Chisholm, United States, Andy Capp discussed on Bloomberg Finance


What about things that haven't happened before in history? You know, we're looking at these trade battles between the US and China that in some ways are unprecedented. So how do you black swans or what are you going? Yeah. How do you? How do you plan for something like that? Or Andy CAPP that in now. And that's one of the reasons why I don't use sort of a black box model because history is not we're not just going to replicate history. You have to sort of learn from it. So when you think about trade, we can actually study what has happened in history. I'm not saying that what's happening. Now is the same exact thing is what happened historically. But I think it can give you a guideline and one of the interesting data points that I have about trade is we know we have a global trade index that goes back to I think nineteen fifty and we can see that contracted about a third of the time. So if you said, hey, I have perfect foresight. And I know the global trade because of this trade war is going to contract in the next year. What would the SNP have done, and you actually find that actually has the highest odds? Of an upmarket and the highest percentage gains versus if you said, I've perfect foresight and global trade is going to be at the highest level. Right. So it's a reverse of what you would think. And so it teaches you that. Hey, wait a minute. This hasn't been a critical driver, historically because the stock market discount that very often quickly and in advance, which may very well be the exact situation we were in the fourth quarter, which sort of gets me earnings as well, which is as much as we are worried about endings recession because we were right on the threshold of potentially contracting on a year on year basis this quarter because as we laughed the tax cuts that earnings recession may have already been discounted in the fourth quarter when you aggregate, those defensive sectors and aggregate, cyclical factors and say what that outperformance is is very very typical of earnings recession. So as much as we focus on earnings as we're going through the earning season. Now, maybe. It actually it doesn't really matter if we contract or not because it's already been discounted in the market. Christobal tells me, you're you're bullish. That's right. And has your bullish. Have you seen investors? Be bullish as well. We've had such a bounce in the stock market. And it's happened more quickly than a lot of people expected given the downturn. We saw at the end of last year. So. Where the money flows is where why isn't more money flowing, and especially from retail any thoughts on that. I can't I can't explain from money flow perspective. I'll tell you a couple of things on the date. I look at one we talked about sort of the dislocation data earlier, which is still persistent in terms of an expression of fear that I think still resides, which is one of the reasons why I think the risk for the risk reward for the market is positive. But a lot of the sentiment indicators that I look at still express that fear as well. Which may or may not be part of the reason why retail funds haven't actually come back into equities. Denise thank you so much for sharing your insights on a variety of sectors in the market right now. Now, thanks so much for having me. That's niece Chisholm. She's a sector strategist at Fidelity Investments in Boston. Attention probability statistics that this week. Additional Bloomberg finance tune it again next week at the same time. We'll get together for look at a hedge funds asset management for begging Collins on John Tucker of this. It only takes what does building a better Bank. Look like it starts with building Capital, One cafes warm inviting places that feel nothing like a typical Bank were you can open an account with.

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