banks have just encouraged the same behaviour, renting the rally via repos and swaps (where are we at with funding the carry trade now?). Can you cover this aspect in your next appearance and discuss the potential for a 2nd liquidation? Thanks
    • PC
      Peter C.
      5 June 2020 @ 09:45
      I wanted to ask the same question. Since mid May repo flows are about 50 billion USD daily again. The short gamma trade is again active and we see the impact of it on the VIX, which is squeezed in a narrow downward channel. With a VIX still at twice the level a Var shock looks less probable at the moment but what about the impact of a change in market structure? As a lot of the dependable inflows (pension and buybacks) are replaced by an emotional herd of FOMO traders, doesn't this mean that the market is more at risk of a volatility event that blows up the gamma trade? Also, what would happen at that moment? Will we see a similar impact on the market as in March or will the FED back-stop it immediately and limit the downside, e.g. to 10-20% max? The FED does not buy equities (yet) so I wonder how they would calm markets? Adding a few extra trillion in QE may not work a second time. I guess buying equities (ETFs) would be the only option. I aslo fear they would close markets first.
    • PC
      Peter C.
      5 June 2020 @ 15:43
      Correction: we had 106 billion repo accepted today. It looks a lot like how it was mid February to me.
  • MT
    Mark T.
    5 June 2020 @ 15:21
    Unemployment rate, jobless claims go up, stocks go up. Unemployment rate goes down, nearly two million new jobless claims, stocks go up. Negative GDP, negative corporate earnings, stocks go up. Something is rotten in the city of Denmark.
  • DR
    Derrick R.
    5 June 2020 @ 13:31
    This is great info but we are missing out on so many great trades in this environment. BRZU is about to explode this morning, for example. I’m starting to wonder why if we are having daily updates, we aren’t getting some daily or at least weekly trade ideas, while I wait for my macro recommendations to pan out here, my buddies are executing multiple trades of 50% plus gains in succession. I admit maybe I’m looking for an altogether different thing than RV wants to provide, I appreciate macro but I think I’m missing so much right now, perhaps Tony Greer’s product is what fills this gap? I don’t know
  • NR
    Nathan R.
    4 June 2020 @ 23:01
    I think Julian’s “Sell the USA” is about to hit...
    • DB
      Douglas B.
      5 June 2020 @ 02:39
      Can you elaborate?
    • NR
      Nathan R.
      5 June 2020 @ 13:20
      Very roughly: Dollar, treasuries and stocks all get sold together as growth prospects dim and RoW takes profits and rotates...
  • GS
    Gary S.
    4 June 2020 @ 22:34
    I never once heard Roger come out and say markets will go to 0.638 fib, now he says it was expected. RV has been bearish all way up and now it will go down in months to a year!!???? So another bearish view... but hey it may go to 4000 ... talk about a bob each way
    • EH
      Edward H. | Real Vision
      4 June 2020 @ 22:37
      Actually, Roger has been saying the market *could* retrace all the way to all-time highs. He also said that the 61% retracement would be significant in terms of upside momentum because, as I understood him, that would change him from looking at retesting lows to retesting highs. I think he has been very consistent.
    • GC
      Gino C.
      5 June 2020 @ 01:21
      I would actually like to see more technical analysis during times like these the fundamentals are one thing but the markets going to move homework is usually move and I’m not smart enough to know what’s going on
    • DB
      Douglas B.
      5 June 2020 @ 02:41
      Selective listening
    • SM
      Shawn M.
