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Ed Butowsky of Chapwood Investments breaks down whether recent government actions are impacting the markets.
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Once I still -- that's pretty flat.
I've got a question -- -- last all investors.
Do you think your money is affected by the recent non financial headlines fast and furious executive privilege White House intelligent -- Syria for example.
You think that affects -- -- money do you.
At -- -- is with childhood investments so head his my opinion on the question.
We're seeing an administration in disarray.
And I think that's bad for competence in government and the economy and stalks the what do you -- Well if in fact it somehow all that information and everything.
Falls into you know -- of situation where we start seeing earnings being hurt.
Then it will Stewart as we -- the politicians of all about the economy the economy in stocks and investing it's all about earnings earnings earnings and if it affects your earnings.
Then it's going to actually impact your stock prices but right now.
You know what -- -- see it up until it starts to affect earnings not I think you believe there's going to be a rally in stocks right.
Yeah hi do -- -- stocks right now have just been kind of city flattening and we've seen you know vacillating back and forth but if you look at where rates are reits are at historical lows which means valuations on stock should be a lot higher.
Quite frankly stock should be selling based -- -- interest rates are today 20% overvalued.
Right now they're about 125%.
Undervalued.
Based on expected earnings are you know solid Bed, Bath & Beyond you know they they're numbers came in a little weaker so they're getting punished but they had already moved up in anticipation because stocks move up in anticipation of future numbers.
Even if those numbers come in.
1015%.
Below you're still going to see a rally in stocks.
I don't like the economy.
I don't like what's going on Washington at all but it's about earnings and earnings are still relatively strong relative to you know where rates are at that point may be.
-- market is telling us that it does not like a look at this economy because it is weakening as we speak.
Yeah maybe it doesn't like what's happening in China eight months of of of the less activity in the manufacturing sector.
Maybe it doesn't want what's happening in Europe that is a clear caught recession so -- may -- -- the market disagrees with you.
And says that earnings will be affected down the road because of a bullies about the -- also because of these non financial stories.
Right.
And in -- when that happens we'll see earnings start to ratchet down you'll start seeing earnings revisions by.
We're revising our numbers down.
I'm not happy with anything -- -- -- -- very strongly believing that China India Europe all of that is going to impact our earnings but the question is how much and how soon.
And right now with stocks where they are -- rates where there are.
We're probably gonna see a rally as we start seeing these second quarter numbers come in.
I don't know how high it goes I don't know what the numbers going to be but I also wouldn't be out of the market at this moment that I think for the next month you might start seeing a little bit of -- rally.
I don't think many investors get in and get out of -- at the drop of -- -- and I think most investors these days put their money into something and leave it that rightly or wrongly.
I think that's what they do.
Yeah I -- I don't -- question about that but the institutions are the ones that are moving this market back and forth of your individual investor.
You get invested you stay invested you know I'm very strong about that I just -- that right now based -- -- earnings are the expectations were rates are you're probably going to see a rally it's counter intuitive.
But it's probably gonna happen right at Battelle -- do we watch these things very -- -- along with -- -- appreciate being with us FactSet.
