Global Market Selloff Intensifies; Buffett Trims Apple Stake

Bloomberg Audio Studios, Podcasts, Radio News. 0:00:09.720 --> 0:00:10.280 Good morning. 0:00:10.320 --> 0:00:13.119 I'm Nathan Hager and I'm Karen Moscow. Here are the 0:00:13.160 --> 0:00:14.640 stories we're following today. 0:00:14.920 --> 0:00:17.639 Karen, let's get more on this global market route. We 0:00:17.680 --> 0:00:20.480 are joined by Bloomberg's Kritty, Goopta and Kritty. We saw 0:00:20.520 --> 0:00:22.800 a historic sell off in Asia overnight. 0:00:23.079 --> 0:00:27.560 We certainly did, and the selloff is one of historic proportions. 0:00:27.560 --> 0:00:31.160 The topics down twelve percent, the Nike also down another 0:00:31.240 --> 0:00:34.360 twelve percent. But it's not just Japan. You're also seeing 0:00:34.360 --> 0:00:36.240 the stock really spread off. Stock self spread off in 0:00:36.240 --> 0:00:39.600 the chip sector across Asia. COSPI, the KAUSDAK, basically the 0:00:39.640 --> 0:00:43.000 South Korean indexes that have that major Samsung havevyweight, both 0:00:43.080 --> 0:00:46.080 down somewhere between eight and nine percent. You even have 0:00:46.200 --> 0:00:48.320 the KOSAK in particular, which is of course at the 0:00:48.560 --> 0:00:51.479 South Korean version of the Nasdaq, basically down a whopping 0:00:51.560 --> 0:00:54.640 eleven percent. That's just in the equity space, Nathan, you 0:00:54.680 --> 0:00:56.840 also have a similar story over in the currency space, 0:00:56.880 --> 0:00:59.960 where dollar yen now at a one forty two handle, 0:01:00.240 --> 0:01:01.800 really shaking things up in the effect space. 0:01:01.960 --> 0:01:04.200 Yeah, we're seeing this sell off spread into Europe where 0:01:04.240 --> 0:01:06.920 you are, though it doesn't look quite as bad there, Critty. 0:01:07.120 --> 0:01:09.400 It doesn't, but it is still read on the screen 0:01:09.440 --> 0:01:11.200 in line with the moves that you are seeing globally. 0:01:11.200 --> 0:01:14.280 About a two percent decline in the eurostocks fifty. The 0:01:14.280 --> 0:01:16.640 Footy one hundred is your underperformer as well, down about 0:01:16.680 --> 0:01:19.920 two point two percent. Ironically, France isn't selling off as much. 0:01:19.959 --> 0:01:21.959 It's only down one point eight percent. But the reason 0:01:22.040 --> 0:01:24.360 for that is simply that these markets aren't as deep 0:01:24.400 --> 0:01:26.560 as the ones in Asia. They're not as liquid as 0:01:26.560 --> 0:01:27.560 the ones in the States either. 0:01:28.319 --> 0:01:30.319 All right, Creatie goopto will be checking in with you 0:01:30.400 --> 0:01:33.880 all morning. Thank you. Treasuries do continue to rally this morning. 0:01:33.920 --> 0:01:37.880 Bets increasing there will be an emergency FED rate cut. 0:01:37.959 --> 0:01:40.760 In fact, traders now see roughly sixty percent chance of 0:01:40.800 --> 0:01:44.559 an emergency quarter point cut within one week. JP Morgan 0:01:44.600 --> 0:01:47.640 and Citigroup are revamping their forecast to predict a half 0:01:47.720 --> 0:01:50.640 point cut in the US in September. It all follows 0:01:50.680 --> 0:01:53.960 Friday's weaker than expected JOMPS report and believes that the 0:01:54.000 --> 0:01:57.160 Fed is too slow to support a slowing economy. Former 0:01:57.200 --> 0:02:00.320 Offen economist Claudia sum to a Bloomberg Radio that data 0:02:00.360 --> 0:02:02.920 triggers her famous recession indicator. 