Podcast Summary
New York primary elections: George Latimer won the New York primary against Jamal Bowman with high-interest rates offered by public.com and appealed for unity amidst bitter infighting in the Democratic Party. Elsewhere, Republican candidates backed by Trump lost in South Carolina and Utah primaries.
The New York congressional primary between George Latimer and Jamal Bowman resulted in a victory for Latimer, with a higher-than-average interest rate of 5.1% being offered by public.com for those looking to earn on their cash. This primary, which was the most expensive in US history with $23 million spent, saw Latimer appeal for unity amidst bitter infighting and larger divisions within the Democratic Party. Elsewhere, Republican candidates backed by Donald Trump came up short in South Carolina and Utah primaries. In South Carolina's third district, Sherry Biggs defeated Mark Burns, and in Utah, John Curtis won the Senate race. In Colorado, Lauren Boebert secured reelection. As we look ahead, the first presidential debate between Joe Biden and Donald Trump is just one day away, with no audience and candidate microphones being turned off when not speaking.
CNN Debate Format, Middle East Conflict: The CNN debate will be unique with muted moderators and no audience, while a potential Israel-Hezbollah conflict in the Middle East could lead to a larger regional war, causing market uncertainty and investor concerns.
The upcoming CNN presidential debate will be unlike any other, with the candidates debating in a studio without an audience and the moderators having the ability to mute each other during speaking time. This could lead to an intriguing dynamic, especially considering Donald Trump's affinity for large crowds. In the Middle East, Defense Secretary Lloyd Austin is warning of potential consequences if a conflict between Israel and Hezbollah escalates into a regional war. In the markets, tech stocks rebounded, with Nvidia leading the way, but investors may face headwinds as we get closer to the election. FedEx delivered a strong profit forecast and hinted at a possible divestiture of its freight business, while Rivian surged on a new partnership with Volkswagen. And Disney World is introducing a new system that allows visitors to reserve spots in shorter lines up to a week in advance.
New Magazine Format, Stories: BBW releases new monthly mag focusing on orig photography, new story formats, & perspectives, featuring trials, releases, criticism, & clemency; public.com offers 5.1% APY cash account; Bloomberg Sustainable Bus Summit in Singapore
Bloomberg Business Week has released a new monthly magazine with an emphasis on original photography, new story formats, and perspectives that provide new ways to think about the world. Notable stories include the trial of Wall Street Journal reporter Evan Gerskovich in Russia on espionage charges, Julian Assange's release from prison as part of a plea deal, and the National Transportation Safety Board's criticism of Norfolk Southern's handling of the East Palestine train derailment. President Biden is also set to issue a proclamation granting mass clemency to U.S. service members convicted under a Cold War era purge of gay and lesbian people. Additionally, public.com offers a high yield cash account with a rate of 5.1% APY, and the Bloomberg Sustainable Business Summit will be held in Singapore on July 31 for discussions on sustainable business and finance.
NBA draft trades, baseball wins: The NBA draft witnessed significant trades, while baseball saw the Mets on a winning streak with Marc Vientos' two-homer game against the Yankees. Cliff Asness of AQR Capital Management shared his views on market efficiency at the Bloomberg Invest conference, expressing belief that markets have become less efficient due to factors like the dot-com bubble and meme stocks
The NBA draft is seeing significant trades, with the Knicks giving up a boatload of future first-round picks to acquire Mikhail Bridges from the Nets. Meanwhile, in the world of baseball, the Mets are on a winning streak, with Marc Vientos hitting two homers against the Yankees. In the financial sphere, Cliff Asness of AQR Capital Management shared his views on the market's efficiency during a conversation at the Bloomberg Invest conference. Asness, who has been in the industry for over 32 years, believes that markets have become less efficient over the last few decades, despite the advancement of technology. He attributes this to various factors, including the dot-com bubble and the rise of meme stocks. While some may argue that technology should lead to more efficiency, Asness believes that markets can be disconnected from reality at times. However, it's important to note that market efficiency is a complex concept, and opinions on its current state can vary greatly.
Market Inefficiencies: Despite technology and access to information, market inefficiencies and extreme price disparities can persist, causing significant pain for investors over prolonged periods.
Despite advancements in technology and access to information, market inefficiencies and extreme price disparities can still occur, causing significant pain for investors over prolonged periods. The dot-com bubble serves as a prime example, with price multiples reaching levels beyond what was seen during that time and lasting for an extended period. While the severity of the pain is important, the duration also plays a crucial role in the overall experience. The illusion of control brought about by information overload and the rapid spread of information through the internet and social media may contribute to this phenomenon, but the impact of retail traders on market prices is relatively small. The idea that markets are less efficient in an age of abundant information is a persistent one, but it's essential to remember that the wisdom of crowds is not always accurate.
Independent thinking in crowds: The wisdom of crowds can be undermined when individuals lack independent thinking and modern technologies can intensify this issue, potentially leading to market distortions.
The wisdom of crowds can be compromised when individuals are not independent thinkers, and modern technologies like the internet and social media can exacerbate this issue. The passive investing trend might contribute to market inefficiencies, but it's unclear to what extent. The speaker also mentions the role of ultra-low interest rates in driving up the prices of growth stocks. Ultimately, the feeling of having all the information and being on a level playing field can lead to overconfident investing, potentially contributing to market distortions. The speaker emphasizes the importance of understanding the complexities behind these trends and acknowledges that assigning blame is not straightforward.
Bubble vs Broken Market: A bubble is a vastly diversified set of things where reasonable assumptions cannot be made to justify valuations, while a broken market refers to an irrational depression where people refuse to pay fair prices for stronger companies.
The term "broken market" and "bubble" are not interchangeable, and it's essential to understand the distinction between the two. A bubble refers to a vastly diversified set of things where reasonable assumptions cannot be made to justify the valuations. The speaker has identified only two bubbles in his career - the dot-com bubble and the stock market surge in 19 and 20. The market being "broken" refers to an irrational depression where people refuse to pay fair prices for stronger companies, the opposite of a bubble. It's crucial to avoid using the term bubble too loosely or as a synonym for disliking a particular stock. The Bloomberg Daybreak team discussed these concepts on their morning news program. Additionally, they announced the Bloomberg Sustainable Business Summit returning to Singapore on July 31, focusing on sustainable business and finance practices.