U.S. economy could take 10 years to recover from COVID-19, CBO finds

Salt Financial President and SLT ETF Co-Founder Alfred Eskandar joins Yahoo Finance’s Kristin Myers to discuss the market outlook as protests continue across the nation and economic data stabilizes.

Video Transcript

KRISTIN MYERS: Welcome to Yahoo Finance's "The Ticker." I'm Kristin Myers, checking the markets today, all of the major indices in the green. NASDAQ actually slipping into the green after spending much of the morning in at the red. Today, the Dow is the leader up over 180 points.

So let's just kick everything off with what the markets are doing because, despite all of the chaos that we are seeing on the streets with civil unrest, with the coronavirus pandemic still raging on, markets seem to largely be ignoring all of that news. So we're joined now by Alfred Eskandar, president of Salt Financial and SLT ETF co-founder. Alfred, thank you so much for joining us.

ALFRED ESKANDAR: Hi. It's good to be with you, Kristin.

KRISTIN MYERS: So I have to start with the big question of why. Why? Why? Why? With all of this terrible news that I feel like would normally send the markets lower, we seem to be doing pretty OK.

ALFRED ESKANDAR: Well, there's a couple of big indicators that are kind of telling you what the market is sensing and feeling. One is we've had the VIX basically come down and stabilize below 30. And obviously, if you recall where it was early in the year, peaking at over 70, it's nice to see it come down. Still elevated, but it's much more stabilized than before.

And the second thing you've got, you know, crude trading at $3-- or $36, excuse me, which is a proxy for, you know, growth to come. And I think net net, the investors are seeing that there are more positive things ahead than there were some horrific things behind us.

KRISTIN MYERS: So speaking about some of those positive things, I know that you, obviously, mentioned the VIX and, obviously, sentiment being a little bit more positive. We got some positive news in terms of manufacturing data. But we do have, you know, jobs numbers coming up. That might not look very pretty. What other positive news [AUDIO OUT] out there right now.

ALFRED ESKANDAR: Well, I think, you know, if you're looking at the number of coronavirus-- actually, statistics across the board, they're all trending downward. We've had a number of states reopen. And we haven't had a second huge wave of cases.

And I think what the investors are looking at is the silver lining in every single statistic. And since they're all trending downward, they're feeling a lot more-- you know, certainly more courageous to be engaged in the market. And you know, nothing gets more people involved than a rising market.

So those who have been sitting on the sideline are jumping in, fueling even more demand. And not to mention, you still have a lot of dry powder sitting on the sideline with, you know, I believe, $5 trillion in, you know, in money market accounts. So you know, there's still some more fuel to keep this rally going, I think.

KRISTIN MYERS: Do you think at all we're due for a pullback in the coming months? And how big? How big is that going to hurt?

ALFRED ESKANDAR: Well, you know, a 10% pullback would not be out of the question. It's certainly not abnormal. If you're thinking about it, we're up 40% from the March 23 lows. And typically, June is not exactly the best month for the S&P anyway.

So if we're going to rely on historical, you know, sort of examples, you could make a bet that June would be a pullback month. I don't know. I don't have a crystal ball. But certainly it's happened before.

KRISTIN MYERS: You're supposed to be my Nostradamus, Alfred. [LAUGHS] So--

ALFRED ESKANDAR: My predictions won't come out so well.

KRISTIN MYERS: I was reading a note a little earlier today about the market being pretty uneven right now and if you are in ETFs. So I want-- this is why I wanted to ask you this question. If you were, you know, investing pretty heavily in ETFs, you are setting yourself up for some hurt coming in the next coming months. What are your thoughts to that? Do you at all see a lot of unevenness in the market right now?

ALFRED ESKANDAR: Well, you know, obviously, I'm a little bit partial. We're an index in an ETF business. But what we do see is the-- there's a lot of great strategies out there that are represented in a ETF wrapper. And those have been incredibly helpful to a lot of investors rather than selecting individual stocks, which is a really, really hard thing to do.

So I don't-- I personally believe that the ETF industry has been very helpful to a lot of investors in times like this and will continue to play a tremendous role. I mean, at the end of the day, investors really need to focus on the level of risk that they're willing to tolerate it for the level of return that they expect. And ETFs enable them to do that very efficiently.

KRISTIN MYERS: All right, Alfred Eskandar, president of Salt Financial, thank you so much for joining us today.

ALFRED ESKANDAR: Great to be with you. Thank you.