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Breaking Down The Bitcoin Drop · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
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Speaker 1: my co host Matt Miller. Every business day we bring
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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
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Speaker 1: at Bloomberg dot com slash podcast. Let's focus in Matt
0:22
Speaker 1: on what we're seeing in Bitcoin in the cryptos, and
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Speaker 1: we do that with our good friend, uh, Mike mcglogan.
0:28
Speaker 1: He's a strategy commodity strategist at Bloomberg Intelligence. Mike, what
0:33
Speaker 1: do you make of the trading here today? I'm just
0:35
Speaker 1: looking at my g I P function for bitcoin and
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Speaker 1: it it hit thirty thousand and then it bounced right
0:41
Speaker 1: back up pretty significantly. What do you make of the
0:43
Speaker 1: trading today? I completely agree with Kathy Wood that this
0:46
Speaker 1: is a capitulation. It's a market backing up to decent
0:50
Speaker 1: support levels in a significantly fundamental boolmarket. So let's look
0:53
Speaker 1: at the iteration is going forward. This is more macro
0:56
Speaker 1: economic at the moment. At the moment, to me, the
0:58
Speaker 1: bigger issue here is mean version in the stock market.
1:01
Speaker 1: Bitcoin has just been the high beta indicating it. And
1:03
Speaker 1: then you also can see that and the rest of
1:04
Speaker 1: the cryptosy're down almost double how much bitcoin is today.
1:07
Speaker 1: Look at the iterations going forward. If this document goes
1:10
Speaker 1: down and stays down for a while, it's a virtual
1:12
Speaker 1: guarantee that there's only one thing the Fed can do.
1:14
Speaker 1: They have to buy more bonds. What is that good
1:17
Speaker 1: for bonds? Gold and bitcoin? They will be the primary beneficiary.
1:21
Speaker 1: So I think the key point Cathy would make made
1:23
Speaker 1: about deflationary trends. To me, that's the biggest fact that
1:27
Speaker 1: it's really kicking in here. Why is crudel down five percent?
1:30
Speaker 1: Because the only thing that's been holding up is this
1:32
Speaker 1: writing right rising this this rising tide. Enough the tide
1:36
Speaker 1: starting the EBB, we're gonna see who's not wearing clothes,
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Speaker 1: and I think it's gonna be bitcoin, golden bonds to
1:41
Speaker 1: benefit again. For you know, A key thing to leave
1:45
Speaker 1: you on is I think we're gonna look back at
1:46
Speaker 1: this and say that that joke coin, that Hustle doage cooin,
1:50
Speaker 1: it marked the peak of speculative froth in virtual all
1:52
Speaker 1: global markets. What what is driving this talent? Can we
1:57
Speaker 1: look across because you can track which wallets are, you know,
2:01
Speaker 1: trade in cash. People say it's anonymous, but it's really
2:04
Speaker 1: sued pseudonymous. Is there any way to know who's pushing
2:09
Speaker 1: these prices down, how it's happening, Well, it's that's um.
2:13
Speaker 1: It depends on why you want to know. And and
2:15
Speaker 1: one thing, Matt, I've always looked at it from a
2:17
Speaker 1: markets guy, beating a new traded pits, I look at
2:19
Speaker 1: and that is trying to define exactly who is doing it,
2:22
Speaker 1: and wise is less important than figuring out what's the
2:25
Speaker 1: purpose and what's going on. And to me, the main
2:27
Speaker 1: thing that's really happening this is massive speculative leverage. Long
2:30
Speaker 1: is getting hit in their stops. And you know, as
2:33
Speaker 1: an ex trader and speeding trading, pitt And traded with
2:35
Speaker 1: a lot more leverage in futures. And you see most markets,
2:37
Speaker 1: you know, leverages down there in the pay trading pits
2:40
Speaker 1: one minimal. You know, have a little sympathy for speculators
2:43
Speaker 1: getting stopped up, but oftentimes they mark the peaks and
2:46
Speaker 1: the trolls. And that's what I think is happening now.
2:48
Speaker 1: And then when you know the dust settles, we're gonna
2:50
Speaker 1: see the fundamentals kick in, and that's where I see
2:52
Speaker 1: bitcoin versus everything else. Now, theorium is okay, but then
2:55
Speaker 1: there's a ten thousand other cryptos. Now we all know
2:58
Speaker 1: from the dot com bubble there's pretty good signs of
3:00
Speaker 1: speculam excess. But then there's only one digital goal in
3:04
Speaker 1: the world going digital. And by the way, Bitcoin still
3:06
Speaker 1: up in the year. I guess how much Tesla is down? Matt.
