THE BOTTOM LINE: Huge market warnings, Keurig's political stand, and the future of the Fed

This week:

• Business Insider CEO Henry Blodget talks about the warnings being issued by a growing faction of fund managers, including John Hussman, the president of the Hussman Investment Trust and a former economics professor. He outlines Hussman's argument that equity valuations are too high, and that technical indicators are flashing sell signals.
• Blodget sits down with Business Insider executive editor Sara Silverstein to discuss Hussman's bear arguments, as well as those posed by Societe Generale strategist Albert Edwards, who's another long-standing critic of the current equity bull market. She looks at recent comments made by Edwards that the number of Americans planning to take a vacation is signaling the type of complacency that can derail the ongoing rally.
• Silverstein and Blodget then debate whether these recent comments from Hussman and Edwards hold water, citing a handful of bull arguments that suggest the market will continue higher for much longer. Blodget says the current environment reminds him of the second half of the 1990s, when bearish value investors were shamed as the market continued to rally. He laments the fact that while Hussman and Edwards may be right at some point, that the lack of clarity around timing makes it difficult to react.
• Blodget discusses the "Smash Your Keurig" phenomenon, which resulted from the coffee machine manufacturer's decision to pull its advertisements from Fox News host Sean Hannity's TV show in response to controversial comments made on his show. He notes that Keurig is just the latest example of a company that's waded into a political debate and found out the hard way that many customers view this negatively. Silverstein points out that Keurig wasn't necessarily trying to take a side, it's a private company that can do what it wants, the same way consumers can vote with their wallet.
• Blodget and Silverstein talk about Papa John's, which has also gotten involved in political issues in recent months. After aligning himself with Trump and the more conservative side of things, the company's CEO has softened his stance a bit. Blodget notes that throughout history, businesses have stayed far away from political issues, but says he can't blame some companies for taking a stance in this day and age. He points out that new business plans are definitively aimed at either the Republican or Democrat consumer base, and that in the current climate, that might actually help certain businesses grow quickly.
• Blodget breaks down the issues facing ESPN and its parent company, Disney, amid plans to produce the network's flagship show SportsCenter for the Snapchat audience. He highlights the link between Disney's recent stock struggles and concerns over ESPN's declining subscriber base. Silverstein says that the new show is more millennial-focused, with younger anchors, and mentions some of the struggles the traditional cable model is facing right now.
• Blodget and Silverstein discuss Alibaba CEO Jack Ma's latest foray into entertainment, which involves a kung-fu short film, where he takes on eight attackers using his tai chi skills. The movie has been viewed more than 100 million times, with many celebrity cameos, which might mean a sequel is in the works.
• Silverstein sits down with Michael Collins, the senior investment officer at PGIM Fixed Income, to discuss newly appointed Fed chair Jerome Powell. He highlights the role the Fed plays in regulating the banks, and says that will be one of the major changes under the new regime, with oversight likely being reduced. In terms of monetary policy, Collins sees the Fed continuing to be transparent with their plan, which he says will likely result in two rate hikes in 2018. He says that there's risk of the Fed hiking too much, too quickly, which would flatten the curve and cause a selloff - and possibly even a recession.
• Collins points out that the economy is in great shape right now, corporate earnings are doing well and that banks are in the best financial condition they've been in for a long time. With that in mind, he predicts that any downturn we see will be an asset price correction. Collins says that he'll be watching closely to see how the Fed unwinds its balance sheet, and mentions that it's the first time in history the central bank will be using two policy tools simultaneously. And by that logic, he thinks that the chances of a policy mistake are bigger than usual.
• Silverstein asks Collins about tax reform, which he says is in constant flux. He says that PGIM is looking at the deductibility of interest expense, which affects his firm, which is a big investor in corporate bonds. He notes that in the long term, some of the proposed measures could end up being positive for credit investors.
• In the Fidelity Insight of the week, Silverstein speaks to Matt Goulet, a vice president of sector investment strategy, about the rise of bond ETFs. He says financial advisers are driving this by replacing their individual bond holdings with ETF shares. And while it hasn't happened on the retail side yet, Goulet sees that coming in the future. In terms of retail investors, he says that they're focusing mostly on sector funds, which they seek out because of the diversification they offer. Goulet also mentions that ETFs are more tax efficient.