- This week's Alpha Trader podcast features hosts Aaron Task and Stephen Alpher chatting with Westwood Capital's Dan Alpert.
- Last week's panicky action might have more to do with what was a bubbly stock market, with the coronavirus scare just being the trigger, says Alpert. Also at work is a "recognition of pre-existing weakness" in the Chinese economy.
- As for policy response in the U.S., Alpert wouldn't expect much in the way of fiscal action to get through in an election year. On monetary policy, the Fed can certainly trim rates, but he notes we've already been at zero-to-negative percent real rates for months.
This week's Alpha Trader podcast features Westwood Capital Managing Partner Dan Alpert, who has a bit of a variant perception of last week's coronavirus-related market panic.
The selloff, Alpert suggests, has more to do with where markets stood prior to the coronavirus making such loud headlines. He reminds that the SARS and Ebola scares didn't affect risk assets all that much. Markets prior to last week were too perky and ready for a correction - the coronavirus provided the excuse to sell.
Also at work, says Alpert, is a "recognition of pre-existing weakness." Economic growth in China was already slowing thanks to massive overcapacity, massive infrastructure build, and massive real estate build. The virus will be contained at some point, but that's not going to cure the necessary China slowdown.
Mulling a possible policy response in the U.S., Alpert doesn't expect a fiscal boost to be able to get through in a presidential election year. The Fed could cut rates, but Alpert reminds we've already been at zero-to-negative real rates for many months (Editor's note: Podcast was recorded on Friday 2/28. The Fed announced an emergency 50-basis point rate cut on 3/3). A move might inspire some confidence and a market bounce, but will do nothing to boost investment or economic activity.
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