0:02:03.040 --> 0:02:07.200 This summ rule way too much momentum in the unemployment 0:02:07.280 --> 0:02:10.760 rate in recent months, I mean four point three percent. 0:02:11.240 --> 0:02:14.640 So whether we are at that moment of a recession 0:02:14.760 --> 0:02:18.400 or not, this is your build into substantial weakening in 0:02:18.440 --> 0:02:19.239 the labor market. 0:02:19.720 --> 0:02:23.160 Claudia sam with some consulting, made the comments Friday on 0:02:23.200 --> 0:02:26.160 Bloomberg Surveillance right after the job's report, And. 0:02:26.280 --> 0:02:29.359 Karen, as you mentioned, we're seeing Nasdaq futures plunge now 0:02:29.480 --> 0:02:32.640 nearly four percent this morning. Several big names are in 0:02:32.680 --> 0:02:35.320 the red. Let's get the latest from Bloomberg's Lisa Matteo. 0:02:35.400 --> 0:02:39.079 Lisa, good morning. Yeah, we're seeing the tech sell off extending. 0:02:39.120 --> 0:02:41.120 We have Nvidia down more than eight percent. We have 0:02:41.280 --> 0:02:45.040 Microsoft metap plunging more than four percent, Alphabet down more 0:02:45.040 --> 0:02:47.320 than four percent, Amazon falling more than two percent. We 0:02:47.360 --> 0:02:50.080 have in Tesla taking a hit, down more than five percent. 0:02:50.440 --> 0:02:53.359 But this comes after the Naszac entered into that technical 0:02:53.400 --> 0:02:56.320 correction on Friday, and this was amid that drawback from 0:02:56.360 --> 0:03:00.600 the overheated artificial intelligence rally. Now that gate page actually 0:03:00.600 --> 0:03:03.720 touched a record high less than a month ago, but 0:03:03.800 --> 0:03:07.399 it's not just AI. Investors also concerned about over elevated 0:03:07.480 --> 0:03:10.920 valuations on the impact of also the presidential election on 0:03:10.960 --> 0:03:14.800 geopolitical tensions in New York. Lisa Mateo, Bloomberg Radio. 0:03:15.000 --> 0:03:17.840 Right, Lisa, thank you. Apple shares they're down about eight 0:03:17.919 --> 0:03:21.239 percent over the weekend. Berkshire Hathaway revealed it's still nearly 0:03:21.360 --> 0:03:24.079 half of its position in Apple during the second quarter, 0:03:24.120 --> 0:03:26.200 and we get more from Bloomberg's Doug Prisner. 0:03:26.680 --> 0:03:29.320 The move could be interpreted as a lack of conviction 0:03:29.520 --> 0:03:31.880 in the Apple growth story. At the end of March, 0:03:31.960 --> 0:03:36.480 Berkshire's position was worth roughly one hundred and forty billion dollars. Then, 0:03:36.840 --> 0:03:39.360 as of the end of June, it was worth eighty 0:03:39.400 --> 0:03:42.840 four billion. Since twenty sixteen, when Berkshire first has closed 0:03:42.840 --> 0:03:46.320 its stake, Apple shares have sored nearly nine hundred percent. 0:03:46.600 --> 0:03:50.480 Even with the sale, Apple does remain Berkshire's largest single position. 0:03:51.000 --> 0:03:54.839 If you're wondering about valuation, Apple's multiple is thirty three 0:03:54.920 --> 0:03:58.320 times future profits. That's eleven points higher than the s 0:03:58.360 --> 0:04:01.960 and P five hundred our Cime, Derek Prisoner, Bloomberg Radio. 