Kevin Simpson, Capital Wealth Planning CIO and Founder joins the Yahoo Finance Live panel to discuss the latest market action.

Video Transcript

AKIKO FUJITA: Let's begin with the broader markets today. We've got Kevin Simpson. He is CIO and Founder of Capital Wealth Planning. And, Kevin, it's good to talk to you on this Monday.

Just give me a sense of your-- what you're seeing in the markets today, down about 400 points but after seeing such a significant run up. What do you think is contributing to the sell-off today?

KEVIN SIMPSON: Yeah, Akiko, I think you're hitting it right on the head. We're on the cusp of one of the greatest months that we've seen since 1987, maybe one of the top two months, we've seen here in 2020. So after a holiday-shortened week, we saw a little bit of light trading, pullback on Friday. I think it's very normal to see some type of pullback here as well.

But 30,000 on the Dow last week was incredibly exciting. We see more highs in the future and the months and years to come. And as we sit here on Cyber Monday, I think the only thing we have to do is look at the major retailers to see how strong the market has been. Amazon, Walmart, Target, Home Depot, Lowe's, these are all companies that have done amazingly well during the shutdown, and the exciting thing about them is that they can be just as optimistic, just as robust in a reopening economy because these are the companies that I think can do well in both a shutdown as well as reopening.

ZACK GUZMAN: Yeah, and Kevin, I mean, we've been hearing a lot of the same things that we heard back in March when we were talking about, you know, this kind of break between the stock market, Wall Street, Main Street, where things are at on that front. You talk a lot about those big-boxes retailers enjoyed the luxury of staying open in a lot of these places, even in those communities that did see lockdowns because they're deemed essential.

But when we talk about some of those other things Americans might be spending on, restaurants maybe not enjoying in the same categorization there. So talk to me about what you're expecting to see here as, you know, this lockdown kind of period or this stressing of limits on going out, restrictions on outdoor dining, on, you know, community events there, what does that do for the underlying consumer here and confidence on that front as we approach 2021?

KEVIN SIMPSON: Yeah, Zack, it's almost like the storm before the calm, right? We have this great news from Moderna this morning, Pfizer last week. Everyone's anxious to see this vaccine be successful and readily available, but the problem is we've got to get there.

So we don't have a Wall Street problem. Wall Street's put COVID-19 in its rear-view mirror and it's looking ahead at 2021, 2022. The problem is that Main Street doesn't have that luxury. There is a Main Street problem, and no matter what anyone tells us, we need another round of stimulus to help the US consumer, the small-business owner, to help Main Street to bridge that gap from here to the vaccine.

And whether it's $1 trillion or $3 trillion, I think what we need is something, the sooner the better. And if we can get to that point, if we can bridge that hurdle, then I think the sky's the limit for the economy.

AKIKO FUJITA: I mean, that may be a problem for Main Street now, but doesn't that ultimately seep into Wall Street? If you look at, for example, even retail, you pointed to a very strong Black Friday online, but foot traffic was down in the physical stores. And this comes at a time when retailers are really trying to find that right mix. Certainly the big names like the Amazons and the Walmarts are doing quite well, but how big of a concern that this kind of seeps down into some of these other businesses and we just see the big ones survive and the other ones sort of left behind?

KEVIN SIMPSON: Yeah, Akiko, it's a tremendous concern, and it's a reality. You know, we're so hyper focused on the reopening. We're so excited about the prospects of the vaccine, and by all rights we should be. But this Main Street problem is real, and it's almost as if it's been maybe somewhat ignored by politicians as of late. And I realize we had a pretty big election in November that maybe took precedence over certain things, but the fact that these cases are rising at such a rapid pace is concerning.

And, you know, we can say that the whole economy is on the shoulders of the US consumer, and I think in large part it is. But eventually, exactly like you've suggested, if the consumer can't support it through this period of time, we're going to see that affect Wall Street for sure.

We came into the COVID-19 with a strong economy. By all rights we can get out of it with an even stronger economy. But for those small businesses, for those restaurateurs, for all those places that every town we all enjoy so, so much, for them to get to the summer is a challenge, and I think the only real way we can expect that to happen is through a stimulus package. And I'm hopeful that that will happen.

ZACK GUZMAN: And, Kevin, until we get there, there are a lot of questions about what the short term might look like for some of these companies that have enjoyed, you know, the lockdown measures. We were talking about Zoom. They're going to be reporting after the bell. How do you see that trade-off here? Is it as clear as, you know, once we return to normal, all of these work-from-home companies are going to be hit for a while here, or are you seeing projecting some of the strength to continue there?

KEVIN SIMPSON: Well, Zack, I love how you said return to normal and not a new normal. And I think normal can be different. It can be changed. It's not an either/or scenario. We've all been so accustomed now to working remotely. I think for folks that work in urban areas that have long commutes of in excess of an hour, you know, maybe the reality moving forward is that instead of taking that commute five or six days a week, you do it three or four days a week.

And I think that allows for all of these shutdown stocks-- you mentioned Zoom is one that should continue to flourish forever in a changed normal. Hopefully we're not dependent on it in its exclusivity because we want to get back to work. We want to be in person. We want to be interacting for sure. But maybe that new normal allows us to have a little flexibility, and I think that can improve productivity.

So I think that's a great thing moving forward. It's not that the world's going to go from growth to value when things reopen. I think there's a terrific balance and an opportunity to invest in great companies both in growth and in value.

AKIKO FUJITA: And, Kevin, we're well off the 30,000 level that we saw the Dow hit last week, but it sounds like you think there are newer-- there are more-- there's more upside going into 2021. What do you think is going to be the catalyst for that? Can the vaccine news alone continue to lift it to new highs if the reality that's happening in the meantime is certainly not good, especially as it relates to the pandemic?

KEVIN SIMPSON: No, it can't. The vaccine news is great, and we've gotten this November surge as a result of it. We need the vaccine not just to exist but to be widely distributed and to be widely distributed sooner rather than later.

You know, so many pundits are talking about winter is coming and the analogies to the "Game of Thrones," but it's not a joke or a far-fetched, bad analogy. I mean, winter is coming. We had Thanksgiving. We've got the December holidays and the new-year holidays. We're all pent up with this kind of COVID fatigue. And the more we get together and the more this virus spreads between now and then, it's terribly problematic.

So I think if we all do our part-- not to sound like a cheerleader, but I mean, taking these precautions that we've done for so long, if we can do them for another two or three more months, getting this vaccine out there will be a tremendous boost to this economy and to the stock market. But until we start to see how it can be distributed and to see the effectiveness, I think a lot of the ammunition has been used up in terms of the vaccine enthusiasm. Now we need to see the vaccine reality.

AKIKO FUJITA: Kevin Simpson, Capital Wealth Planning CIO and founder, it's good to talk to you today. Appreciate your time.

KEVIN SIMPSON: Thanks, Akiko.