Behind the Markets Podcast

Guest Robert Novy-Marx, an award-winning finance professor, discusses the predictive power of value research, the underperformance of value stocks due to sector tilts, and the difference between gross profits and net income. He also previews his upcoming presentation on reversals and liquidity provisions at the Wharton School's conference. The podcast also covers market trends, the impact of oil prices on the economy, recent news on tech valuations, factor investing, and concerns about AI in finance.

Show from 9/8/23 Prof. Siegel joins Jeremy Schwartz and their colleagues Jeff and Liqian with his reaction to the softer tones of the market this week. He feels that China’s threat to remove Apple is a bit out of proportion which has affected the market. Although the market is not doing strong, he feels we aren’t anywhere near a recession. He doesn’t think the Fed should increase rates in September, nor does he think they will. He also explains how rising bond correlations affect the market. (12:42) Jeff begins by describing his take on the current job market and great moderation. He talks about what charts he thinks will cause a drop in the future job market and why. Jeremy also asks him to analyze the current housing market and the banks. He ends with his view on the equity markets and his suspicion of a looming recession. Liqian discusses how she feels about China’s move to step away from foreign owned companies and the over exaggeration of the Apple drop. She tells us what she thinks about the US/China relationship and if it will improve in the near future. She talks about her recent travels through China which allows her to give us a view of what is happening on the ground there right now. She also dives into investments moving to China, whether it’s a good idea and its rising popularity. Guests: Jeff Weniger, CFA serves as Head of Equity Strategy at WisdomTree. In his role, Weniger helps to formulate the firm’s stock market outlook by assessing macro and fundamental trends. Prior to joining WisdomTree, he was Director, Senior Strategist at BMO, where he worked in the office of the CIO from 2006 to 2017. He served on the firm’s Asset Allocation Committee and co-managed the firm’s ETF model portfolios for both the U.S. and Canada. In 2013, at the age of 32, Jeff was chosen as the youngest member of BMO’s Global Investment Forum, which collected the firm’s top global strategists to formulate the firm’s official long-term outlook for investment trends and markets. Jeff has a B.S. in Finance from the University of Florida and an MBA from Notre Dame. He has been a CFA charterholder and a member of the CFA Society of Chicago since 2006. He has appeared in various financial publications such as Barron’s and the Wall Street Journal and makes regular appearances on Canada’s Business News Network (BNN) and Wharton Business Radio. Liqian Ren, Ph.D., joined WisdomTree as Director of Modern Alpha in 2018. She leads WisdomTree’s quantitative investment capabilities and serves as a thought leader for WisdomTree’s Modern Alpha® approach. Liqian was previously at Vanguard, where she worked for 12 years, most recently as a portfolio manager in the Quantitative Equity Group managing Vanguard’s active funds and conducting research on factor strategies. Prior to joining Vanguard, she was an associate economist at the Federal Reserve Bank of Chicago. Liqian received her bachelor’s degree in Computer Science from Peking University in Beijing, her master’s in Economics from Indiana University—Purdue University Indianapolis, and her MBA and Ph.D. in Economics from the University of Chicago Booth School of Business. Liqian co-hosts a podcast on China and Asian markets with Jeremy Schwartz, WisdomTree’s Global Head of Research, and she is a co-host on the Wharton Business Radio program Behind the Markets on SiriusXM 132. Learn more at: https://www.wisdomtree.com/investments Follow Jeff on Twitter: @JeffWeniger Follow Liqian on Twitter: @liqian_ren

Show from 9/1/23 Prof. Siegel joins Jeremy Schwartz this week with his analysis of the new employment report and the fade of fear in the labor market. He also discusses inflation and the housing market fueling his positive outlook on the current total market trend. (08:38) This week's guest, Jack Farley, starts off by asking Prof. Seigel about the downward revisions in non-farm payrolls as well as the historical significance in the 0.3% increase in the unemployment rate. He talks to us about the connection between the current labor supply and the threat of a recession. He dives into the rise in net interest rates and who is affected by the burden of these rate hikes. He gives us his key take-aways from what he’s learned about the current banking system and the commercial re-estate market. Guest: Jack Farley covers traditional finance markets as the host of “Forward Guidance”. Jack previously worked at Bloomberg, Dealbreaker, and Real Vision, where he hosted over 100 long-form interviews with investors, analysts, and financial professionals. Jack graduated from Brown University with a degree in economics, and lives in NYC. Learn more at: https://blockworks.co/speaker/jack-farley Follow him on Twitter: @JackFarley96

