Stocks plunge more than 1,000 points as coronavirus cases spike in reopening states

yeah I think the prevailing trend is the

one where large-cap outperforms

small-cap market cap weight indices

outperform equal weight indices and

growth stocks do better than value

that's like the real trend but then we

have this massive counter trend rally

where it was just the opposite and I

think that was important for the market

to have that catch-up in a lot of the

names that have just been so

substantially trashed make big moves to

the upside see some excitement about

some companies that aren't based in

Cupertino and and that's fine but again

the prevailing trend the real trend is

taking hold again today and even the

stay at home stocks are rallying again

so it almost feels like it's blue team

red team and so let's say blue team is

where people have really made the most

money and then red team makes money

occasionally when they do those

counter-trend trades but I do think we

had a two month bubble in in day trading

activity I don't know if it's over yet

it feels like it's bursting a little bit

in some of the give back that we're

seeing in the names that were most

associated with it but a lot can happen

even between now and the clothes and

thousand point days in the Dow are not

that rare this year so today looks like

it's something special and different it

might not be yeah and it stays yeah you

know it was easy when stocks were going

up unabated every day right now the work

gets a little more difficult - Josh's

point you look at some of those

so-called epicenter stocks that's the

term that Tom Lee had coined these

tremendous gains over the last month in

names like Boeing up more than 40% and

many of the airlines which have had just

astronomical gains the cruise ships the

banks other areas that we're gonna

benefit from a fast opening economy and

maybe today is a reality check that says

you know what j-pal threw water on that

yesterday you almost have like a larry

cudlow versus jpowel market and the

Kudlow market was working for a good

while because there was this thought

that it was going to be a V recovery in

the economy j-pal yesterday all but said

no way yeah you know Scott I'm not so

sure that it was necessarily a trade for

the second half of the year and the

v-shape recovery I think it was really

the reopening trade that was working so

well we went from being an additional

lockdown for a couple of months just

starting to venture out into the real

world and I think that's what some of

those social distancing underperforming

stocks like hotels and restaurants and

Airlines were responding to so that this

was been playing out and that's why

they've been rallying at one point we

had a basket of social distancing under

performers there was up 60% or so a

quarter today so I would agree that they

have done a lot of the rally to kind of

you know to coincide with the reality of

their reopening but this is why I think

they're absolutely due here for a little

bit of a pause and this is not going to

be a straight-line recovery here by any

means I will say maybe after this little

bit of a pause I do still think that

there is a trade to be had for consumers

that are venturing back out into the

into the economy we see this in

restaurant data we see this in mobility

data we see this in gasoline stations we

see this for example in transactions

where the card is present that suggests

to us that consumers are venturing out

so after this little bit of a pullback I

think if we can be discerning about the

type of pent-up demand stocks that we

don't want to owe and I think that's

really the trade for the remainder of

the some you know you don't think

anastasiya that that trade already

happened I mean that's a reason that

these stocks came back to the to the

manner which they did right banking on

exactly what you just said so what's

left yeah well look they have come down

but if I look at the underperformers

they're still lagging some of the tech

out performers by 40 50 percent in

certain cases a lot of the names are

still down pretty significantly here

today so the reason for the sharpness of

the rally is because we're starting from

such a low low point but more

fundamentally the reason why I think the

trade the reopening trade has to focus

on the consumer is because we'll take a

look at the personal savings rate it is

now at 10% take a look at last Friday's

was a jobs report where we've seen some

positive momentum in jobs data and by

the way some of the alternative data

suggests that we could see something

similar for the next several months and

you couple this with consumers that want

to venture out the

maybe is starting to think about what's

gonna happen in q4 are we gonna be in a

second wave one gonna be locked down

again so I think the pent-up demand the

ability the means to spend all of this

should continue to power some of the

consumer services okay