WITH US NOT TO DISCUSS AS MIKE
HANSEN USING SENIOR VICE
PRESIDENT OF RESEARCH AND
FISHER INVESTMENTS SUCH WAS
ABOUT HERE WITH US TODAY TO
START RIGHT IN EITHER SIDE.
WHAT'S THE SHOW WEAKNESS SO
WHAT IS GOING TO BUDGE FIRST
AND WHAT HAPPENS IF WE NEVER
SEE AND DO.
>>WELL I THINK YOU'RE EXACTLY
RIGHT IN THE WAY YOU PUT THAT
YOU KNOW THIS TO ME IS MUCH
MORE A POLITICAL ISSUE THAN IT
IS AN ECONOMIC ISSUE
ECONOMICALLY THE VALUE OF THESE
TRADES IS JUST VERY SMALL
RELATIVE TO THE SIZE OF THE
BOTH THE CHINESE AND THE US
ECONOMY IS LET ALONE THE WORLD
ECONOMIES. SO WHAT THIS REALLY
IS A POLITICAL ISSUE AND MY
BEST GUESS IS THAT POLITICAL
ISSUES TEND TO GET USED AROUND
ELECTION TIME SO I WOULDN'T
EXPECT A REAL RESOLUTION OF
THIS UNTIL PERHAPS INTO NEXT
YEAR WHEN IT BECOMES MORE
EXPEDIENT FOR BOTH SIDES TO SEE
A RESOLUTION, ESPECIALLY AS WE
SEE ARE ELECTION US COME.
>>AND GIVEN THAT WE'RE STILL
OVER A YEAR AWAY DOES THAT MEAN
WE'RE GOING TO EXPECT TO HAVE
MARKETS SEE WEEKS LIKE THIS
WEEK WHERE WERE FLIP-FLOPPING
AND DRAMATIC FASHION. YOU KNOW
400 POINT SWINGS IN THE
WELL VOLATILITIES.
>>COMMON IS THERE. I MEAN ONE
OF THE OLD SAYINGS IN THE STOCK
MARKET IS A 2% DAYS JUST TO
TUESDAY FOR THE STOCK MARKET
AND VOLATILITY ON
A WEEKLY BASIS HAPPENS ALL THE
TIME, WE'RE STILL SITTING NEAR
OR AT ALL TIME HIGHS FOR A LOT
OF PARTS OF THE GLOBE,
INCLUDING THE UNITED STATES AND
IN FACT. STOCK MARKET SHOWN A
FAIR AMOUNT OF
RESILIENCE JUST IN THE BACK
HALF OF THIS WEEK. I EXPECT
THAT YOU'LL SEE MORE VOLATILITY
BECAUSE VOLATILITY IS THE PRICE
YOU PAY FOR
BEING THE STOCK MARKET
INVESTOR, BUT IT'S A PRETTY
GOOD WORLD OUT THERE IT'S A LOW
INFLATION WORLD, IT'S A LOW
INTEREST RATE WORLD. IT'S A
WORLD OF MODEST BUT NOT
OVERHEATING GROWTH THAT'S A
PRETTY GOOD THING AND VERY FEW
PEOPLE ARE RECOGNIZING THAT
TODAY.
>>IS THE MARKET DAY KIND OF
TOOL THAT YOU SEE THE PRESIDENT
CONTINUING TO USE AS WE GO ON
FURTHER THROUGHOUT THE STREET
TENSIONS IN WAR AT THIS POINT.
>>WELL, YOU KNOW THERE IS A
VERY LONG HISTORY OF PRESIDENTS
USING THE ECONOMY AND THE STOCK
MARKET TO THEIR ADVANTAGE
THAT'S NOTHING NEW ALL
POLITICIANS DO IT. I THINK IT'S
WORTH MENTIONING SOMETHING
THAT NOBODY IS TALKING ABOUT
WHICH IS THAT WELL EVERYONE
LOOKS AT US AND CHINA IN THE
BACKGROUND SINCE THE BEGINNING
OF 2018 WE'VE SEEN OVER $2
TRILLION OF NEW BILATERAL AND
IN SOME CASES MULTILATERAL
TRADE ACCORD STRUCK ACROSS THE
GLOBE. THAT DWARFS ANY SIZE OF
THESE NEW TARIFFS. IT'S A VERY
POSITIVE THING FOR THE GLOBAL
ECONOMY. IT'S A VERY POSITIVE
THING ULTIMATELY FOR THE STOCK
MARKET AND YET NOBODY IS
TALKING ABOUT THAT WHEN PEOPLE
ARE TALKING ABOUT THINGS
THAT ARE GOOD THAT'S USUALLY
PRETTY BULLISH.
