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Uber is 'definitely on the the right track', says analyst

Mizuho Americas' senior U.S./China internet analyst James Lee joins Yahoo Finance to discuss Uber's third-quarter results, and what the passage of Proposition 22 in California means for the company.

Video Transcript

JULIE HYMAN: --Uber are up by 6%. The company reporting sort of a mixed quarter, at least if you look at what's going on in its core business versus the Eats business. The Eats business sort of salvaging [INAUDIBLE], bookings more than doubling year over year for Eats. At the same time, gross bookings were down 53%. Still an improvement from the prior quarter.

Net losses narrowed for Uber, and revenue was down overall by 18%. Let's get more details on the Uber numbers with James Lee. He is Mizuho Group's senior US and China internet analyst. And our Pras Subramanian is joining us as well, who covers car stuff for us, I think we could say.

James, as you look at these Uber numbers, do you think that the company is sort of on the right track? I mean, given, of course, that there is the pandemic, is the mix in the business correct?

JAMES LEE: Yes, thanks for having me. I think they are definitely on the right track. I think the biggest surprise that we've seen here is the food delivery business, right? They continue to accelerate and gain market share.

You know, they started pretty well, up 90% year over year in April. And now they're up about 135% in October. And also unit economics is getting better as we see an increase in takeaway. Now we expect the takeaway to continue to improve with a more rationalized market. And also the introduction of advertising model, which will be very helpful for the takeaway, too.

The only international proxy we can see is China's Meituan, their largest food delivery company. Their takeaway is about 1 and 1/2%. I think with that introduction or advertising model, the company came out and very confidently said that they will be breakeven on the food delivery business in FY 21. In fact, 10 of the countries are already EBITDA positive.

PRAS SUBRAMANIAN: Hey, James, you know, on the call last night, Dra Khosrowshahi very you know, positive around Eats, and we're going to talk more about this, too. But, you know, saying that he thinks that that business is just as big as mobility. He won't say that it actually might even be bigger than that. I mean, but the margins are actually smaller for that business. So how do you see that take rate improving if they're counting on Eats to become a bigger part of the business?

JAMES LEE: Yes, that's right. And then, obviously, they have to work on the technology side to do better batching. Once you do better batching of delivery, unit economics gets better. I think that's a key acquisition. That's why they decide to acquire Postmates not only to, number one, consolidate the market, and number two, they have a great batching technology. Their batching technology is 2 times better than Uber.

Once that technology is being integrated onto Uber's platform, I think that will help to drive better unit economic and close the gap between the EBITDA of the mobility business and the food delivery business.

BRIAN SOZZI: James, I'm sure you know this, but from 2018 through the most recent quarter, Uber has lost $6 and 1/2 billion on an adjusted operating profit basis. Why should investors believe they are suddenly going to be able turn a profit, like they keep saying, by the end of 2021 during a health pandemic?

JAMES LEE: Yes. I think the company realized that, right? They have cut down, number one, their expansion plan by quite a bit. And number two, they have rationalized their cost structure, especially on the food delivery business, right? They have said last year, there were 18 markets that were outside of their category leading position. By that, I mean number one and number two. They exited a number of markets over the last 12 months, including India. That's an indication.

And number two, if you look at autonomous driving business, they're losing about $400 million a year. They'll continue to look way to rationalize that business, cutting losses, or potentially taking equity investment for someone to share the burden of the losses as well. I think management has definitely done a good job rightsizing the company and to get into EBITDA positive for next year.

MYLES UDLAND: And then, James, I guess, I just want to talk a bit about the mobility business, you know, I guess we call the core Uber business. Still down significantly over last year in major US cities. It's interesting the split, I guess, we see between the west coast cities and the east coast cities. But as we look out over the next several years, do you have an expectation on when they could return to, let's say, baseline 2019 type levels on that side?

JAMES LEE: Yeah, well, obviously, the business is pending on the situation of COVID-19, right? And despite, you know, the COVID-19 still-- we're still seeing rising cases in US and we've seen the mobility business actually improve quite a bit with negative 80% year over year in April. Now that's down to negative 44% in October.

