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Another record breaking day on Wall Street market stealing a third week it -- I -- that.
This after Fed Chairman Ben Bernanke reaffirmed his aggressive monetary policy this week so.
After a dismal June the stock market rally seems to be back on track but -- 7UP to get you back into stocks joining me now to Bryant's.
Brian Reid chief economist for the Investment Company Institute they care about mutual funds.
And -- white senior analyst for to -- -- capital markets welcome to you both great to have you here.
Our Brian -- I'm gonna start with you yes talk about where these markets are going next you seem to think this is all about fundamentals.
Fundamentals that's right in the economy is getting it's legs -- -- growing.
And so what is as result interest rates are gonna rise in stock market's gonna perform better.
And what they've chairman was indicating was was that as the economy improves their best start take their foot -- accelerator and that means that.
Interest rates are gonna rise because they're not -- -- keep him down as much.
-- -- When you look at this I think there's a lot about Ben Bernanke -- this market I think in fact.
Most of the market is on -- shoulders because he is supporting every move in the stock market do you agree or do you think it's fundamentals.
I think you know the companies have performed well the tech companies that I cover but what are the reasons this has been an artificial stimulus -- got it doesn't hurt doesn't.
But I am seeing signs you know more recently -- it -- companies are struggling a little bit I think it's going to be tough -- quarter for technology.
Demand is down -- on demand a stop -- -- -- -- let's talk a little bit about -- -- search on investors high net worth.
Folks are keeping a big chunk of their money on the sidelines and you know I know what was so interesting in the sell off that we saw people were selling bonds and stocks.
But you see a big exodus from bond mutual funds what's going -- So those headline numbers about seventy billion came out of bond mutual -- since the end of -- about 2% a bond fund assets so.
In its got a kind of -- headline catching sort of level to it but not as much in terms of a really percentage.
What's happening I think is the following is that interest rates are certain to rise and every time we've seen this after recession we've seen some investors kind of pull back they're going to cash right now.
And so they're taking that money sort of -- the bond market and putting it into the short term part of the market.
I couldn't tell you I mean you're gonna lose money on that money because at some point inflation's gonna pick up -- you're gonna get penalized for sitting on the sidelines.
I you know Brian white I love technology and I think it's a leading part of the economy and one of the places that we always want to invest if you want -- But -- you see a slowdown coming what's going on out there.
That's just been I think a lot of businesses says have been hesitant to spend out obviously government spending has been -- you're starting to see China softened Brazil.
-- in Europe is obviously in the tank so.
It's just been a kind of a challenged environment you've -- Napoli and and struggle India and Smartphone market so it's been pretty widespread -- the most recent.
Indicator of that was -- work -- Who that would -- during their strongest court of your fourth quarter of those softer than expected.
And at -- get glimpses into this and of course there were reports that the second quarter generally for the S&P 500.
EPS reporting would be weaker softer than the first half of the year.
Do you see the same thing happening here what should individual investors be looking at.
As bumps in the road for the remainder of the year.
You're one of the things that really impresses me about what investors do and we've seen more and more of this over time as they.
Really plan not -- -- what it's gonna be coming up next in terms of the markets on the horizon.
-- really creating a sort of a portfolio allocation.
I think that's one of the reasons why we've seen so much money going to bond funds in the last five or six years he's a baby boomers who are approaching our entry retirement.
They want to have some portion of their portfolio allocated to fixed income.
And that's why I think this money's going to be much stickier than a lot of people think we've had some money come out but I think the book about -- trillion or so that's -- to bond funds a lot of that's gonna -- As you get older you want to put more and more that money in the bond and PG white what you perceived to be the safety of that asset class and who knows if that's what's gonna happen and the -- it helps to sort of also provide.
A diversification for the equity in your portfolio is well so I -- that's just sort of a natural tendency that goes on among investors.
-- I want -- about apple if your hot and the stock right oh come on isn't over.
It's not over.
-- play my best days are still ahead of apple so.
So -- look at you know really what's happened over the past few quarters is that the high end Smartphone market hit a ball.
Apple really only has one new Smartphone -- that caters to the high side for five.
So here we are as we look into the future were beginning a new product cycle fiscal fourteen and I think that's very exciting stock trading at 56 times earnings.
X cash they've got a great to portfolio of new products lower priced iPhone.
I watch apple TV.
But a lower price iPhone doesn't that tell the world -- -- -- the products that you expect this to make the most money on two different product.
And so it's going to have a plastic got casing on the back it's gonna come in colors.
I don't think we'll have some of the new technology.
That the -- assess a fingerprint identification will be quarter new technology and five -- it's not going to be in the lower priced iPhone.
What else do they have that you think is truly breakthrough at this point is let's face it when you talk about apple what you're expecting -- something you've never -- right so let's.
People got a little spoiled.
What are we have been in 2001 we -- the iPod right.
And it took until 2007 until the iPhone and iPad and -- -- ten.
Took a six year gap between iPod -- so iPad in 20102013.
2014 we're gonna have apple TV.
That's going to be the new product I they -- they can revolutionize the TV market.
It's gonna come to -- are -- -- revealed last word here what would be your last word for.
Investors people who are watching the show -- And looking for some intelligence on the market right I think you know they have to be aware that interest rates are gonna be -- the next two years we're not going to be in this juncture not sort of trending downward.
And I'm biggest happy prepared for that and you -- and -- with the financial advisor you know sort of how much they wanna have a fixed income but also keep their right I mean what as sort of the trends and equity side as well.
-- -- -- -- -- -- They may change what are your first names that next time I make it easier on me thanks for coming -- I think you're great great dance.
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