Daily Briefing – May 6, 2020

Published on
May 6th, 2020
Duration
38 minutes


Daily Briefing – May 6, 2020

Daily Briefing ·
Featuring Peter Cooper, Ash Bennington, and Roger Hirst

Published on: May 6th, 2020 • Duration: 38 minutes

Ash Bennington hosts Real Vision's Roger Hirst. Today, Bennington and Hirst explore the relationship between fundamental and technical analysis in the context of the Coronavirus crisis. The pair also discuss the role of the European Central Bank in light of the recent landmark decision by the German constitutional court.

Comments

Transcript

  • GA
    Gabriel A.
    13 May 2020 @ 17:05
    great video, love the work you guys do. I'd love to be on your show and talk about how me as an fine artist, learned to invest and to trade, lot of which your shows have confirmed. Thank you
  • GA
    Gabriel A.
    13 May 2020 @ 17:04
    great video, love the work you guys do. I'd love to be on your show and talk about how me as an fine artist, learned to invest and to trade, lot of which your shows have confirmed. Thank you
  • JB
    Jose B.
    8 May 2020 @ 07:49
    The issue of proportionality of the German Constitutional Court has nothing to do with the capital key. It’s something related to the proportional use of monetary policy as in the reasonable use of monetary policy. That’s even more clear when you realize that the court hasn’t had any issue with PEPP (the bond buying program for the pandemic), which is the one for which the ECB has said to manage flexibly with respect to the capital key. Hope this helps. Jose
  • JP
    Jan P.
    7 May 2020 @ 01:15
    Would it be possible to tone down the "...aren't we having a wonderful conversation" and "...isn't this just great, us talking here" ?
    • DP
      Duane P.
      7 May 2020 @ 01:53
      Beat me to it. Totally agree.
    • JS
      James S.
      7 May 2020 @ 03:37
      Nothing wrong with a bit of passion for your work
    • RK
      Roger K.
      7 May 2020 @ 11:58
      Not this discussion though. Some guest are rumbling here for hours and wasting time , but with Rogers 20 minutes well spent. Thank you Roger for not wasting time!!!
    • ef
      eric f.
      8 May 2020 @ 00:16
      Not intrusive at all. A little feel-good self-promotion is no big deal. It IS a business that needs subscribers. Far better than breaking up the conversation with ads etc.
  • DS
    David S.
    7 May 2020 @ 22:11
    It cost Germany two trillion Euros to unify the East and the West. They did this for Germans, but they will not spend many more trillions trying to bail out Euro debtor countries. They will go to the brink to keep the Euro low for their export economy. When it comes to paying off the national debts of other countries forever - Rome was in debt - they know it is impossible to save the Euro. DLS
  • FB
    Frank B.
    7 May 2020 @ 21:04
    The moment during the intro Peter said football league instead of soccer I knew this was gonna be a great segment.
  • RM
    Russell M.
    7 May 2020 @ 12:41
    If you want to possibly add to the depth of your framework, look at Lyn Alden Schwartzer's explanation of how the modern western governments are working now. It provides deep insight into the disconnect between the markets and economy. https://seekingalpha.com/article/4343574-qe-mmt-and-inflation-deflation . She is brilliant.
    • IZ
      Ileana Z.
      7 May 2020 @ 18:34
      Thanks so much for the link!! Its the clearest explanation of all of these CB/Gov machinations I have read. I forwarded it to my three adult children as well. We all need to understand what is going on with the foundations of "money" to help us better navigate our future.
  • DS
    David S.
    7 May 2020 @ 18:10
    SBA wage protection plan allows payment up to $100,000 in wages per employee. This looks like another bailout for the rich. Maybe this is why so much passive money is going into the market. A small business may have five employees earning minimum wage and an owner paying himself $200,000 per year. He pays minimum wage to the employees and $100,000 to himself from the Cares Act. Funneling trillions of dollars through the Care Act to enrich the rich was the intent. Am I misreading something? DLS
  • SB
    Stephen B.
    7 May 2020 @ 17:26
    I believe that the German constitutional court ruling is a big deal. Remember: (i) Germany has a deeply engrained nervousness of loose money, given the Weimar Republic and WW2 experience; (ii) Given that philosophical disposition, they were very attached to the old DM and very suspicious of the Euro; (iii) They were coerced/persuaded into the Euro project only because they were given broad assurances as to how the Euro project would be managed; (iv) Since then, the ECB + EU + individual countries have violated many of those original founding principles; (v) arguably, the German elites knew that those principles would be violated and planned to use a future crisis to justify greater integration. Nonetheless (just as in Britain with Brexit) a significant portion of the German population have a very different view (one of reasons the German Government were so tough on Greece, reflecting domestic political opinion); (vi) This constitutional court ruling is a big deal, therefore, as it is close to a declaration of war against the ECB; (vii) Temporarily, Merkel has enjoyed a boost in poll numbers due to their handling of the coranavirus but she still needs to tread very carefully and cannot be seen to challenge the constitutional court. Time will tell but this ruling may, potentially, be as significant a moment as 2016 was to the UK's relationship with the EU.