>>OK SO THEN WHY IS THAT BEING
PUSHED TO THE SIDE YOU THINK.
>>INVESTORS ON AVERAGE TEND TO
LOOK TOWARDS THE PESSIMISTIC
WHAT THEY SAY CLASSICALLY IN
THE STOCK MARKET
IS THE BULL MARKET'S CLIMB A
WALL OF WORRY, YOU DON'T REALLY
GET TO HIGH OPTIMISM OR WHAT
THEY WOULD CALL EUPHORIA FOR
VERY BRIEF PERIODS AND IT'S NOT
REALLY UNTIL YOU TRULY GET TO
THE END OF THE CYCLE AND SO
WHILE THE CYCLE HAS BEEN VERY
LONG. IT'S BEEN TRULY
CHARACTERISTIC IF NOT ARCHETYPE
WILL IN THE SENSE THAT PEOPLE
HAVE WORRIED AND WORRIED AND
THEY FIND THINGS TO WORRY
ABOUT. MEANWHILE OVER TIME THE
STOCK MARKET'S
TRAJECTORY HAS STILL BEEN ON AN
UPWARD PATH.
>>YES, A SOMEWHAT PUSHED BACK
BECAUSE I MEAN LOOK WE'RE
WATCHING THIS VERY CLOSELY
BECAUSE YOU HAVE TO COUNTRIES
THAT REPRESENT OVER A
3RD OF THE TOTAL GLOBAL GDP
THAT ARE GOING OUT AND OVER
MORE THAN A YEAR AT THIS POINT
IN TIME AND SO WITH THAT IN
MIND SURE THERE ARE OTHER
PLACES THAT WE COULD BE
LOOKING, BUT THERE DOESN'T SEEM
TO BE ANOTHER PLACE THAT WE
SHOULD BE LOOKING THAT HAS MORE
FAR RANGING IMPLICATIONS IF
THERE'S NOT A DEAL DONE RIGHT
NOW.
>>YEAH, I DON'T REALLY DISAGREE
WITH YOU, I MEAN TARIFFS ARE
NOT A GOOD THING I THINK OF
THEM AS A BAD
THING IN THE LONGER THINGS
GRIND ON. THERE IS SOME CASE TO
BE MADE ON A MINOR BASIS FOR
SOME DELETERIOUS. ECONOMIC
ACTIVITY THAT COULD OTHERWISE
HAVE BEEN HAD. BUT
I THINK YOUR POINT IS EXACTLY
RIGHT. THE FACT THAT PEOPLE ARE
SO KEYED IN ON
THIS ARE WORRYING ABOUT IT SO
MUCH IS THE WAY THE STOCK
MARKET ULTIMATELY MOVES FORWARD
THE PRICING MECHANISM OF THE
STOCK MARKET. IT'S ABOUT WHAT
PEOPLE IN FACT ARE LOOKING AT
AND ALREADY PRICING IN AND
THERE COULDN'T POSSIBLY BE MORE
ATTENTION ON THIS ISSUE WHICH
TELLS ME THAT THIS ISSUE IS
MORE PRICED IN AND PEOPLE
RECOGNIZE AND WITH A HEIGHTENED
AMOUNT OF FEAR WHICH AGAIN
ULTIMATELY IF YOU LOOK AT THE
REST OF THE WORLD WHICH IS
MOVING ON OK NOT GREAT BUT WITH
MODEST ECONOMIC GROWTH THAT'S A
PRETTY BENIGN THING IT SPEAKS
FOR HIGHER PRICES IN THE FUTURE
NOT LOWER.
>>THEY DIDN'T AS YOU MENTIONED,
AND THE MARKETS ARE STILL
CONTINUING TO FALL EVEN WHEN WE
SEE THESE PIECES OF NEWS COMING
OUT FROM THE WHITE HOUSE THAT
MEANS THAT THESE WORRIES TEND
TO BE GROWING RIGHT MIKE.
>>THE LEVEL OF WORRIES BEEN
PRETTY CONSISTENT OVER THE
COURSE OF THE LAST YEAR AND AS
WE WERE JUST SAYING BEFORE YOU
KNOW POLITICIANS PULL THESE
LEVERS WHEN IT SEEMS EXPEDIENT
IF IT'S A SLOW, MAYBE IT'S KIND
OF A SLOW NEWS TIME DURING THE
SUMMER AND THEY START TO PICK
THESE THINGS BACK UP IN THE
ATTENTION COMES BACK ON IT.