3:11
Speaker 1: Can't you picture Mike McGlone in commodities pitch trading? Absolutely?
3:16
Speaker 1: I also would love to be there myself. I mean,
3:19
Speaker 1: that's those were the days. I wonder if we still
3:24
Speaker 1: have the same kind of commodity pits, are the same
3:26
Speaker 1: kind of open outcry trading anywhere in the world. Is
3:28
Speaker 1: it dead everywhere? It's dead everywhere. But I'd like to
3:31
Speaker 1: say the five years I spent in the Chicago Board
3:33
Speaker 1: of Trade is more than anything I learned. Isn't an
3:35
Speaker 1: m B A c F, A FRM, all these all
3:38
Speaker 1: these degrees we get, It's just there's nothing like being
3:40
Speaker 1: around five thousand people every day and just knocking around markets.
3:44
Speaker 1: This is what fascinates me in terms of what's going
3:47
Speaker 1: on right now with bitcoin, because I've seen, you know,
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Speaker 1: a crash from a thousand and we we wrote these
3:53
Speaker 1: stories about how the masses got pulled in and now
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Speaker 1: it's all over and the fat lady has sung and
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Speaker 1: I saw the crash. It's seventeen thousand and everyone. We
4:02
Speaker 1: wrote stories that said, this is it. We called the game.
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Speaker 1: It's over now, and we're doing that again today, which
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Speaker 1: makes me sort of simultaneously laugh and and puke to
4:12
Speaker 1: some extent. But what I what fascinates me is the
4:16
Speaker 1: mechanics of what's happening here. Who's selling? Why are there
4:20
Speaker 1: margin stops, you know, our margin calls, um, you know
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Speaker 1: forcing this liquidation? Are we seeing any big whales get
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Speaker 1: out of um? You know, wallets that haven't moved forever?
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Speaker 1: Is this all retail? Is this institutional? Are people selling short? Like? This?
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Speaker 1: Is what I wonder about what's going on right now?
4:39
Speaker 1: Well that's the key thing, man, And I'd love to
4:41
Speaker 1: see people selling short of bull market get backing up
4:44
Speaker 1: the good support with fundamentally good drivers. So I think
4:48
Speaker 1: that should continue and for a little while. But this
4:51
Speaker 1: is how you make bottoms in markets, as fowers who's signed?
4:54
Speaker 1: Oftentimes you find that out later when the markets already recovers,
4:57
Speaker 1: so it's kind of hard to tell now, but I
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Speaker 1: fully expect this is it is the speculat access is
5:01
Speaker 1: hitting their stops. And by the way, you know, that's
5:04
Speaker 1: oftentimes we used to say that in trading of bits, Hey,
5:05
Speaker 1: where's the stops? Because you want to hit them, and
5:07
Speaker 1: that's when you know where you get. You run through
5:08
Speaker 1: the prices and then you put in the bottom or
5:10
Speaker 1: a peak if it's in a bowl market. Right now,
5:12
Speaker 1: it's just I think putty near a bottom in a
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Speaker 1: bowl market as you just run through these these people
5:17
Speaker 1: got a little too bullish around sixty and probably getting
5:19
Speaker 1: a little too barrish around thirty. Hey, Mike, you know,
5:23
Speaker 1: let's put this technical trading or this capitulation trade aside
5:27
Speaker 1: for just a moment. If I'm a fundamental investor, what
5:29
Speaker 1: are the next data points I should be focusing on
5:33
Speaker 1: for bitcoin? Well, I think the next key thing is
5:36
Speaker 1: I think it holds around thirty a douta gets much
5:38
Speaker 1: below and then to see how it gravitates. The key
5:41
Speaker 1: thing I'm looking at is the macro. How does this
5:43
Speaker 1: stock market resun respond to this? Is the stock market
5:46
Speaker 1: continues to show just too Maybe you have a normal
5:49
Speaker 1: temperacent correction which used to be history. What does that
5:52
Speaker 1: mean for the iterations from the macro And to me,
5:54
Speaker 1: that's where the bitcoin is different from all the cryptos.