  • DO
    Daryl O.
    7 May 2020 @ 08:19
    Totally appreciate these updates. Rhetorical question: tell me where else on the planet you get to hear quality discussions like this? Awesome resource.
    • AB
      Ash B. | Real Vision
      7 May 2020 @ 13:06
      Thanks, Daryl. Much appreciated.
  • KB
    Kevin B.
    7 May 2020 @ 12:55
    A number of these briefings (as well as other interviews) have referred to the Fed’s ability to drive the market up (regardless of economic fundamentals), or at least to prevent it having another severe decline. I do not understand how that works in practice. The Fed is not actually buying stocks (yet). If they do then this analysis goes out the door. But without direct purchases any deployment of Fed liquidity has to go through indirect paths. All I have found for these are: 1) Direct lending to hedge funds through the repo window. 2) Indirect lending through banks both to hedge funds and to businesses for buybacks. In earlier times these paths coupled with a risk on appetite underpinned by the Fed put were enough to move things up but now they seem to be diminishing or disappearing. Buy back activity has collapsed and while the Fed is still manning the repo window bank credit availability is being significantly curtailed with tighter lending standards introduced. In any event there is no evidence of bull risk appetite among hedge funds. According to analyses by Nomura’s quants they are not particularly active in this market on the long side. They’ve mainly been closing short positions throughout this bull phase. Also there’s nothing to prevent them from becoming aggressively short rather than long if that’s where they thought the better prospects were which puts the Fed's ability to halt a decline in question. If Fed liquidity is driving this bull run why has S&P Futures volume collapsed by over 50% since the rally began. I tend to suspect Jay Powell may be just another “Wizard of OZ”. The only actual power he exerts is to create belief in other people that he can actually do stuff. If I’ve missed anything please let me know.
  • IH
    Ian H.
    7 May 2020 @ 10:41
    One of the best. Really enjoyed Rogers observation of earning over the last 10 years going up a little (~0.75x), but the market went from 666 to 3.3k (~3x)
  • PJ
    Peter J.
    7 May 2020 @ 09:50
    Excellent, IMO Roger’s Europe based view view adds significantly to the brief. Great contributions.
  • SL
    Stephen L.
    7 May 2020 @ 09:04
    Good intro, well done peter
  • MD
    Mark D.
    7 May 2020 @ 09:02
    So great to hear you mention Hedgeye, them and RealVision leading us through these times. Credit to the guest you guys are bringing us also. Well done
  • ns
    niall s.
    7 May 2020 @ 00:36
    Question for Roger , where are you on Raoul's theory of the baby boomers becoming net sellers and the incremental buyer of the S&P drying up . Appreciate your excellent insights on the financial markets.
    • CM
      Chris M.
      7 May 2020 @ 01:58
      Not Raoul, but as a boomer, not sure we will be net sellers. Fed is forcing everyone into equities by driving bond rates to zero. After 2008, this lasted almost a decade. After 2020, it may last the rest of my lifetime. So with no return from bonds, only other options are real estate, MLPs, REITs, gold, bitcoin, private equity or playing in the stock market.
    • PC
      Paul C.
      7 May 2020 @ 07:00
      As boomer i’m livid that i’m being driven further along the risk curve for any sort of yield. When this all goes bang, which surely it must, there will be a generation with pitch forks outside the Fed, demanding reparation. And they’d have a good argument to.
  • II
    IDA I.
    7 May 2020 @ 05:51
    On the ERI-C website there is an excellent comment on the European situation https://www.eri-c.com/news/411
  • BA
    Bob A.
    7 May 2020 @ 03:56
    I always enjoy Roger. His comment about European banks and also German banks is especially interesting. Perhaps we will see the ECB over time become a CB with sime teeth and some swagger.
  • JS
    James S.
    7 May 2020 @ 03:41
    Look forward to hearing regularly from Roger about the evolution of his framework and how it's interplaying with Raoul's Unfolding
  • DL
    David L.
    6 May 2020 @ 23:47
