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You if you -- to stay by your televisions and listen to what Tom Lee has to say because.
Heading into the earnings season investors are preparing for weak results and -- you just heard saying -- how can this last but.
Are we in for some surprises pretty Smart guy JPMorgan chief US equity strategist Tom Lee.
Joins us for the last hour of trading in a Fox Business exclusive and -- I was so interested.
In your outlook because you -- up.
Okay I'm -- with the guys and saying that the the earnings picture may not be great for Q3 were starting to report tomorrow with the official kick off of Alcoa's numbers.
But nonetheless he feel that stocks will perform well.
-- -- and thanks for having me on here are I think this period reminds me a lot of 1985 you know which was a period of two years of earnings languishing -- stocks actually saw.
SP earnings fall almost 5% of -- year period.
Yet the S&P rose 50%.
The reason for that was the market -- says -- 50%.
You're given that 85.
Yes we -- a melt up over two years even as earnings fell and I think investors today kind of forget that they keep thinking -- earnings are going to be weak stock should be down that's not nationally true.
What we have to remember is number one.
Stocks are really starting for a relative valuation that you've never seen in sixty years we've been so cheap relative to bonds especially high yield bonds which are trading in Iran if it's almost a fifteen point two times PE.
That's vis a thirteen time -- trading at a discount.
But the second is I think -- bright spots in the quarter.
-- that's very important you know when you look at that data -- last couple months where there's not been disappointment as US centric data -- -- US employment.
US retail sales auto sales I think it's a sign of a consumer doing better than expected and I think anything tied to US housing -- surprise -- -- then translate to say for example durable goods which have not looked -- absolutely and that's the I think this is a very big -- story in US.
The US according to the CIA fact book ranks number one -- 142 in construction spending globally.
We're spending less as a percentage -- GDP in Greece and Spain and Japan Germany in terms of building roads infrastructure housing -- -- And it's not sustainable so I think over the next five to ten years you're gonna see you -- -- goods boom.
At -- at a level that you mean -- -- seen since the ninety's.
-- -- -- The children of the children of baby boomers they call that the echo boom by the way.
The echo boom you say is going to.
-- what -- -- you know the youngest echo boomers are.
Just about to turn 24 today and stay focused -- -- so I think this is very similar to 82 which was.
What we're seeing today is that is the echo boom which is the grandchildren be boom -- to enter the workforce and that's been a pretty big demographic challenge for the next ten years.
Okay that you know you we heard so much belly aching about what is lacking.
You hear these traitors and and Teddy Weisberg is one of the smartest around he's been on that floor for decades you know he has not felt good for the past year and yet stocks do this they do the moon shot.
Now we have this concern about Asia and that is that the World Bank says you know what we -- lower our forecasts for Asian and especially if there's an exit of a single eurozone country Greece and what's -- what it is here -- or possibly Spain.
If they exit that cuts off another two percentage points of preferred for Asia.
That's at one point -- the one point on the globe where they're consume our stuff far is an.
That's right way you know I think that's an important perspective never wanted to I kind of -- -- Teddy which is you know when the market's telling you something.
Vs consensus you might have to really listen I think with the market's telling s.'s.
If global growth was as weak as we're expecting it to be global credit market should be weak and have been very strong.
And so I I I think that there's probably more missed a shift occurring which is I think global manufacturing -- plateauing.
And I think you know in China where we're really -- a maturation that market I think the shift is really coming to.
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