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The ultimate market guessing game lately -- know a lot of you -- thinking about it how long can this Central Bank party last you've got.
Ben Bernanke and the Federal Reserve -- a lot of money into the system it's happening all over in many other countries too but our investors focusing too much attention that.
On the Fed and central banks around the nation in the world worried about when the easy money will lend and where should you be putting your money right now -- cost which is a guy -- not willing.
Black -- global chief investment strategist joining via Fox Business excludes from San Francisco.
I'm worried -- and I'm usually a really big optimism -- that up why aren't you worried Brad.
Well I -- -- think it's -- ought to be concerned about the -- it's a guess is the degree of worry -- Unless -- about it for the simple reason I think that -- the Fed is obviously gonna have to start to slow their monetary accommodation at some point.
Over the last few weeks having people might be prematurely nervous about when that's gonna happen so consider with the feds looking at -- look at the economy.
Most of the signs at least the near term signs that there's a modest deceleration the economy.
And second -- -- inflation is close to half of the Fed's target level.
So gonna slow economy not much inflation to me that doesn't equal in -- tightening.
From the fat.
Okay and and look -- -- does a Bill Gross of Pimco believe that there's an imminent tightening we just saw his tweaks and he doesn't seem to be concerned at all but.
We saw a bizarre little bit of -- heart angina -- -- of Japan this week and you started to see the markets when they're in the Nikkei 225 which.
By the way has performed beautifully year to date and over the past year.
But for the past couple sessions it's been touch and go.
The Bank of Japan hot head slowly involved you can see from the one month picture yet.
And it ended up being down six tenths of a percent for the month up 32%.
Year to date for these Japanese companies but.
The Bank of Japan is also doing pretty much what -- US.
Federal Reserve is doing and you say still you are not -- is this not a bubble you believe that he can't.
It's in Japan is actually there isn't doing more than a fat so if you look at the size of the monthly asset purchase in Japan.
And you adjusted for the size of the economy.
There that there three times as aggressive as the Fed has been so it it's very aggressive no I think the problem in Japan.
He's been that the BOJ has been a little less nimble -- communication.
So -- these selloffs have been the result of confusion.
About BOJ policy regarding regarding long term rates in Japan and what impact these asset purchases -- gonna have.
On treasury rates partner at treasury rates -- Japanese government bond rates in Japan.
Now I think the short answer your question is I don't think Japan is in a bubble the valuations are still fairly inexpensive.
But the reality is that -- -- liquidity driven market and how that market does is -- very much depend on investor perception about the BOJ's next action.
Well that's the problem you you say that the perception that is too prematurely.
Nervous we put that up.
Russ says it works you're prematurely nervous I've never heard that her before at love -- let's get to the fact that you are still an existing exactly.
Where are you investing.
-- and more importantly where aren't you investing right now you are avoiding.
What has traditionally been a very strong sector that has great dividend returns.
Yes so -- -- you're speaking about the utility sector and this has been the worst performing sector month to date is down around 89%.
Wind warning investors about this for most of the year.
You I don't think the US markets and a bubble I think equities can go higher but there are parts of the US market -- the valuations are stretched.
And they tend to be the more defensive parts of the market utility companies consumer staple companies.
Because that characteristics that investors have like they're relatively defensive they're not as volatile -- the parts the market.
And they pay a big deal.
But our theories that these are the mark marks the market that an outstretched and the ones that you wanna avoid going forward what do you love what are you -- right now for your clients.
I think there are some good opportunities you won the places have been talking about energy companies now oil does not have to go to a hundred -- a 150.
Even at ninety dollars a barrel these companies are very profitable.
They've got a high debating yield and -- a fairly good long term hedge against inflation.
Not some -- about today or tomorrow even this year.
But some -- the long term investors want to keep in the back of their minds that's one of our favorite sectors right now we do have an overweight.
-- overweight for energy -- have a good weekend thank you very much -- is gonna have a better weekend than I am because I'm still worried about bank to take a look at it.
Update careless -- too good to see it thank you very much impresses with black -- how we.
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