Out of sectors. And amazon prime days kicked off an unusual Holiday Shopping season with retailers adapting to the challenges of the covid19 crisis. Which companies will benefit . Apple unveiled its new iphone 12. Will 5g drive a phone sales super cycle . My colleagues, ben levisohn, carlton english and jack howe. Ben, lets start with you. Mr. Market is sometimes described as manic depressive, but this week it was more sort of schizophrenia that we saw. Whats going on . Yeah. It was just a very indecisive market. There were days when investors flocked to tech, and other days the nasdaq went down, other parts of the market went up. It really just depended on the news of the day. Early in the week we had plenty of things that could have caused the market to sell off including drug trials at johnson johnson, eli lilly for Covid Treatment being halted, and we also saw, you know, cases of covid rising. But the market actually pulled through all that and even got some good news from pfizer. But it really, it was almost as if the investors were playing with a rubiks cube and just kept turning their portfolios and buying this and buying that and trying to figure out what they were supposed to own and couldnt do it. Thankfully, they didnt chuck it in the corner and just walk away. Jack thats what i would probably do if you gave me a rubiks cube. Everything you just mentioned was an outsized stimulus. Theres a disease that no one really has too much control over, then theres, of course, stimulus, theres the fed. But sometimes that makes investors nervous. They want to look at fundamentals. So if you dig inside the stock market, really the earnings and so forth, what are they telling you . Theyre looking pretty good. I mean, i think the best case was jpmorgan. The stock didnt react well to the news, but when you look at the numbers, they grew earnings 4 over a year ago. So despite everything thats going on, theyre able to grow their business. And thats pretty impressive. And i think youll see a lot of Companies Beating earnings forecasts, and hopefully offering guidance for the Fourth Quarter thats pretty good as well. And if that happens, i think we can feel pretty comfortable about the stock market continuing to go higher. Jack we also saw a nice retail sales number, and, carlton, for so many years weve been saying that the American Economy is being carried by the consumer. How much longer can that last. Well, it seem to be lasting seems to be lasting, maybe as people who kept their jobs, theyre not going on vacation, a lot of things theyre not spending on, but they are going on amazon. Com and spending money on prime day. They absolutely are doing that. And also i know halloween isnt over yet, but the Holiday Shopping season is underway. As you mentioned, amazon held its prime day earlier this week, and thats look dogging to be the looking to be the kickoff. This puts pressure on targets, walmarts, other big box retailers to spread out their Holiday Shopping season especially because black friday not going to look the way that the it has in previous years. So were going to see this surge in Online Shopping. Last year it accounted for about 14 of spend. This year salesforce predicts Online Shopping will see about 30 of shopping spend. And thats because fewer people want to go into the stores, expect stores themselves, you know, they want to be careful about having too many people all at once. Jack so this week barrons is right about i ebay. It kind of got left behind. Why do we find it interesting . So ebay, it has actually done pretty well this year, and it had some activist investors in it earlier. It sold some noncore businesses and, you know, its had a runup this year. But its still trading pretty cheaply at about 15 time earnings where you have etsy trading above 70 times. Ebay is in that mode of reinventing itself, it wants to be that place where shoppers can come for electronics, message to probill ya, you know, synthesizers, things like that. Its trying to have this rebirthright now. Jack so if ebay is the least sexiest stock, jack, probably one of the sexiest stocks is, obviously, apple. Big news this week with the iphone 12. What do you make of it . Thanks for coming to me for the sexy story, jack. I dont know how supercycley im feeling about this one. Apples a world class wooer, but the big selling point here supposed to be 5g. Thats, you know, very fast mobile service. The problem is a lot of people arent really mobile right now. Were working at home off of wifi, and the networks are not so ready right now. They need, like, another year, the carriers, to get their act together. So its kind of an open question. You know, theres a forecast out there for 150 billion in iphone revenue, thats the consensus. I would call that a sort of super cycle. Its up nicely from the last couple of years. The low end is 143 billion, that would be a slumper cycle. That would be a big disappointment, and the high end is 178 billion, that would be a super duper cycle. The carriers have been very aggressive with the subsidies theyre offering on these phones, much more so than in past years. I think theres plenty of chance for a big number. I dont think wall street has any idea, and the stock up to 30 time earnings four years ago. Jack yeah. Thats pretty expensive, and you going to find few places today at least where you can use 5g. And you guys wont know how cool i am because you wont be able to see me with a new phone. [laughter] jack thanks, jack. How would a biden win affect the markets . Pimcos Libby Cantrill on how you should position your portfolio. Thats next. My husband and i have never eaten healthier. Shingles doesnt care. I logged 10,000 steps today. Shingles doesnt care. I get as much fresh air as possible. 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One of the fears heading into november was that election day could come and go, we might not know who won the presidency, it could even be weeks before we get a result, and in the worst case, people actually fear violence. You say the markets are sending some signals that those worst Case Scenarios may be less likely. Thats exactly right. Equity soling tilt had been elevated, indicating that the markets were pricing in an election outcome that you may not know until certainly not on election night, but maybe for several days of after or even several weeks. And there was some indication that markets were pricing in an elevated chance of a contested election. Fast forward to today, they really are pricing that in, still some elevated volatility around the actual election but not necessarily the expectation that there is going to be a contested election, and for good reason from our perspective. Specifically, because many of the battleground states actually process and count ballots weeks before the election day which means that they will likely be able to report on election night. So we may know the results of florida, of ohio, of arizona and, big battleground states actually on election night. And as a result, the market actually may have a good sense of who actually