Today's Market News: Markets Start Strong for 2012
Does Wall St. have confidence in world markets?
- Duration 4:21
- Date Jan 3, 2012
Does Wall St. have confidence in world markets?
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I don't know who's crystal ball is right but a lot of people -- appearing -- -- today we're gonna ask bonds ending and -- -- chief investment officer of Greenwich wealth management.
And the editor of Forbes special situations survey.
Where we don't 2012.
Well no actually on.
I'm growing more optimistic on as far as the US economy -- in US markets -- I think we could see a pretty good year 2012 but.
Paul and are not saying that just because the markets -- so strongly today on.
In fact it's not unusual for the market to rally pretty strongly in January January -- is January effect so so called January effect -- the best month and I think part of the reason that we're seeing the rally today is because a lot of the off.
The tax loss selling pressure that we saw in December is now -- -- that people are no longer selling stocks to realize those capital losses for tax purposes.
On so there's more net -- in the market.
Why what's changed that you -- your optimism has changed about the US economy why well -- -- -- is true critical factors or housing and employment.
-- both of which are still very bad I don't know and replace those things.
On however -- the trends or improving.
Home if you look at the employment cost situation -- nonfarm payrolls figures have been positive they've been averaging close to 150000.
-- month for several months now that's a really good -- The initial jobless claims have been falling -- -- certainly a good sign on if you look at the housing market.
Home prices are beginning to stabilize -- there's evidence that on.
All permits to build new homes are going off the sales contracts are going up.
-- -- -- those are -- so this combination of it is that was slightly improving jobs market.
And a housing market I think would be enough to Austria for the stock.
What about -- flip side of that you know that foreclosures still 22% of most mortgages are underwater.
It's just you know -- Is it less bad than what it was navy and then we're saying exactly.
Still bad it's still very very little -- reported up at all -- -- -- less -- On and there's also somewhat evidence that the banks -- more willing now to want to take their losses on these foreclosures and I would -- clear the market all politically -- -- the jobs market improves.
Then we will see that the foreclosures should the point is well.
Let's talk about -- China because we just mentioned at the PMI manufacturing number came in better than expected.
Which -- you know I never trust China I feel like you can't trust the numbers right there is no.
There's no system there's no audited financials there's nothing so.
We presume they're growing we have heard for awhile that it would the growth was pulling back a little bit now its -- backpack and that -- Well first of all much right even trust the numbers coming out of the US going they have -- -- -- little -- -- -- -- but all.
-- about the take a Chinese numbers would definitely with a -- of -- on.
I think -- growth in China will remain strong there's no question about that but I think growth in China is slowing.
And that could result in a significant unrest in China we've already seen a number of cities in China where unrest -- some unrest in us home.
There's been a number of demonstrations in China where the the population has been upset about one issue or another and they seem to be less fearful about taking the streets and demonstrating and an airing their grievances.
On if the economy in China slows down significantly by -- I mean even to about 6% which is still strong growth anywhere right.
Paul I think you could see more unrest.
While I'm not too concerned about that right now because I do expect the Chinese economy to continue doing well I'm really much more concerned about Europe I think Europe's you know the -- call.
So let's talk about -- having on them again we did get some decent numbers Germany's unemployment fell a little bit.
And Switzerland apparently doing better.
But yet and -- we have this debt issue that's not going away do you think it's gonna hang over our heads for the rest of the year like it did last year.
Absolutely I think I think because the European debt and also the US that is going to be hanging over -- has for quite awhile on.
The big question however that everybody's been asking is that is the -- long zone.
Going to collapse -- -- the European Union going to collapse cause I think the answer to both is -- I think at the very most it's possible that.
All one or two countries may drop out of the eurozone but I don't think you're gonna see.
A complete collapse of the entire zone I think you'll continue as the currency you.