      5 June 2020 @ 05:18
      Listen Gary S. If you were looking for like a short term answer to the market action, I think you're missing the real value that these gentlemen are offering. Macro is the ultimate chess match in global investing, not to mention we are in the most trying times markets have ever witnessed because of the absolute decimation of capitalism as we all grew up knowing. These gentlemen are putting their thoughts out there for everyone to criticize as they see fit at the detriment or gain of their reputation not only personally but professionally but personally being as they are such a small sector of the financial community right now. Fantastic content and my hats off to all at RVTV. MUCH LOVE AND MUCH RESPECT. TY
    • RH
      Roger H. | Real Vision
      5 June 2020 @ 05:58
      Hi Gary – you are correct in that I never said “markets will go to 0.638 fib”. I have been talking about a framework and possibilities rather than certainties throughout, because a framework is relevant to everyone. However, here are a few of the signposts that I previously highlighted (obviously these are selective and therefore biased, but they are taken from transcripts): On March 18th I made the following observation in the comments section. “Its worth being aware that it's quarterly expiry week …..We have seen many instances of reversals (in both directions) around these expiries …. BUT it's not a statistically relevant observation. I factor the expiry potential into the framework, rather than use it as a hard and fast rule.” The market low was the day after expiry. I didn’t predict it. I outlined it as a possibility On March 25th I said: “So we should expect some bounces. And even if we got the basic Fibonacci bounce, 38%, that would take you to 2,640 on the S&P. We're still 3% or 4% away from that.” On March 26th I said: “I think the rally is more a function of how oversold we got post expiry and now rebalancing into the month end. I think I've mentioned a few times 2640. Well, we closed not far off that already tonight. Then the biggest target would be 2900. Just about 2900, which is the 62% retracement, so you go 38, 50, 62. I'm not saying we do that, but those would still be targets.” On April 8th I did a slightly deeper diver into Fibbs: “I use Fibonaccis not because I believe in them religiously but I just find them a great guideline. …. it's a very dangerous bit between the 38% retracement and the 62% retracement. Generally, we can expect markets to bounce at least 38% of the original selloff and more likely 50% to 62%. We can actually compare it to pretty much all these big selloffs that we've had. 2015, 2016 saw, I think, around about those levels of 50%, 62% rebounds.” On April 9th I looked at comments from Mike Green: “What he's also saying is that the size of the response can be unlimited, and theoretically, it can. It's also why I said yesterday why I'm happy to wait out until I see a new all-time high in the equity market, which obviously a significant way above where we are. Because if we do, then Mike's absolutely right. Then in that Dr. Strangelove way, I'll come to stop worrying and come to love the Fed. Now, I don't know, my gut feeling is that the assumption from Mike is probably correct. That's another reason why here we are, we've got a 50% retracement nearly all these big selloffs get to 62. If we get to 62, I'll start thinking about being maybe shorting it or taking off some more equity, but I'll have tight stops and then if I'm wrong at 62, I'll wait for the all-time highs and I'll have a drink to Mike Green. His analysis would have been correct.”
    • RK
      Roger K.
      5 June 2020 @ 08:53
      I normally don't praise people for the sake of praising them. To me Roger H is the only who does a decent analysis in a concise manner. Most of the guests and hosts are just rambling for hours with the boring rants with no real substances!.
    • RC
      Robert C.
      5 June 2020 @ 13:01
      That's a very good response and journaling, Roger, and the interview also of course. Thank you very much. Idea to RV: as you are an education platform as well, could you consider laying out the framework's and processed of thinking on all your own specialists (and why not, the people being interviewed) and have a separate section on your website for that where people can easily go read them and LEARN. Similarly like Hedgeye has laid out its framework on its website. Currently, people have to dig up all the transcripts and comment sections across the whole site and go to historical shows etc just to understand how some person's framework is.
  • IH
    Ian H.
    5 June 2020 @ 12:58
    That US10Y:US2Y spread I'd imagine is very bullish? Perhaps I'm misunderstanding.
  • SB
    Stewart B.