And as we continue to seek solutions for COVID-19, possibly getting vaccine as economies start to open, get back to normal, you know, we can continue more that path, right? Because right now, before the European lockdown, actually, Europe was leading over US a little bit. Given the COVID-19 lockdowns and [INAUDIBLE], things are sitting back a little bit. I think that's a short-term setback.

I think over a longer term, if you look at China as a proxy, if you look at competitive company like Didi in China, they have recovered pretty well. They're down less than 25% year over year, probably on track to go positive at the beginning of the next year. I mean, US may be lagging a couple quarters behind that.

MYLES UDLAND: Yeah, so I guess, another way to drill down the question then would be, are you not concerned that maybe consumers have unlearned the behavior of calling an Uber during this time, as we've seen a lot of our lives upended? And that, you know, you're confident that-- and I guess the company be confident that people will go back to living something like the life they were living before the pandemic.

JAMES LEE: They seem very confident, right? We feel confident as well. But obviously, they have variability to the environment, right? So what the company has said is they optimize to the cost structure to a point. Even if the gross booking decline by 20% for mobility business, the overall business can get to profitability. So their path to profitability does not depend on mobility business to return to positive growth.

PRAS SUBRAMANIAN: Hey, James, sticking with mobility, are you concerned at all about the suburban versus urban mixing? It was touched on the call last night about how a lot of people have been leaving the urban environment for suburban environments. And there, it is a bit of a tougher business for them.

JAMES LEE: Yeah, your question's about suburban business. You lost me a little bit at the end, sorry.

PRAS SUBRAMANIAN: Sorry, but basically, how some of the mix of their customers moving to suburban environments where it's a bit harder to make-- you know, your take rate's a bit lower there as versus the urban environment.

JAMES LEE: True, true. That certainly could be the case, right? We'll continue to observe what's going on there. There's certainly some consumers are moving to suburban market. And therefore, you can make an argument that there's less of a need taking Uber rides.

But however, I think the company is preparing for that, right? Keep in mind, they're saying even if the gross booking is down 20% or so, they're still on a path of profitability. So they reorganized the organization, you know, for contingency on the mobility side of the business, for sure.

JULIE HYMAN: James, just quickly, I got to ask you about Prop 22, which we haven't mentioned yet. A big victory for Uber as well as for Lyft and other freelance heavy companies. How much does this sort of remove the regulatory overhang from Uber? Because it still has some battles to undergo in other places, other nations, for example.

JAMES LEE: Yeah, that's a good question. That's huge, right? You know, more than-- about 60% of people voted for Prop 22. And this is kind of consistent with our check, you know, prior maybe about a quarter or two ago, where drivers are really looking for flexibility of working hours, not unnecessarily full-time restriction, right?

And under Prop 22, they provide allowances for wage protection and also for healthcare and paid vacation as well. Now going forward, I think the state that we need to pay attention to is New York, right? I think New York right now has a very similar bill to AB 5. They're likely to vote it on as early as June 2021.

Certainly, you know, when you have a very progressive state like California supporting Prop 22, that bodes well for another progressive state like New York. Even if they were defeated, they can certainly set a path for another proposition, similar ballot as Proposition 22 in New York as well. So from that perspective, I think Prop 22 winning that sets a very good precedent for the rest of the country.

JULIE HYMAN: All right, James Lee, Mizuho Group senior US and China internet analyst, and our Pras Subramanian, thank you so much for taking a look in-depth at those Uber numbers.