won the white house which is the reason why a lot of the el elevate elevated ec by few volatility has receded. Jack as far as what we actually find out on that night, you have studied two scenarios. One is the blue wave, the other is if trump wins and the republicans hold the senate. You think its unlikely that there would be a split between the white house and the senate. Why is that . Yeah. Just in terms of, you know, for better or for worse, the american electorate has become much more polarized, much more part sanctioner as we all know. And that has partisan, as we all know, and that has led to much less vote splitting, ticket splitting in terms of different parties. And actually the 2018 midterms you said ticket splitting at its absolute lowerrest meaning that usually people just vote for the same party down ballot jack now, what i do want to ask, the republicans are often seen as more investorfriendly. What to you the Market Pricing in now . Yeah. The market has been, i think, has gone through different feeling, different emotions about what a democratic sweep would look like. And i think, you know, several weeks ago there was really the fear of increased Corporate Tax rate, increased individual taxes, that could actually be a headwind from an Economic Growth perspective, but the markets pivoted over the past few weeks, and now the focus really is on additional stimulus. Almost romanticizing this democratic sweep scenario and, you know, with an increased chance of stimulus not only in terms of covid relief, but also infrastructure and other sources of spending. So in some ways, theyre a little bit schizophrenic. Its gone from fearing the democrats to almost wanting the democrats, again, because of the prospect of additional stimulus. Jack the word schizophrenic has describing investor activities. Under a biden win, what sectors do you think would do well . They line up in terms of husband policy priorities. His policy priorities. Construction, Home Building will likely do well with a big infrastructure bill, tax incentives for firsting time home buyers. Well likely see, and weve already seen it, Renewable Energy do very well, hospitals do well as the Affordable Care act is put on more firm footing and also states and municipal ities because we know democrats are going to prioritize spending there. This is one lesson from the financial crisis that states and cities really lagged in terms of Economic Growth. Theyre a big employer of about 13 of nonfarm payroll. So really prioritizing them in terms of funding. And better credit but also likely muni bonds would do well with the anticipation of higher tax rates. To those sort of, kind of the winners in terms of a democratic sweep. Jack trump sectors would be what . Status quo, kind of status quo policy. Maybe you see a small infrastructure bill, again, kind of a tallwind for construction and Home Building, but also probably financials and technology and also pharmaceuticals with the assumption that we may see a bill under biden i would never come to fruition under trump. Jack Libby Cantrilling thank you so much, really appreciate it. Thank you. Jack coming up, what do highlevel Money Managers really think about the economy and where its going . The results of barrons big money poll. Its good stuff, thats next. Cell phone repair. 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Jack twice a year barrons surveys a group of highlevel Money Managers to find out where theyre looking for investment opportunities. We call it the barrons big money poll. Oppenheimer invest. Chief investment manager john stolfus participated and joins us now. 33 were neutral, thats more bullish than in recent years, but nearly 95 think the market either fairly valued or overvalued. And maybe the most useful statistic for longterm investors is that nearly 9 in 10 are expecting singledigit returns over the coming decade. That is well below the returns weve seen in the past ten years. John, are you still bullish e on stocks . Jack, indeed i am still bullish after this long run. I think the evidence is in resilience in Economic Data and the fact that Many Companies are doing much better than expected navigating these rough waters as a result of their ability to deploy technology. Whether it is to manufacture goods, deliver goods or provide services. Jack we just heard from Libby Cantrill on how pimco preparing for the election. Of our, the people we surveyed, 56 , i think, said joe biden would win. Last year, four years ago they thought clinton would win, so i dont know if thats a good gude. But are you doing anything to prepare for the election . You know, we are holding in the place our positions related to cyclicals over defensives. And in our approach, we want to own technology, industrials, consumer discretionary. And our contrarian pick, financials. When it comes to the economy, we think its all about when it comes to the market, we think it really comes down to you have to look at policy at the Federal Reserve and economic performance. So we think whichever party wins, we think were going to have a fairly good market as we get covid in the Rearview Mirror and we begin to see the processes of moving towards a sustainable economic recovery stateside. Jack you mentioned the industrials. What appeals about that sector when everybody else focused on Sexy Technology companies . Jack, industrials to us are the new technology. We love em. Its the internet of things whether its the conversation a jet engine has with a central database or whether it is a pallet that has sensors on it that comment on where the pallet9 is located, what the contents of the pallet are or whether its a vehicle thats able to let its owners know is it well maintained, does it need an upgrade, does it need servicing. Jack i know that carlton has a question for you. Youal like one of her favorite sectors. Yeah. So one of the sectors that has been unloved has been financials, and i think we saw evidence when the big banks reported this week and didnt get much love. Where do you see promise in the bigbags where maybe big banks where maybe other investors do not . Well, when it comes to financials, we think theyre going the get their day once we get some kind of more traditional steeping of the yield curve. Steepening of the yield curve. But if we can just get to a point where we feel more comfortable about safety related to covid, which would likely mean once we get a vaccine of good efficacy and adaptability, we think well return to a more normal economy. In the meantime, investors are worried that if covid sticks around longer than expected and the economy suffers as a result of that, that banks might experience nonperforming loans, and they might have to the fed might force them to raise the reserve requirements. We dont think thatll happen. So we think positioning now, theyre cheap on a price to boog basis, and a good number of them are highly attractive including some of the names that reported this week. Jack i think jack howe hey, john, this is jack howe. I want do you about bonds. A lot of our big money pol