    5 June 2020 @ 09:29
    Spot on. It is good to hear someone else acknowledge that lower rates and QE actually lead in the longer term to stagnant/lower growth. This is not just through misallocation and overcapacity, but fundamentally, if you supply the market inelastically funding at 0%, you will get 0% growth. In other words, when r < r* (where r* is natural rate of growth in the economy and r is the central bank rate), it will tend to pull r* down in the long term. Here is an example which clarifies. Imagine an economy with a 3.5% short end rate. GDP growth is 4%. Let's assume that banks lend freely at this rate. Also imagine that you are a project manager and in the economy there are three types of projects. One set of projects has an expected return of 4%, the next set has an expected return of 3% and the last 2%. Which do you borrow to fund? The answer should be clear; the 4% projects. So, you, like all good entrepreneur will borrow at 3.5% to fund a new project that yields 4%. However over time, all the 4% projects eventually try up. Economic activity stagnates and GDP growth falls to 3%. Now the central bank cuts rates to inelastically supply the market with a 2.5% short end rate. Now, given all the 4% projects are done, there are only projects available that are expected to yield 3% and 2%. Which do you choose? Again, you borrow at 2.5% to fund 3% projects. This creates economic activity but eventually it is done and economic activity stagnates and GDP growth falls to 2%. Again, the central bank cuts to 1.5%. You as the project manager do the best you can, which is to borrow at 1.5% to fund projects with an expected yield of 2%. This is a very contrived example, and doesn't factor in the market price of risk. But hopefully it demonstrates why lower rates may stimulate economic activity in the short term but ultimately lead to lower growth rates in the long term. If in any doubt, take a look at the world over the past 40 years. Nearly every country has long end rates very similar to their nominal economic growth rates. Similarly, those countries that have tried to artificially supply the real economy with lower borrowing costs have ultimately found slower growth rates after this short term stimulus has passed. Unfortunately this is not something that central bankers realise.
    • SB
      Stewart B.
      5 June 2020 @ 09:30
      Apologies for the typos.
    • SN
      SAT N.
      5 June 2020 @ 10:55
      Thanks Stewart. Helpful. In your example, if the central had set the rate higher than 4% at the beginning, wouldn't the program manager have no projects to choose from that is profitable? Are you imagining that would force the manager to come up with something more creative project that could have higher than 4% return?
    • SB
      Stewart B.
      5 June 2020 @ 12:49
      Spot on Satish. Yes, it works the other way too, within reason. A simple example of that was when Volker hiked rates to 20% in the early 1980s. This meant that there were very few new enterprises which it made sense to fund, and hence loan creation dried up and went into reverse. After this stagnation, only projects with high expected yields existed. As entrepreneurs did these projects, we saw strong nominal GDP growth following this in the 1980s.
    • SB
      Stewart B.
      5 June 2020 @ 12:53
      Apologies, that should have read: Spot on Satish. Yes, it works the other way too, within reason. A simple example of that was when Volker hiked rates to 20% in the early 1980s. This meant that there were very few new enterprises which it made sense to fund at these high rates, and hence loan creation dried up and went into reverse. After this stagnation, and as rates began to fall, many projects with high expected yields existed as they had not been profitable when funded at 20%+. As entrepreneurs did these projects, we saw strong nominal GDP growth following this in the 1980s. A simple way of saying the same thing is that lowering rates brings forward not only consumption but economic opportunity too. Once held lower for longer, less economic opportunity will exist in the future.
  • NP
    Nick P.
    5 June 2020 @ 12:45
    Can we change the name of this show to the Daily Bear Report?
  • Dv
    Daniel v.
    5 June 2020 @ 10:40
    Hi Roger, can you please elaborate on short interest? Last Friday CTFC Futures pointed out that there are nearly 285k short future contracts in the SPX. In the other index (DJI, NDQ, R2K) the amount of shorts is much higher than the 1YR and 3YR averages. I think that's also behind this up move. There are still a lot of short contracts that need to be covered. Love your show guys! Many Thanks!
    • Dv
      Daniel v.
      5 June 2020 @ 10:41
      of course I mean: CFTC Non-Commercial Net Long Positioning
    • RH
      Roger H. | Real Vision
      5 June 2020 @ 12:26
      Hi Daniel - S&P e-mini futures shorts have moved considerably higher - this move actually started after 24th March, (the day after the lows) and has increased as the market has moved higher. This would either be hedging of the gains as the market rises or playing outperformance vs long single stocks and ETFs. The fall in short interest was within prime brokerage (hedge fund) accounts. The upside risk is that these hedges could now be lifted.