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It purchased Time Warner in 2018 for $85 billion, making Ma Bell the improbable parent company of HBO, CNN, Warner Bros. and DC Comics. The carrier also made smaller deals, such as the 2018 acquisition of AppNexus, an online ad platform.And once again, AT&T was too big.This time around, it isn’t the government pushing to slim down the company — though the Justice Department did unsuccessfully oppose the Time Warner deal — but its own investors and Chief Executive Officer John Stankey.Stankey took the helm in July, putting him in charge of a company with heavy debt and a media business that was ravaged by the pandemic. AT&T also was shunted to No. 3 in the wireless-phone business this year, following T-Mobile US Inc.’s acquisition of Sprint Corp. 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Since its founding in the 1980s, SVB has provided funding for more than 30,000 start-ups, and has also become a major financial services provider for Napa Valley’s vineyards.Working in the high-wealth areas of the San Francisco Bay region, and maintaining offices in other financial centers around the world – London, Hong Kong, and Toronto, among others – Silicon Valley Bank was well-positioned to weather the corona crisis. The bank’s revenue has been rising through 2020, from $807 million in Q1, to $860 million in Q2, to $1.08 billion in Q3. Earnings, after a sequential slip entering Q1, have also been on an upward track; the Q3 EPS came in at $8.47, beating the forecast by 55%.The bank’s shares have reflected the strong financial performance. SVB is up 27% year-to-date, having bounced back from the mid-winter market crash.Covering SIVB for Maxim, analyst Michael Diana writes, “SIVB remains our top bank pick due to: 1) its unique, non-replicable franchise; and 2) the growth implications of that franchise… The environment for VC-backed companies has improved, in our view, especially for the technology and life sciences companies that are SIVB's focus… we expect that SIVB's deposits, loan volumes, and investment/warrant gains should all benefit in 2021.”Diana rates SIVB as a Buy, and his $335 price target implies another 10% gain for the year ahead. (To watch Diana’s track record, click here)Overall, SVB Holdings has a Moderate Buy rating from the analyst consensus, based on 13 recent reviews, including 10 Buys, 2 Holds, and 1 Sell. (See SIVB stock analysis on TipRanks)Danaher Corporation (DHR)The second stock on the list is a conglomerate, a globally diversified company based in Washington, DC. Danaher works in the science and technology field, bringing together a range of companies through acquisitions and partnerships. Danaher operates three business segments, Life Sciences, Diagnostics, and Environmental & Applied Solutions.Danaher has performed well through 2020, repeating its normal pattern of rising earnings from Q1 – but on steroids. The first quarter EPS was low, at $1.05, but quickly rose to $1.44 in Q2 and then $1.72 in Q3. The third quarter result was 25% higher than expectations. Revenues followed a similar path, gaining from $4.3 billion in Q1 to $5.9 billion in Q3.DHR shares have heavily outperformed the overall markets this year, rising nearly 60%.Doug Schenkel, 5-star analyst from Cowen, sees Danaher benefitting directly from the current pandemic situation and, as a result, moves the stock to a Top Pick.“We believe DHR has one of the best product portfolios among the Tools group to address the current COVID-19 challenges (bioprocessing, Dx). Over the next several quarters, a double-digit pro forma core revenue growth rate appears attainable, in part driven by these COVID-19 solutions. Looking beyond the current pandemic, we believe management commentary on the evolution of the business portfolio, strategy to extract durable revenue from near-term COVID-19 driven demand, and M&A capacity (we estimate ~$15B+ over the next 12 months) should help build confidence that DHR is now plausibly built to generate sustainable HSD core revenue growth. This would be an impressive growth profile for a nearly ~$200B market cap Tools company and is well above current consensus estimates.” Schenkel opined. Schenkel, who is rated 56 of more than 7,000 analysts in the TipRanks database, rates DHR shares as an Outperform (i.e. Buy). His price target of $275 indicates an upside of 12% in the next 12 months. (To watch Schenkel’s track record, click here)Overall, Danaher boasts a Strong Buy analyst consensus rating, and it is unanimous – the stock has received 6 Buys in recent weeks. (See DHR stock analysis on TipRanks)Boston Beer (SAM)The last stock on the list today is one you may be familiar with. Boston Beer is the owner of Sam Adams, the popular brew named after the Colonial-era patriot. Boston Beer is the fourth largest brewery in the US, boasted $1.33 billion in revenue for 2019.So far, 2020 has been a good year for Boston Beer. To put it bluntly, the social lockdown policies keeping people at home caused many of them to turn to beer for comfort, and Boston Beer has a well-liked flagship brand. The company’s earnings have risen steadily this year, from $1.32 in Q1 to $6.10 in Q3. At the top line, revenues have moved from $330 million in the first quarter, to $492 million in the third.Of the stocks on this list, Boston Beer has shown the strongest year-to-date share appreciation. The stock has almost tripled, gaining 183% despite all the vicissitudes of 2020.Cowen analyst Vivien Azer, who holds 5 stars with TipRanks, has reviewed the company's latest Q3 results and was duly impressed. As a result, Azer reiterated SAM as her Top Pick.“SAM handily beat our above-consensus est. for 3Q (historically their biggest EPS quarter, at 40% of 2019)… the company expects *all* of their brands to grow in 2021… Despite the reality of COVID uncertainty, select nuances inform the company's ahead-of-expectation outlook: 1) delayed shelf sets… 2) line of sight in terms of in-house and outsourced capacity and 3) an outlook for a doubling of hard seltzer,” Azer wrote.In line with her upbeat outlook, Azer rates the stock as a Buy along with a $1,250 price target. Her target suggests an upside of 17% over the coming year. (To watch Azer’s track record, click here)Overall, SAM shares get a Moderate Buy rating from the analyst consensus on Wall Street. The stock has 9 recent reviews, breaking down to 6 Buys and 3 Holds. (See SAM stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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  • Which Bank Stock Will Grow The Most By 2025?

