Liz Ann Sonders, Chief Investment Strategist at Charles Schwab Talks Markets

Chief Investment Strategist at Charles Schwab, Liz Ann Sonders discusses the "spooking" market today and the stagflationary air to growth/inflation in terms of GDP/PCE data june rate cut odds. She is joined by Bloomberg's Tom Keene and Paul Sweeney.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news, joining.

Speaker 2 (00:07):
Us in studio Lizzie Saunders today. Okay, forget about all
the equity discussion. I want to know the act of
your Twitter feed. Yesterday your Twitter feed looked like the
Federal Reserve analyzing economic data. It was a rock star
feed of like fifteen studies of GDP and the dynamics

(00:28):
into the equity market. Are you doing that in your
spare time?

Speaker 3 (00:32):
Well, I'm not creating most of the charts. You know,
that's Kevin's domain.

Speaker 1 (00:37):
If I had to create, would be.

Speaker 2 (00:39):
You know, from the Bloomberg terminals with crayon.

Speaker 3 (00:44):
So thankfully I've got a great pair of folks with
Kevin and Adrian who do the charts. But you know,
there are there are days where weeks happen, and this
week is one of those unbelievable weeks.

Speaker 2 (00:59):
And I got breakfast at Sarah Bass in Central Park,
South today and do like a four hour conversation on
this moment. At hand, I got bran crewed under sixty
dollars A barrel global slowdown? US slowdown? Is that what
you model in?

Speaker 3 (01:13):
Yeah, I think what we're seeing now is there was
a lot of debate in the onset of the escalation
of the trade war as to whether the growth hit
would come first or the inflation pop would come first.
And it looks like the growth hit maybe coming first.

Speaker 1 (01:27):
So Liz, we've got the S and P five hundred.
I mean that good news bad news, and bad news
is were down ten percent from the high early in
the year, but the good news is were ten percent
higher from the bottom. What do you make of this?
What do you think we should be doing here?

Speaker 3 (01:40):
I think what we're seeing in the month of April,
particularly since the low, is a sign that the retail
trader is still very active. They're still in the by
the dip mentality. You've got a tech back and the
leaderboard on a month to date basis, even though it's
toward the bottom on a year to date baseis vand

(02:01):
Track tracks what retail traders are doing. And that's in
start contrast to hedge funds and other institutions and CTAs
that have been going more risk off. And then when
you see something, you know Goldman Sachs has those great
indexes and boxes of baskets, and their Meme stock basket
is soaring in the last month too. Another proxy for

(02:24):
retail traders.

Speaker 1 (02:26):
What do you make here of earnings? Because we're almost
halfway through the earning cycle. I see a lot of
companies probably doing what I would do, which is like,
I don't know what's going on at there, so I'm
going to pull my guidance or give you some ranges
or some scenarios. What are you taking away from earnings?

Speaker 3 (02:38):
I think companies have put themselves into time out, you know,
earning so far for first quarter a little bit better
than expected, not quite the beat rate that we've seen
over the last year. So but that's through March data.
So it's the it's the guidance or lack thereof that
I think is really important. And it is starting to
feel a little bit like the early stages of the pandemic,

(02:59):
when at that time you've had a record percentage of
companies ships got and solved together.

Speaker 2 (03:03):
Is institutional under owned in the MEGS seven that retail
owns up to their eyeballs.

Speaker 3 (03:10):
In many cases yes, because of certain funds requirements that
they have a max on the amount they can hold
percentage wise in any individual stock. Even some of the
sector exchange traded funds are limited are limited, so they
they thereby default can't get couldn't have developed the same
concentration problem as what was embedded in cap weighted indexes.

Speaker 2 (03:33):
Our conversation with the Day and the Equity Marcus Lizzie Saunders
with us from Charles Schwab