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First Trust Advisors Chief Economist Brian Wesbury on corporate earnings and Greece’s impact on the U.S. market’s outlook.
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The FM OF OMC minutes out just a couple of hours ago revealing that several members of the Fed -- more stimulus could be necessary in the economy loses momentum.
But Brian Wesbury chief economist at first trust advisors says there's no threat of that happening again he joins us now Brian what threat -- mean.
The markets have loved this gigantic punch -- spiked with Red Bull from the Fed where.
Every five minutes something bad happens we get -- -- piece -- -- this it don't worry we're there with more potential liquidity or easing or help at this point.
There's a lot do what you just said -- -- you know it's fascinating is if you go back to the beginning.
Of QE1 quantitative easing -- all the way back in a way don't nine there's lots of people that think.
That's what's driven the market up but if that were really true if if quantitative easing if the Fed were the thing that entered not the market.
We would see PE ratios higher than they were back in 2008 and they're not PE ratios have gone nowhere.
And so what at that tells me is that the reason stock prices are up.
Is because earnings are up you know we have doubled earnings in the past three years.
And the stock market has doubled so I don't think it's all sugar I don't think it's all the punch -- that's doing this.
You know Brian I've read here -- you know as you know particularly concerned about Greece is really it's because no matter who you lost you what's gonna get a different opinion there are those -- think it's gonna be all for those -- -- don't worry you say don't worry.
Yeah I we've week how long -- we've been talking about Greece in the markets higher.
Then when we started talking about Greece is I mean Greece is is Greece peaked in fifteen DC -- hundreds and -- not up.
Now yeah.
Great place to Ghana senator -- I didn't say it was a beautiful.
Academy visiting has not been a driver of the world for a very very well it is maybe it's more and Greece leads to Brian author of that that we have a run on their banks the contagion effect.
-- -- we've just done the analysis to add up.
What that that five biggest banks in America say their exposure to the pigs is needs 36 billion dollars net exposure and I know people are gonna say net doesn't matter -- it's thirty Italy's million dollars.
They have 575.
Billion dollars worth of capital so it to me it looks like we can withstand.
Pretty -- big problems in Europe without having a major catastrophe our hands in the United States I think work.
I think we're pretty good -- Let's -- affect us we've got some industrial production numbers that look like factories are bombing at a at a brisk pace and and certainly the auto industry is helping their we got.
April housing starts to look better than expected.
Are we finally starting to find some firm footing here or is that just a trick or -- head -- that we've seen in the past.
Yeah.
Yeah I think the weakness we've seen in just the last couple of months is now over and and we're gonna see a little bit better numbers.
But net net when you when you put it all together the last three years the economy has grown.
Pretty consistently twelve straight quarters of GDP growth.
I call it the plow horse economy -- -- -- -- since it ain't gonna win the preakness but it ain't gonna keel over and die either and I think that's what this academy has shown us over the last three years it's like every time.
The double dip crowd really gets behind and -- starts waving the -- -- that data get better again.
And and and so we're just keep going we're going through the mud we're going through the the rocks we're going through the -- this -- -- is continuing to pull.
And I think this economy continues to grow.
Well into next year is that which is about as far as I can see you right now I'm very nice very bullish to thank you very much Brian Wesbury chief economist at first pass advises -- feel -- --