    Every week, Benzinga conducts a sentiment survey to find out what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios.We recently asked over 300 Benzinga investors and traders which bank stock they believe will grow the most by 2025. * JPMorgan Chase (NYSE: JPM) * Bank of America (NYSE: BAC) * Morgan Stanley (NYSE: MS) * Goldman Sachs (NYSE: GS) * Wells Fargo (NYSE: WFC) * Citi (NYSE: C)26.6% of readers said shares of JPMorgan Chase would grow the most by 2025. Readers chose Chase's stock to increase the most out of the options our study provided.Respondents were also confident in Bank of America's 2025 growth prospects, with 21.2% of readers saying it would gain the most in the coming years. Goldman Sachs followed BAC closely, selected as the top bank stop by 17.9% of traders.Only 9.6% of traders and investors thought Morgan Stanley would gain the most. Benzinga readers didn't see as much upside with Wells Fargo or Citi either, with both stocks garnering 13.7% and 11% of investors support, respectively.As of publishing, the bank stock from our study trading at the lowest price per share is Wells Fargo at $22.66. The bank stock trading at the highest price per share is Goldman Sachs at $201.59 per share.This study was conducted by Benzinga in November 2020 and included the responses of a diverse population of adults 18 or older. Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The order of survey answers were randomized for each respondent. The study reflects results from over 300 adults.Photo credit: Mike Mozart, FlickrSee more from Benzinga * Click here for options trades from Benzinga * Which Fintech Payment Stock Will Grow The Most By 2025? * Biden Vs. Trump: Best Prop Bets For The 2020 Presidential Election(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Beijing Strangles Hong Kong Even Tighter

    A new proposal would destroy any semblance of the city’s autonomy and its residents’ freedom.

  • Wynn, Caesars Report Latest Brutal Casino Earnings

    The global pandemic has been devastating to casino stocks in 2020, and two top Las Vegas operators have reported some disappointing third-quarter earnings numbers as investors continue to hope the casino recovery will start picking up steam heading into 2021.Caesars Turnaround Story: On Thursday, Caesars Entertainment Inc (NYSE: CZR) reported a third-quarter EPS loss of $6.09, far worse than the $2.03 loss analysts were expecting. Caesars also reported $1.37 billion in revenue, missing consensus analyst estimates by $360 million. Caesars' revenue was up 106.6% compared to a year ago following the acquisition of Eldorado Resorts earlier this year.Bank of America analyst Shaun Kelley said the Caesars turnaround story is still in the early innings."As a whole, CZR remains confident in its ability to drive meaningful margin expansion across the proforma structure, and reiterated its 35-40% margin target, while the deal with WMH will provide CZR with more exposure to the Sports/iGaming themes," Kelley wrote in a note.Bank of America has a Neutral rating and $65 price target for Caesars.Related Link: Las Vegas Sands Looks To Sell Vegas Casinos For B, But Analyst Isn't OptimisticWynn's Encouraging Outlook: Also on Thursday, Wynn Resorts, Limited (NASDAQ: WYNN) reported an adjusted third-quarter EPS loss of $7.04, well short of the $3.89 loss analysts were expecting. Third-quarter revenue of $370.4 million also missed analyst estimates by $64 million. Revenue was down 77.5% from a year ago.Despite the lackluster top- and bottom-line numbers, Kelley said Wynn's operating results in Las Vegas, Boston and Macau were encouraging."Bottom line, Wynn is back to EBITDA positive across all of its geographies, which reduces cash burn and raises optionality," Kelley said.Bank of America has a Buy rating and $95 price target for Wynn.Benzinga's Take: The good news for investors is that gross gaming revenue in both Macau and Las Vegas clearly seems to have bottomed barring another round of casino shutdowns. The million-dollar question for casino investors is when, if ever, will the industry fully recover to pre-pandemic levels.See more from Benzinga * Click here for options trades from Benzinga * Why Corporate Profits—Not Politics—Is Key For Stock Market Performance * Cannabis Stocks Rebound As Dust Settles Following US Election(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • The Day Jack Ma Became Ray Dalio's Nightmare

