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-- to today's action we have Jim they -- he is zephyr management managing director who says the -- -- -- it will continue.
He's got two ways to play in the rally by the way his last -- Microsoft when he was here it's up 30% -- got to listen to what he has to say and Phillips -- able is in the pits of the CME.
-- let's start with you and again it's it's Tuesday were getting kind of Blase about this.
Every Tuesday for the past.
It seems like guys and year's been -- it's just extraordinary what this mortgage -- I'm wondering about technical benchmarks I know a lot of the technical guys are saying we're blowing through these benchmarks it doesn't make sense anymore what do you think.
Yeah I mean it was a really easy day we saw the kneecap one point 2% and we got great housing number we got -- consumer confidence.
Central banks are still talking about -- rates providing more support I mean it's his catch a wave.
And -- it back on up were about thirty points off last week slow looks like probably sometime this week -- -- get some good data.
Come out here on Thursday we'll probably see -- market push right on up that 1686 level that I think 17100.
Right around the corner.
World 17100 boy you know we -- JPMorgan upping their forecasts about a week and a half ago to moving it from 1615 to seventeen -- represented 1015.
But but OK so people are jumping on that what now appears to be a very crowded bandwagon should they -- and yet.
You make an excellent point -- that -- momentum is tremendous.
And the alternatives to anything other than equities seemed to be -- at the moment.
-- you've got an economy that's growing you got corporate profits that are growing stocks that are still not expensive.
You've got a lack of powerful investment alternatives to equities and you've got the Fed and central banks.
Around the world impacts your back if you will.
And so this will go on until either stocks get over -- which they ultimately will -- down not now you say not yet been gone from being cheap they're certainly not cheap to fairly valued at some would say.
Actually a little bit more than fairly valued but.
If there's -- bad news they can actually go to an overvalued situation which would probably be.
Another ten of fifteen or maybe even 20% from here if they're not interrupted by an accident now the accidents could be.
There's tremendous speculation in the credit markets almost equal to 2007.
Easy money is making debt investors.
-- chase yield.
And the disciplines are disappearing and you could get somebody.
Who shouldn't have gotten -- -- get alone and not be able to repay and I'm talking about somebody significant which could -- the financial markets.
You've always -- Europe where you can get a negative surprise and by the way has anybody noticed what's going on in the Middle East with the the the the the Russians and Hezbollah and Syria.
Taking actions that could affect Israel -- you can get -- -- there are many minutes so I think what you do.
Is you stay in that you reduce your risk most people tend to increase their risk -- stocks go up I would reduce my risk.
And go with higher quality multinationals would dividends rather than increasing speculation it up.
-- we'll talk specifics on that in a second but I want to ask both you guys for a second here.
The big question about the market right now -- some kind of disaster like Jim was just talking about is whether the Fed.
Pull back it which is going to come we've seen it being telegraphed by a number of fed officials.
Whether that is when it caused a jolt in the market Jim first to you.
Well I think the Fed is is going to be very controlled and I think they -- not to spook the market the risk is that the interest rate market gets away from them.
And that ten year treasuries go up to the point where they start to affect the economy.
Because the economy is improving -- and.
Either way at ten years to -- -- -- went up quite a bit today but -- what happens when the Fed starts pulling back are we gonna see a big jolt to the market or maybe is it already been discount.
Now lie to get stories start to see our consolidation and our slide back down I mean the -- not gonna do anything don't sell well laughter Bernanke's -- stopped.
-- get multiple meetings after that.
So I think at that point you start looking at you know maybe some gold.
Maybe some volatility next but -- In the meantime to stay with what you got -- that going forward and I agree a 100% reduce your risk a little -- start moving some -- out of some -- -- and you know.
Just pare back and be more concerned -- well.
And Jim -- some names like GE and JPMorgan and as we look at those it's it's relatively evident that these are sort of best in class strong names.
Right -- worry about that -- everybody's eyes to glaze over here but a lot of talk over the weekend about what happened with Japanese government bonds these so called JGBs.
Right where they started to falter and Japan's Central Bank had to jump in on a single day last week and -- -- twenty billion worth.
I I got nervous because Alabama -- that's a sign of a crack -- stress in there well.
Obviously you could have the credit markets get away from the central banks here and -- in uncharted territory with all the World Bank's central banks around the world.
Effectively devaluing their currencies by by printing money and we don't know where this is gonna lead and that's why I say you protect yourself.
By sticking with best in class companies the worst thing you could do is to jump into speculative dead -- -- companies.
So you what kind of movies that you wouldn't worry about it any kind of financial little -- JPMorgan if Japan started to falter.
Now I would want to.
And a good management I don't think JPMorgan.
Would be would be more vulnerable than a variety of other companies that you can buy in the marketplace so.
Sure everybody would get affected if the credit markets started to affect the equity markets.
But I rather be with strong companies them with weak ones and and finance is an integral part of the functioning.
Of our economy and I'm one of the strongest companies and financial.
On the other end of whatever -- valley we were to go through would be there I think strong.
And it's got Jamie Dimon added dividends got the best of both worlds from our perspective Phil what about Japan.
Some people say what -- -- good companies over their two and in fact.
What we saw that 7% pullback last week we saw a lot of buyers go ended with.
Yeah I mean we saw nice bounce a lot of one point 2% -- -- just recently I still think.
You gotta stay with the US -- I think you're buying some of these companies I mean look at Europe here last year there were completely falling apart -- looked completely dire as well as Italy.
And you know the US was one of the -- performing equity markets because it seems to be the most shelter right now so I think you have to avoid Japan and -- can stay within the US and stay with some postscript companies that you guys -- You know you look at all that's happened didn't there's still no slight to the old dressed sort of corners of quality like gold does that surprise you Jim.
-- -- gold as well during periods at one point I thought -- we doing better.
Then it than it is now but I I get a gold as well during periods of high inflation or periods of tremendous financial instability.
And you don't have either of those you have an economy that's.
Creaking along with 2% you got low inflation you got.
Growing corporate profits at some point -- there may be a day were gold shines but not in this environment.
By the way Jim another thing you have now that you didn't as some people are saying hey in 2007 some people were overly optimistic -- -- -- the crash coming.
But right now our company's.
There -- some stragglers but most of the companies had tremendous balance sheets that's going to affect your long term.
Are buying potential of these stocks right -- Only you have to you look around the world US corporate equities multinationals in the best place to be either better.
Then then I'm not much sovereign -- both their equity and -- that absolutely but I do want to emphasize that there is there is speculation going on the credit markets that you can't.
Keep out of focus on I'm afraid.
That that people are taking too much risk in the credit markets trying to achieve yield.
An enemy no yield environs Ben -- afraid -- that -- so you're not feel like -- they -- great to see you Jim thank you very much still straight -- we're gonna check in with you -- just a couple of minutes when.
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