Daily Briefing – October 6, 2020

Published on
October 6th, 2020
Duration
25 minutes


Daily Briefing – October 6, 2020

Daily Briefing ·
Featuring Haley Draznin, Ash Bennington, and Tony Greer

Published on: October 6th, 2020 • Duration: 25 minutes

Senior editor, Ash Bennington, joins Tony Greer, editor of the Morning Navigator, to examine the latest wild market swings. Despite a large selling episode on Friday with the announcement of President Trump being diagnosed with COVID-19, Tony discusses how the rally still has momentum as the macro indicators are still driving markets upward. Ash then asks how Tony is currently hedging the news of the president's health, and they talk about how FAANG is now getting pummeled even though the rally is still holding. They review historical examples of key anti-trust cases and share their thoughts on why breaking up big tech may catch retail investors flat-footed. They wrap up their conversation with Tony sharing some trading lessons he's learned from his experience and what he's looking out for next. Real Vision reporter Haley Draznin explains why stocks took a dive Tuesday afternoon after President Trump said he ordered an end to stimulus negotiations until after the November election.

Comments

Transcript

  • DB
    Daniel B.
    11 October 2020 @ 00:38
    Splitting tech companies or controlling their acquisitions, will essentially remove their dominance. Great for Chinese tech.
  • DB
    Daniel B.
    11 October 2020 @ 00:34
    Trump's recovery is a positive broader signal, that our health care system has developed significant understanding and treatment for managing the cv. The statistics strongly support strategically opening up the economy.
  • pd
    preston d.
    7 October 2020 @ 19:26
    Ash, great questions.
  • JS
    Jon S.
    7 October 2020 @ 01:18
    Tony is such a bull... even when he speaks about retracement he calls it „back and fill“. I think is good to have a bull like him. Nice interview to a bull. Ash can you ask him next week: Tony are you bullish? In the beginning of every Interview. Many thanks, Sir.
    • SM
      Sergio M.
      7 October 2020 @ 19:22
      price action though.
  • MT
    Mark T.
    7 October 2020 @ 19:11
    Don't like social media? Don't use it. Pretty simple. I get a kick out of how people complain about, say, Twitter, as if it's like the water or electric utility somehow messing with their water or electricity quality. You're choosing to use it and let it influence your life. It's up to you to turn it off.
  • OC
    O C.
    7 October 2020 @ 17:24
    "I always believe that prices move first and fundamentals come second" - Paul Tudor Jones
    • SM
      Sergio M.
      7 October 2020 @ 19:03
      real quote??
  • IH
    Ian H.
    7 October 2020 @ 18:13
    Tony really has a look of Henry Dean Morgan about him. It's like learning markets with Negan lol. Good interview though, I always look out for Tony's interviews, he makes a lot of sense.
  • DR
    Derrick R.
    7 October 2020 @ 17:05
    We call people who want to read and spread fake news and conspiracy theories “intellectuals”?
  • LB
    Lukas B.
    7 October 2020 @ 15:38
    FANG stocks didn't go up, so Tony sees a conspiracy.
  • GH
    Guy H.
    7 October 2020 @ 10:39
    Really enjoyable interview. On topic, few distractions and something for everyone. Thanks to both.
  • NL
    Nikola L.
    6 October 2020 @ 22:49
    Last Friday morning (Sydney time which is Thursday's afternoon NY) I shorted US market and sold my positions 1 hour later on the back of the news Trump testing positive for covid19. Was enough profit I guess but real reason why I sold was because this news muddied my view on how things will play out on the political scene in the US. My reason for buying those shorts was that Dems will pretend to want to deliver stimulus but in effect they will drag the negotiations and crash the markets in order to hurt Trump. Yesterday I bought those shorts back as I thought things settled down and we are back on track for my scenario to play out. Trump tweet caught me by surprise as I did not expect Trump to play this card but when I think about it makes sense. It works in my favor as markets tanked but I did not expect Trump to pull the pin. I was expecting this to be long foreplay with main event in the week before the elections. Trump explained in his tweet what Rep offer was and what Dems are pushing for and technically is presenting himself as reasonable as Rep offer was not as small as many in the media are reporting. I think Trump's team worked out that Dems never wanted to have stimulus before the elections so he is now trying to turn the tables and make Dems look unreasonable - which in my view is probably correct. Just to be clear I don't care who wins. I am no fan of Trump but Dems are not really offering better candidate. It's amazing that these two are the best US political parties can offer to the world but most importantly to their own citizens. Anyway, back to my point, moving forward I think markets will now tank faster than I expected as I doubt Trump will be back to the negotiating table this week. For me now is.. should I sell or should I hold - things will play out much faster and it is hard to read which way this will go even though I still think there will be no stimulus before the elections and markets will tank further. But the very next tweet can turn everything upside down again.
