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Well my next guest says there's still room for stocks to move higher even after today's record highs.
Here with his outlook is global equity strategist for SP capital IQ Alec young out -- me -- Great to be here -- so the jobs report really set the tone for the markets this morning.
Do you think it was just mixed use the bulls were looking for or is there a good fundamental reason that people bid stocks even hiring pushed oil up as well copper had a big right to for that matter on sort of the same thing up expectations -- -- -- growth.
Yeah I think I think there is a good justification for and you know what we're seeing.
Is we have the Fed -- that's keeping interest rates -- a very low trying to stimulate the economy trying to get investors to move into riskier assets by keeping those.
Those bond yields so low.
And there -- -- there's evidence that the Fed is succeeding in in jump starting growth.
I'm were were trending the gradual improvement in in the job numbers.
Run a 165000.
Jobs hitting that's more than a 140 that was expected and I think there's -- there's a sense that the economy is gonna continue to heal.
As we move into the second half.
And it's in the 2014 and that a corporate earnings and corporate revenues are gonna -- go along for the ride.
The stock market despite its run is still not that expensive by historical measures and we think it's got further to go on the upside.
Let's pick up on the Fed obviously we heard from the Fed this week it's.
Business as usual full steam ahead gas pedal down as part is -- can -- they're going to continue with these record low.
-- 85 billion dollars asset purchases a lot of a critical of that because it's been going on for so long.
And question here is this wealth -- that you're describing is -- cream stock market bubble that.
-- we don't think so I think -- kind of a goldilocks scenario where the economic news is.
Not good enough to give people confidence that the earnings from the companies are going to be there.
-- but it's not so strong that the Fed is ready to remove that stimulus and if we think about what the -- trying to do they're trying to get people to invest in things like -- to get the economy going.
And if we look at companies there it record health in terms of their corporate Balentien to -- so it really doesn't look bubble like whether you look at.
They're p.s of their balance -- these companies are.
Bring great shape so it's not like the dot com companies that we saw you know ten or fifteen years ago when clearly there was a bubble so I don't think that's the right way to describe this.
What do you say to critics point out this last earnings season that revenue only something like 4445%.
Of companies actually -- on the top -- -- Well again when -- buying stocks are really investing in a stream of earnings in the earnings have been coming in significantly better than expected up about 5% year over year.
And as we continue to get economic reports like this that are beating expectations.
I think investors think the economy is gonna kick into higher gear down the road second half next year and the revenues and they take care of so you think.
At this economy as sluggish at it as it is we're just talking Julia Coronado lastly -- writing -- thing you know it's not great but it's chugging along it's the so called new normal.
Is robust enough to support the stock market at -- because you think you know there's a disconnect here but.
At this point let's just join the stock market right and even -- bond market today the bond bulls like chumps it.
Let me -- just -- you know the saying don't fight the bed don't buy the tape just like the stock market party how much more room is there to run.
We think that the yes and he can get up to 1670.
Right now so you know another few percentage points and given how little you're earning in cash -- -- these days.
A week if the stock market still wouldn't -- so what is the risk factors that -- -- at night.
Well eventually we -- shall we that would lift the economy does continue to recover is we expect this -- -- be.
A risk that the Fed is gonna is gonna remove that punch -- removed some of that extreme stimulus that the pumping -- the economy.
That could worry investors but ultimately you know that's that's a high class problem itself the Fed stepping away means the economy stronger the scanners won't be so.
That might cause a bit of a wobble for the market but but overall I think a lot of what dictates where you should be investing is relative.
And we just think that ten year bond -- -- one point 7%.
And earning almost nothing in money markets and CDs you know given those things we would stay with the market sure you're gonna get -- back from time to time but compared to the alternatives.
We think it's the best asset class for most people to build wealth.
Well here on trade is very crowded right now hello Alec but we appreciate your comments nonetheless thank you so much Alec young -- okay.
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