0:04:01.800 --> 0:04:04.240 Thanks Doug. Tech stocks aren't the only assets selling off 0:04:04.280 --> 0:04:07.960 this morning. We're also watching cryptocurrencies. Bitcoin is down nearly 0:04:08.040 --> 0:04:11.360 eleven percent, adding to a thirteen point one percent drop 0:04:11.480 --> 0:04:14.160 last week, the worst then since the period when the 0:04:14.240 --> 0:04:18.479 FTX exchange imploded. US exchange traded funds for bitcoin suffer 0:04:18.560 --> 0:04:21.520 their largest outflows in about three months last Friday. 0:04:21.920 --> 0:04:24.120 Well, Nathan, we'll have much more on the market selloff 0:04:24.160 --> 0:04:27.039 in five minutes when we speak with RBC Capital Markets 0:04:27.040 --> 0:04:30.440 Head of US equity Strategy, Lori Calvesina. But now we 0:04:30.480 --> 0:04:32.920 want to get the latest on the Middle East tensions 0:04:33.000 --> 0:04:37.040 there maybe piling on to negative market sentiment. Israel is 0:04:37.200 --> 0:04:41.039 racing for possible attacks from Iran and regional militias after 0:04:41.080 --> 0:04:44.520 the high profile assassinations of Hamas and hes Beila leaders 0:04:44.640 --> 0:04:47.960 last week. Prime Minister Benjamin Ettnyah, who says his country 0:04:48.000 --> 0:04:51.800 is in a quote multi front war against Iran's Axis 0:04:51.839 --> 0:04:54.359 of Evil. But the White House is urging NETANYAHUO to 0:04:54.400 --> 0:04:58.679 redouble ceasefire negotiations with Hamas, even as the US moves 0:04:58.680 --> 0:05:02.200 in a fighter jets Squander and keeps an aircraft carrier 0:05:02.240 --> 0:05:06.360 in the area. Here's Deputy National Security Advisor Jonathan Finer. 0:05:06.720 --> 0:05:09.600 What we're trying to do is prepare for any eventuality, 0:05:09.680 --> 0:05:13.760 any possibility that's only responsible for the United States. Obviously, 0:05:13.760 --> 0:05:17.040 we've been quite clear that we'll work with our ally, Israel, 0:05:17.120 --> 0:05:20.599 to defend itself against any threats that it faces, and 0:05:20.640 --> 0:05:22.400 we are in a moment that appears to be of 0:05:22.440 --> 0:05:23.080 heightened threat. 0:05:23.520 --> 0:05:26.920 White House Deputy National Security Advisor John Finer made those 0:05:26.960 --> 0:05:31.520 comments on CBS's Face the Nation heard Sundays on Bloomberg Radio. 0:05:31.400 --> 0:05:34.320 Think Karen Well, the White House focuses on geopolitical tensions. 0:05:34.400 --> 0:05:37.880 Vice President Kamala Harris is reportedly focusing on the final 0:05:37.880 --> 0:05:41.040 stretch of choosing a running mate in her presidential campaign. 0:05:41.120 --> 0:05:43.360 We get that story from Bloomberg's Ed Baxter. 0:05:44.080 --> 0:05:46.679 Three people on our shortlist met with her over the weekend. 0:05:46.720 --> 0:05:50.839 Arizona Senator Mark Kelly, Pennsylvania Governor Josh Shapiro, and Minnesota 0:05:50.839 --> 0:05:56.280 Governor Tim Walls. Kentucky Governor Andy Basher, Transportation Secretary Pete Buddhachic, 0:05:56.680 --> 0:06:01.159 and Illinois Governor JB. Pritzker also names that are still 0:06:01.200 --> 0:06:04.520 being floated now. The Democratic Party is planning a virtually 0:06:04.640 --> 0:06:08.880 nominated ticket by August seventh, and Harris has said the 0:06:08.880 --> 0:06:12.640 shop plans day at the campaign trail weather running mate tomorrow, 0:06:13.440 --> 0:06:15.000 Ed Baxter Bloomberg Radio. 0:06:15.240 --> 0:06:16.520 All right, ed, thanks. 