    • MS
      Melissa S.
      6 October 2020 @ 23:18
      I was a little surprised to see him do this too. It really isn't in the interest of either party (politically) at this point to pass stimulus. He's really used to rolling the dice and getting his way. I also agree that's a fairly good reason why to try and pull the rug out from under the dems. Was making this declaration on a Tuesday in the middle of the trading day a great idea? Guess we'll find out.
    • DS
      David S.
      6 October 2020 @ 23:58
      It is possible crashing the markets is an unusual Republican ploy. President Trump's supporters are going to vote for him regardless. By not having the stimulus, crashing the market, disabling the US Post Office, etc. there will be chaos in the streets during the election. Then President Trump can come in and say that he is the only one that can save the country. The instant reaction of the market is not a good indicator. As I recall the market tanked when President Trump won the election. DLS
    • LF
      Liam F.
      7 October 2020 @ 00:14
      Both national parties are PoS, and both are turning the USA into a SH country. One more than the other, in a big, big way. I won't stoke controversy by saying which I think it is. I'm negative on both but for different reasons in each case. The US empire is in decline. This is the sound of looting.
    • HB
      Herman B.
      7 October 2020 @ 00:40
      Let's me, please, take a shot on the other side of this equation: 1-Trump has always believed that the financial markets are effectively the economy. Wall street is main street. 2-All polls, even those taken post Walter Reed's visit, have trump under water. I suspect even his internals are telling him the same. 3-Today, Goldman sacks came out and said that a Dems' sweep will present the best option for economical recovery. 4-It was speaker Pelosi who calmed the markets down with comments like " With Trump's covit test, this is a game changer for the stimulus talk". In fact, she went on to ask the airline's folks to hold off the layoffs as she was ready to have separate registration to assist the industry. Please go back and check out the price action, especially the airlines', after those comments. 5-The Feds have been saying that they are out of bullets. Pushing for fiscal authorities action. To me, Trump has only one card left under his sleeves: Pull the pin on the stimulus talk so that the conversation can only focus on the financial markets. I expect the next weeks to be about " Look at your 401K, layoffs, etc...........". The cartoon network business Corporation & Fox business to join this choir.
    • VN
      Vitali N.
      7 October 2020 @ 00:55
      Trump was the last to weigh in on the stimulus debate from Walter Reed bed. GOP did not want to go along, he pulled out in order not to give GOP to push back against him for the first time, which would have become his last time.
    • CM
      Christopher M.
      7 October 2020 @ 01:59
      Nikola, your view and approach and mine are almost identical. However, I didn’t trust the timing this week, so I’ve been using long and short ETFs with real tight stop losses. I caught the end of day upswing yesterday with UPRO and used a trailing stop to get out before market close as I didn’t trust holding it overnight. Today I had consultations so I didn’t see the market drop until minutes after Trump tweeted and it hit an alarm off. I bought SPXU as quickly as I could but didn’t fill the orders till it was under the 50 day moving average. I still profited quite well, and it continued to tank hard in after hours trading, so for the first time in a while I’m entirely comfortable holding it over night. I’m still going to set trailing stops but I don’t think the market recovers until there’s stimulus, and I think it is painfully obvious the stimulus NEVER had a chance of passing. Regarding Tony’s belief that the Fed is backstopping asset prices, why did the market immediately tank after Powell ended his speech and not start trading sidewards until the fiscal stimulus negotiations were back in order, and not break the downward trend until Pelosi started a new religion on Wall Street claiming that Trump’s illness would lead to a mystical enlightenment of the Senate that would cause them to completely give up their negotiating position and adopt wholesale the House stimulus plan? The market knows the Fed is no longer its savior and has been looking to the fiscal stimulus. Now that’s gone too.
    • RW
      Robert W.
      7 October 2020 @ 03:59
      Flashback: October 2016. NBC Hillary by 14 ABC Hillary by 12 CBS Hillary by 11 AP Hillary by 13 Monmouth Hillary by 12 Atlantic Hillary by 12 USA Today Hillary by 10 CNBC Hillary by 10
    • JC
      John C.
      7 October 2020 @ 08:48
      Agree with your views. I think Trump is now just trying to get some small stimulus done outside Congress before the election so he shows he is doing something. Think another $1200 check from Treasury. This also bypasses our inept and corrupt congress who will load any stimulus bill with pork and try to get blue states bailed out. Better to give the average American some real relief as opposed to funneling it through Congress where it gets lost in the mire and will take months to execute. Moreover, I think McConnell told Trump there was no way the Senate was going to approve the House bill as is so they needed to take a differnet tack.
