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Milton Ezrati, Lord Abbett & Co. senior economist, market strategist & partner, weighs in on the economic recovery and housing climate.
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That so is this a break out all we do for a pullback which depends who you talk to but we are gonna talk to.
-- as -- senior economist -- market strategist with -- Abbott Milton.
You know a lot of investors wondering where the resistance level is when we look at the S&P but you know maybe we've already blown through it what what's by the -- the pivot points for you and yes some eight.
Think the S&P is -- still even after these gains shows excellent value so from our point of view fundamentally this market has a great deal of upside.
The competition from bonds isn't there.
Any kind of value a risk off trade with -- talking about our cash or treasuries office nothing in -- after inflation it has a negative return.
Equities -- very good value.
And unless you throw curve -- it's likely to continue to rise never goes straight line but we see a lot of upside.
The current -- supposed to be is if the liquidity stops being pumped -- and I know we know that at this point there's no talk of its its stopping anytime soon.
But -- lousy continued to hit that market goes up and keep the uncertainty in Washington.
Unemployment kinda stays high heading eventually bring -- all together.
While I think the issue is is that the market can.
And it'll take awhile.
Catch up to the value it has.
And then we're gonna need some real progress in Washington -- and that we're gonna need Federal Reserve to sell -- unwinding.
-- situation so that people aren't threatened by this liquidity issue.
We're gonna lead -- need a lot of fundamental change but right now the value can carry things forward.
Not suggesting that Washington -- Europe can't throw -- curve ball into this but the value right now is the ultimate consideration and it'll probably carry the market for at least twelve to 44 months.
You say one of the ways to make money is to get into risky assets with staying power so what are we talking about.
Mostly equities.
That's where the greatest value is.
And -- that is where the staying power is.
We made the easy money and junk bonds we've made the easy money and other bonds in fact there's a risk in treasuries and high grade corporates -- actual losses.
It's inequities in the United States in particular.
And and -- that equities market consumer discretionary in particular nose on your list.
With a few people saying that -- we're not really seeing the consumer spending that everybody's anticipating.
Or not seeing a lot of consumer spending but the issue here again.
As long as the consumer continues to increase spending even if it's at a sub par mediocre -- the valuations.
Implicitly.
-- casting.
A decline in spending or -- -- and spending.
So on that basis even mediocre consumer behavior comes as a relief to the market it can move up.
We've seen that all 32012.
Through the early weeks of this year.
We think that this can persist for quite some time.
The sing mostly encouraging data -- from the housing sector though you think the recovery is a little slower than perhaps some people are saying no based on the statistics.
How much will -- drag on the overall economy at this housing recovery really is gonna be painfully slow.
Well I think it's one of the reasons why this is going to remain a sub par recovery going forward just one of them.
But I think it's important to put this in perspective we think the numbers we saw what the -- -- 2012.
Overstate the strength in housing but even the most modest increase is a vast improvement over the free -- That dominated Tony 1011 and Ali Tony twelve.
Good stuff.
The price house prices on lithium which is a good sign all right milk -- -- -- I would -- Abbott -- thank you so much for joining us.