5:57
Speaker 1: It is macro and macro only that's what matters the most,
6:01
Speaker 1: and to me, that's what's gonna matter. So as far
6:02
Speaker 1: as technical levels, a lot of times this is like
6:04
Speaker 1: this to me is kind of like noise in the
6:06
Speaker 1: big picture. If you look back at this from the
6:08
Speaker 1: future hypothetically five years so now we're going to look
6:10
Speaker 1: back at this, it's like, Okay, finally we had some
6:13
Speaker 1: time for this, that massive rallying and stock market just
6:16
Speaker 1: to mean revert and normalize a little bit, and it
6:19
Speaker 1: made everything kicking, like the FED and mask and fiscal
6:22
Speaker 1: monical stem monitory stemas has to pick up. And then
6:25
Speaker 1: we see these predominant deflationary forces, like look at crude oil.
6:29
Speaker 1: It just probably peaked around seventy and guess what, in
6:31
Speaker 1: ten years, we're not gonna be using much of it.
6:33
Speaker 1: We're all we're driving electric cars. But that's the key
6:35
Speaker 1: thing where bitcoin s up comes in. It's set rapidly
6:37
Speaker 1: advancing technology and innovation, reshaping the world with Catty Cathy
6:42
Speaker 1: Woods touts on this is part of the whole world
6:44
Speaker 1: getting banked. And by the way, there's no the monetary
6:48
Speaker 1: powers policy is fixed. You don't have to worry about
6:50
Speaker 1: more bitcoins coming on. To me, that's what's gonna come on.
6:52
Speaker 1: As far as levels, they're kind of noise, but you know,
6:54
Speaker 1: getting back above fifty I think will be the next
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Speaker 1: key threshold. Sustaining above below thirty and b m of
7:00
Speaker 1: a problem for a well, but for me, the last
7:02
Speaker 1: thing I want to do is focus on the day trade.
7:03
Speaker 1: It's the macro and the bigger picture. I think we're
7:05
Speaker 1: more likely to head towards a hundred um than sustained
7:08
Speaker 1: below thirty this year. Agree with you a hundred percent,
7:11
Speaker 1: But you know, it's the day traders and Wall Street
7:13
Speaker 1: bets that get the headlines. Um, it's the momentary moves
7:18
Speaker 1: that spur people to to call the game. By the way,
7:21
Speaker 1: Elon Musk, I don't know if you saw this, Mike
7:23
Speaker 1: that he just tweeted it, but uh, he just tweeted
7:26
Speaker 1: that he has that Tesla has diamond hands, which is,
7:30
Speaker 1: for those who don't know kind of Wall Street bets
7:33
Speaker 1: Redditt jargon for someone who absolutely refuses to roll over
7:37
Speaker 1: and sell. He will not capitulate. It's kind of what
7:40
Speaker 1: he's saying now. But you can never trust Elon, or
7:43
Speaker 1: at least I think crypto investors won't won't be able
7:46
Speaker 1: to trust him Um to stick to his word, because
7:50
Speaker 1: he seems to go back and forth. He seems to
7:52
Speaker 1: waffle on his commitment to crypto and to bitcoin. And
7:57
Speaker 1: it's also I think interesting that he embraces DOES because
8:02
Speaker 1: serious crypto investors are sickened by DOES, or at least
8:07
Speaker 1: embarrassed by it. Wouldn't you say, oh absolutely, I look
8:10
Speaker 1: at the whole Doge saga and him getting instead of
8:12
Speaker 1: right live is We're gonna look back at that and
8:14
Speaker 1: from the future and say, okay, well that was the
8:16
Speaker 1: peak in speculative accesses and all those ten thousand cryptos
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Speaker 1: that don't really matter anymore. Now there's only like ten
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Speaker 1: that really matter, Bitcoin and Theoryum and then a few others.
8:25
Speaker 1: And you know, I look yet, right now, let's just
8:27
Speaker 1: let's fixtion and put an iteration on this. Let's say,
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Speaker 1: by you know, end of the year, we sustain above
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Speaker 1: fifty thousand. What does that mean? Bitcoin just survived another
8:36
Speaker 1: of the thousand cuts. It's it's with it's hit, it's
8:38
Speaker 1: it's been hit, hit, hit it for ten years. Markets
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Speaker 1: are used to this, and if you're allocating to the space,
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Speaker 1: you should be, you know, a small percentage your portfolio
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Speaker 1: expected to drop fifty and if you don't, then you're
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Speaker 1: too overweight. But give it five ten years and it's
8:52
Speaker 1: it's a major ten x. And if it doesn't continue
8:55
Speaker 1: being the digital version of gold, well the world's going digital.
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Speaker 1: Something else will and it's just a matter of time.