  • GC
    Gino C.
    5 June 2020 @ 01:23
    I think the RV subscribers could really benefit from having a good or even excellent technical analyst on board to give us a better idea what’s going on behind the markets. Fundamentals are one thing but these market movements are impossible to figure out for people like most of us. There are lots of great technician is out there can we please get one on staff did speak to us at least once a week? What would you guys are doing I just see an opportunity here to make things even better. Thanks as always!
    • RL
      Remmelt L.
      5 June 2020 @ 09:41
      I fully agree with you. 1 technical day would help so much. That we have a trader and tell us what we could expect in the week time. By the price. Because markets are not rational. Could you consider to do that? Have them in the team. For example Mish Schneider of the trader that you had in daily briefing a couple of weeks ago. He was the only person who predicted this.
    • JF
      James F.
      5 June 2020 @ 11:55
      They had Tony Greer on the April 24th daily briefing, from what I remember of the comments it did not sit well. But that might have been because he was predicting S&P going higher, which has happened. I also found myself disliking his views initially (as they were opposed to mine), but it was such an education to hear his psychology. So as a proxy for trader psychology in general it was a real window in to what is going on. After, by chance, I read Reminiscences of a Stock Operator. Then it all made sense. They helped changed my mind, and improved my ability to hear views I disagree with dispassionately. They also made me a little less prone to 'wanting' the market to do what it 'should' do. The market doesn't care. It does what it wants. I'd recommend both that episode and the book. Especially if we're now potentially entering the realm of an emotional market.
  • NL
    Nicholas L.
    5 June 2020 @ 11:34
    Always enjoy listening to Roger - clear, concise, easy to understand - thank you!
  • JB
    Jamie B.
    5 June 2020 @ 09:58
    When I look at the time left on the video and am disappointed it's not longer, I know I'm truly respecting the commentary. So many comments asking for more specific predictions but how is that possible when there's nothing to model off because this situation is so unique. Ash, Ed & Roger do an amazing job of making the best sense possible of a time that makes absolutely no sense at all. Well done guys, truly stellar job.
  • IP
    IDA P.
    5 June 2020 @ 05:54
    German yields are going higher because for the first time in years Germany is pursuing fiscal spending, this is the big change. I believe this is the reason for gold weakness, euro strength and bank rebounds. I wonder the implications for the DAX, stimulus is bullish I guess but higher bond yields reduce the actual value of future cash flows, so I don't see how this can be good for the dax. I hope Roger Hirst may comment on this, thanks in advance
    • RH
      Roger H. | Real Vision
      5 June 2020 @ 09:43
      Hi Ida - the fiscal side is key and the one to watch. We are starting to see the optimism that was concentrated in specific parts of the US now spread globally (EMFX have also broken higher: the Brazilian Real, despite unrelentingly bad news and data, has also strengthened significantly). Partly this is because other regions, such as Europe, are starting catch up on the accommodation front. The US went fast and hard. Early on, their stimulus was 2x that of Europe. With these latest increases (E600bn extra from ECB, extra E132bn fiscal from Germany), Europe is getting closer to parity. The potential for the EU to launch E500bn of non refundable bonds could also help stabilize the outlook further. Globally, fiscal stimulus should be putting upward pressure on long end bond yields, versus the QE bid from central banks on the other side. Higher yields should help banks (though a small part of the DAX now) and insurers (a bigger element in the index). The DAX also responds to global growth as it is an exporter: auto, chemical and industrial sectors have a heavy weighting (about 40%). So, if yields are moving up because of better growth prospects (perceived or real) then the DAX will perform well alongside higher yields. Over the last 2 years, the DAX has struggled when China growth was on the back foot (mainly 2018) - therefore watching how US-China trade relations develop maybe key to DAX relative performance.
  • SB
    Stewart B.