    (Bloomberg Opinion) -- Nov. 3 was a sad, sad day for China. Not because America’s election changes anything about its hawkish stance toward Beijing — that’s bipartisan — but because China lost a golden investment opportunity by shooting itself in the foot. Looking purely at the numbers, China is in a sweet spot right now. Its bonds are attractive, as the yield differential with U.S. Treasuries hovers near a five-year high. Beijing’s virus-containment strategy is working, and the economy has bounced back. Meanwhile, President Xi Jinping’s latest five-year economic blueprint, which favors innovation and domestic consumption, is a win for tech companies — exactly the kind of growth stocks investors love. Foreigners have been buying the China story this year, even as President Donald Trump threatened to sanction and delist mainland companies. They are crowding into Beijing’s sovereign issues at a record pace, promising to overtake domestic city commercial banks as the second largest purchasing bloc. Global investors need to have “a significant portion” of their portfolios in Chinese assets, both for diversification and short-term tactical gains, said Bridgewater Associates LP founder Ray Dalio. (Dalio says as he understands it, events were progressing faster than regulators were comfortable with, which led to their actions.  “So I assure you that Chinese regulators’ move to curtail Ma’s IPO was not my worst nightmare, and I certainly do not believe that it will have any notable effect on the evolution of China and its markets.” To read his full statement, click here.)The Shanghai Stock Exchange’s surprise suspension of Ant Group’s record-breaking initial public offering Tuesday night changed the landscape entirely. Two weeks earlier, the company’s billionaire founder Jack Ma made a sensational speech, saying China’s financial system and regulatory framework are broken. On Monday, Beijing’s top financial watchdogs summoned Ma and dressed him down. Then they issued new draft rules to rein in Ant’s lucrative consumer loan business.  It’s episodes like this that remind us how capricious and thin-skinned Beijing’s policy makers can be. Regulators have been debating whether to allow online microlenders to act as simple matchmakers (rather than traditional lenders, which require capital buffers), for a good two years. Why the sudden change of heart two days before Ant’s much-anticipated trading debut? The fintech giant had already raised at least $34.5 billion from its dual listing in Hong Kong and Shanghai. Now, it has to return billions of dollars to its IPO subscribers. Somehow, Beijing has proved Ma’s point: China’s bureaucrats don’t know what they’re doing. To govern well, you can’t pick and choose when and how hard to regulate; the secret sauce is consistency. Beijing is looking as childish and moody as Trump on the day of the U.S. election. While Jack Ma’s botched IPO is the big story, there are plenty of obscure examples that also matter to long-term investors. Consider instead the so-called  keepwell clause. This “gentlemen’s agreement” is a common feature of China’s $790 billion dollar bond market, and in theory protects investors in the event of default. In September, a Beijing court rejected the recognition of the keepwell deed for a conglomerate’s dollar bond. Two months later, a court in Shanghai ruled to accept this provision for an energy trader. China’s stance on keepwell is anyone’s guess. This is the problem with investing in China. First, assumed rules can be broken at whim, especially when policy makers fear they are losing face. Second, after Ma’s troubles, what billionaire executive will want to speak up? It’s much better to be supplicant, keep quiet and busy yourself making money.  Sure, China has many attractive traits, but you’d better be prepared to stay in perpetual crisis mode. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Election Results Drive Powerful Stock Market Rally; Nio, Square, Cloudflare, Qualcomm, Alibaba In Focus

    Election results spurred a big stock market rally, with the major indexes and leading stocks showing impressive action.