0:06:19.800 --> 0:06:20.960 Time now for a look at some of the other 0:06:21.040 --> 0:06:23.279 stories making news in New York and around the world. 0:06:23.320 --> 0:06:25.400 For that, we're joined by Bloomberg's John Tucker. 0:06:25.480 --> 0:06:29.640 John, Good Morning, Good morning, Karen. Debbie strengthened into a hurricane. 0:06:29.680 --> 0:06:32.440 Has the system neared landflow in Florida's Big Bend region, 0:06:32.680 --> 0:06:35.640 where residents have fled ahead of a potential week long 0:06:35.720 --> 0:06:40.200 disaster across the South. Bloomberg mediorologist Rob Carolyn is tracking 0:06:40.200 --> 0:06:41.280 the storm now. 0:06:41.320 --> 0:06:43.719 The very big concern with Debbie is as it moves 0:06:43.720 --> 0:06:45.960 inlet over in North Florida over the next day or so, 0:06:46.360 --> 0:06:48.360 the steering currents are going to collapse, and that means 0:06:48.360 --> 0:06:50.400 there's going to be nothing pushing the storm along, So 0:06:50.440 --> 0:06:54.359 it's just going to conder meander over portions of southeastern Georgia, 0:06:54.600 --> 0:06:57.880 maybe eventually off the coast of southeastern South Carolina. This 0:06:57.960 --> 0:07:00.600 means some very heavy localized rain are going to fall 0:07:00.680 --> 0:07:03.680 over North Florida, Eastern Georgia, and South Carolina. 0:07:03.720 --> 0:07:06.720 Through the first part of the workweek, top wins intensified 0:07:06.760 --> 0:07:09.720 to eighty miles per hour, making Debbie a Category one. 0:07:09.800 --> 0:07:13.760 System Defense Secretary Lloyd Austin has revoked a plea agreement 0:07:13.840 --> 0:07:16.720 reached last week with the accused mastermind of the September 0:07:16.720 --> 0:07:20.600 eleventh terror attacks and two alleged accomplices. That story this 0:07:20.680 --> 0:07:23.600 morning from Bloomberg's Denise Penegreni Secretary. 0:07:23.680 --> 0:07:26.440 Austin has now assumed direct oversight of the case and 0:07:26.480 --> 0:07:29.320 canceled the plea agreement with Khaleage Sheik Mohammed and his 0:07:29.480 --> 0:07:32.800 lodged accomplices for the attacks that killed nearly three thousand 0:07:32.800 --> 0:07:35.200 people in New York City, at the Pentagon and in 0:07:35.200 --> 0:07:39.080 a Pennsylvania field. This effectively reinstates it as a death 0:07:39.160 --> 0:07:43.200 penalty case. Austin also relieved the senior Defense Department official 0:07:43.320 --> 0:07:47.160 responsible for oversight of this case. His decision brought relief 0:07:47.200 --> 0:07:49.920 to some family members of victims who had expressed anger 0:07:49.960 --> 0:07:52.600 over the deal, but it also left uncertain the next 0:07:52.600 --> 0:07:56.440 steps of the prosecution. Denise Pelgrinny Bloomberg Radio, and. 0:07:56.440 --> 0:08:00.320 After ten days in theaters, Deadpool and Wolverine ready the 0:08:00.400 --> 0:08:04.080 highest grossing R rated movie ever. In a second weekend, 0:08:04.120 --> 0:08:07.840 the Marvel Studios Blockboster, starring Ryan Reynolds and Hugh Jackman, 0:08:07.960 --> 0:08:12.200 continued to steamroll through movie theaters collecting ninety seven million 0:08:12.280 --> 0:08:16.320 dollars according to Studio estimates. Global News twenty four hours 0:08:16.360 --> 0:08:18.800 a day and whatever you wanted with Bloomberg News Now. 0:08:19.000 --> 0:08:22.800 I'm John Tucker. This is Bloomberg Nathan and Karen. 