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Will Interest Rates Influence Washington?

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    Jeff Saut of Raymond James gives his outlook for the economy and markets.

  • Duration 3:09
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Today and throughout.

And moving forward to be the bond market interest rates -- we started to talk with -- this article up a little bit.

As you bring in Jeff -- chief investment strategist at Raymond James thinks he has -- That's -- see what forces Washington to act at some point Jeff I don't know.

But it also might affect the stock market what do you think of the movement we've seen -- the movement we might see in interest rates.

Thought you had in in the past few sessions you he had the ten year TNX treasury index a ten year guy.

Back up on Monday from a battle why -- about a one point 69.

Yield to a one point 911.

Yield as of yesterday's intraday high.

Which doesn't sound like much -- -- twelve point 8% back up in.

In interest rates -- -- move in the -- has broken that index back above its 200 day moving average as well as what a technical analysts would call a quadruple.

Top and interest rates so looks like the yield blows our end at least to me from the interest rate complex and then then -- interest.

-- go ahead no finish your -- and I have a follow up but go ahead -- you're gonna say next because there's -- I was gonna say into it interest rates can go up and stocks can go up with them right as -- -- interest rates are going up for the right reason because the economy is gaining traction.

That's the thing that we're not fearful of inflation or something but the economy is actually getting stronger.

The jobs report today may -- it leads to that or signals that to some degree -- little bit of a job growth -- -- -- says Doug said we're not getting too terribly excited about -- these numbers are pretty much what we expected.

Nothing great in it but the Fed we learned yesterday's kind of split on what it's gonna do going forward -- lot of people are making something of that saying.

Well at some point.

The -- reserve won't be there to prop us up anymore in the stock market.

-- stop buying bonds to stop the stimulus and then what then rates shoot up that Washington has to get its act together to go back to our previous point right.

-- I don't -- shoot up by thinking get a gradual move up in interest rates.

And I think that would cause a migration and a shift of the flow of funds out of fixed income.

And into US equities especially dividend paying stocks in fact that's one of the major things going forward over the next eighteen to 24 months that we have any eighteen to 24 months any better timetable in terms of of movement and it very tough difficult predicts the these things but in terms of a movement even higher interest rates and and that reaction that you talked on the stock market.

Well that's -- -- everybody's piled into bond funds you can see it in the retail side you can see in the endowments side in the endowment funds in the pension funds cannot possibly get to their mandate.

Of 678%.

Per annum returns.

What they can hear.

Treasury yields where it is so -- -- eventually.

They have to go back into equities and we think that the housing recovery is for real the auto space she saw the numbers this week yes even that she -- suggests there's still a twelve year.

Average life of the cars in the US fleet.

So I think you get a pull forward out of the economy from that.

So I think the back half of this year is going to be stronger than most people think in the economy I think that -- pretty well for equity prices -- to your earlier point if rates are going up because of that that's pretty good thing we can actually -- for that to happen Jeff good to see a happy new year.

-- merry new year -- -- sought.

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