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Hank Smith, Haverford Trust CIO, on the impact China’s economic slowdown will have on U.S. markets.
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The most in two weeks -- to China's prime minister well.
Are frankly admitted that the nation's economy faces relatively -- he says downward -- kind of worrying is that but how launch of the concerned is China's economic slowdown.
For the US economy joining us now -- Chief investment officer at -- happened but don't trust.
Hank I often you know I never believe anything to the Chinese Government say so you kind of little bit -- velocity we know it's a huge country with a big engine room for an economy but how concerned are you about China.
But as you said you have to be concerned because it is -- second largest economy.
And all of a sudden our back in this debate whether we're gonna have a hard landing soft landing -- -- just a few months ago we're worried about inflation and now all of a sudden.
Deflation is a rising but.
The fact is China does have a lot of ability to re stimulate there are all of their economy and we would look for that to start happening sooner rather than later so oh.
What we think China's gonna end up in somewhere.
In the 67.
Maybe 5% works range and -- to GDP growth.
And then we we bring -- -- back home Hank -- we heard today from President Obama that is we're gonna raise taxes.
Basically on the well -- -- low tax -- to the middle class.
Economy struggling already what's not gonna do for us.
Well look the two macro issues affecting our economy our deleveraging.
And uncertainty.
And you throw the tax code into that uncertainty camp.
And we're gonna be living with this throughout the fall and hopefully in the new year we can get some clarity on the tax code and also be.
A massive increase in regulation has also created a fair amount of uncertainty.
Well but look.
Any lifting of that -- be -- powerful catalyst for our economy.
Black let's also bring in the -- crisis going on in Europe a day continues to just child -- Drag on you know endlessly.
And it's really is hurting -- markets here's a headline driven market continues to be how do you see that crisis is ever gonna get resolved and how much of an impact is that having a -- impact on the economy here or is -- continuing to drag it down.
Well -- a little bit of an impact there's no question about it.
I don't know over again need of the 21 second third fourth summit meeting what we would probably well.
Off but that's the way Europe does things but here you have the bond vigilantes.
Now coming in and forcing action so I think you're gonna see something quicker.
And basically do two of the bond market.
-- -- -- -- -- -- -- Well I think -- have to stick with all large.
High quality.
Large cap high quality companies that pay and -- dividends.
And we also think you'd you'd need a balance between not just the defensive companies.
But also you can't ignore some of the more cyclical companies have really taken -- on the chin this summer.
Just like they did last summer and in 2010.
Which proved to be great buying opportunities.
Very good J&J always in a very safe -- in Caterpillar and have a for the high Smith -- have the trust thank you very much thanks for joining us.
The -- thoughts I appreciate it good to be.
