WEBVTT

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WE JUST NEED TO MOVE FORWARD AND

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TRY TO UNITE AS MANY PEOPLE AS

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WE CAN.

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>> BE KIND.

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>> LET’S BRING IN STEVE RATTNER

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RIGHT NOW.

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SO STEVE, LOOKS LIKE WE HAVE GOT

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OUR FIRST BIDEN RALLY THIS

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MORNING.

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WHAT’S IT LOOKING LIKE AND TAKE

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US THROUGH YOUR CHARTS TODAY.

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>> YEAH.

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THE MARKET WILL OPEN STRONG

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TODAY.

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SOME OF THAT IS I THINK THIS

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ANNOUNCEMENT FROM PFIZER ABOUT A

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VACCINE POSSIBLY BEING

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EFFECTIVE, BUT IF WE LOOK BACK

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OVER THE PAST WEEK WE CAN SEE

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THAT THE MARKET HAS ACTUALLY

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BEEN PRETTY ENTHUSIASTIC ABOUT A

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BIDEN PRESIDENCY FOR SOME TIME

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NOW.

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THE MARKET HAS BELIEVED AS YOU

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CAN SEE ON THE CHART, THE MARKET

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HAS BELIEVED THAT A BIDEN

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PRESIDENCY WOULD MEAN MORE

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STIMULUS FOR THE ECONOMY, AND A

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STEADIER HAND AT THE WHEEL.

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YOU CAN DIVIDE IT, FIRST IT

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MOVED UP IN ANTICIPATION OF

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BIDEN DOING BETTER.

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SECONDLY, IT MOVED UP AFTER THE

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ELECTION DAY BECAUSE THE MARKET

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CONCLUDED EARLY ON THAT BIDEN

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WOULD WIN AND GOING BACK TO YOUR

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CONVERSATION ABOUT 2000, DURING

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THE RECOUNT, THOSE 35 DAYS IN

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2000, THE MARKET DROPPED 4% SO

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CERTAINTY IS AN IMPORTANT THING

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FOR THE MARKET.

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THEN LASTLY, THE MARKET HAS

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STARTED TO FOCUS ON DIVIDED

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GOVERNMENT AND WHAT THE

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IMPLICATIONS OF DIVIDED

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GOVERNMENT WOULD BE FOR BOTH

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PRESIDENT-ELECT BIDEN’S

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PERSONNEL CHOICES AND HIS POLICY

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DECISIONS.

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SO IF YOU TURN TO THE NEXT

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CHART, YOU CAN GET A SENSE AS TO

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HOW THE MARKET HAS ROTATED

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AROUND THE REALIZATION THAT WE

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ARE LOOKING AT A DIFFERENT

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SCENARIO THAN IT PROBABLY

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THOUGHT BEFORE ELECTION DAY.

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YOU CAN SEE SECTORS LIKE

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INFRASTRUCTURE AND RENEWABLES

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FALLING AS PROSPECTS FOR MORE

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INFRASTRUCTURE, MORE EMPHASIS ON

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RENEWABLE EXAMPLES TO PICK THOSE

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TWO EXAMPLES IS DIMINISHED.

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ON THE OTHER SIDE OF THE LEDGER,

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PHARMA STOCKS ARE UP 4%.

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THIS IS ALL ON WEDNESDAY RIGHT

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AFTER THE ELECTION.

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PHARMA STOCKS UP 4% BECAUSE IT’S

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UNLIKELY WE’LL BE DOING MUCH

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ABOUT THE DRUG PRICES IN A

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DIVIDED GOVERNMENT.

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TECH UP 4% BECAUSE IT SEEMS LESS

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PROBABLE THERE WILL BE

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LEGISLATION TO BREAK UP THE BIG

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TECHS OR DO SOMETHING TO THE BIG

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TECHS.

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THEN LASTLY, YOU SEE TREASURIES

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ARE UP, WHICH MEANS INTEREST

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RATES WENT DOWN.

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INTEREST RATES WENT DOWN BECAUSE

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PEOPLE FELT WITH DIVIDED

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GOVERNMENT THERE’S LESS STIMULUS

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AND LESS PROGRESS ON THE

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POLICIES AND THAT DROVE THE

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BANKS DOWN BECAUSE THE LOWER

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INTEREST RATES ARE BAD FOR BANKS

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AND ALSO THE ECONOMY WILL BE

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SLOWER.

