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Looks like that thirteen year high for the NASDAQ let's get to today's action Peter Kenny -- -- managing director is telling investors.
To brace for more volatility and Larry schober is in the pits of the CME.
Look I could start with Larry that both of you guys could -- on this what volatility there's -- the only volatility Peter is is to the upside lately.
Well over the last four -- five sessions that's certainly been the case.
But if you look back from the beginning of the second quarter.
Through to today's close.
The swings intraday swings in the market though recently they've been very much to the plus side they have been to cited the second quarter was -- very much a horizontal.
Move from the beginning to the end we're seeing a bit of a with feared being driven largely by earnings that are coming out positive employment numbers strength in housing and autos.
It was so we are seeing that leg up that -- mentioned before I came on and that leg up is a very susceptible I mean there's lots of headline risk out there it's not all -- We -- headline risk you know it's funny -- Larry the Fed minutes out tomorrow the last three times the Fed minutes has come out.
The market is sold off what are you expecting tomorrow.
I think more intraday volatility just like the other guests -- -- -- right now.
The -- -- does seem to be to the outside however a lot of people are on the sidelines just because of what you said.
The last few times that happened the market did correct itself than we do know or bumping up to -- really big resistance at 1650.
And most traders -- get meaningfully higher than that we -- this season compelling evidence out of the the earnings reports and are -- the start flowing July and indeed.
Well here we are above -- 1652 and and you look now that.
-- Peter and and I'm just wondering now what you said is is very true -- good news is finally being taken as good news until it isn't until people realize oh.
The better this economy gets the sooner we might see tapering which shouldn't be so healthcare -- community should be the worst thing in the world certainly.
No actually from you know from a purely academic standpoint.
It's actually very good news to hear such free flowing discussion about tapering because it's a clear indication.
That the economy has caught that sustainable traction.
That we all ultimately want I mean we don't or any of us really want to have to depend on.
Liquidity that is being -- by the Federal Reserve for the market to find buoyancy we want organic growth we want top line and bottom line -- we want revenue growth we want.
Real growth in the economy and as long as we've seen more of that believe the greater the likelihood is the sooner that we see tapering and that's not all that.
Well let me follow up on that -- -- with rising rates -- as we've seen with the talk from -- fed easing its.
Monetary policy how does that affect your investment strategy.
Well basically were still by any historical standard at the very very very inexpensive rates.
Even though just recently since the -- roughly the last two weeks or so we've seen a fairly -- sharp move in the ten year for example.
We are so we have over the last two -- and seen some moderation in the ten years so it's not 001 directional trade.
Though we probably have seen the lows for the time being.
Even a minor adjustment in rates moving higher shouldn't.
And provide the headwind that many people are anticipating it will for equity markets equity markets can move up.
Even an environment where interest rates are climbing higher is well.
We've seen this repeatedly going back to 1982.
They've been severing several cycles all of low rates moving higher in the equity market continuing to move higher.
That had -- said.
If you're going to continue to see interest rates rise.
That's probably not gonna be terrible for at that rate of inflation as the currency while while it's probably going to be very therapeutic for the -- season.
Well exactly but but funeral we sorry Larry we are seeing.
Inflation certainly say for example in China we got.
Out of Shanghai we've got these numbers that the looked hotter than expected for inflation and just in the last hour -- -- -- zephyr was saying avoid Brazil because resilience to export to China about -- not such a great market is everybody's looking at some of these numbers.
So how does that then what how -- set piece of the puzzle fit into the US economy.
-- that's a big question because we all worry about China and your right CPI came out hotter than expected.
It was offset with a PPI -- -- lot softer than expected but again.
We're more worried about Brazil Mexico Korea had sat -- emerging markets is so.
Our dollar going higher and that's the really hurt and that might be that missing puzzle right now that's -- unhinged this market.
I mean I am constructively bullish for the equity market however the emerging markets a much bigger thing than most of us are giving credit for right now.
I created time to show us the money where do you like.
Learned what sectors do like in particular are there any particular stocks out there that you like well I can't be stock specific but I've been harp.
-- these sectors for quite some time as you well know.
All three of them have been real.
Stalwarts real Bolton is moved they've outperformed the broader indexes they're likely to continue in spite of the fact that we're gonna continue to see the -- -- -- rates.
All of them speak to a strengthening domestic economy an economy that is really the flagship of the global GDP story.
The US consumer continues to grow in confidence and in demand that is driving these three sectors and should continue to do so well.
It all the charts of the of these fighters will help us exactly the same almost a moon shot with just a little bit of a jacket edge here but again.
The big question now becomes where where is they're cheaper opportunity and didn't is it emerging markets do we or don't -- everybody has an opinion on this.
Even -- an emerging markets clearly represented.
Are very risk gone profile for investors at -- stage of the game.
And part of that is because of the concern over global demand.
Natural resource the -- -- manufacturing demand.
And you mentioned result it's a classic case in point and the other guests mentioned several other emerging market economies that are really didn't.
Heavily dependent on the global demand scenario and it is quite frankly not robust around the world as a direct result.
You at the US economy which he is maintaining some sort of competitive advantage as a direct result of the weaker dollar.
Vis a vis quantitative easing there's a window on that and I completely agree with the other -- in that.
Good strong -- the dollar gets the less competitive advantage we have in terms of manufacturing and exporting so we need to kind of capitalize on that.
Good to see you both Peter Kenny -- Larry we'll check back in with you would just a few moments to -- the S&P futures -- but again.
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