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Says -- ability keep the housing recovery -- on his way more important than any other variable in the markets right now.
Joining us now not and we thank him for -- patiently waiting for a spot tries SP capital IQ a vice president.
We appreciate you -- wait around for this so what first let's talk about the market what do you think up 163 we -- gone.
As long as we -- keep getting good news on the economy like we've seen recently with new home sales with.
Durable goods ex transportation today it shows that the Fed's policies may be finally starting to put down some roots and show some real growth in the economy which is huge for -- is it worth -- thought -- really expensive to show finally a little bit of growth.
That the Fed has been targeting housing specifically since last fall.
And that and we believe it at global markets intelligence research that the Fed is trying to promote the US economy by stimulating housing.
And if it's the only game in town that you wanna see it work and thankful we are seeing some signs now that it is working an -- a lot of work with.
The balance sheets -- -- cash things like that when we start to see that actually filter its way into the economy.
Well that the trend of increasing cash on balance sheet for S&P 500 non financial has been in place for a long time but now in the fourth quarter with thirty companies have to report.
We actually hit a new record of one and a quarter trillion cash on the balance sheet.
Of non financial some 500 companies so as long as we see earnings growth like we're seeing in the fourth quarter -- 20127 point 8% growth.
4% higher than what we're looking for.
You gonna see companies continue to hoard some of that cash in the gonna put some its work.
Next week you know with so we have these countdown clocks of what's the next deadline in Washington -- -- you know what to do it yourself.
Well the stock market thankfully is fairly modestly priced here it's thirteen and a half times forward twelve month earnings which makes it resilient in the face of a lot of these stresses like we've seen for instance -- -- coming out of Italy the sequester the fiscal cliff.
You know the upcoming debate over the -- -- debt ceiling.
But as long as the stock market remains modestly priced and we continue see earnings growth the -- -- the market should only be higher.
Let's talk about -- and a little bit because we've had a bunch of deals this year and you've done some research that shows there's a correlation between MNA activity and GDP growth that's right.
Annual rates of change in M and -- activity.
Is about 60% correlated with annual change in US GDP growth and its interest -- it's either -- perhaps a leading indicator.
So it it doesn't surprise to see a fast pace of deal making in the so far in the first quarter this year this economy looks -- don't know cut.
What what are some of these deals one offs though I mean many of them you know.
The -- thing -- he just needs something to do right we all know Dell is going private I mean things like this economy in the works for awhile.
The the mega deals word from noticeably absent in 2012 right so it's good to see them coming back in the first quarter 2013.
The key -- could -- what can you see robust and any deal making activity throughout the year because of it starts to fall off you're gonna see a return of cautious.
In decision making and -- for the balance did you wanna see what the big companies -- you want to see the little guys come together.
Ideally like to see both ends of the bigger the deal the more confidence in the marketplace so we think it's very encouraging -- you sir couple these mega deals in the first two so from where you sit right now do you think it -- and the -- -- continue.
Based on what we're seeing so far nearly 8% earnings growth that year and 2012.
Signs that housing is starting the stimulant additional growth in the economy -- reasons to.
Leave us optimistic the deal making over the balance of 2013 and that -- therefore then pretend that GDP would increase as well.
Yes you'd like to see an uptick from the roughly 2% pace that's existed.
As housing starts to come -- headwind and more stimulus from the economy yes we certainly would that's quite an optimistic India Latin thrilled about it Bob Kaiser equity cap.