    5 June 2020 @ 09:33
    Good pick up on buybacks being confined to tech stocks.
  • JS
    Johannes S.
    5 June 2020 @ 07:02
    Dear @Ash, I love your segments and your analysis, you're an excellent interviewer. But please please please stop with the awkward and contrived referencing of other videos in the library. It is so obvious that your doing this since recently as a new template to drive more viewers to the site, but it just comes across as forced and unhelpful. You basically serve RV with this, not us. We're all adults and have paid our dues already, so if we are curious about other content in the library, we will find it. Apart from that, keep up the good work! :)
  • IP
    IDA P.
    5 June 2020 @ 06:20
    today was excellent thanks
  • IP
    IDA P.
    5 June 2020 @ 05:58
    'There is a vast pool of liquidity, much of it borrowed, under-pinning share prices and ready to move in on any setback. Only when the credit markets are disrupted … is the buying power undermined. The investment fundamentals now play little role'. from the book Capital Wars the rise in global liquidity. What I wonder if this holds up when you have a demand shock like now, other previous recessions were not demand shocks like now, there were financial shocks mainly (china devaluing, Vix crash, Fed tightening) . I hope you will continue to affront these topics
  • AA
    Aymman A.
    5 June 2020 @ 04:31
    Other than Robinhood, how are you quantifying the “emotional players” in the market are they of a significant enough size to matter?
  • mB
    marc B.
    5 June 2020 @ 02:28
    Great conversation as usual!
  • DS
    David S.
    5 June 2020 @ 02:21
    Really well done! Since I am in the overbought camp, it was great to see analyses of why this may be true. No one knows the future, but when a market looks forward to declining earnings with increasing stock prices, it surely is not value investors. Thanks for explaining so many possibilities for the money flowing into the market. One of the best Daily Briefings for me. I will watch it again and take a few notes. DLS
  • XM
    Xavier M.
    5 June 2020 @ 02:05
    Wonderful discussion as always. When will these policy works at the Central Banks realize that we must be made to take the bad medicine in order to progress? “How sweet it is to hate one’s native land and avidly await its ruin...and in its ruin to discern the dawn of universal renaissance.”
  • LK
    Lana K.
    5 June 2020 @ 01:15
    Really great discussion today, Ash, Roger and Nick. In addition to all the excellent points you make, the stock market has now become almost "the only game in town" for the average person to attempt to get a return on whatever savings they have. People pile in because where else can they put their money? Bond yields are historically low and now only do well when their prices rise. Property markets have been bid up fantastically over the last 10 years by easy money, but these will now be vulnerable. Younger generations have watched the Fed's success in preventing prolonged downturns over the last 10 years and confidently "buy the dip" under these conditions. So it appears things will continue like this unless and until a trigger occurs where the Fed is truly unable to backstop quickly (and fiscal response is too slow),
  • MD
    Matt D.
    5 June 2020 @ 00:59
    Nice point about the emotional angst Ash.
  • JG
    Jordan G.
    4 June 2020 @ 23:06
    Nick, love the pic stitching on ur blazer
    • NC
      Nick C. | Real Vision
      5 June 2020 @ 00:43
      Thank you Jordan! It's the only decent blazer I own : )
  • AN
    Andrew N.
    4 June 2020 @ 23:14
    I'm a biomedical scientist, and whenever I interact with colleagues (scientists and clinicians) there is a basic assumption that a serious 2nd wave of COVID will happen in the US in the fall. Literally to a person...nobody expects otherwise. This is based on: 1. The history of pandemics in the 20th century. They always involve multiple waves, based on season, with subsequent waves often being worse. 2. Basic virus theory. This virus is out there, very widespread, and will accelerate its spread when conditions are right. Many colds are coronaviruses, and there's a reason they're called "colds". The vast majority of people have yet to be infected with the novel coronavirus. 3. The current behavior of the coronavirus. It appears to be in exponential growth phase in many southern hemisphere countries (Brazil, Chile, Argentina, South Africa), which are now entering winter. It has been fully contained in Australia and New Zealand, but those are both islands with well organized governments and health care systems. I have heard one virologist confidently say "Our darkest month [in the US] will be October". Whenever I watch financial media these days, I feel like this is a gorilla in the room that nobody wants to address. At most, someone will give an analysis and then add the disclaimer "of course this is assuming that there will not be a second wave"...but I really do think a 2nd wave, likely worse than the first, should be incorporated into any base case. I'm not picking on RV, this is true for any financial media I've seen.