0:08:22.840 --> 0:08:29.960 John, thank you time now for the Bloomberg Sports Update 0:08:30.000 --> 0:08:31.080 with John stash Hour. 0:08:31.200 --> 0:08:32.360 John, Good morning, Good morning. 0:08:32.440 --> 0:08:34.600 Care of the Yankees and Blue Jays. Rubbert game at 0:08:34.640 --> 0:08:37.240 the stadium and won Soto Homemwerd seventh, thenning Yanks had 0:08:37.240 --> 0:08:39.360 their first lead, Toronto tie the game. Then there was 0:08:39.400 --> 0:08:42.079 a rain delay, and then there was a DJ Lemy 0:08:42.120 --> 0:08:44.280 who walk off hit the tenth innning. The Yanks won 0:08:44.320 --> 0:08:46.440 four to three. They've won seven of their last eight. 0:08:46.520 --> 0:08:48.960 Mets held the five Hits lost three to two. They 0:08:49.040 --> 0:08:51.320 lost two of three to the Angels in Anaheim. The 0:08:51.400 --> 0:08:54.360 Chicago White Sox swept by the Twins. The White Sox 0:08:54.720 --> 0:08:56.760 have lost twenty games in a row. They have been 0:08:56.800 --> 0:09:00.679 only two longer losing streaks since nineteen hundred. The sixty 0:09:00.720 --> 0:09:03.679 one Phillies dropped twenty three straight. The nineteen eighty eight 0:09:03.720 --> 0:09:06.480 Orioles began their season oh and twenty one. The White 0:09:06.520 --> 0:09:10.280 Sox will try again tonight in Oakland Noah Isles one 0:09:10.360 --> 0:09:13.240 to one hundred meters in Paris by five one thousands 0:09:13.240 --> 0:09:15.640 of a second. There's a belief that it was the 0:09:15.679 --> 0:09:18.360 closest race in Olympic history, not official because they didn't 0:09:18.400 --> 0:09:21.120 used to carry the times out that many decimal points. 0:09:21.120 --> 0:09:23.520 With Lyles can now be called the fastest man in 0:09:23.559 --> 0:09:24.880 the world. He is the first American to win one 0:09:24.960 --> 0:09:27.960 hundred meters in twenty years. Novak Djokovic can now be 0:09:28.000 --> 0:09:31.360 called an Olympic gold medal winner. He beat Carlos Alcareza 0:09:31.360 --> 0:09:33.600 and the thirty seven year old winner of twenty four 0:09:33.640 --> 0:09:34.560 Grand Slams. 0:09:34.880 --> 0:09:39.959 Was asked where this ranks twenty twelve opening ceremony in London, 0:09:40.200 --> 0:09:43.160 carrying the flag for my country the opening ceremony opening 0:09:43.160 --> 0:09:45.120 in the Olympic Games is the best feeling that an 0:09:45.160 --> 0:09:52.240 athlete could have until today. This kind of supersedes everything 0:09:52.320 --> 0:09:57.920 that I imagined, that hoped that I could experience, and that 0:09:58.000 --> 0:09:58.640 I could feel. 0:09:58.679 --> 0:10:01.360 Scotti Schefler on Olympic go then golf for the furious 0:10:01.400 --> 0:10:04.360 finish final round sixty two. Had Bobby Finke not won 0:10:04.400 --> 0:10:06.920 the fifteen hundred meters in the last individual event of 0:10:06.960 --> 0:10:08.800 the Games, would have been the only time in Olympic 0:10:08.960 --> 0:10:12.360 history no US goals and individual men's swimming, but Fink one. 0:10:12.720 --> 0:10:15.400 He broke the world record. The US men did not 0:10:15.520 --> 0:10:17.800 win the medley. Really, they had won each of the 0:10:17.840 --> 0:10:21.760 fifteen previous ones. They were in Johns Dashedward Bloomberg Sports 0:10:21.840 --> 0:10:22.640 Karen daven. 