What Goes Up

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 OutbreakSee omnystudio.com/listener for privacy information.

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 MarketsMarkets Upset From China Virus Is Only Getting LargerExtreme Valuation Cases Wanted for a Red-Hot Rally in EquitiesSee omnystudio.com/listener for privacy information.

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.See omnystudio.com/listener for privacy information.

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. See omnystudio.com/listener for privacy information.

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 FugitiveRed Flags Emerge With Record-High Stocks Brushing Aside Political TurmoilBuy the Dip, Wait and See, Add Hedges: Investors on Iran StrikeSee omnystudio.com/listener for privacy information.

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. StocksSee omnystudio.com/listener for privacy information.

An inverted yield curve. Fears of recession. Three rate cuts from the Federal Reserve. And a boatload of negative yielding debt. All remnants of a year to remember, when everything rallied and U.S. stocks notched one of their best in decades. Matthew Peron, chief investment officer for City National Rochdale recounts 2019’s highlights.See omnystudio.com/listener for privacy information.

It was a fabulous year to be invested in stocks or bonds. But what’s in store for 2020? Nela Richardson, an investment strategist at Edward Jones, and Bloomberg columnist Cameron Crise give their outlooks. Richardson says a lot of older clients are reluctant to make less risky investments due to the huge returns they’ve enjoyed in 2019. Meanwhile, the rally in bonds has pushed interest rates down and made the returns on fixed-income look unappealing. Mentioned in this podcast:Maybe It’s Time to Start Worrying About Euphoria in U.S. StocksU.S. Yield Curve Hits Steepest Point in Over a YearSee omnystudio.com/listener for privacy information.

Multiple central bank meetings, a trade deal, a U.K. election, impeachment—all in the span of a week. To make sense of it all, Mike Schumacher, the head of rates strategy at Wells Fargo Securities, joins the podcast. Also joining the podcast is Bloomberg News Executive Editor Chris Nagi, who shares his views on the equity market.Mentioned in this podcast:Job-Crusader Powell Signals Long Policy Pause Amid Low InflationFed Aims a Half-Trillion Dollar Liquidity Hose at Year-End Risks It Took 13 Years for the Crisis to End in U.S. Financial StocksSee omnystudio.com/listener for privacy information.

Veteran stock-market strategist Jeffrey Saut’s retirement lasted only three weeks. Now he’s back, to explain why all the hand-wringing about 2020 may not be necessary. Saut isn’t worried about the “longest bull market ever” coming to an end, despite fears in some quarters that the economy is near the conclusion of the business cycle. Also joining the podcast is Bloomberg Markets Live blogger Pimm Fox, who shares his views on the outlook for equities and commodities.Mentioned in this podcast:Peloton Stock Is Pummeled on Backlash From ‘Gift That Gives’ AdA 20-Carat Blue Diamond Is Sold for Almost $15 MillionSee omnystudio.com/listener for privacy information.