What Goes Up

Financial markets around the world have been roiled by the spread of the novel coronavirus, and it’s unclear what if anything the Federal Reserve and other central banks can do to stop the bleeding. Kathy Jones, chief fixed income strategist at Charles Schwab Corp., joins this week’s “What Goes Up” podcast to discuss the limited impact the Fed may have. Bloomberg’s Chris Nagi also joins the discussion to discuss the historic plunge in the stock market.

Mentioned in this podcast:

Wall Street Seeks the Right Metaphor for the Virus Meltdown

Reddit’s Profane, Greedy Traders Are Shaking Up the Stock Market

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Flows into ProShares exchange-traded funds this year show investor appetite for investments that benefit from a declining stock market as the coronavirus threatens economic growth and investor confidence. Simeon Hyman, head of investment strategy at ProShares, and Bloomberg’s Rachel Evans explain how investors are positioning themselves amid the uncertainty. 

Mentioned in this podcast:

Riskiest ETFs Get Green Light, But Brokers Might Not Touch Them

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With passive and factor investing dominating the strategies of more and more investors, one would be forgiven for thinking that traditional bottoms-up stock picking is a dying art. But they’d be wrong. This week features Glenn Gawronski, who led the JPMorgan Small Cap Equity Fund to a top 1% performance in its Morningstar category before leaving to start his own investing firm called Byron Place Capital Management. Also joining the show is Bloomberg columnist John Authers, who talks about some of his recent columns about value investing and the European debt crisis. 

Mentioned in this podcast:

A Three-Legged Stool Approach to Finding Great Stocks To Invest In

Value Investing’s Time to Shine Again Is Approaching

Now We Can Say Euro-Zone Crisis Is Finally Over

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China’s intense effort to contain the deadly new coronavirus is causing major damage to the nation’s economy and sending ripples through global financial markets. But it hasn’t shaken the conviction of Barry Gill, head of investments at UBS Asset Management, who is bullish on China’s long-term prospects as the nation continues to shift to a consumer-oriented economy. Bloomberg consumer-team editor Sally Bakewell also discusses how the coronavirus is affecting U.S. companies.

Mentioned in this podcast:

The Lasting Toll of a Deadly Virus

Tesla’s 10,000% Options Surge Leaves Stock Gains in the Dust

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Paranoia about the coronavirus is spreading rapidly around the world, and the reaction in financial markets has been swift. Principal Global Investors strategist Seema Shah discusses how the “velocity of risk” is much faster now than it was during the outbreak of a similar virus, severe acute respiratory syndrome or SARS, in 2003. Also joining the podcast is Bloomberg Opinion’s health-care columnist Max Nisen, who explains how the clinical trial process and the profit incentives for drugmakers mean the quick development of a coronavirus vaccine is unlikely.

Mentioned in this podcast:

The Market Is Trying to Put a Price on the Coronavirus Outbreak

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Déjà vu? A week dominated by headlines of a spreading respiratory virus had investors recalling pandemics past, from SARS in 2003 to the Ebola scare six years ago. To discuss what the Wuhan virus could mean for markets, Dave Lafferty, chief market strategist at Natixis Investment Managers, and Ye Xie, a contributor to Bloomberg’s Markets Live blog, join the “What Goes Up” podcast.

Some highlights from Natixis’ Lafferty:

"There’s always sort of two phases: there’s the knee-jerk sort of risk-off, markets go down 1 percent, 2 percent, 3 percent, something like that, and then there’s a waiting period where we find out if it’s actually a more systemic problem. By and large in history, policy makers have gotten their arms around it, market tends to rally back."

"The thing that worries me is that there’s so much optimism priced in, and people are worried about valuation. But valuation, in and of itself, isn’t a catalyst. So in that vacuum, people tend to look for catalysts and maybe some type of epidemic or pandemic becomes the excuse they’ve been looking for to either profit-take or sell down assets that they think are expensive. So I don’t think it’s necessarily the thing that makes or breaks the market, but I would agree at these valuations, with the way the market has run, it does make for kind of a convenient excuse to take a little profit here."

Mentioned in this podcast:

‘Sharp and Short-Lived’: The Impact of Health Scares on Markets

Markets Upset From China Virus Is Only Getting Larger

Extreme Valuation Cases Wanted for a Red-Hot Rally in Equities

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Sometimes, it’s best to rip up the playbook, hold your nose and buy some of the worst stocks you can find. That’s the message from Jonathan Golub, chief U.S. equity strategist at Credit Suisse. He joined this week’s “What Goes Up” podcast to explain.

“We like high quality portfolios, we like stocks that don’t have a lot of debt, we like stocks with growth and big global footprints,” Golub says. “But every one of those characteristics does well—or poorly—in certain situations.” Right now, the latter is the case, he contends. “Companies with deteriorating fundamentals that are heavily shorted are outperforming the market. And you wouldn’t normally think that, because those sound like they are negative characteristics.”

A company is shorted because investors somewhere are betting its headed for bankruptcy, which Golub says makes sense in a weak economy. But if the economy turns around, he adds, “they’re going to actually improve more than a really healthy company. And this is really frustrating for investors with a quality bias.”

Also joining the podcast is Bloomberg reporter Lananh Nguyen to discuss the takeaways from a busy week in bank earnings.

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Americans are paying more and getting less for their health care than ever before. On the new season of Prognosis, reporter John Tozzi explores what went wrong. 

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U.S. benchmark stock indexes climbed to record highs this week even as the U.S. and Iran appeared to be on the brink of war. The return of investment-risk appetites was attributed to what appears to be a de-escalation of tensions after Iranian missiles hit U.S. targets in Iraq without causing any casualties. So is that the end of that? Not so fast, says Jonathan Mackay, senior market strategist at Schroders. Also joining the podcast is Bloomberg journalist Vildana Hajric, who discusses her reporting on how investors are reacting to the situation.

Mentioned in this podcast:

How Carlos Ghosn Became the World’s Most Famous Fugitive

Red Flags Emerge With Record-High Stocks Brushing Aside Political Turmoil

Buy the Dip, Wait and See, Add Hedges: Investors on Iran Strike

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New year, new predictions. With 2020 off to the races, projections from strategists across Wall Street are now set in stone. Will market leadership change? Will a correction materialize over the next few months? What are the biggest risks? Chris Harvey, the head of equity strategy at Wells Fargo Securities, gives his view.

Mentioned in this podcast:

Maybe It’s Time to Start Worrying About Euphoria in U.S. Stocks

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