0:10:24.760 --> 0:10:28.880 Coast to Coast on Bloomberg Radio, nationwide on Sirius XM, 0:10:28.960 --> 0:10:31.880 and around the world on Bloomberg dot Com and the 0:10:31.920 --> 0:10:33.120 Bloomberg Business app. 0:10:33.360 --> 0:10:37.120 This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. The 0:10:37.160 --> 0:10:40.760 global stock route that began last week is intensifying this morning, 0:10:40.840 --> 0:10:43.520 growing concerns about a weakening economy and a FED that 0:10:43.559 --> 0:10:45.400 may have been too late to act to stop it. 0:10:45.480 --> 0:10:48.160 To get some perspective on this market reaction, we are 0:10:48.240 --> 0:10:51.720 joined now by Lori Calvacina, head of US Equity Strategy 0:10:51.760 --> 0:10:55.040 at RBC Capital Markets. Luri, good morning. It is very 0:10:55.040 --> 0:10:57.240 tough to find some green on the screen this morning. 0:10:57.280 --> 0:10:59.280 Is it a pivot point for the market or our 0:10:59.320 --> 0:11:00.680 investors reacting? 0:11:01.880 --> 0:11:04.079 Hi, Nathan, Well, thanks for having me. Look. I think 0:11:04.120 --> 0:11:06.360 there was a lot of confusion on Friday with the 0:11:06.440 --> 0:11:08.880 jobs report. I think we also had some negative data 0:11:08.880 --> 0:11:11.960 points from ism last week, and to be honest, it 0:11:12.040 --> 0:11:14.880 really stands in contrast on both those reports with the 0:11:14.920 --> 0:11:18.199 tone we've been hearing from companies throughout this reporting season. 0:11:18.679 --> 0:11:20.840 So I think that there is a lot of sorting 0:11:20.880 --> 0:11:23.640 out to do right here. I do think that one 0:11:23.640 --> 0:11:25.560 of the reasons we've seen such a big reaction in 0:11:25.640 --> 0:11:28.920 markets has been sort of the sharp detour that we've seen. 0:11:29.040 --> 0:11:30.400 But I do think we need a little bit more 0:11:30.400 --> 0:11:32.280 information at this point as. 0:11:32.120 --> 0:11:35.880 That sorting out period continues. Lorie, We're seeing markets already 0:11:35.960 --> 0:11:39.160 pricing in something like sixty percent odds that the Fed's 0:11:39.200 --> 0:11:42.360 going to cut rates this week. I mean, how would 0:11:42.400 --> 0:11:46.079 stocks react if the Fed essentially makes up for last 0:11:46.080 --> 0:11:47.000 week's lost time. 0:11:48.400 --> 0:11:50.480 So I think that we always have to ask about 0:11:50.480 --> 0:11:53.320 the reason that these sorts of things happen. I remember, 0:11:53.320 --> 0:11:56.480 this is market pricing, this is an official action. We 0:11:56.520 --> 0:11:59.080 did sort of look at this phenomenon last year during 0:11:59.080 --> 0:12:02.840 the Regional Banking CIS, and what we found was that 0:12:03.000 --> 0:12:05.800 really you have to be careful what you wish for, 0:12:05.920 --> 0:12:07.600 you know, in this kind of regards. And I know 0:12:07.600 --> 0:12:09.280 there's been a lot of talk about, you know, sort 0:12:09.320 --> 0:12:12.480 of fifty basis point cuts that have come out. We 0:12:12.520 --> 0:12:15.760 did actually publish something on that this morning, looking at 0:12:15.760 --> 0:12:19.400 when we've seen fifty basis point cuts in just recent decades, 0:12:19.440 --> 0:12:22.040 and it's tended to be associated with periods like the GFC, 