ARE WE SEEING A DOUBLE BOTTOM
NOW OR IS THERE MORE TROUBLE IN
YOUR OPINION?
>> I THINK WE WILL RALLY IN
SEPTEMBER WHEN EVERYBODY COMES
BACK TO THE OFFICE.
WE HAD PRETTY LOW VOLUME IN THE
END OF AUGUST AND BAD COMMENTS
AND NEGATIVE COMMENTS TO THE FED
RELATIVE TO WHAT PEOPLE ARE
THINKING THEREFORE WE HAD A
ROUGH MONTH RELATIVE TO THE GOOD
SENTIMENT THAT WE HAD IN JULY.
YOU WERE TELLING ME IN A
COMMERCIAL ON THE BOND MARKET A
DIFFERENT STORY THAN WHAT THE
FED IS TELLING US.
>> THE 210 CURVE IS INVERTED BY
30 BASIS POINTS I DON’T HAVE IT
IN FRONT OF ME RIGHT NOW.
THAT IS SIGNALING THERE IS
TROUBLE AHEAD WHEREAS THE STOCK
MARKET AS WE ALL KNOW FROM MID
JUNE TILL MID AUGUST KINDA BRUSH
EVERYTHING OFF BRUSHED OFF THE
COMMENTS FROM THE FED AND
DECIDED IT WAS GOING TO RALLY IN
SPITE OF EVERYTHING THAT’S
HAPPENING YOU MENTIONED LORETTA
LESTER, THE DAY BEFORE THAT WAS
JOHN WILLIAMS OF THE NEW YORK
FED, WE NEED TO GET A POSITIVE
RATES THE FED FUNDS RATE HAS TO
EXCEED THE INFLATION RATE, WE
HAVE A LONG WAY TO GO.
DAVID MY QUESTION TO YOU HOW HAS
THE STOCK MARKET IGNORED THE
FED’S HAWKISH TONE AND HOW HAS THE STOCK MARKET GOTTEN SO WRONG
THE STOCK MARKET GOTTEN SO WRONG
FROM MID JUNE UNTIL MID AUGUST.
>> CERTAINLY THERE WERE FOLKS
THAT GOT IT WRONG IN THE SENSE
THAT THE EXPECTED CUTS TO COME
WAY SOONER THAN REALITY WOULD
DICTATE INSENSIBILITY DICTATES,
THAT IS ONE THING HOWEVER, THE
OTHER THING WE SEEM TO CONTINUE
TO HAVE A RESILIENT ECONOMY IN
THE FACE OF AND WHAT I SAY
RESILIENT ECONOMY I MEAN THINGS
LIKE UNEMPLOYMENT LET’S SAY AND
ALSO WAGE GROWTH IN THE FACE OF
THOSE RISING RATES THAT WE ARE
EXPECTING TO GO AHEAD AND COME.
CHERYL: DAVID I WANT TO MOVE ON
TO OIL IF YOU LOOK AT THE
CONTRACT FOR AUGUST, WTI DOWN
NINE-POINT TO PERCENT FOR THE
MONTH, FOR THE CONTRACT WORST
MONTH SINCE NOVEMBER BUT FRANKLY
NICE FOR THE REST OF US WERE
DRIVING VEHICLES AND PAID $100
TO FILL UP HER TANK.
ALL OF THIS ON THE SLOWDOWN
CONCERNS, AS FAR AS OIL AND WHAT
WE EXPECT FROM OPEC WHICH IS
FRANKLY WILL BE BOOSTING OUTPUT,
WHAT DO YOU THINK THE OIL PRICES
GO?
>> THE MARKET HAS GOT THAT WRONG
RIGHT NOW AS WELL.
IT IS REACTING TO THE SENTIMENT
BROADLY IN A MARKET REGARDING AN
RECESSION AND NOT THE GREAT
HAPPINESS WE HAD IN JULY
REGARDING THE EXPECTATION OF THE
ECONOMY COMING OUT OF A SHALLOW
RECESSION VERY QUICKLY, I THINK
THAT IS WRONG BECAUSE WE’RE
STARTING TO SEE THINGS GENERALLY
OPEN UP AND ANOTHER’S CONCERN
ABOUT WHAT’S GOING ON IN TERMS
OF CHINA BUT FRANKLY I THINK
THAT’S TEMPORARY REALLY
SHORT-TERM THING AND I DON’T
THINK THE PRODUCTION IS COMING
OFF ALL OF THAT FAST.
INVENTORIES ARE INCREDIBLY LOW I
BELIEVE AND I SAID THIS ON THE
SHOW BEFORE I THINK WE HANG
AROUND $100 A BARREL PLUS OR
MINUS $10 FOR A LONG PERIOD OF
TIME AT THE CURRENT PRICES I
THINK IT’S WORTHWHILE INVESTING
IN OIL FUTURES AND WATCHING THEM
RISE OVER TIME.
CHERYL: WE ARE AT 87 AND CHANGE
IF YOU ARE CORRECT THAT MAKES
MEANS WE CAN MAKE MONEY ON THE
UPSIDE.
YOU HAVE A COUPLE OF PICS I KNOW
YOU’RE SHORTING BED BATH AND
BEYOND YESTERDAY WAS A ROUGH DAY
BUT YOU LIKE AMAZON AND THAT’S
THE CONSUMER STORY FOR YOU,
EXPLAIN.
>> I THINK CONSUMER HAS BEEN
GENERALLY STRONG IN THE EARNINGS
SEASON THERE WAS A LOT OF
CONCERN AND THE FIRST COUPLE
REPORTS THAT WE GOT WERE FOLKS
TAKING DOWN THE EXPECTATION OF
SALES FOR THE UPCOMING QUARTERS
INTO THE END OF THE YEAR AND IT
SEEMS IN Q2 THE CONSUMER WAS NOT
AS WEAK AS WE MIGHT HAVE THOUGHT
ESPECIALLY FROM THE LAST SET OF
REPORTING COMPANIES THAT WE SAW
IN THE QUARTER, THEREFORE I
THINK DISCRETIONARY CERTAINLY IS
AN AREA TO BE CONCERNED ABOUT.
AND THAT’S NOT WHERE AMAZON
MAKES ITS MONEY.
I THINK IT’S CAN HAVE A STRONG
FALL BACK TO SCHOOL SEASON AND I
THINK AWS BUSINESS ALONG WITH
THE DATA CENTER BUSINESS IS
GOING TO BECOME INCREDIBLY
STRONG AS ONE OF VERY FEW
GIGANTIC PLAYERS IN THAT
BUSINESS.
CHERYL: WE TALK ABOUT AMAZON
BECAUSE IT’S SUCH A BIG PART OF
OUR LIVES ESPECIALLY DURING THE