Squawk Pod

Sell-Off Calls: a Rate Cut, a “Growth Scare,” & Buffett’s Slash 08/05/24

Aug 5, 2024

Tom Lee, managing partner at Fundstrat Global Advisors, discusses the latest market sell-off and its implications for the Federal Reserve. He highlights concerns about a U.S. recession and the drastic drop of Japan's Nikkei 225. Jeremy Siegel, a renowned finance professor, advocates for urgent rate cuts from the Fed, arguing they are crucial to stabilize the economy. The conversation also touches on Warren Buffett's significant reduction of his stake in Apple, reflecting caution amid market turbulence.

39:42

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Episode guests

Jeremy Siegel

Tom Lee

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Episode notes

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Quick takeaways

The global market has suffered significantly, with rising recession fears contributing to notable declines in major indices like Japan's Nikkei 225.

Experts are advocating for immediate Federal Reserve rate cuts to address misaligned interest rates amid rising unemployment and economic uncertainty.

Deep dives

Global Market Sell-Off Insights

Recent events have triggered a significant global market sell-off, with the NASDAQ losing 800 points due to rising fears of a U.S. recession and dissatisfaction with the Federal Reserve's decisions. Many investors are reacting to the volatility, with the Market Volatility Index (VIX) reaching its highest level in four years, a commonly used fear gauge. Notably, Japan experienced its worst trading day since Black Monday, with the Nikkei dropping 12.4% in a single session. Such dramatic declines have raised concerns about broader economic impacts and have investors closely monitoring the Federal Reserve's response, particularly in light of disappointing job reports.

Intro

2min

Market Turmoil and Economic Forecasts

5min

Market Turbulence and Strategic Decisions

14min

Urgent Calls for Fed Intervention

4min

Federal Reserve Rates and Market Reactions

8min

Strategic Decisions and Election Dynamics

2min

Vice Presidential Choices and Political Implications

7min

Building Coalitions in a Fast-Paced Business Environment

2min

U.S. stocks take a significant hit, mirroring a worldwide market downturn driven by fears of an impending U.S. recession. Part of the global market sell-off, Japan's Nikkei 225 experienced a dramatic plunge, marking its steepest drop since 1987. Tom Lee, managing partner and head of research at Fundstrat Global Advisors, offers insights into the latest market moves and the broader implications of the sell-off on the Federal Reserve’s interest rate decisions. Then, Jeremy Siegel, professor emeritus of finance at the University of Pennsylvania’s Wharton School of Business and chief economist at Wisdom Tree, is calling for emergency rate cuts from the Fed. And Axios co-founder Mike Allen gives an analysis of the 2024 election and the potential impact of Vice President Kamala Harris’ upcoming vice-presidential pick. Plus, Warren Buffett dropped over 49% of Berkshire Hathaway’s stake in Apple.

Tom Lee - 12:15

Jeremy Siegel - 23:14

Mike Allen - 35:27

Tom Lee, @fundstrat

Mike Allen, @mikeallen

Joe Kernen, @JoeSquawk

Andrew Ross Sorkin,@andrewrsorkin

Cameron Costa, @CameronCostaNY