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Well John wants he says stocks can continue their record rise as long as profits grow and interest rates -- -- Joining us now with his outlook -- the chief economist for Moody's capital markets John Lonsky -- This is really terrific -- I'm I'm not even gonna look down below to see hi we are.
This is great stuff it feels like it where you think is -- -- last.
Well I think it's gonna last only because stocks don't have much in way of competition from the credit market -- -- as long as you we have deposit rates close 0%.
More money should move into wecht what he's provided that.
Earnings continue to grow they don't have to grow rapidly they just have to continue the rough or decline is it your sense that earnings are going to be better.
Than we expected at one point.
I'll put it that Jim.
I wouldn't go that far out yet I'm happy for he should come in and meet you know slightly exceed our concern is one point six from people giving very adventurous talking about maybe a little bit more about our -- -- you point is that you really.
Outlook has it that earnings growth will pick up considerably later this year let's see if that happens so I think the more I've got to wait till later this year.
Well I'm dealing with a current quarter earnings season like I got to know what's gone on now right I mean that's true perhaps if you're a traitor but I think as an investor.
Even though the market is up by 12%.
Market value of common equity for the year to date.
I still think the market could rise by another five to 6%.
Before we begin to become worried about.
A possible overvaluation of equities.
-- -- you you dismissed the idea that one should be concerned about the the onset of burnings and and and not to worry about it.
But I would submit to you that people who were not been in this market.
I've got to be pretty curious about whether or not this is the time -- it and and they -- -- have a sense of what what but the environment is what are those external.
Well you know you're still gonna have to be worried about what's going on with.
Fiscal austerity how heavily that might link on the economy -- we're -- he's -- -- her against the -- areas -- -- nation.
As a people we voted and said no we're at it.
And you've also got to be worried about that situation in Europe.
-- a special importance is whether or not China in other dynamic emerging market economies will grow by enough to replied.
A US based multinationals within -- -- for growth.
Overseas are you surprised at the response -- the Japanese markets to their sudden.
Quantitative easing approach.
I am dumbfounded.
-- we think we're doing well up 12%.
The Japanese market is up by 30% for the year to date absolutely what do you -- -- -- is thinking the head of the European Central Bank he's over he's looking to -- -- Japan he's reaching.
Austerity he wants he's got a template for discipline.
I mean -- the Germans are saying trust those austerity is better.
And -- borrowing on your way yet this inflation is taken hold.
The annual rate of inflation in China is just over 2%.
I mean -- we had some good news on import price inflation for the United States for import prices are down half a percent from year ago.
It makes you wonder who sort of period in Germany right thing happening to about Libya there inflation phobia is is beyond.
Imagination so we shouldn't to worry too much about the -- we're gonna have more continuing resolutions that Obama's delivered another.
What the what was it McConnell -- -- -- left wing wish list not a budget.
-- -- -- it's only going to be when push comes to shove that we're gonna get substantial progress at long term budget deficit reduction.
And that push would have to come from a sharply lower equity market.
And I could tell you right now it's not happening it may not occur any time soon.
-- better -- global investors are happy with the situation the dollar is rising especially against the yet.
And oddly enough of course it's not -- -- significantly yet against the Euro but eventually should do so.
Well John I just want to do -- -- -- which -- sign this here and he has reiterated look for coach Wright that we appreciated legally binding contract.
But so -- up.
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