  • Wall Street strategists are already telling clients what to expect in 2021: Morning Brief

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  • Nvidia, IBD Stock Of The Day, Hits Buy Point Ahead Of Earnings Report

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  • Target-Date Funds Are Too Risky for Savers

    (Bloomberg Opinion) -- One of the great financial innovations in recent decades is target date funds. These investment vehicles, which have $2.3 trillion in assets, are intended to be a sort of “set it and forget it” program for investors saving for retirement, automatically shifting one’s asset allocation from aggressive to conservative over time. This might not seem to be all that revolutionary. In the grand scheme of financial innovations, it’s actually a pretty simple idea, but studies show the vast majority of investors are terrible at allocating assets optimally on their own.The thesis behind target date funds is that the investor outsources his or her asset allocation to a fund manager in exchange for an extra layer of fees that are typically not all that large. In doing so, the investor only has to pick one fund, taking all the brain damage out of investing and having to actively change the allocation between stocks and bonds as retirement approaches. Of course, there is the risk that the target date fund manager gets the asset allocation wrong, given generally accepted assumptions about future equity returns.My criticism of target date funds is that they are uniformly too aggressive with their equity allocations. Most of them start out with about a 90% allocation to stocks in an investor’s early years, moving toward a 50% allocation as retirement nears. Having 90% of one’s money in stocks is too high in the beginning, and having 50% in stocks is too high at the end. These allocations are a function of the peculiar belief in that stocks are the best way to save for retirement. And even though stocks returned about 8% a year for the last 100 years, we have no knowledge of what they will return in the future, which argues for more diversification across asset classes.The reason you’re not supposed to have such high allocations to equities is because volatility prods people to make stupid decisions. In a severe bear market, few people who will “hold on” and continue to dollar-cost average as stocks fall. Instead, they usually panic and liquidate their investments at the worst possible time. A target date fund that is predominantly in stocks will have the same effect on people.Read more: Less Stress Is the Key to Investing Success: Jared DillianSome personal finance experts say target date funds are not aggressive enough, claiming they could leave investors with lower returns in their later working years and forcing them to retire later. This is bad advice. The whole reason investors should de-risk over time is that as they get closer to retirement, they’re no longer seeking capital appreciation, but rather safety and income. Nobody wants to lose half of their nest egg the year before retirement. There’s no reason someone in their 60s should be in a portfolio of 100% stocks.The good thing about target date funds is that they force investors to invest in bonds, which they’d otherwise probably avoid altogether. Most individual investors don’t understand bonds, and they invest in fixed-income assets only because someone told them that bonds have some diversification benefits. The problem is that it’s not enough. A 50% allocation to equities for someone in their 60s still leaves someone with a lot of risk right before retirement.The old rule of thumb was that one’s allocation to bonds should be about equivalent to their age. We don’t hear that advice much anymore because there is a perception that bonds are less attractive these days, owing to record-low interest rates. There are ways to make money in the bond market that don’t involve a dependence on microscopic interest rates. When people refer to bonds in the abstract, most think they are referring to U.S. Treasury securities. But other fixed-income assets, including corporate bonds with below investment grade credit ratings and preferred stock, still offer decent yields relative to the risk-free alternative.Many target date funds have an allocation to international stocks, which is good, but it would be nice if they had exposure to other asset classes, like certain commodities and even real estate. A target date fund’s returns are often dominated by the stock market, causing much volatility. Even so, investors are probably happy with their target date allocations. After all, stocks and bonds have both been going up. Plus, it’s just not fashionable to be conservative nowadays. A sustained bear market in stocks might cause asset managers to rethink the assumptions about equity exposure and the glide path. But it would too late by then.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Jared Dillian is the editor and publisher of The Daily Dirtnap, investment strategist at Mauldin Economics, and the author of "Street Freak" and "All the Evil of This World." He may have a stake in the areas he writes about.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.