Also in this playlist...
This transcript is automatically generated
Cars so what's driving stocks -- looked -- or an improving economy what is it.
With us now Jamie Cox from Harris financial Kimberly spots within -- and wealth management and don't Silberman and managing partner it's -- and company Phil I'll start with you.
So -- in sag gave cyclicals and big write up this weekend saying that's placed put your money now do you agree.
You know I'm I'm not necessarily as while about the cyclicals but I think people are looking for action where they can get -- needed to get -- this market.
And job right now that's one of the places people are going.
A single look at this full screen this chart that's -- -- stocks they look like they've been on finding -- really pretty well here.
Jamie do you.
So how does this happen when -- -- -- our overall economic growth has just 2.5 percent.
A lot of times people are looking -- cyclicals.
-- -- figure out whether there really inexpensive at this point if you look at durable goods which is.
Sort of indicator people used to determine whether you're the economy's getting better of the possibility -- Of cyclical companies to do better in the future.
They're looking at durable goods being low on a relative basis by and for over twenty years so -- -- all time low.
So people are saying gosh this is probably not a bad time community to be getting into cyclical stocks because of the next.
The economy's probably had to pick up in this is a really good placed the body stocks plus.
People been holed up in defense -- for so long.
Now -- -- -- just like crazy we look at what's gone on what this market remembering Kimberly and here.
When you look at what's gone on in this market to think it's taken this long for people to get to cyclicals have amazing to me.
Do you think that these stocks are fully valued here do you think that -- are starting to get expensive -- say camp.
Yeah it I'm -- story -- the market is believed agonize.
-- it's certainly our -- -- a better position.
That we weren't hit 1002007.
Adding corporate balance sheets are much more streamline -- much healthier.
As well I think that individual portfolios.
And bank accounts so.
To that and it it -- I'm not sure fervor for about -- that I did not.
But don't forget a bull market.
A -- and with the -- up fairly valued market so I think we have more willing to go one parent I definitely.
My hair -- -- let's talk about stock buybacks on.
Fire companies are buying back their -- into records amount here's some 286 billion up 88% this year amazing numbers -- what does that tell -- individual investor the regular investor.
Well what -- it what it tells people if you look even cited is that they don't have any good investment opportunities that they're buying our own stock.
Now that's good for the stock market in the short term because that's demand they're going out there putting their money to work you know their levering up their balance sheets but.
-- concerns me that they can't they find any good investments.
You know he -- right now businesses are not really investing.
They're they're able to keep their profit margins up essentially by keeping their labor costs low which is our problem with unemployment right you know.
The US corporation that -- their biggest input is people.
And yes that's how they've been able to keep their bottom line.
Growing while their top line has not been doing so well the question is how long can profit margins today it's such.
At some point they're gonna have to put down some -- certainly think that it.
You know it looks good on the face of lead but ultimately got to wonder how good -- news it is.
Phil do you I would ask you about something totally different this Chicago fed president Charles Evans today saying that the Fed will keep some of the same policies that they've had for some time.
I guess -- monetary easing continues.
No big changes there what do you think of that what do you make of those comments today surprise you at all.
Jamie sorry Jamie.
I'll yup I'm sorry -- -- not -- does okay aveda governor Evans talked about a stable -- city today and I think that's very important.
Mean we've had -- you know this period of disinflation and and water do you flesh and over the past couple of years.
And -- talk fed policy is designed to sort of break the back of that terrible disease called deflation.
And the Fed policies that have been implemented over the course of a couple years.
Have been designed primarily to do that and what he's saying is is that they're gonna keep going until they're fully committed to fully committed to get inflation back in the economy.
So I I have a feeling that we're probably there's no tapering conversation is gonna convince me and the next little while at the Fed is gonna step off the accelerator.
GDP growth is too small and the Fed is going to be supportive of of their QE policies until they're the satisfied that the economy is on its own to -- Can really -- you though I mean -- -- the dual mandate -- it is it Ben Bernanke is essentially elevated the idea that the Fed has to fight.
It's clearly not happy with the level it's at now.
And where does it have to go for the Fed to be satisfied.
-- I think you know the Fed -- sandy you know they're not going to.
Take away the punch ball and Jerry and tell I don't plan as under.
Six point five you know in January 7 point nine it's it's not going down.
So -- how that happens you know the Fed I think continues to putt push money and -- that assist them.
Everybody's happy the markets are happy but we know it's a false sense of security -- -- at the other candidate Larry everybody have to participate.
And you can't happen in this market a little but I think -- -- -- -- Make sure if they can't figure out -- Out patient out and I bat well.
I have to ask all of you about this one because I think this is really important win another flash crash Friday and nobody pay the damn bit of attention to it.
Anadarko shares -- petroleum company went down 99%.
Like this and then recovered immediately this really worries me and I I think it's a really bad sign for individual investors who don't like to see this kind of action.
Phil what do you say.
Well you know I think you're that there are some issues in this market it -- -- structure -- these exchanges that need to be addressed.
And I don't -- -- high frequency trading -- bad think but we need to have some some common sense rules to stop things like this from happening in the future where.
When a market starts to go down all of a sudden liquidity just dries up.
We need to address some of these concerns the -- it is scaring people away Jamie what do you -- Well I think it it points out you know that this that -- there's a -- change in the in this circuit breaker rules and there's a limit up limit down and it shows some of that -- the market has a funny way of figuring out the holes and these things and the last thirty minutes of trade.
None of these limit up down things work right now -- phase one so.
Basically what you're saying is the market sort of exposing some of the limitations in these rules to try to protect investors and it's all the phase ends occur.
I don't think there -- that we could see this happen over and over again -- well.
And the -- ever thought that.
Little does not make me feel any better I gonna tell you I'd love to feel reassured by some of -- stuff but.
Really I mean what -- -- in the middle of the trade at that time we've seen some really scary movements and stocks will we see more.
I think you it looked at more and we'll see more frequently.
But also the markets are are really haven't ignoring and -- -- and they are expecting a monster -- that.
These things we'll be will be -- and will be taking care an eleventh hour and it tells something really somebody really gets hurt or the markets really really.
They get -- because what is backlash past crashes.
You know I think we're just get it to have the blip in the radar and then it will go on an end people will continue to went back well I I can't tell -- -- -- on the radar not so much guys are gonna have to leave it there thanks for coming on tonight.
Filter by section