    Great discussion, especially the point about the stock market and the real economy being two distinct things. I can't help thinking, however, that at some point problems in the real economy will spill over into stocks and the financial markets. Any ideas about likely avenues for this influence? Perhaps if we are going into widespread insolvency the banks will be hit?
    • TM
      The-First-James M.
      7 May 2020 @ 00:37
      A collapse in advertising spend negatively impacting both Google and Facebook.
    • JD
      Jesse D.
      7 May 2020 @ 02:54
      Part of that point is that the S&P is not the market. The S&P/QQQ will make up most of the “survivors”. If a person want to play the economy I think they have to get away from two index’s.
  • DP
    Doug P.
    6 May 2020 @ 22:38
    I’m getting video but no sound, although I could hear the opening music. Any else?
    • DB
      Douglas B.
      7 May 2020 @ 02:32
      Nope
  • MS
    Mark S.
    7 May 2020 @ 01:57
    I am a little surprised at Rogers comment about WTI and that price swing being behind us. Cushing storage is full. FULL. So whoever owns those futures is taking delivery whether they want to or not. So if I own the futures for June or July and I was hoping to sell the contract for the gain or loss, who am I selling it to? There might not be much of a bid. Nobody can store it. So the next question is what am I willing to PAY to get rid of my long future contracts?
  • CB
    Clifford B.
    6 May 2020 @ 23:38
    Great discussion. Form your thesis, then find people who disagree with you if you REALLY want to learn anything.
    • AB
      Ash B. | Real Vision
      6 May 2020 @ 23:41
      Ha. Yes. Very well said, Clifford.
    • DP
      Duane P.
      7 May 2020 @ 01:56
      Good point! This is good info but it's a little bit too much, "Yeah, I agree" too often.
  • PB
    Paul B.
    7 May 2020 @ 00:55
    You can probably get Greer on once every 2 or 3 months, above that and you guys are going to get flamed again. I get you are trying to provide a balance, but you've had him on twice now in pretty quick succession, as such you tilted the balance and got punished for it.
    • B
      Bob .
      7 May 2020 @ 01:28
      I think Greer is an excellent Friday guest. He ties up the week and talks about the next week.
    • CM
      Chris M.
      7 May 2020 @ 01:53
      Made this point in a long post yesterday, Greer can be a good guest, but can't be every 2 to 3 months to be effective to RV viewers. Ash, you did a good job today tying in why you had Greer as a guest yesterday. His conversation is relevant, just need to bring it together with the rest of the daily briefings. As a subscriber to Rosenberg's research service (a macro service), David does a weekly tech report, which one may not expect from an economist, but it adds to his daily reports. Greer as a trader or another technician would make an excellent weekly guest where you can tie in RV's macro conversations to the technicals that can drive ST trading (particularly with all the programmed/algo trading we have today).
    • DP
      Duane P.
      7 May 2020 @ 01:54
      Bob A, there's more to a week's review than tape chasing.
  • OT
    Omar T.
    7 May 2020 @ 01:15
    So if no buybacks how is the money from Fed getting to the market?
  • DL
    Dominic L.
    7 May 2020 @ 01:02
    Really great discussion today, gentlemen—thanks.
  • AS
    Andrew S.
    7 May 2020 @ 01:01
    Love your work guys but this really does sound like a shouting match as the microphones pick up the room reverberations. I recommend not use your laptop microphones and plug in an external USB microphone or at least use earbuds. I am starting to find this briefing abrasive to listen to.
  • SP
    Saxon P.
    7 May 2020 @ 00:55
    Really enjoy the daily briefing. Hope you keep it going when Corona is finally behind us!
  • RT
    Rob T.
    7 May 2020 @ 00:16
    RV is a great platform. It was great before COVID and I think with the Daily Briefing it's taken on a different pace. Now with both the stress of the lockdown and the market volatility, I feel a more emotional element in these comments. From a product perspective, is there a potential to create an interaction medium that allows both a release valve for views and emotions that still supports healthy debates? I've never been a polling person but it could be interesting to see a Q&S style approach that supports both differences of opinion and healthy debate. It would be cool to offer polling support (either solely from questions posed on the RV end or at the user end, that would allow an element of opinion as well as subsequent comments to explain / debate those views). Basically instead of comment post, have a poll post and people can interact with the poll and add comments. As a techie, yea sucks to modify etc. but just a thought. Anyone have any views?
  • AS
    Alexandru S.
    6 May 2020 @ 23:23
    Any comment on the new 20Y bodnd and the move in TLT?
  • MP
    Mark P.
    6 May 2020 @ 23:09
    Great to see you back, Roger! Roger that.