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00:00Now for more on the markets let's bring in Jason Brown. He is Alexis Investment Partners president and just a follow on what Sarah was saying the S & P 500 seeing a swing in August of six point eight percent from peak to trough. It's currently below its 50 day moving average certainly tested that 100 day moving average as well. What do you make of this august volatility does it signal the start of a more serious decline for the rest of the year. Yes it's interesting you say that I think coming into August we were kind of setting up for for a dip of some kind. And I think that was really the initial question I had was why are we going to sell something more extreme or would this just be a simple correction. What you saw almost immediately was this this little 5 percent pullback turned into extreme pessimism across the board. You saw analysts after analysts coming out painting a dire picture you saw a ISE Sentiment dip to extreme lows. It was as if we had gone down 15 or 20 percent when we went down the first five or six. So from my perspective I had gone into the month maybe raising a little bit of cash to try writing covered calls and so forth and I immediately started covering the covered calls reinvesting some of the cash maybe upgrading some positions so you saw some places where you know I guess when you get more volatility in the market you don't have to necessarily reach for more volatile names you can kind of hone in on better quality because they become cheaper and so forth. And I think that's that's kind of why I'm playing it currently. Well how much can you read into I guess what happened this month when you consider how low the volumes are. I assume that a lot of folks really aren't the human beings aren't at their desk. Well we know the machines never actually take a vacation. But I mean when we talk about trying to gauge market sentiment and gauge the direction of where folks think prices should be. Do you think that this month gave us an accurate sort of picture of that. I think you gave you two things one is it definitely gave you some fear coming back into the market and you did see reactions to that kind on a broad broad basis. I think you also definitely saw some resilience and maybe that is because people have some money on the sidelines. I guess it is a low volume window at time but at the end of the day you know it seems like there's a lot of defense happening. And again I think part of the issue is if people are learning that lesson that if I sell into these down moves I get punished for it. And I think they're learning that over and over and over again when you go from last December to what happened in May to what's happening now and you see that kind of kind of chugging along with a series of kind of higher lows each time it starts to get a little encouraging. It's certainly a little encouraging but we're looking at an economy that's doing better than most economies around the world. The consumer is very strong here. The declines in the volatility that we've seen in the month of August is accompanied by a lot of weakness overseas. And you've talked about how we're in a global bear market at least since the January 20 18 peak. But this is a global bear market without a recession. There's a lot of fear of recession but we don't have recession right. That's absolutely correct. So when you when you look at that context you know the whole idea of a global bear market or a bear market in general right is sort of a resetting of prices. And when you go through this 18 month window like we had where basically you had a lot of volatility but you've effectively gone nowhere and for many foreign markets you're actually negative emerging markets or negative U.S. small caps or negative. You've done a lot of of kind of unwinding of that excess optimism. So you know we've had good earnings growth we've even had good earnings growth recently maybe not as good as what it would have been without some of the issues that we've obviously been concerned about. But nonetheless valuations are improving and that's what I find as I go out and I start looking at companies that I was maybe attracted to previously just because of the trend of the strength their trend and or who they were as an enterprise I start saying Wait a minute they're actually attractively valued as well now which which is surprising just to some extent. But at the same time what it tells me is when you have this much pessimism this much concern things are actually maybe a little more attractive. You've also got ultra low yield which is stimulative whether you know and maybe you'll go lower. Who knows. Right. But you add all these pieces together and even if we were to have you know a downturn from here the real question is how deep is it likely to go after the amount of damage it's already been done and what's already been corrected . And so if we go into a recession you know could could things get worse before they get better certainly but they will get better. And and again what if we don't go into a recession . You have to start to ask yourself those optimistic questions and I think at the moment anyway I think we're going to go higher. All right. Well you heard it there Jason Brown from Alexis Investment Partners .

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Alexis Investments Partners' President on Market Volatility

Jason Brown, President of Alexis Investment Partners discusses the August volatile stock market and extreme trading and what it might mean for the near future on "Bloomberg Markets: The Close." (Source: Bloomberg)

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