Show from 8/25/23 Prof. Siegel joins Jeremy Schwartz this week to discuss his disappointment in the Powell speech as well as the Nvidia stock drop. They discuss the surprising drop Nvidia had after a large spike in the market. (09:12) Daniel Di Martino begins by telling us what he does at Columbia University, his move to America and more about his personal story. He discusses what he thought about the most recent debate that occurred and his view on the economic policies discussed. Daniel enlightens us on the history of Venezuela's dark economic history. It’s rise and fall from being one of the wealthiest countries to what it is today. He talks about the unlikely hood that the world will move away from the US dollar. He also talks to us about the drug problem at the US border, immigration policy issues and the unnecessary fear behind an increase in people moving to America. Guest: Daniel Di Martino is a third-year PhD candidate in Economics at Columbia University. He graduated with honors from Indiana University in Indianapolis in 2019 with a B.A. in Economics and is pursuing a Ph.D. in Economics at Columbia University in New York City where his research focuses on immigration. Learn more at: https://www.danieldimartino.com/ Follow him on Twitter: @DanielDiMartino

Show from 8/18/23 Prof. Siegel and Jeremy Schwartz begin by highlighting the significant surge in 10-year and TIPS (Treasury Inflation-Protected Securities) yields to their highest levels in decades. They discuss the remarkable increase from negative rates a few years ago, along with the equity premium's alignment with historical averages, reflecting overall strength in the economy. With upcoming talks from Powell, no significant changes are anticipated, emphasizing a continued commitment to data dependency. (10:24) Peter and Julia then join the discussion to examine the nuanced economy and the current state of the labor market. The conversation shifts to the impact of rising interest rates on small and medium-sized businesses and the factors contributing to inflation, highlighting cautious spending and the indication that higher inflation may persist. They also delve into the quality of labor statistics, challenges with response rates in surveys, biases in capturing data, and a bullish outlook on energy, underscoring potential reasons for a rise in oil prices. Guest: Peter Boockvar is solely an investment advisor representative of Bleakley Financial Group, LLC, a registered investment adviser and separate entity from LPL Financial. Peter serves as Chief Investment Officer of Bleakley Financial Group. Learn more at: https://www.bleakley.com/about/our-team Follow him on Twitter: @pboockvar Guest: Julia Pollak is Chief Economist at ZipRecruiter. She leads ZipRecruiter's economic research team, which provides insights and analysis on current labor market trends and the future of work. Learn more at: https://www.ziprecruiter.com/blog/ Follow her on Twitter: @juliaonjobs

Show from 8/11/23 Prof. Siegel joins Jeremy Schwartz to dissect the current state of the economy. They discuss everything from jobless claims and inflation to the roles of major companies like Tesla and Ford. With an optimistic yet cautious tone, Prof. Siegel offers a glimpse into what the future may hold for the markets. (10:07) Dom Rizzo, a portfolio manager for T Rowe Price, discusses his career and the global technology equity strategy with particular focus on the semiconductor industry. He highlights Nvidia's powerful GPU technology and its linchpin status, predicting the AI chip market's significant growth. The conversation also covers the potential for a second source in the market, such as AMD, and the need for continuous innovation within the semiconductor space. AI is viewed as a major productivity boost, impacting areas like natural language processing and cybersecurity. Large companies with data and distribution are expected to benefit, with AI augmenting tasks rather than replacing them in the short term, offering efficiency gains across various industries. Guest: Dominic Rizzo is the portfolio manager of the Global Technology Equity Strategy. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. Learn more at: https://www.troweprice.com/financial-intermediary/au/en/bios/dom-rizzo.html Chris Gannatti is Head of Research at WisdomTree Europe Follow him on Twitter: @CGannatti

Show from 8/4/23 Doomberg begins by telling us about who they are and what their newsletter is about. The writers are able to stay anonymous and write about topics including economy, climate and policy without fear of losing their careers in the fields they specialize in. He tells us that climate happens to be the most controversial topic with carbon reduction being the most heated debate. He dives deep into the importance of nuclear power and how it is the future of power for the world. He covers the controversy surrounding it, countries actively expanding their nuclear programs and success stories that can be used as examples to persuade fear based opinions. He talks about investing into different areas of energy. He also discusses the gold market, bitcoins future and train derailments. Guest: Doomberg is a subscription based newsletter highlighting the fundamentals missing from many economic and policy decisions. The Substack articles are written by a small group of former executives, free to write without boundaries. Learn more at: https://doomberg.substack.com/ Follow Doomberg on Twitter: @DoombergT

