CME Group’s Blu Putnam and Ally Invest’s Lindsey Bell join Alpha Trader

This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher first talking with Blu Putnam, chief economist at CME Group, and then with Lindsey Bell, chief investment strategist at Ally Invest. The strength of this wave of the coronavirus has surprised Putnam, who says the economic recovery will now take longer than he expected when he last appeared on Alpha Trader back in August. He also takes note of the uneven nature of the recovery and says traditional central bank stimulus - lowering rates, buying assets - isn’t necessarily suited to the task. Instead, he says, fiscal stimulus - targeting particularly stressed areas of the economy - is what’s needed. It’s no secret that markets for the moment are looking past some nasty news on Covid-19, and instead focusing on 6-12 months from now when a vaccine might be begin to take hold around the country (and the globe). Fair enough, says Putnam, but he believes markets are also pricing in as many as two rounds of fiscal stimulus - one this month, and another perhaps larger package after January 20. The combination of government action and a vaccine should be highly favorable in particular for the cyclical sectors like energy (XLE), industrials (XLI), and financials (XLF). While there will be near-term bumps in the road in terms of bad Covid news and its effect on the economy, Lindsey Bell also believes investors are looking over that valley and seeing vaccine availability and fiscal stimulus as reasons to be bullish about 2021. Maybe not talked about enough is the enormous amount of “dry powder” being held by the U.S. consumer, even as the economy remains soft and fiscal stimulus benefits run out. Bell notes consumers this year have been building savings to double-digit percentage levels, sending retail deposits across the banking system to a record $15T. While there surely needs to be a near-term fiscal bill targeted at those most hit by the pandemic response, Bell says a viable vaccine is liable to unleash an explosion in spending next year as co