0:12:22.320 --> 0:12:25.360 periods like COVID. You know, at the moment, that doesn't 0:12:25.400 --> 0:12:27.640 seem to be the sort of environment that we are in. 0:12:27.840 --> 0:12:30.040 So again, I think we need to wait and see 0:12:30.400 --> 0:12:32.280 what we're going to get from the FED. But if 0:12:32.280 --> 0:12:35.319 you look at the history, the fifty basis point cuts, 0:12:35.360 --> 0:12:37.960 you know, just in recent decades have been associated with 0:12:38.040 --> 0:12:40.600 sort of major periods of distress and markets. You can 0:12:40.640 --> 0:12:42.760 go back farther and look at the nineties and earlier 0:12:43.320 --> 0:12:45.680 to find other examples where that was not the case. 0:12:45.679 --> 0:12:47.160 But I do think that's the kind of playbook a 0:12:47.160 --> 0:12:48.640 live investors have in their heads. 0:12:49.040 --> 0:12:50.960 So while we wait for the FED, and while we 0:12:51.040 --> 0:12:55.160 wait for further data, do you see this route going 0:12:55.320 --> 0:12:58.640 further or could this be a by opportunity. 0:13:00.000 --> 0:13:01.560 I think we're going to have to watch the data 0:13:01.600 --> 0:13:03.480 this week that comes in. But what I will tell 0:13:03.520 --> 0:13:06.160 you is that we came into the third quarter thinking 0:13:06.200 --> 0:13:08.080 that we were at risk of a pullback. Now, we 0:13:08.160 --> 0:13:12.760 did not have sudden concerns about a recession on our 0:13:12.760 --> 0:13:14.920 BINGO card. But the reality is that if you look 0:13:14.960 --> 0:13:18.480 at the CFTC data, and we looked at US equity 0:13:18.520 --> 0:13:21.679 futures positioning, this is something we track every week. If 0:13:21.760 --> 0:13:24.560 you look at where we've been throughout most of this year, frankly, 0:13:24.679 --> 0:13:27.720 it's been on US equity future positioning broadly, and S 0:13:27.760 --> 0:13:31.080 and P five hundred future positioning in particular above the 0:13:31.160 --> 0:13:36.040 January twenty eighteen highs and above the February twenty twenty highs, 0:13:36.120 --> 0:13:38.000 and so we had, you know, obviously a tough year 0:13:38.040 --> 0:13:39.880 in twenty eighteen, but we did have you know, sort 0:13:39.880 --> 0:13:41.640 of a milder draw down on the low ball and 0:13:41.720 --> 0:13:44.960 wined early that year twenty twenty. Obviously we all know 0:13:45.000 --> 0:13:48.160 what happened there. But from a positioning perspective, whether you're 0:13:48.160 --> 0:13:51.520 looking S and P naddak futures positioning as well, has 0:13:51.559 --> 0:13:54.800 looked extremely extended and we have looked vulnerable to bad 0:13:54.840 --> 0:13:55.959 news from that perspective. 0:13:56.679 --> 0:13:59.280 You know, I think this is just maybe the last 0:13:59.320 --> 0:14:02.680 time or two we spoke, you had cautiously raised your 0:14:02.720 --> 0:14:05.600 S and P five hundred price target for the end 0:14:05.600 --> 0:14:09.480 of this year. Now that we've seen this pretty significant 0:14:09.520 --> 0:14:13.040 dive this morning and the potential for more. Are you 0:14:13.120 --> 0:14:13.760 rethinking that? 0:14:15.200 --> 0:14:17.719 So what we had baked into our outlook was the 0:14:17.760 --> 0:14:19.920 idea that we would see a five to ten percent 0:14:20.000 --> 0:14:22.680 type draw down, and that's a garden variety type drawdown. 