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Speaker 1: Bitcoin has already won that race. So I look at
9:03
Speaker 1: it as bitcoin and gold together. It can analyze gold
9:06
Speaker 1: without it, and this type of dip. I expect them
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Speaker 1: both to appreciate out of this. Most notably if we see,
9:11
Speaker 1: let's say the stock market actually goes back to unchanged
9:14
Speaker 1: on the year, just imagine the iterations from the FET
9:17
Speaker 1: What do you, Mike, doesn't give you any concern here
9:20
Speaker 1: that the Elon Musk of the world can have such
9:22
Speaker 1: an outsize impact on this security it Maybe we're peak
9:26
Speaker 1: Musk hitting Peak Musk was Senterate live. But the key
9:30
Speaker 1: thing is also I like to say the fact that
9:32
Speaker 1: the world's largest automaker by market cap is allocated to
9:35
Speaker 1: this digital reserve asset makes significant sense, but it's also
9:39
Speaker 1: might be marking a peak for death sla. I mean,
9:41
Speaker 1: who else can in the world cannot make electric cars?
9:43
Speaker 1: I mean everybody can know. I drive a Chevy Volte.
9:45
Speaker 1: I love it because I don't have range anxiety. And
9:48
Speaker 1: of course it's it's it's a poor man's teslas, so
9:50
Speaker 1: maybe it's peaked. Dude, I love it. I love it too,
9:53
Speaker 1: I gotta tell you, Um, I have always loved that car.
9:57
Speaker 1: And beyond the specific Chevy Vault, hybrids are the answer.
10:03
Speaker 1: I don't know why anyone has to be dedicated to
10:07
Speaker 1: a battery battery electric vehicles, and now we're going off
10:10
Speaker 1: on a tangent here. But for me, um, why not
10:14
Speaker 1: have a range extend or as BMW calls, you know
10:18
Speaker 1: their three cylinder engines that they throw in the I
10:21
Speaker 1: eight and the I three. Why not have that extra
10:23
Speaker 1: security and you can use the battery most of the time,
10:26
Speaker 1: be good for the environment most of the time. When
10:28
Speaker 1: you need it, throw in a little bit of internal combustion.
10:31
Speaker 1: But Matt, I think that's very relevant to the current topic.
10:34
Speaker 1: It's called innovation and rampidly advancing technology disrupting what's happening.
10:39
Speaker 1: So right now the infrastructure is just not there for
10:41
Speaker 1: all electric cars. The infrastructure is still not there for
10:44
Speaker 1: digital asses. We don't have an e t F in
10:46
Speaker 1: the U S. And guess what, it's a matter of time.
10:48
Speaker 1: The rest of the world has proven there's no problem
10:50
Speaker 1: with e t f s. By the way I used
10:51
Speaker 1: to run, you know, I remember in the natural gas
10:53
Speaker 1: ETF it went to zero and some things like that.
10:56
Speaker 1: So to me, what you're we're in the midst of
10:58
Speaker 1: rapidly I think when the most significant periods of history
11:02
Speaker 1: of technologies taken over pressuring inflationary forces, and we're seeing
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Speaker 1: a little bit of that normalization today. Bitcoin is part
11:08
Speaker 1: of it. It's just this is part of that adjustment.
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Speaker 1: I think we're gonna look back at this in the
11:12
Speaker 1: future when there's e t F so and when the
11:14
Speaker 1: Baltil the in bitcoin drops to about the same as goal,
11:16
Speaker 1: which it probably will because it gets what. Only thing
11:18
Speaker 1: that's uncertain is demand, and um all car cars will
11:22
Speaker 1: be electric. But I'll end on this one key point
11:24
Speaker 1: just because of efficiency that you mentioned in cars, total
11:27
Speaker 1: consumption of U S liquid fuels is exactly the same
11:30
Speaker 1: as it was twenty years ago. Yet GDP and production
11:33
Speaker 1: is increased over that's just efficiency. Now everything is going electronic,
11:37
Speaker 1: and it's an electrification, digitalization, decarbonization. It's all kicking in.