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SO THE QUESTION THEN IS WHAT --

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WHAT IS THE STIMULUS PROGRAM

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LIKELY TO LOOK LIKE AT THIS

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MOMENT?

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YOU KNOW THAT THE DEMOCRATS AND

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THE WHITE HOUSE GOT PRETTY CLOSE

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RIGHT BEFORE THE ELECTION AND

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FAILED.

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BUT NOW ANALYSTS ARE DOWNGRADING

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THE EXPECTATION FOR MORE

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STIMULUS SO THIS CHART ON THE

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LEFT IS GOLDMAN SACHS WHICH IS

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ASSUMING THAT THE NEXT STIMULUS

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PROGRAM IS $1 TRILLION INSTEAD

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OF $2 TRILLION.

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AND YOU CAN SEE IT WOULD HAVE A

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MUCH SMALLER EFFECT ON THE

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ECONOMY.

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THE RED LINE ON THE EFFECT ON

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THE ECONOMY, THE HUGE STIMULUS

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PACKAGE AND THE BLUE LINE IS

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WHAT THE ECONOMY EXPECTED FROM

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THE NEXT STIMULUS PACKAGE AND

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THIS IS THE AMOUNT OF STIMULUS

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RELATIVE TO THE GDP.

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ON THE RIGHT, WE’RE THEREFORE,

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EXPECTING A EXPECTING STIMULUS

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MOVING DOWN FROM THE DOTTED BLUE

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LINE TO THE DOTTED RED LINE.

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I WOULD SAY THAT GOLDMAN SACHS

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HAS CUT THE ESTIMATE OF THE

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FIRST QUARTER GDP OF 7% TO 3.5%

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IN LARGE PART BECAUSE OF THE

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STIMULUS BUT ALSO BECAUSE OF THE

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RISING CASELOAD.

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SO THE MARKET IS OPTIMISTIC

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ABOUT THE BIDEN PRESIDENCY BUT A

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LOT OF WORK TO DO AND THE AMOUNT

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OF STIMULUS IS LIKELY TO BE A

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DRAG ON THE ECONOMY INTO NEXT

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YEAR.

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>> KATTY KAY IS WITH US AND HAS

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A QUESTION.

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>> YES.

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STEVE, AT ONE POINT DURING THE

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CAMPAIGN, JOE BIDEN HAD SAID

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THAT HE WOULD FOLLOW SCIENTISTS

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AND IF THEY RECOMMENDED SOME

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KIND OF NATIONAL LOCKDOWN HE

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WOULD PUSH FOR THAT.

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OBVIOUSLY HE CAN’T DO IT, BUT HE

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WOULD PUSH GOVERNORS TO FOLLOW

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THAT.

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YOU SEE WHAT’S HAPPENING IN

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EUROPE WITH LOTS OF COUNTRIES

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GOING BACK INTO LOCKDOWN.

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MIGHT MARKETS BE CONCERNED THAT

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IF AMERICA WAS TO TAKE MORE

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RESTRICTIVE MEASURES THAT WOULD

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PROLONG THE ECONOMIC AGONY IN

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THE COUNTRY AND RESPOND NEGATIVE

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NEGATIVELY ACCORDINGLY?

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>> SURE.

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BUT THE YIN AND THE YANG AS WE

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HAVE SEEN THROUGHOUT THIS VIRUS,

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THE MORE YOU SHUT DOWN, WHICH

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YOU HAVE TO DO FOR GOOD PUBLIC

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HEALTH REASONS, IT DOES HAVE A

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NEGATIVE IMPACT.

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SO GOING INTO TO ANOTHER

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LOCKDOWN WOULD OBVIOUSLY VERY

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CLEARLY HAVE NEGATIVE

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IMPLICATIONS FOR THE ECONOMY.

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AND THAT’S ONE OF THE THINGS

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THAT GOLDMAN SACHS WAS WORRIED

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ABOUT WHEN IT CUT THE ECONOMIC

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FORECAST.

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THE MARKET IS RESPONDING IN PART

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TO LOWER INTEREST RATES WHICH IS

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ALWAYS A PLUS FOR THE MARKET.

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AS WELL AS THIS GENERAL BELIEF

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THAT A BIDE PRESIDENCY IS MORE

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LIKELY THAN A CONTINUATION OF

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THE TRUMP PRESIDENCY TO DO

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STIMULUS AND GET THE ECONOMY

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GOING.

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EVEN IN A SITUATION OF DIVIDED