Daily Briefing – September 17, 2020

Published on
September 17th, 2020
Duration
29 minutes


Daily Briefing – September 17, 2020

Daily Briefing ·
Featuring Peter Cooper, Ash Bennington, and Ed Harrison

Published on: September 17th, 2020 • Duration: 29 minutes

Senior editor, Ash Bennington, joins managing editor, Ed Harrison, to discuss the latest in markets, macro, and coronavirus. They discuss how the results of the upcoming earnings season will provide a gauge on the health of the economy and solidify its standing as 2020 begins to come to a close. They also speculate on the ongoing persistence and momentum to the upside in equity markets, short-dated options trading amongst retail investors, and the sudden proliferation of special purpose acquisition companies (SPACs). Ash and Ed then debrief yesterday's FOMC meeting, lay out the impact the Fed's actions will have on the bond market, and consider whether the Fed really is out of ammo at this point. In the intro, Peter Cooper shares the latest jobless claims data and enumerates on the flaws of solely relying on this data to understand the health of the labor market.

Comments

Transcript

  • DS
    David S.
    18 September 2020 @ 00:39
    I agree we need infrastructure rebuild with fiscal. It will add a base to the economy, but still it will be paid for with taxes. Japan did fiscal to the max and now they are buying up a lot of their stock market. It is important in the US that we save, encourage, and develop small businesses. If we cannot find a way to catalyze small business growth, we will be Japan. DLS
    • SB
      Stephen B.
      20 September 2020 @ 20:25
      I just finished a ten state, 2,600 mile coast to coast trip, keeping mainly off the interstate and on state roads, through small and older towns. The economic impact of COVID is not only disproportionately impacting small businesses (over corporates) but smaller towns over larger urban areas. Larger towns at least have one or two Starbucks + McDonalds etc. (which have survived), whereas small towns often relied on a handful of locally owned businesses, which have not. I fear that COVID, in time, is going to kill off some of our smaller, more remote, more marginal towns which will be a tragedy.
  • CD
    Christopher D.
    17 September 2020 @ 22:44
    Ed hits the nail on the head: “The Fed is the Bank of Japan.”
    • SB
      Stephen B.
      20 September 2020 @ 18:45
      In which case we should all re-read "The Prince's of the Yen".
  • SB
    Steve B.
    19 September 2020 @ 05:01
    Ed on fire!!!
  • DM
    Don M.
    18 September 2020 @ 18:19
    This is what I come to RealVision for. Not someone telling us the market's going up because it's going up with no reason to think it'll end or vica versa. Great job.
  • GG
    Gary G.
    18 September 2020 @ 11:48
    This is just a suggestion for the techies of RV, those behind the scenes. Often while watching the Daily Briefing or any other RV video, I like to pause the program to get a better look at a chart or other form of data that is being talked about. It would be nice if the content wasn't obscured by the running time left until the end of the video and the 15 sec back/forward toggles. I appreciate that info but wish it were smaller, off to the side or if there could be some other solution such that allows for a clear view of what's on the screen. Thanks.
    • GG
      Gary G.
      18 September 2020 @ 11:51
      I just realized that it's only in full-screen mode that the problem exists. :)
    • RN
      Robert N.
      18 September 2020 @ 15:28
      If you use any screen capture (or region capture) program such as Ashampoo Snap, the running time indicator will not show on the capture.
  • HK
    Henrik K.
    18 September 2020 @ 09:24
    Great RVDB; thanks! It would be really interesting if you could dig deeper into the notion that the Fed is running out of bullets. In her latest excellent newsletter Lyn Alden suggested that the Fed is currently buying c.50% of all newly issued US Treasuries. Assuming this continues (and it may even need to go higher...), what does the upcoming maturity profile + likely additional fiscal spending packages imply as to how much more the Fed will have to buy in the next say 12-24 months just to keep the US Treasury solvent? Could it be that the Fed knows it will need to keep it's money printers going to buy new Treasuries and that the traditional QE where they are buying already issued Treasuries, MBS and fixed income ETFs etc.. from non government institutions will have to take a backseat for the foreseeable future? Could this imply that there will be a lot less asset price support from the Fed going forward as their focus need to shift to supporting the US deficit? As the recent Bank of England report on the impact of QE suggests it seems that Central Banks now finally understand that traditional QE (or Asset Purchase Program in the UK) does not lead to additional bank lending and that the only way the Central Banks can help generate real economy inflation (as opposed to asset price inflation and trickle dow inflation in high end real estate and luxury goods) is through supporting/financing Government fiscal deficit spending.....MMT in full action?
    • JS
      Jon S.
      18 September 2020 @ 12:02
      You can simply upgrade to plus and you will get much more on that topic. Very worth the subscription price!
  • CP
    Christopher P.
    18 September 2020 @ 11:34
    You guys rock! Where do I get shares of the RV SPAC? :)
  • DS
    David S.
    18 September 2020 @ 00:27
    If the market did not react to the zero bound rate projections, it was generally expected. (Normally I do not like to ascribe market motivations, but in this case it may be accurate.) Congress will not act decisively on fiscal projects until after the election as incumbents are filling their pockets by pandering to everyone and promising anything. DLS
