At some time the economy has to stand upon its own; we can’t count on the Fed to bail us out: Fmr. Speaker of the Florida House

Will Weatherford, Weatherford Capital Managing Partner & Fmr. Speaker of the Florida House joins the On the Move panel to discuss the impact of COVID-19 and the upcoming 2020 presidential election on the markets.

Video Transcript

JULIE HYMAN: Well, as I mentioned, some of these headlines are what is driving the market higher in terms of the plasma therapy as well as a report that the Trump administration might fast track an AstraZeneca experimental vaccine.

Let's talk about what all of this means for the markets. Will Weatherford is joining us now. He is Weatherford Capital Management managing partner, and he's also former Speaker of the Florida House. He's joining us from Tampa. Will, it's good to see you again.

So we have these headlines on this therapy, which do seem to be giving a boost to the markets today. But we also have, on the flip side, these concerns about testing, right? We also had a report out today of the first confirmed reinfection case from someone who had coronavirus and had it again. So it seems like all of this stuff is fits and starts, but the market's not fits and starts, right? The market has been almost exclusively pushing higher. What do you make of it?

WILL WEATHERFORD: Well, I mean, it's kind of amazing to see. Since June, we've just seen, you know, an incredible uptick in the market, and some of that is well-founded if you look at it and you break it down. The large technology companies are effectively driving the market and certainly the S&P, and so that's understandable.

But when you look out into the future, there's a lot of uncertainty, and it doesn't make a lot of sense to Main Street the way that the stock market is performing. And so, you know, whether or not this is sustainable, hard to say, but it certainly is being driven by a few companies and the fact that the economy is in a transition right now. And we don't really know how long it'll last, but I think the COVID uncertainty continues to exist. There is positive news with today, but there's a long way to go before we can really rest and feel like we've, you know, turned a corner.

RICK NEWMAN: Hey, Will, Rick Newman here. We have been talking a lot during the last few months about the Fed's role in basically propping up asset prices through all the liquidity programs and other types of monetary stimulus they're doing. What is your degree of confidence that the Fed can keep this up and keep all these balls in the air?

WILL WEATHERFORD: Well, I guess there's can they keep it up? and then there's the question should they keep it up? right, Rick? There's very few things that a few trillion dollars thrown at can't solve.

And so, you know, I worry a little bit about, you know, what the Fed can and should do. I think they've done a good job to date of trying to meet the crisis with the best tools that they have available to them. But at some point in time, the economy has to stand up on its own. We can't count on the federal government sending checks to people in the mail. We can't count on the Fed bailing us out. And so the economy needs to function, and it's hard for it to function when you've got a global pandemic going on.

So I worry about the moral hazard of it all. But to date, I think that they've been effective. But, you know, we can't count on them in the long term to hold us up forever.

DAN HOWLEY: Will, when you look at, you know, the idea of a potential President Biden coming down the line, what do you see that impact being? We've talked about obviously the market prefers stability, but then there have been some people saying that a President Biden would be good for the market compared to a President Trump. I guess where do you kind of stand on that?

WILL WEATHERFORD: It's a good question. Hard to say how the market will perform. If you remember on election night four years ago when Donald Trump won the market, it originally tanked very quickly, and by the morning, it had recovered and ended up having a big surge in that November. So hard to know exactly how investors will respond to a President Biden presidency.

That being said, I think, you know, politically speaking, you know, he had a good night the other night at the convention. I thought, overall, he did what he needed to do to appeal to his base and people in the middle.

This is a big week for the RNC and for President Trump. They've really got to broaden their tent and not just count on their base. They've got a strong base, but they need to broaden it in order for them to be successful on election night. But how the market will respond to a Trump versus Biden presidency is hard to tell at this point.

JULIE HYMAN: We know that Biden talked about sort of tax policy in an interview with David Muir where he said that he's not going to raise taxes on individuals making under $400,000. However, part of his tax plan does include things like increases on capital gains, which certainly could affect people making less than that. But is this election going to be about that? Is it going to be about tax policy, or is it, as the Democrats have tried to frame it, more about sort of character and integrity?

WILL WEATHERFORD: You know, whenever there's an incumbent involved, it's typically a referendum on the incumbent. And so, you know, you can try to make the race about Biden or try to make it about tax policy or international trade or maybe even COVID. But I think at the end of the day, elections, if there is an incumbent involved, are a mandate for the president and, you know, do people want to give him another four years?

And so President Trump has an opportunity to make that case in front of the American people here in the coming days. But I think that's what will drive it.

And the two negative narratives that are out there, obviously the COVID-19 and how that plays out over the next 60 to 90 days is going to be really important. And then also how does the economy hold up in the next 60 days? You know, what happens? The market obviously is performing well, but there is a disconnect between what's going on in Wall Street and Main Street, and how people respond to that when they go to the ballot box is going to be interesting to see.

RICK NEWMAN: Will, you're on the host committee for the 2021 Super Bowl, which is supposed to be in Tampa where you are right now. It is hard to imagine we're going to have anything new by-- I guess it's February-- that's going to allow people to gather in an event like the Super Bowl. What is-- what do you think is going to happen there?

WILL WEATHERFORD: Well, it's a great question. I've had the-- you know, the honor of serving as co-chairman of the Super Bowl here, Super Bowl LV, which we'll be hosting in Tampa. Rick, we're counting on it still being in Tampa, so we think it will still take place.

I think the NBA and hockey have shown that you can put on these world-class events and do it in an a first-class way, but they may look different. And, you know, I think the NFL right now is moving forward. They're going to put safety first. We anticipate there being a Super Bowl in Tampa. We anticipate there being fans in the stadium for the Super Bowl in Tampa Bay on February 7.

But at the end of the day, the NFL, as you get closer and as we have more information, they'll make the call, and they're always going to put safety first. So I've got confidence in them to do the right thing, but it is a very unique time when you're watching the NBA playoffs in a bubble and the NHL playoffs in a bubble and the Super Bowl, you know, out there hanging in February. It's a big event. It's a world-class event, and we want to make sure that the hundreds of millions of people that normally get to watch it still get to watch it.

JULIE HYMAN: I know a lot of football fans on the Yahoo Finance team are hoping the same, Will. We'll see. Will Weatherford is Weatherford Capital managing partner and former speaker of the Florida House and also, as he mentioned, co-chair of the Super Bowl committee for Tampa 2021. Thank you so much. Good to see you, Will. Be well.

WILL WEATHERFORD: Thanks. Thank you, Julie.