You're watching...
Stifel Nicolaus portfolio manager Chad Morganlander on investors switching to bonds from stocks.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
I called thanks and any time we see yet.
A surprise in the market we like to highlight it for you and the statistics may be surprising to you as investors pulled nearly three point seven billion dollars at a US stocks.
In this past week an inflow of two point six billion dollars meantime in the bond market up for bonds down for stock seems kinda strange Chad Morgan lender.
Is a portfolio manager Stifel Nicolaus and the -- kind enough to join us today because everybody seems to making the case to us that comes on Chad.
That the stock market makes more sense for a number of reasons than the bond markets and for nine weeks in a row that's where the flows.
We're going to stocks over bonds I -- one week doesn't make a trend that what do they -- this.
Well it it this is an early trend the stock stock flows into mutual funds have -- -- quite bullish over -- last six weeks.
-- unfortunately though that trends.
It if we don't think that that's gonna last very long term I mean we're at a point in time where the market has had a heck of a run that S&P is up about 7% year to date.
Often the back of a very.
Very strong market in 2000 -- well.
So I think what has to be a little bit more cautious and take more -- balanced approach -- make your case for bonds we saw ten year treasury -- at just over 2%.
And there's the stock market in the run up the Chad's been alluding to but.
Why would you want to be in the bond market why would bonds make more sense than stocks generally speaking as their reason.
Well I don't generally think that it's it's a very I can't I can't make a very bullish case right for being in the bond market this point in time.
What what investors are doing is they're balancing their portfolio.
In part because of what global growth is doing and what you've seen happen over -- last I would say six weeks is a re acceleration of global growth.
And that is one of the reasons why you had the bond market sell off.
Now on the equity market side here in the United States you've also had a very very.
Positive three months a very good economic -- better numbers that have come out so.
You know.
The market here is trading around.
About a fifteen to fourteen times multiple which is an -- historic range you know it makes it pretty much a fair market.
Fair market value.
That is the and that brings up -- -- larger question is we've been highlighting.
Have -- a chart that does this we say what the Dow is approaching an all time high we're getting close to -- and protesting that -- around 141000 so you're basically saying there is 14164.
You're basically saying that we won't quite get there that we're gonna hang around for a little while or.
Recruitment what -- -- on equities that -- cases that might Keizai equities state you're gonna have earnings that one -- -- 5 dollars per share.
For 2013.
And that's a lot less than what market expectations are for a 112.
Now what we.
You can see is a little bit more of -- multiple expansion.
Where the S&P goes.
From where we are currently about 1521.
To -- 1575.
For the year the cuts would give a total return of around 10%.
For the S&P 500 -- bond market expectation.
Is for the ten year to trade between 2%.
And two and a quarter percent and that's based off of the UUS economic growth -- -- that -- its -- to a quarter percent over 2013.
-- mix and where the low end of that spot market -- at least right now there's the S&P.
And your ten year yield to a four -- chatter.
Good discussion we're balancing things out job market vaccine but thanks for joining us today Chad Morgan -- good stuff thank you -- with -- -- --