    • TB
      Tobin B.
      4 June 2020 @ 23:23
      Yea it will probably happen, so enjoy your northern hemisphere summer while the sun shines
    • MT
      Mark T.
      4 June 2020 @ 23:27
      What I see is data that says who is at risk, i.e. those over age 60 are 98% of deaths, the remaining 2% are those with comorbidity. But what I hear in the media is a narrative that we're all going to die. It's frustrating to have these two disjointed themes. I'm not concerned about a 2nd wave at all if measures are taken to protect those in the high risk groups. From what I understand about all viruses is we're all going to get them at some point.
    • PS
      Parminder S.
      4 June 2020 @ 23:35
      Trump wasn't president and there was no CNBC in previous pandemics. He said its over, so it must be.
    • BS
      Bevyn S.
      4 June 2020 @ 23:44
      Nobody talks about the fact that S America is in winter now!! Totally agree with this. I've been think this too over the past few weeks
    • AN
      Andrew N.
      5 June 2020 @ 00:19
      We're definitely not all going to die (of coronavirus). The true fatality rate is probably 0.5%-1%. If there is a serious second wave (seems likely) many places will go into lockdown again, and you can imagine the impact of that. If there are no lockdowns, imposed or voluntary, we could face breakdown of the medical system....which is why we went into lockdown in the first place.
  • jg
    jesse g.
    4 June 2020 @ 23:52
    Thank you Ash and Roger!
  • KC
    Kamil C.
    4 June 2020 @ 23:04
    Ash is right, stonks only go up :D
  • AS
    Alexandru S.
    4 June 2020 @ 23:03
    Maybe you can put this on the list of explanations for the price of FAAMGs... https://www.zerohedge.com/markets/swiss-national-bank-ready-buy-much-more-tech-stocks-weaken-franc
  • MT
    Mark T.
    4 June 2020 @ 23:01
    Ash/Roger/Ed- How significant is the retracement of the indexes since the FAANG + microsoft stocks skew them so much? Do the retracement levels need to be looked at in through this lens? How have retracement levels in the past been skewed by over-weighting? Thanks.
  • AC
    Ay C.
    4 June 2020 @ 22:51
    Great interview guys. Thanks.
  • TB
    Tobin B.
    4 June 2020 @ 22:47
    Great talk as always guys/mates! Wish I could do an "easy" video response… someday soon likely. appreciate the insight on 401(k) flows, I can say that I have a day job and I have changed my allocation back in October of last year actually I went to money market. Today I actually go lightly long again although I do believe we will see a pullback at these technical levels. Not tomorrow though it's Friday and there were 55b in repos this morning and 0b in reverse repos today afternoon. Question is, can that much liquidity overrun the inflows from passive. Put yourself in th central banks shoes, why do all this, why not do it at key times? What do humans always want more of (power). Really enjoyed the princes of the yen talk as it confirms a few long time held suspicions, and as always, keep up the great work! Tobin from Denver Colorado
  • DT
    David T.
    4 June 2020 @ 22:38
    Please, bring Daniel Lacalle for the European economic and political developments and ECB bailouts, especially in Spain.
  • DH
    David H.
    4 June 2020 @ 22:28
    What do we know about the dollar size of the "RobinHood" investors? The newbies. Is it significant or trivial. You noted the number of players, but the dollar value? As a percentage of 401K flows?
    • GS
      Gary S.
      4 June 2020 @ 22:35
      red herring...irrelevant information