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TD Ameritrade CEO Fred Tomczyk on the state of the market and its impact on investors’ strategies.
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Would be better for their money joining me now for more.
-- TD Ameritrade president and CEO Fred Thompson thank you for having us and thank you for joining us on the show what a beautiful day -- got here beautiful day here in Southern California and congratulations on -- -- -- -- -- it's a great team here but not so much of the market is everybody inside of that we're talking about it today what are they telling you.
I'd love.
They're not talking -- as much as you might think today these are basically are is that -- they've managed some money for the long term for their clients.
So their little less worried about today the one thing I think that's become clearer when in my discussions discussions with them.
This clearly the markets are fairly fragile and only -- a little bit of news or a little bit of a surprise to move the markets like we -- today.
So why are they is so fragile I mean is it high frequency trading is it Facebook's initial IPO I mean is it all of things that -- point -- in the marketer do you feel like there's a bigger driver.
I think this is all about the US economy the world economy what's going on in Europe and Spain.
But also both corporate earnings and I think we've seen you know a season here of corporate earnings -- from next and people who are talking about outlook statements.
And I saw a statistic today that 90% of them are actually -- down there.
-- -- that's you know but I think that's what's weighing on the market as we put -- off.
Typical economy of good corporate earnings is be pulling back.
-- pricing -- because I know we were already for this corporate earnings season to be not great and now here comes in.
Is it worse than expected word did investors -- -- think companies were sandbagging and they were gonna come -- beaten here turns out it was as bad as we thought.
Well I think people have been expecting corporate earnings to.
Pullback cure for a while it seems like every quarter when we start to have your earnings releases they actually did find -- -- to be.
Yeah and I think this the first time we've seen a few companies -- start just more companies such talk won't know about future of what we won't tougher right now.
Restore confidence -- -- we talked about this earlier today you said certainties went back seems like it's an easy thing to point -- -- never wincing certainty but it's certainty of higher taxes I -- that's not gonna help there's a certain kinds of certainty that are better.
Well I think that's true but I I do think the misery of certain is better than the misery of uncertainty really.
I think you know a lot of times in the market what really causes problems in the market -- on certain.
And when you have certainly people know how to -- just now I agree.
You can have certainly that can be bad there's no question about that.
But what's clearly driving people right now today you -- our investor survey is all both the US economy down.
It's both the federal deficit that's supposed Europe it's ultimately that's a boat to China and India's most types of places.
What the most in the US it is -- the US economy and the fiscal deficit.
Yet you were talking about your survey -- put together five point seven million active accounts that you see.
What are people hardly reacting to that uncertainty what are they doing are they keeping their money sent one place.
Are they still making bets that they're -- -- words.
I think we're continuing to see a difference between what the way they say there are investing move similar sentiment.
And what they're actually don't really.
What they're actually doing is there's no question a more active investors definitely participating in the market.
It in the ways that they do that -- and -- Before long term investor and they are -- are definitely a more conservative stance.
For a bit of money on the sidelines a lot of money and risk free assets.
And so they're still taking a fairly comes -- very conservative stance based on the unprecedented uncertainty.
You said that it's all about the economy and that president put forward -- is twenty page plan I think on the economy.
The -- points being that education and training clean energy.
And raising taxes on the wealthy this -- were some of the salient points that he put forward today to -- and convince people.
That he has a plan to attack the next four years we think about that.
What an -- -- you know released today you know -- two weeks away from the election.
But when a top priority had a chance to glance at a forward -- that is basically what he's been saying it's been repackaged.
In a -- form to hopefully help people understand where he's really come.
What do you think -- -- the economy grow right now I mean it's a very basic question that everybody's been grappling with for at least four years.
Why have my own here but I you know I would say -- -- -- -- -- -- Number one as we need to get the election behind us and hopefully the fiscal -- behind us.
There's there's definitely a bit of an overhang and talk of both -- fiscal cliff we're gonna go beyond that.
The second thing as we need to get Washington working again and I think you know -- Washington working out okay okay.
Usually see usually -- the bad connotation for me.
From doing any big but you say.
Dealing with the fiscal cliff -- what you mean -- balance.
It's dealing with the fiscal cliff OK but I think more -- is the starting to line fiscal policy.
With monetary policy and some people would say no you need to.
Cutbacks and I don't think you can cut back spending in the short term.
But the key here is to have some short term fiscal stimulus and -- how you do that that's important.
And then the long term credible deficit reduction plan along the lines of -- -- -- I don't think it's too far off.
And if you have both -- those that you wind monetary policy and fiscal policy I do think the US economy will start to come.
The last thing is to get rid of they'll they'll last piece of the uncertainty which is on the regulatory side.
I don't think that's on the average business and what is definitely on the financial services to our rate -- -- thanks so much for your time we appreciate it.