11:43
Speaker 1: Everything gets more efficient. You know, you might not eleven
11:45
Speaker 1: gets forty miles a gallon now it's pretty insane. UM,
11:48
Speaker 1: the way you drive it, well, no, not the way
11:51
Speaker 1: I drive when my wife drives in. Mike, thanks so
11:53
Speaker 1: much for joining us. I really appreciate it. I know
11:55
Speaker 1: you're super busy today. You can see Mike's work UM
11:58
Speaker 1: today on the t live blog. We've out of a
12:00
Speaker 1: top live blog which is excellent and excellent way to
12:03
Speaker 1: follow events like this. UM. Just type t L I
12:06
Speaker 1: V go on your Bloomberg terminal to continue keeping up
12:11
Speaker 1: with what's going on. Big point. Also, I hope I
12:12
Speaker 1: can get Mike and my television program later. I'm on
12:15
Speaker 1: Bloomberg TV at one pm for people. I'm gonna have
12:18
Speaker 1: my people talk to his people and see if we
12:20
Speaker 1: can get him. We have FED minutes will be released
12:27
Speaker 1: today two pm Wall Street time, and I think most
12:30
Speaker 1: observers are going to be, you know, taking a look
12:32
Speaker 1: at how the FED of views inflation. It has been
12:35
Speaker 1: fairly consistent across the board saying, Hey, this inflation that
12:38
Speaker 1: you're seeing in the economy is transitory, uh, and it
12:42
Speaker 1: should not be a concern for this economic rebound. But
12:46
Speaker 1: that's clearly one of the key issues that the market
12:49
Speaker 1: is focusing on. Now, let's bring in our good friend,
12:51
Speaker 1: Danielle DiMartino Booth. She's a CEO and director of Intelligence
12:55
Speaker 1: for Quill Intelligence. She's also a former advisor at the
12:58
Speaker 1: Dallas Federal Reserve and a Bloom Opinion contributor. Also is
13:02
Speaker 1: the author of the book entitled fed Up, An Insider's
13:05
Speaker 1: take on why the Federal Reserve is Bad for America. Danielle,
13:08
Speaker 1: thanks so much for taking the time here. What are
13:11
Speaker 1: you going to be looking for here as in these
13:13
Speaker 1: FED minutes later this afternoon. Well, first of all, thanks
13:17
Speaker 1: for having me this morning. And you know, I will
13:20
Speaker 1: be tuned in to what Clarda mentioned a few days ago,
13:26
Speaker 1: and and that is that he's going to be attuned
13:28
Speaker 1: and attentive to incoming data. You know, being a former
13:33
Speaker 1: FED insider, it's not on on hood of for the
13:37
Speaker 1: minutes to not two changes in between the end of
13:41
Speaker 1: the meeting and the time that's passed since then, and
13:44
Speaker 1: you know what, what we can say is that there's
13:47
Speaker 1: been a lot of mixed messaging. We started to see
13:51
Speaker 1: the commodities complex come off of its highs. This is
13:54
Speaker 1: going to be very reassuring for anybody inside the FED
13:58
Speaker 1: who's sticking to their transitor um narrative. But by the
14:03
Speaker 1: same token, there is an undeniability about the stickiness in
14:08
Speaker 1: some of the prices that we're seeing. So you don't
14:13
Speaker 1: buy the transitory narrative. Although I will say, if I
14:16
Speaker 1: look at the commodities complex right now, uh, there are
14:20
Speaker 1: some serious red arrows everywhere you look, just today, right
14:24
Speaker 1: and one day. Of course, a trend does not make
14:26
Speaker 1: But you don't think that this inflation we're gonna see
14:29
Speaker 1: is only a momentary. Well, I think that there are
14:34
Speaker 1: certain areas that are showing again stickiness we're seeing We're
14:38
Speaker 1: seeing that in steel and iron ore in specific pockets. Um.
14:42
Speaker 1: But I'm actually in the camp that does not believe
14:47
Speaker 1: in the inflation expectations narrative because it's got such a
14:51
Speaker 1: tight correlation purely with the commodities index. So I prefer
14:57
Speaker 1: the Cleveland said inflation gauge, which which takes into context
15:01
Speaker 1: labor costs, and if you look at the Atlanta FEDS
15:04
Speaker 1: that have kind of a real time labor gauge, it
15:06
Speaker 1: really isn't flashing red just yet. And you know where
15:11
Speaker 1: I live in Texas. Next week is the last week
15:13
Speaker 1: of school. We've got a ton of high school students
15:16
Speaker 1: who are going to be hitting the labor market, and
15:20
Speaker 1: wages are a lot higher than they've been in past summers.
