Daily Briefing - June 9, 2020

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.1 • 1.1K Ratings

🗓️ 9 June 2020

⏱️ 26 minutes

🔗️ Recording | iTunes | RSS

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Summary

Senior editor Ash Bennington joins managing editor Ed Harrison to discuss market sentiment in light of NBER's recent announcement that the U.S. slid into recession in February. Bennington and Harrison explore whether market participants are betting that liquidity will mitigate the credit cycle's severity and whether this could be a miscalculation that catches investors off guard, leading to a “double-dip” recession. They also draw comparisons between today’s markets to that of the dot-com era, highlight the shift toward momentum trading, and share their thoughts on how durable damage to demand can bring an unnaturally elevated market crashing down later in the year. In the intro, Peter Cooper explains the surge in new online brokerage accounts and explores particular instances of excess speculation by retail investors. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	It's Tuesday, June 9, 2020, just after market close in New York.
0:17.0	This is the Real Vision Daily Briefing.
0:19.1	I'm Ash Bennington in New York,
0:20.4	joined shortly by Ed Harrison from Washington DC but first Peter
0:24.5	Cooper with the latest market stories. Thanks Ash. Retail fervor continues to
0:29.0	grip Wall Street with the combination of a worldwide shutdown people people being stuck at home board, and sports and online betting suspended,
0:36.5	there's been a surge of accounts opened at online brokages since March.
0:40.3	This has afforded novice investors some entertainment and an opportunity to make a few bucks.
0:45.0	Charles Schwab saw a 58% increase in new accounts, while TD Ameritrade saw a 149% increase.
0:52.0	And E-Trade, a 169% increase.
0:55.0	Robin Hood saw its first quarter net deposits rise the month average from Q4 2019.
1:01.0	And daily trading volume in Q1 of 2020 was three times what it was in the previous quarter.
1:06.3	With the introduction of fractional trading and low to no commission costs for various online
1:10.4	brokers, investing has become cheap and simple. That in
1:13.7	combination with March's market nose dive, many young investors pounce on the
1:17.5	opportunity. According to InvestNet Yodley, those who are making between
1:21.3	35,000 and 75,000 annually,
1:24.0	traded stocks about 90% more than the week prior to receiving their stimulus checks.
1:29.0	In fact, stock trading was one of the most common uses for the stimulus check from the US government across almost every income bracket.
1:35.7	Of course, this sort of speculation from this new surge of retail investors may be temporary
1:40.8	as the economy reopens and sports betting picks up speed.
1:43.7	A lot of these new investors have been trading equities that will probably rise as the economy
	...

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