I love joining Stuart Varney on his "Varney & Co." program on FOX Business Network - although I wish the news was better than what I've had to talk about lately.
There's been plenty to cover since the coronavirus slammed markets a few weeks ago. Now we're focused on what's next - are we at a market bottom, and is the government doing enough to help the inevitable economic impact we're facing as China, Italy, South Korea, the United States, and many other countries deal with the virus fallout?
These are the big questions Stuart had for me this week. In case you missed it, here's what I shared...
Looking for the Market Bottom
Shah on when we'll see the market bottom...
Stuart: Shah, any sign of a bottom at all in this market?
Shah: Unfortunately no, Stuart. On Tuesday, there was some sign of hope when markets closed on a high. I thought maybe stocks would settle in a little there - then obviously we saw selling overnight and in markets Wednesday, indicating to investors the worst has not yet come to pass. So I think we have some time to go - and it may be a matter of months.
The unknowns are so extraordinary in terms of this virus, and in terms of the global impact it will have. Let's not mistake this for anything other than what it is: a global crisis.[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
When you see an entire country - Italy - closing down, think about what that is going to do to the Italian economy, to knock on countries and exports and imports into Italy and out of Italy, and what's the impact it's having on China right now?
There will be these impacts globally, and in the United States. And the government has to continue to be proactive to aid the economy, to aid businesses, to aid the public.
Shah on the economic stimulus needed to help the market...
Stuart: Shah, what do you think happens to the market if we don't get a comprehensive package?
Shah: If we don't get a comprehensive package, Stuart, we're going to go down much, much lower. A comprehensive package is absolutely necessary because no one knows what impact the virus is going to have across the economy.
What I mean by "across the economy" pertains to corporate structures - in terms of earnings, in terms of profits, and in terms of demand disruption. All the things that the country relies on - consumption, production, etc., is going to be impacted by this virus, and for how long, we don't know.
I think the president and his administration trying to get ahead of it by proposing some of these things is fantastic, and unbelievably necessary. Timing is of the essence. I think it's appropriate, and without this, the market would be a lot lower.
On the continuing global spread of coronavirus cases...
Stuart: I do think that we should look at what's going on in China. The number of new cases is way, way, way down. They appear to have got a grip on it - at least they say they've got a grip on it - and the number of new cases would suggest that you can believe what they're saying.
South Korea, unfortunately, has had a new cluster develop in Seoul, the capital of South Korea, and their number of new cases has started to go right back up again.
And Shah, I don't know whether you've heard this, but earlier this morning, Angela Merkel, Germany's chancellor, suggested that 70% of the German population could be infected at some point, and the Brits are telling us they expect 20% of their workforce to be at home on any given day, at any given time.
This backs up your point here; this is a global thing. But if it's a global thing, is the United States in perhaps a better position to deal with it?
Shah: Right now, we appear to be in a better position to deal with it here. I think the healthcare systems in the United States are outstanding, and given the criticisms that they've gotten over the years, they're still probably among the world's best.
As I mentioned before, I think our government is doing the right thing here. I think the government is doing everything it needs to be doing in terms of expediting the production of test kits, in terms of organizing hospitals, and everything they're doing in terms of crisis management, they're doing that.
Perhaps it's happening a little too much behind the scenes. Maybe they don't want to be too "out front" in telling the public exactly what steps they're taking because they're afraid of creating a larger panic than some people already feel exists in the economy.
But being proactive in terms of the economy is the right thing to do. You cannot afford to wait too long.
If we were to wait one, two, or three months, who knows how much demand destruction we're going to see, who knows how difficult it will be to reinvigorate companies, production, getting materials and supplies, sourcing, on and on and on. This has to be addressed immediately.
Stuart: Yep, it does. And we're going to leave it there. No market bottom in sight, according to Shah Gilani. Thanks Shah, we'll see you again real soon.
Shah: Thanks, Stuart. Pleasure.
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About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.