15:22
Speaker 1: They might think of doing things other than being a
15:25
Speaker 1: lifeguard because there there might be enough of a poll
15:28
Speaker 1: for low skilled positions, especially the five thousands that are
15:32
Speaker 1: open among manufacturers. They're mostly low skilled positions, but these
15:35
Speaker 1: kids can make a lot over the next three months
15:37
Speaker 1: between Memorial Day and Labor Day. That's a great point, Danielle,
15:41
Speaker 1: because I guess we've had the news you know, earlier
15:44
Speaker 1: in the week about McDonald's raising it's you know, minimum wage,
15:47
Speaker 1: the thirteen dollars in Amazon to fifteen dollars and even
15:50
Speaker 1: Bank of America talking twenty five dollars here. Is that
15:55
Speaker 1: just kind of anecdotal news in your mind, or is
15:58
Speaker 1: that indicative of made some wage inflation creeping into this economy. Well, again,
16:04
Speaker 1: we're not seeing it picked up in the aggregate measures
16:07
Speaker 1: just yet, can we have to remember that there are
16:10
Speaker 1: still so many small businesses in this country that can't
16:13
Speaker 1: afford to compete with the larger big box retailers the
16:17
Speaker 1: banks of America. As you say, so, we're definitely seeing
16:21
Speaker 1: a grab for labor. What we don't know is what
16:24
Speaker 1: the other side of September six looks like when these
16:28
Speaker 1: UM supplemental unemployment benefits expiring. We've already heard from Joe Mansion,
16:32
Speaker 1: who is arguably the most powerful person inside the Beltway,
16:36
Speaker 1: that he's not going to sign on for an extension
16:39
Speaker 1: of the extra three dollars per week. So again, we've
16:42
Speaker 1: got two two flows into the labor market between teenagers
16:46
Speaker 1: and one stag of back to school. You're gonna have
16:48
Speaker 1: millions of Americans who are who are going to be
16:50
Speaker 1: faced with the choice of, well, gee, I might have
16:53
Speaker 1: to go back to work because I can't make as much.
16:56
Speaker 1: I can't sustain myself anymore. On these unemployment benefits will
16:59
Speaker 1: be reopening nationwide. Yeah, I got it. Just a minute
17:02
Speaker 1: left here, Danielle. But a question from a financial professional,
17:05
Speaker 1: a listener who who also has seen you speak in
17:08
Speaker 1: the past and appreciates your UM your views. He he
17:12
Speaker 1: wants to know if you think any other central bank
17:15
Speaker 1: will blink before the FED, or does the FED have
17:18
Speaker 1: to move before the rest of the global central banks
17:21
Speaker 1: do it? Oh, gracious, We've already heard from the Bank
17:24
Speaker 1: of Canada as well as some of the emerging markets
17:26
Speaker 1: for dilful one. We know that other banks are going
17:28
Speaker 1: to start the tapering process, and they've indicated that they're
17:31
Speaker 1: going to do that, while the SET is maintaining that
17:33
Speaker 1: they're not thinking about thinking about the taper discussion Rob Kaplan,
17:37
Speaker 1: you know, notwithstanding so uh no, I I think it's
17:41
Speaker 1: feasible that the FED not be first out of the gate.
17:44
Speaker 1: That would be abnormal. And so you think and even
17:47
Speaker 1: the important, the big ones like the e c B
17:50
Speaker 1: in the Bank of England could move first. That's a
17:53
Speaker 1: different story. You know, they're the level of quantitative easing
17:57
Speaker 1: that they're pumping out. John Authors had a great call
17:59
Speaker 1: up few days ago. It's it's higher than it was
18:02
Speaker 1: when the pandemic first hit. When you're talking about the
18:04
Speaker 1: ECB and even even the FED and the Bank of Engment,
18:07
Speaker 1: I don't know. I I still send a lot of
18:09
Speaker 1: reticence on the part of the Big four Central Banks.
18:13
Speaker 1: All right, Daniel, thanks so much for joining us. Daniel
18:15
Speaker 1: DeMartino booth there. She is the CEO of Quill Intelligence.
18:19
Speaker 1: Of course, she's a former advisor at the Dallas Federal
18:22
Speaker 1: Reserve as well, also a Bloomberg Opinion contributor, as is
18:27
Speaker 1: John Authors. You can find columns from both of them.
18:30
Speaker 1: Just type O, P, I, N GO. I want to
18:34
Speaker 1: talk about what's going on in retail. You have a
18:36
Speaker 1: slew of earnings yesterday and then a slew today as well.
18:41
Speaker 1: Let's bring in Ty Lopez to see winners and losers.