  • JF
    Jess F.
    7 October 2020 @ 08:11
    a view from abroad, I'm shocked that the outing of Ms Gina Haspel, and by implication Mr Obama, did not get a mention.
  • JA
    John A.
    6 October 2020 @ 23:22
    Tony starting to get "concerned". When the perma bulls start getting wide-eyed as Ash reads the coming Democrat anti-trust movement on big tech, retail needs to pay attention. Tony has become my canary in the coal mine for the opposite viewpoint I hold lol.
    • AB
      Alastair B.
      7 October 2020 @ 04:32
      Thanks for pointing this out Ash
  • AH
    Alex H.
    7 October 2020 @ 04:20
    punchy and objective. Thanks Ash and Tony. So helpful
  • EP
    Elton P.
    7 October 2020 @ 04:07
    TG Tuesdays are my favorite!
  • SL
    Shawn L.
    7 October 2020 @ 03:33
    The market is always rallying on hope of the positive narrative (ie. Trump is in the hospital we will come together and get a stimulus, Trump beat covid and things are improving, someone mentions the word vaccine, big rally). All indicate a hope driven market. HOWEVER, the fact the market dives when Trump dashes their hopes with a tweet tells me, the market knows it is kidding itself. The market is full of fools playing musical chairs AND THEY KNOW IT. Is this wanton lack of concern for their capital (Graham we are sorry, look away) due to the massive liquidity injections? I think not. If QE is deflationary and does not increase money supply. It must be the fiscal stimulus? It is all about the stimulus, the market is PRAYING for its stimulus payday. They are praying even harder for a miracle / imaginary V shaped total recovery. Its not just Robin-Hooders that think they have fiscal stimulus checks on monthly direct deposit? This market ends with the last stimulus check and when the fake news (lol) V-shaped recovery lie is seen for what it was - propaganda. When will that be I ask? We are getting very close I think...
    • SL
      Shawn L.
      7 October 2020 @ 04:00
      Despite my above thoughts, Tony reminds me this market craziness is larger than I can comprehend.
  • MA
    Mike A.
    7 October 2020 @ 03:31
    Ash This is IMO the best DB you have ever done covering the biggest issues pertaining to markets!..Keep it up!...AWESOME!!
    • AB
      Ash B. | Real Vision
      7 October 2020 @ 03:41
      Thanks, Mike. Much appreciated.
  • JN
    Jerrick N.
    7 October 2020 @ 01:52
    You cant be serious.... long tech and natural resources??? Is deflation a concept in your mind? Are you considering the high probability of Quad 4?
    • MK
      Michael K.
      7 October 2020 @ 02:56
      Been a Hedgeye sub for three years. They’re a good marker, but Keith has a good business running day trade signals versus asset allocation. He’s pretty good at catching tops not so great at getting you into stuff. Just my take. Not hating. I think they’re great. Just saying, don’t subscribe too much to having a guru to rely on.
  • RC
    Robert C.
    7 October 2020 @ 02:40
    WhEw! Ya Baby!! Good Stuff or WHAT eh!!
  • JN
    Jerrick N.
    7 October 2020 @ 01:44
    Seriously TG if you see this comment, go to hedgeye and pay for 1 month of of their risk manager subscription. its 225 bucks but it will enlighten so many things for you....
  • JN
    Jerrick N.
    7 October 2020 @ 01:41
    TG really should sign up for hedgeye risk manager. Theres so many things he is missing...
  • VR
    Victoria R.
    7 October 2020 @ 01:29
    So true, Tony, the markets lead and our goal is to follow. Pay attention!
  • CW
    Calvin W.
    6 October 2020 @ 23:27
    how would a worsening of Trump's health play into Tony's narrative. Let's remember still a ~10% chance he could get a lot sicker and even possibly die.
    • NF
      N. F.
      7 October 2020 @ 00:47
      A 74 year old has 3-4% chance of dying of Covid https://www.statista.com/statistics/1105431/covid-case-fatality-rates-us-by-age-group/ .
  • ER
    Ernesto R.
    6 October 2020 @ 23:21
    amazing recap of the latest movie we watch on the weekend
    • TG
      Tony G. | Contributor
      7 October 2020 @ 00:41
      Ernesto that weekend deserves a screenplay.
  • DS
    David S.
    7 October 2020 @ 00:41
    Good comment Mr. Bennington about conservatives actively opposed to the monopoly power of the FAANGs as well as the liberals. The problem is other countries in the world like China have state sponsored "FAANG'" stocks. It is going to be a fine line to control the monopoly power of our FAANGs while still competing on a world stage against their FAANGs. DLS
  • AB
    Aditya B.
    7 October 2020 @ 00:26
    monday was a low volume day!
  • MS
    Melissa S.
    6 October 2020 @ 23:19
    The last 10 to 12 minutes is really gold. Very thought provoking.
  • JH
    Joseph H.
    6 October 2020 @ 22:55
    Great recap and lessons to take. Cheers.
  • JL
    Jason L.
    6 October 2020 @ 22:23
    Great recap of a wild swing in markets today. Thanks to the stellar RV team!