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-- -- that album -- yesterday we spoke to one of the bigger balls on Wall Street with an S&P year end target of 1760.
Our next guest only say that's a -- going to 1575.
It says what 1569 right now -- Morgan Lander is here from steeple Nicholas.
That's not very bullish view why why are you more optimistic.
-- pack behavior by the -- -- -- do you as well at the beginning of the year we were very volition and we're we're still overweight equities at this point in time.
But -- you had this huge liquidity drawn rally courtesy of the Federal Reserve the global central banks Bank of England bank of Tokyo.
You know the story.
But you haven't seen -- transition to more of an earnings driven rally in fact for Q1 of this year.
You're gonna have roughly flat to negative earnings growth.
And the last couple quarters PDQ four and Q.
Three of last year they were lackluster as well you know we are seeing improvement in the economy is limping along but it's below trend right.
In terms -- if you're overweight equities.
Are you still more positive about US equities vs the rest of the world and if you look at the run on Japanese stocks it was even more David stronger than it was here in the US in the first quarter well Japan it was certainly an amplified.
By Central Bank intervention.
And it wasn't an economic strong rally.
Which brings us back to the original part of the conversation its liquidity drawn around.
So what what we're trying to do you hear it as portfolio managers.
But because we now hit -- price target we're moving up the quality spectrum to more large -- stable consistently grown companies.
And on the fixed income side as well we're moving up the quality spectrum.
From high yield bonds which are really now trading -- six and a half percent and and that's for risk asset on the high yield side to more quality kind of -- -- Corporate bonds that are best.
Great dynamic admit you talk about the Federal Reserve and you talk about central banks around the world.
Investors aren't gonna know it how do you believe that there will get caught by surprise win say the Fed.
Decides this morning the start backing off all the juice that it's pumped into the economy.
They're gonna see con men and they're gonna start selling stocks and everything is gonna get Smith lakes and it just never -- so.
Ben Bernanke's dream and wish is that windy start paring back there buying program their asset buying program or QB to infinity.
That the economy will already have to get up and go that's -- self sustaining rally and that earnings wheel driving the markets higher.
Unfortunately you haven't seen that the last several QBs when they start to wind there -- programs down.
He started see the economy slumped.
The markets roll over and spreads widen out on credit.
The fear trade came back -- so I suspect the Federal Reserve will continue GQ we.
Well into 2014.
And start to wind it down into the mid part of 2014.
Kind and I -- -- -- give it up sooner or later thank you so much Chad thank you have a great week.
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