18:44
Speaker 1: Are executive chairman of Retail e Commerce Ventures. Um, Ty,
18:49
Speaker 1: what do you think now that we've seen UH Target,
18:53
Speaker 1: t J Max, Lowe's, Home Depot, Macy's, UH Walmart? Where
18:59
Speaker 1: do you think? Which business do you think is best
19:03
Speaker 1: poised to succeed in a reopening? Yeah? Thanks for having me.
19:10
Speaker 1: I would say the better question is what's not going
19:12
Speaker 1: to do well? Not much. I just read an interesting
19:16
Speaker 1: report by Adobe on a calm and U. For example,
19:20
Speaker 1: ten of Americans had who are now shopping a calm
19:25
Speaker 1: had never bought anything at the beginning of the pandemic.
19:28
Speaker 1: That's thirty million new people entered just because of the pandemic.
19:32
Speaker 1: So that momentum, I mean, this thing's wild clothings up
19:36
Speaker 1: for us. We're in all kind of we on radiosheck, electronics,
19:39
Speaker 1: all this stuff. We haven't seen anything, uh do anything
19:43
Speaker 1: but surge. So I think there's probably some B two
19:46
Speaker 1: C stuff, maybe something that supports commercial real estate. That's
19:50
Speaker 1: about the only thing I know that's getting hit right now.
19:52
Speaker 1: So it's a great time to be in retail, especially
19:55
Speaker 1: if you have that a calm, you know, if you
19:56
Speaker 1: have the flair for e calm, by the by the way,
19:59
Speaker 1: your business, so you invest in companies that have well
20:04
Speaker 1: known brands but didn't do great as brick and mortar stores.
20:08
Speaker 1: You mentioned radio shack, but also Model's, um uh one,
20:15
Speaker 1: linens and things. Yeah, so so how is that going? Then?
20:22
Speaker 1: It's been you know, we started buying before the pandemic
20:27
Speaker 1: and it was going well then and this thing has
20:30
Speaker 1: just super truck what would have taken until happened last
20:36
Speaker 1: in the last twelve months without a doubt. So there's
20:38
Speaker 1: been just we fought forwarded ten years. As I said,
20:41
Speaker 1: thirty million people according to one survey in the United States.
20:45
Speaker 1: That's just the US and of course e calm is
20:47
Speaker 1: very easy to go global with, so you have of
20:51
Speaker 1: people in the UK had never shopped a calm before COVID.
20:54
Speaker 1: So everything is just pointing to of course we knew
20:58
Speaker 1: this was going to happen. If you we would all
21:01
Speaker 1: predict our great grandchildren would be completely digital and how
21:05
Speaker 1: they do things. Well, guess what it happened right now.
21:08
Speaker 1: So you op to wait for your grandchildren to live
21:11
Speaker 1: that life. You're living it right now, alright, Ty, So
21:15
Speaker 1: as we think about retail one of the key issues
21:17
Speaker 1: here and it's probably been accelerated because of the pandemic,
21:19
Speaker 1: and is uh acceleration and e commerces? Are there still
21:23
Speaker 1: too many stores out there? Um, you know a lot
21:26
Speaker 1: of it's right sized itself. I think you see everybody
21:31
Speaker 1: from Victoria's Secret down has kind of right size their stores. Um,
21:36
Speaker 1: will probably start for one, will probably start opening stores
21:40
Speaker 1: back up. All right, all right, Ty, thanks so much.
21:42
Speaker 1: We're gon have to leave it there because we have
21:44
Speaker 1: some breaking news here. Ty Lopez, Executive Chairman, Retail e
21:47
Speaker 1: Commerce Adventures. We appreciate that. A risk off day today,
21:54
Speaker 1: We're sure, particularly you look at some of the cryptocurrencies again, uh,
21:59
Speaker 1: you know, it's Bitcoin is off about twelve percent now,
22:02
Speaker 1: having Uh, it's declined from earlier in the day, so
22:06
Speaker 1: perhaps a little bit of a correction there. Let's get
22:08
Speaker 1: a sense of, you know, kind of how we should
22:10
Speaker 1: step back here on days like today and maybe take
22:12
Speaker 1: a look at the bigger picture. We can do that
22:14
Speaker 1: today with David Could. He's a founder, CEO, and chief
22:18
Speaker 1: investment strategist for Mainstay Capital. David, thanks so much for
22:21
Speaker 1: joining us. A great day to chat with you, given
22:24
Speaker 1: what's going on in the markets here. So let's take
22:26
Speaker 1: a step back. What do you make of the markets
22:28
Speaker 1: here today, the equity markets, the crypto markets. Uh. Is
22:32
Speaker 1: this just kind of a healthy pullback or is it
22:34
Speaker 1: something more? Well, we've had a good run here from
22:40
Speaker 1: you know, really over the past twelve months in the markets,
22:43
Speaker 1: and and we we were rolling here into May with
22:46
Speaker 1: the markets at all time highs, margin debt at all
22:50
Speaker 1: time highs, and we're seeing a day here. I think
22:53
Speaker 1: it's uh triggered by this massive sell off in crypto,
22:58
Speaker 1: but we're seeing some certainly risk off across the board,
23:02
Speaker 1: and I think some of that's to be expected, but
23:05
Speaker 1: you know, it is giving investors a chance to take
23:08
Speaker 1: a look at their portfolios and understand how they're allocated
23:11
Speaker 1: and where they might want to be allocated. And we
23:14
Speaker 1: think this is an opportunity to take a hard look
23:17
Speaker 1: at that. Certainly, uh in the crypto space for seeing
23:20
Speaker 1: uh some massive sell off and bitcoin, etherium and so forth. Well,
23:25
Speaker 1: we're seeing sell sell offs across the board, really, David.