    • AT
      Adelina T.
      18 September 2020 @ 11:22
      Yes, no positive market reaction suggest it was all priced in, and as we have seen, even a bit more was expected in the market before the session, thus the reaction following. Think Powell's somewhat nervous and repeated "This is very powerfull" in the Q&A showed how they are concerned about their lack of ammo.
  • CA
    Cyrus A.
    18 September 2020 @ 08:51
    An exceptional RVDB. Thank you to both. Purely anecdotal, but it plays into the wider discussion about a brewing mania, but last night I saw a TV commercial for online stock trading. The commercial showed a phone screen with "TESLA" in bright letters and a green chart pointing upwards next to it..and .wait for it, the TV commercial came immediately after the football highlights show. I have never seen TV ads such as this on mainstream channels before watershed hours and it made me draw a deep breath...
  • ES
    Edward S.
    17 September 2020 @ 23:43
    Powell said we need to look at fiscal policy...."Shovel ready projects" will not increase the velocity of money and create the inflation we need. This complete lockdown has been a colossal mistake. The only way out of this mess, the only way to increase the velocity of money is through Universal Basic Income. The bond market knows that even with the $7T bazooka we are not seeing inflation. UBI will occur under either a Trump or Biden administration. There is no other way out.
    • DS
      David S.
      18 September 2020 @ 08:16
      Be careful what you wish for. Inflation is not the goal in itself. A strong economy that generates a controlled level of inflation is the goal. Just generating inflation by flooding the market with money is counterproductive. DLS
  • LL
    Ludovico L.
    18 September 2020 @ 08:16
    SPACs (or SPAVs as sometimes called - vehicle instead of company) were and are still quite a common theme on the LSE junior markets (AIM, standard list segment of the main market) and recently acquired NEX exchange (now Aquis Stock Exchange Growth Market). Mainly used for reverse takeovers of private limited companies and founded on track records of SPAC management on their ability to deal make; they are also subject to time limit to find and complete a deal or they face temporary suspension. As an adviser, you look closely at management payouts/equity in relation to shareholders / target shareholders parity and valuation of the combined group. Obviously these have not been done on such a huge scale that we can see now - mainly in the small cap space
  • MS
    MICHAEL S.
    18 September 2020 @ 06:58
    Ed saying that PE is selling out is not correct. PE taking out dividends is core to their business model. They still retain their initial investment and at the moment the cheapest way to pay dividends is via cheap debt rather than from depressed profits. Michael S
  • MB
    Mark B.
    18 September 2020 @ 06:35
    To be sure... I’m a huge fan of these daily briefings & Chelsea...Bristol, Uk
  • NI
    Nate I.
    18 September 2020 @ 05:53
    Ed Harrison is awesome. I start the day at 5 am local time with Hedgeye and finish it with RVDB. Keeps my investing at an elite level and making money in extremely challenging markets. Most importantly I'm avoiding losses. Thanks RV.
  • DB
    David B.
    18 September 2020 @ 03:33
    You guys do a great job.
  • BB
    Bob B.
    18 September 2020 @ 02:16
    Ed - The market can remain irrational longer than your thesis can remain intact :(
  • CM
    Cory M.
    18 September 2020 @ 02:03
    Great as always! My question: If 24% of bank lending is to PE, how do we know that's not co-mingled with "legit" micro business and small business loans?
  • DB
    David B.
    18 September 2020 @ 01:00
    Great that Ben Inker is coming on!
  • BK
    Bruce K.
    18 September 2020 @ 00:28
    Ed consistently sets a very high bar ... and this briefing EXCEEDS expectations. Bravo Ed, keep up the outstanding work.
  • MA
    Mike A.
    18 September 2020 @ 00:19
    The FEDS mandate is to help fight inflation not create it. It' like calling the Fire dpt if you want a fire to break out..
  • HN
    Hassan N.
    18 September 2020 @ 00:02
    Great briefing as always, Ed!
  • HN
    Hassan N.
    17 September 2020 @ 23:56
    There's too much fluff in the economy and bad debt..
  • MH
    Muddshir H.
    17 September 2020 @ 23:34
    Ed and ash u guys are great
  • MD
    Matt D.
    17 September 2020 @ 23:33
    Good discussion Ash and Ed. Great insights! Summed up: Turning Japanese - The Vapors ?
  • ER
    Ernesto R.
    17 September 2020 @ 23:28
    Thanks Ed , Ash and Peter excellent show and very good knowledge amazing thesis
  • ES
    Edward S.
    17 September 2020 @ 23:23
    Ed's comments about the SPAC market are spot on. This is a fantastic interview. Well done Ed & Ash.
  • JP
    John P.
    17 September 2020 @ 22:47
    What’s the point of these dailies? It must take some time, possibly useful to a few, but it s really just filler to the main product.
    • JS
      John S.
      17 September 2020 @ 23:23
      You must be really bright ... or perhaps that other thing
  • RM
    Ron M.
    17 September 2020 @ 23:15
    Great job, guys! These markets are NUTS! There are days of reckoning coming!
  • DB
    David B.
    17 September 2020 @ 23:07
    Everyone on the daily briefing from the opening remarks and all the dialogue is simply fantastic. I very much appreciate the candid discussion. I wish everyone at RV the best, especially the latest hires!
  • BD
    Blake D.
    17 September 2020 @ 22:57
    Would love to hear Ed speak to Chamath Palihapitiya from Social Capital about SPAC's. He's reserved SPAC's IPOA all the way to IPOZ.
  • DT
    David T.
    17 September 2020 @ 22:57
    FED is done!! Agreed.