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Stocks mixed after record-setting rally

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Yahoo Finance’s Brian Sozzi, Myles Udland and Julie Hyman break down how markets fared this week.

Video Transcript

MYLES UDLAND: And so we set to wrap up this week, guys, I just want to talk a little bit about sort of where we are at this point, Bank of America out with a recent survey showing the biggest risk that investors see to the markets is the economy doing better, the reopening trade, as it were. We continue to see some of these big pandemic winners under pressure.

We talked to DocuSign in the last hour. It's a company that, again, is reporting record results. Meanwhile, they're seeing their stock under pressure amid a kind of broad sell off in this preference, in this style. And Julie, I do wonder sort of where the market sits in the summer as we hear the president last night saying that all American adults are going to be eligible for a vaccine on May 1.

So let's even be conservative. Let's call it Father's Day, everybody has actually gotten a shot, at least one shot at that point. We can all go do stuff. We don't have to Zoom. We don't have to order everything online. I think that's certainly good for all of us. But it will be interesting to see how markets take that, because there has been such a clear and direct theme to play the pandemic in markets.

And there's so much money on those types of bets. And we're seeing it start to unwind a little bit. We're seeing action in the bond market as well. And boy, it's been a tough go, as we kind of work towards that moment here in time.

JULIE HYMAN: Well, it's a cliche, but I'm going to say it again, because it always bears repeating, which is that stocks are a discounting mechanism. So just like yesterday, we were reflecting on where we were a year ago and how difficult it would have been to predict that stocks were where they were six months later or 12 months later at new record highs, when we were in the depths of the pandemic.

So now while the predictions for the economy are robust, stocks are extraordinarily robust. Of course, the market's looking ahead at what is going to be the next challenge coming down the pike. And as we heard from Paul Gruenwald earlier, maybe that challenge is going to be, even if reflation is a good thing, that it's going to cause some sort of pain points, tension points, dislocations within the economy and the markets.

And I think that we are seeing that now the markets sort of try to think about that and work through that as we see the transition back to the stuff that we used to do before from the stuff that we did increasingly during the pandemic.

So it seems somewhat obvious that this is what's going to happen. But still in the execution of that happening, you do tend to see that kind of turmoil, if you will. We were looking at some of the numbers of some of the stocks that bottomed.

Stocks overall, of course, bottomed last March, March 23, as you pointed out to me, Myles. And we've been looking at some of the outperformers since then. Tesla is in the number one spot, 705%. Brian Sozzi, I have a hard time believing that Tesla is going to rise another 705% over the next year.

BRIAN SOZZI: Well, you never know, Julie. But listen, no, they've had a tremendous year. And it's not just it's not just Tesla, of course. It's all the pandemic plays. But I will say this. I'm glad Myles brought up DocuSign, because we just talked to CEO Dan Springer. And I came off the interview. You know what? Business is doing pretty good so far to kick off the first quarter.

First quarter growth rates, at least my interpretation, might be mirroring what they saw in the fourth quarter. So to see the stock down about 5% here, that's not that bad. But it's strange here, guys, because I think as we do go back to the office and we go back to work, whatever normal, this new normal, in fact is I don't think we stop using Zoom.

I know DocuSign has weaved itself into our workflow functions. I don't want 100 pieces of paper on my desk that I have to physically sign. Just send me over the digital document. I'll sign it. I'll get it done. And I'll keep it moving. And I think this notion that the market has that we're no longer going to use Zoom anymore. We're no longer going to use Google Meets.

DocuSign, forget about it. It was a great thing we use during the pandemic. But you know what? E-signatures are not the future. Well, I think they are. And Zoom will, I think, still stay embedded in our workflows, maybe not to the extent that they were during the pandemic, of course, but still the company is not going anywhere.

JULIE HYMAN: Well, the company is not going anywhere, but the adoption rate, the new adoption rate, has to fall off. I mean, yes, we're all going to keep using Zoom. But there just aren't as many new people to use Zoom anymore who haven't used it already. So inevitably, there's going to be a slowdown of growth. If you look at the year over year comps, you just can't match it. There's just no way.

BRIAN SOZZI: I mean, you can't match it, right. I feel you on that. But we're going into a world of a hybrid work solution. So I would say, as companies start to onboard more workers, I would argue that Zoom remains more important than it was last year. That's just my sense.

MYLES UDLAND: My mom always told me when I was a little kid that I shouldn't say absolutes like, you know, this never happens, this always happens. Now, of course, thinking that way preps you well for a life commenting on financial markets. And just to your frame, Sozzi, the market over the last year was like, we're going to only use Zoom forever.

And yeah, now it goes back to, like, we're going to never use Zoom again. Personally, if we want to just talk about these companies, I'd much rather use DocuSign than you Zoom for the rest of my life.

BRIAN SOZZI: Fair point.

MYLES UDLAND: I think I've done enough. Of course, the thing is, that's not going to happen. You're right. I'm going to be on many, many Zoom calls for the next however many years we're out here doing this. But I'd much rather sign my documents digitally, which is probably going to happen than do digital calls. But look, it's the way the world.

And again, as we say almost every day at some point, the three of us will be in the same room together. And we can all have this out in person. And maybe-- I don't know. Maybe it'll be easier for me to moderate the two of you in person, or maybe it's better if I just sit here digitally and just kind of keep that dumb look on my face.

BRIAN SOZZI: Let's not talk about minimum wage or Zoom, and I think we're good to go.

MYLES UDLAND: Yeah, well, you guys go over the top of me. I'm just, quite literally, stuck here, just kind of refereeing the action.