23:28
Speaker 1: I mean if I look at UM, well we've got
23:31
Speaker 1: a GMM Global Macro Movers function on the Bloomberg and
23:37
Speaker 1: there's just read across the screen. Equity index is selling
23:40
Speaker 1: down four x, UM is selling off, and it looks
23:43
Speaker 1: like UM pretty much everything against the dollars down. Commodities,
23:47
Speaker 1: we have copper down, w t I, soybeans, um, iron,
23:51
Speaker 1: ore all selling off. You know, where where do you
23:56
Speaker 1: take advantage of this? If if you want to, if
23:58
Speaker 1: you've got dry powder cash to put to work, where
24:02
Speaker 1: would you put it? So? You know, today, notwithstanding, we
24:07
Speaker 1: think that it makes sense for investors to continue to
24:11
Speaker 1: look at the value trade, value oriented stocks and those
24:15
Speaker 1: reflation or inflation trades. Uh. You know, technology was clearly
24:19
Speaker 1: a place to be last year, but our our mantra
24:22
Speaker 1: has been to continue to rotate into value and we
24:25
Speaker 1: still think it makes sense to do that, even the
24:28
Speaker 1: in in commodities for that matter, some of the e
24:30
Speaker 1: t F E t f s like c M, the
24:33
Speaker 1: direction commodity strategy XLB, the spider material select sector, even
24:39
Speaker 1: though we've seen lumber, which had gone to astronomic levels,
24:45
Speaker 1: has had a significant correction here uh, and some of
24:48
Speaker 1: the commodities have corrected. Going forward with the inflationary pressures,
24:53
Speaker 1: with the demand that will still be there. UH, we
24:56
Speaker 1: think it makes sense. And those areas helped to diversify
25:00
Speaker 1: our stock portfolio in past days and weeks. We've seen
25:05
Speaker 1: good diversification benefits with our stocks. We think that makes
25:08
Speaker 1: sense to continue in the value trade because we've literally
25:11
Speaker 1: seen a route in tech stocks, so we think that
25:15
Speaker 1: continues to make makes sense for investors. All right, David,
25:21
Speaker 1: just real quickly, UM, what's your sector that you guys
25:24
Speaker 1: are most excited about? Right here, right now, thirty seconds?
25:29
Speaker 1: Right now, We think that it makes sense to value
25:33
Speaker 1: oriented stocks UH, Infrastructure plays et f s like PAVES,
25:38
Speaker 1: the global x US US infrastructure e t F UH,
25:42
Speaker 1: and then the small cap, MidCap, large cap value intiiculcally
25:49
Speaker 1: oriented stocks. You can get that through E T F
25:52
Speaker 1: s uh like the Piece or US small cap cash
25:56
Speaker 1: cows the A L F H. Those plays make a
26:01
Speaker 1: lot of sense right here, David, thanks so much for
26:03
Speaker 1: joining us, David could la. They really appreciate your time
26:07
Speaker 1: and your insight, especially on a day like this. This
26:10
Speaker 1: is Bloomberg. Thanks for listening to the Bloomberg Markets podcast.
26:14
Speaker 1: You can subscribe and listen to interviews with Apple Podcasts
26:18
Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
26:22
Speaker 1: on Twitter at Matt Miller three. Pet On Ball Sweeney
26:26
Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you
26:28
Speaker 1: can always catch us worldwide at Bloomberg Radio.