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Are Markets Overextended and Due for a Pullback?

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    Bedford Oak Advisors CEO Harvey Eisen on the outlook for the markets.

  • Duration 4:36
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My next guest says the markets right now are over extended due for something of a pull -- joining us for -- outlook.

Harvey Eisen chairman and CEO Bedford oak advisors Harvey good to have you here.

A 130 -- Parts were talking about the worst sell off of the year.

I mean that's that's a mile high yield adjustment what do you think we have -- story.

Well the data we keep tells us that the market is really extended and you have pullbacks I mean markets don't go up -- straight lines he should get a three to 5%.

Pull back -- And and eight.

-- you say that is there a sense in the market right now in your opinion that this is that there is a straight line in front of us right now that the bulls are just.

Outweighing.

The -- to such a point that they they thinking straight line and higher.

Well that's what the data shows -- mean.

Mutual funds.

Finally have had an inflow in equity funds.

Institutions.

Yeah people are really but that's the way the game works.

We're looking at for the past month just about.

10% replacement of what have been the total outflow over the course the last war here.

I mean that's a strong strong performance.

In terms of forward after the market is a bubble.

So there is that what little overall book what's.

Well way you think it's a little late.

Outside a little later mean the point is the good news this -- a bull market because the Fed has dictated bull market and money supplies growing out of control.

And they're just gonna keep the -- of the Florida bad news as.

The court should a correction and would three to 5% satisfy you in terms -- A correction a an adequate pulled back to prudent to build a foundation for the next move up.

But -- at this game long enough now I don't know I don't know the answer to that but I look at a look at the data in the data tells me three to five it's normal.

Five to eight if it's.

A little bit tougher and you need to have people say what even you know this has really gotten scary.

If this is at this point and hearing a lot of people say you know we are worried about corruption Spain and Italy.

And you know a -- -- that corruption and Spain and Italy are any other part of Europe which is so pristine and all of its values.

I I don't see the role here for a for Europe in these markets as we did a year ago when everyone was sort of holding their breath.

With every day that passed without resolution on the Euro crisis.

What's your take.

The take is that the dollar is in the new low vs the Euro you cannot make this stuff hot either what are they thinking about.

Well that the dollars at a new low interest rates are.

Still low very low who do you think there's any possibility rooms here rate to rise here.

I mean we're looking at an almost two press -- ten year note -- good habits a problem we have is the Federal Reserve has air cover from slow economic recovery.

High unemployment and no inflation what what.

What they are doing with the money supply would be the legal and any other risks.

I know that this is such a passing concept but indeed do you do you have any.

Any view mr.

earnings were we can expect from -- the S&P 500 the way of earnings growth.

Or earnings prospects.

And we're kind of multiple we can look -- the rest of this year.

Both -- interest in him in the markets threatening the high of five years ago -- both promise the earnings of 20% higher -- that -- five years ago I mean it's unbelievable.

How cheap these things are so the answer is yes.

If you look at the earnings every data coming -- that you talked about basically 75% of all companies.

-- -- street investments.

The economy is doing better and earnings are calling up.

And this economy doing better we're coming off a report well.

Not so good.

And we have they missed that they -- is that they've that's not what operator gonna -- to revise that -- Do you see the economy growing from here.

The economy is good muses the economy's growing bad news is it is that slots such a slow rate this police sure liked speak.

But that's great moves for the market because that allows the Fed to keep pumping in money hello want people complicate this there.

85 billion a month everybody is far from this happen.

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