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Moody's Chief Economist John Lonski on the outlook for the markets and the concerns investors still have about the European economy.
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Lonsky chief economist Moody's capital markets John.
Who -- over at the day.
Some disquiet in the market but overall positive.
Yeah I would -- -- the finish was positive of course I think the market.
Really believes.
That the US economy will continue to gain momentum despite worries over energy cost and lingering concerns regarding Europe.
It's annoying to me I have to -- Then the pocket of a contagion in your.
Still can overcome good news on the jobs market good news on leaving the index of leading economic indicators.
The market dismisses -- apparently in favor of such unseemly.
Concerns.
We -- this is in large part a legacy of what happened in 2008.
-- in the early part of 2008.
Many analysts in many on Wall Street were quite dismissive of the risks are presented body sub prime mortgages fine and indeed we saw what eventually happened.
So per caps.
It you know it's it's understandable that investors remain a little bit anxious about that situation in Europe until it's ultimately -- resolved.
Are anxious about it but at the same time what we have is a different a different situation although governor in this country definitely the starting point right now -- that the market is significantly undervalued.
With respect to level of profitability.
As well as interest rates and -- quite frankly don't see interest rates moving higher in a manner.
That would have bonds.
Constituted a great deal more competition for equities are gonna -- money move out of the bond market into equities.
-- -- gradually that's very much going to be the case I think that's something that the Fed wants to see.
And once we Begin if you think it would happen sooner given quantitative easing one and -- -- with a little boost additional I I would think they yet you may -- what what the Fed is doing is they're trying to encourage investors to take on risk both that it -- longer dated bonds as well list with earnings sensitive securities in the -- having some success.
On that front right now.
Aren't certain.
Currency volume -- do you think.
I think you will.
And but I think you know it's very important.
That we somehow convince investors -- that they're not gonna be facing a sharp upturn by energy -- That could have the effect of bringing -- -- A disruptive slowdown by consumer spending.
I'm sure this administration will have a solution -- have all those concerns were and let's not forget this is and election year that has a lot of political risk that you know of what the market wants come early November.
And that is you know well that is perhaps.
-- -- -- four more years.
We got there we go up their job special about star --