0:14:22.720 --> 0:14:25.480 But if you go beyond ten percent, what the history 0:14:25.520 --> 0:14:27.480 tends to tell us is that it's associated with a 0:14:27.480 --> 0:14:31.400 pretty intense growth scare. So obviously those risks have risen 0:14:31.440 --> 0:14:33.720 in here. We don't know that it's certain we're going 0:14:33.760 --> 0:14:36.200 to get that time of twenty percent draw down, but 0:14:36.240 --> 0:14:39.520 if you look at those periods, especially in recent history, 0:14:39.560 --> 0:14:42.160 we've seen those kinds of draw downs fifteen percent back 0:14:42.160 --> 0:14:46.200 in twenty ten, twenty percent, and twenty eleven. Obviously, if 0:14:46.240 --> 0:14:48.520 you go back to the twenty fifteen twenty sixteen growth scare, 0:14:48.560 --> 0:14:51.560 I think we fell about fourteen percent. So those are 0:14:51.560 --> 0:14:53.440 the kinds of periods. We have not baked in that 0:14:53.560 --> 0:14:55.360 kind of scenario into our modeling. 0:14:55.400 --> 0:14:58.520 As of now, about thirty seconds left, Laurie, what's it 0:14:58.560 --> 0:15:00.920 going to take to bring confidence back into this market? 0:15:01.960 --> 0:15:05.000 So I think let's watch the sentiment positioning indicators. Remember 0:15:05.040 --> 0:15:08.160 AAII has also looked stretch. When we get down to 0:15:08.200 --> 0:15:10.800 the one standard deviation mark below the long term average 0:15:10.800 --> 0:15:13.600 that has typically, you know, in recent years, given us 0:15:13.600 --> 0:15:17.000 a buy signal. Also, watch valuations. They've been very extended 0:15:17.040 --> 0:15:19.280 for the broad market. They've been very extended for the 0:15:19.320 --> 0:15:22.240 top ten megacat names. Let's watch what happens when those 0:15:22.280 --> 0:15:25.160 numbers get back down to average. We can often see 0:15:25.440 --> 0:15:27.520 markets try to make a stand around those kinds of 0:15:27.560 --> 0:15:28.960 levels and the source of environment. 0:15:29.200 --> 0:15:32.080 This is Bloomberg day Break Today, your morning brief on 0:15:32.160 --> 0:15:35.680 the stories making news from Wall Street to Washington and beyond. 0:15:35.960 --> 0:15:38.760 Look for us on your podcast feed at six am 0:15:38.840 --> 0:15:42.480 Eastern each morning, on Apple, Spotify, and anywhere else you 0:15:42.560 --> 0:15:43.720 get your podcasts. 0:15:43.840 --> 0:15:46.520 You can also listen live each morning starting at five 0:15:46.600 --> 0:15:49.160 am Wall Street time on Bloomberg eleven three to zero 0:15:49.240 --> 0:15:52.040 in New York, Bloomberg ninety nine to one in Washington, 0:15:52.200 --> 0:15:55.040 Bloomberg one oh six to one in Boston, and Bloomberg 0:15:55.120 --> 0:15:56.800 nine sixty in San Francisco. 0:15:57.200 --> 0:16:00.360 Our flagship New York station is also available on your 0:16:00.400 --> 0:16:05.160 Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty 0:16:05.520 --> 0:16:08.400 plus listen coast to coast on the Bloomberg Business app, 0:16:08.480 --> 0:16:12.480 Serious XM, the iHeartRadio app, and on Bloomberg dot Com. 0:16:12.520 --> 0:16:15.480 I'm Nathan Hager and I'm Karen Moscow. Join us again 0:16:15.520 --> 0:16:18.240 tomorrow morning for all the news you need to start 0:16:18.280 --> 0:16:20.920 your day, right here on Bloomberg Daybreak