Show from 7/28/23 Prof. Siegel kicks off with his take on the recent news conference from the Fed. He believes that we are not as close to a recession as previously thought, due to the stability of some essential commodities (10:28). Torsten agrees with the Professor, highlighting how the Fed is slowing the economy down with interest rate hikes. He explains his concern that there could be a huge shift in foreign asset allocations, Japan currently being the largest with over a trillion dollars in US treasuries. Torsten and the Professor go back and forth on market rate hikes and what the potential outcome of the market could be. They discuss which investments are better to hedge at this point in time. Torsten talks about regional banking systems and his research into that area. Guest: Torsten Slok is Partner and Chief Economist at Apollo. Prior to joining in 2020, Torsten worked for 15 years on the sell-side, where his team was top-ranked by Institutional Investor in fixed income and equities for ten years. Previously, he worked at the OECD in Paris in the Money and Finance Division and the Structural Policy Analysis Division. Before joining the OECD, Torsten was with the IMF in the division responsible for writing the World Economic Outlook, and the division responsible for China, Hong Kong, and Mongolia. Learn more at: https://www.apollo.com/about-apollo/our-people/torsten-slok Follow Torsten on LinkedIn: https://www.linkedin.com/in/torsten-slok-8a7520a2

Show from 7/21/23 Prof. Siegel calls in live from his cruise to share his big takes on today's current market. He explains to us his shift of opinion towards the Feds and what he is looking into to suggest market recovery (13:25). Alejandro starts by telling us what he researches and studies at the University of Florida. He explains his use of AI to calculate rates and how it could be used by companies to mitigate risks. Through his research, he explains his beliefs on using many different signals to attain the data you need from machine learning. He elaborates on how performance factors can greatly affect outcomes of these data sets. The group discusses the results of testing Chat GPT’s ability to calculate these data sets and whether it’s a useful tool for market predictions. He discusses the future research and advancements in using AI models to add in finance decisions. Guest: Alejandro Lopez-Lira is an Assistant professor of Finance at Warrington College of Business, University of Florida. He holds a PhD in Finance from the Wharton School, University of Pennsylvania. His research covers topics in Empirical Asset Pricing, Machine Learning and Textual Analysis. Learn more at: https://alejandrolopezlira.site/ Follow Alejandro on Twitter: @alejandroll10 Chris Gannatti is Head of Research at WisdomTree Europe Follow him on Twitter: @CGannatti

Show from 7/14/23 Prof. Siegel begins with the positive news of inflation coming in below expectations. He highlights the strength of the real economy, citing low initial jobless claims and strong consumer sentiment. Market sentiment is optimistic, with money flowing back into the market and a favorable outlook for investors. (00:12:50) Warren focuses on the potential margin contraction in 2024 earnings due to wage pressures and interest expenses, expressing concern about the excessive optimism in the market. He also mentions that while AI may enhance productivity in the long term, its efficiency gains might not materialize in time to support the 2024 earnings picture. Nitesh discusses the disappointment in China's reopening and the absence of substantial stimulus measures to drive growth. While China has been strategically accumulating raw materials and investing in grid expenditures for the energy transition, questions arise about its ability to maintain demand growth, especially in the oil market. Guest: Prior to founding 3Fourteen Research, Warren led Ned Davis Research’s Energy and Commodity strategy. In that role, he built the firm’s commodity-related studies, models, and unique indicators. His research combines proprietary fundamental, technical and macro indicators to identify major investment themes and market trends affecting capital markets. Warren is a frequent contributor to the media including participating in the 2013 Barron’s MLP Roundtable discussion, the Wall Street Journal, CNBC, and RealVision. In 2014, Euromoney Institutional Investor awarded Warren the Padraic Fallon award for his research on the Shale Revolution. Outside of the research world, Warren has worked as a practicing attorney specializing in regulatory approvals for various industrial activities and projects. He has also owned, operated, and sold a portfolio of self-storage properties to a national REIT. Learn more at: https://www.3fourteenresearch.com/about Follow Warren on LinkedIn: https://www.linkedin.com/in/warren-pies-erp-1b999437/ Nitesh Shah is Head of Commodities & Macroeconomic Research at WisdomTree Europe Follow Nitesh on Twitter: @NiteshShahWT