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He's got well now we have a strategist who says gas prices are not necessarily -- -- the economic recovery.
Interest saying I'm Liz and -- Thursday is the warm who's saying it she's senior VP and chief investment strategist at Charles Schwab.
But you're bucking the trend here you often happened the past but everybody's saying watch out.
-- -- Necessarily first of all it's -- rate of change it tends to matter with energy prices more than is the level if that happens over an extended period of time.
There's a very easy ability to add to adapt to that but what it happens in a spike in you get to.
There -- 50% annualized rate of change that's when it hits not to mention the fact that unlike.
Last year's spike we have a lot of much more positive offsets we have huge decline in natural gas crisis which is that electricity bills come down.
We've got job growth at a significantly.
Better we've got food prices which had risen in conjunction with energy prices.
In the spike last year are much more contained so I I don't think it's a problem it certainly is a tax on consumption.
But it's not a recovery breaker.
By the way we talked a little bit about 11 factor of course it affects oil prices significantly as the actions of the Fed reserve.
What happens to the dollar -- -- They have this weird plan now and I'll just -- it put it in a nutshell if I can they're gonna print more money.
To buy more treasury bonds.
And then they're gonna borrow that money that they have printed right back.
And put it in their own coffers for a while and supposedly this will prevent inflation from happening but it will keep interest rates low.
It sounds to me that it like it's too clever by.
-- well I don't like -- what one of the criticisms is that at some point of all this additional liquidity provided into the reserve system that it will be inflationary.
It hasn't today because there's been no velocity of money that is the money doesn't go out a lot of the collateral that lending growth has picked up.
And I think that's one of their concerns one of the reasons -- traditional QE3 is off the table.
Because when QE1 ended when QE2 ended lending growth was still.
-- action was what negative so you had no growth from money.
Now you have a significant improvement -- but it's in positive territory which means I think they view if they're going to do anything it has to be sterilized that they don't.
Have that impact.
I I I wanna say I don't think they're even going to do that but I think of expressing my personal bias that I don't think I'm against.
It plans I can't quite a cigarette I think when I think it the Fed ought to you know take a breather for a little while and actually let the economy do but I think it's dirty doing which is operating on on its own power with the pedal to the Matalin and that gas tank has.
I do not think that that's behind the market rally either today or since early October I do not think it's that policy.
What sectors are you looking up right now.
That we do well in all of these question mark -- -- -- that we're dealing well I think we're in the second phase of recovery that will be broader based we'll have job growth associated to its more significant degree you'll see more small business participation which is a key housing will be a positive contributor.
-- you're almost at the beginning of a cycle early early expansion phase yet again and that tends to favor the more cyclical sector so.
We've had a long standing outperform on technology more recently industrial so clearly cyclical bias in our under performs.
Are on utilities and consumer Staples the big defensive areas that -- last year's winners and we think you do -- -- have.
A bias toward economically sensitive -- -- -- All the cash and equities right now is it that.
Good of of an indicator -- -- how the economy is going who who's the U.
That you personally your body investors out there should -- if when they hearsay your folks who were bullish on the economy in general notion that all their assets and anyone asset -- and really to how would you -- obviously it depends on who you are you are you 23 -- -- -- just started working at before -- K you don't you don't sort of goals for the moon.
And have a very high exposure to the riskier asset classes are you seven years old you're retired you need every dime -- saved -- you -- income on that money.
Those I could have the same exact perspective on the market.
Sitting with both of those people of what I would might recommend would be diametrically opposed and that's the mistake and -- a lot of folks take a listen and Saunders and and with.
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