BUT DESPITE THE WEEKLY
MOVEMENTS BECAUSE WE HAD
SEVERAL OF THESE NOW IN A YEAR
WHICH IS ALREADY BEEN PRETTY
GOOD FOR THE STOCK MARKET.
I THINK PEOPLE NEED TO REFOCUS
ON THE FACT THE TRAJECTORY IS
UP. AND THE WEEKLY VOLATILITY
IS ALWAYS GOING TO BE THERE
THAT'S JUST THE NATURE OF
THE MARKET ALL RIGHT, BUT THERE
IS A RECENT REUTERS.
>>HOLD AND THERE IS A MEDIUM
PROBABILITY NOW 45%. RECESSION
IN THE NEXT. HOW DO
YOU BALANCE THAT WITH
WHAT YOU'RE SAYING AND
SUGGESTING THAT THIS IS JUST
PAR FOR THE COURSE.
>>COULD BE
2 YEARS IS A LONG TIME FROM NOW
AND
WHILE STOCK MARKETS TO PRICE
OUT THE FUTURE. I WOULDN'T BE
MAKING ANY BETS ON ANYTHING
THAT'S MORE THAN ABOUT A YEAR
FROM NOW. THE FACT IS EVEN AS
YOU LOOK AT THINGS LIKE YIELD
CURVES IN INTEREST RATES WHICH
OF COURSE ARE INVERTED HERE IN
THE UNITED
STATES AND EVEN ON A GLOBAL
BASIS, PRETTY THE GLOBAL YIELD
CURVE ON THE GDP WEIGHTED BASIS
LOOKS PRETTY FLAT THOSE THINGS
AREN'T GOOD TIMING TOOLS.
THEY DON'T NECESSARILY TELL YOU
WHEN A RECESSION IS COMING AND
IN FACT WHEN YOU DO FINALLY GET
AN INVERSION IT CAN BE YEARS
BEFORE YOU FINALLY DO GET TO
THAT BEAR MARKET AND RECESSION.
SO COULD THERE
BE A RECESSION IN 2 YEARS.
YEAH, MAYBE BUT THE
FUNDAMENTALS RIGHT AHEAD OF US
AT LEAST LOOKING OUT ANOTHER 12
MONTHS ARE A LITTLE MORE STILL
LOOK PRETTY
GOOD LIQUIDITY CREDIT ACTIVITY.
MOST FOR THE MOST PART,
ESPECIALLY IN THE SERVICES
SECTOR OF THE ECONOMY HAS BEEN
STRONG THOSE THINGS ARE GOING
TO PUSH THE MARKET FORWARD AT
LEAST FOR THE FORESEEABLE
FUTURE AND 2 YEARS FROM
NOW STILL PRETTY LONG WAY AWAY.
>>OKAY SO THAT'S ON THE TO YOUR
SCHOOL WAS SCALE WHAT ABOUT ON
THE 2 WEEKS OUT FROM MOSCOW IN
2 WEEKS YOU COULD HAVE YOU KNOW
TAKING THEIR VACATIONS ARE
GOING TO SEE EXTREMELY LOW
VOLATILE OR THE VOLUME. BUT IF
THIS VOLATILITY
REMAINS RELATIVELY HIGH.
WHAT DO WE EXPECT ARE WE
EXPECTING A REPEAT OF LAST
AUGUST WHERE WE ACTUALLY SAW
THE BEST PERFORMANCE IN THE
PAST 4 YEARS FOR AN AUGUST IN
SPITE OF SOME OF THE SAME
CONCERNS THAT WE'RE SEEING THIS
AUGUST.
>>I DON'T KNOW I COULDN'T TELL
YOU YOU KNOW COMING OFF OF THE
BIG CORRECTION WE HAD IN THE
4TH QUARTER LAST YEAR WHAT WE
HAD WAS A CLASSICAL THE SHAPED
RECOVERY OFF OF A BIG
CORRECTION THAT ABOUT
DISSIPATED ITSELF TOWARDS JUNE.
BUT IF YOU REMEMBER BACK
TOWARDS MAY WE HAD KIND OF A
MINI CORRECTION ONLY TO SEE
MARKETS GO BACK TOWARDS THEIR
HIGHS. WOULDN'T SURPRISE ME TO
SEE SOMETHING LIKE THAT RIGHT
AROUND HERE. IN FACT THERE'S
QUITE A LONG HISTORY OF WHEN
MARKETS SEE STEEP VOLATILITY TO
THE DOWNSIDE WHEN THEY'RE AT OR
AROUND THEIR ALL TIME HIGHS.
IT'S USUALLY BULLISH NOT
BEARISH IN THAT I DON'T KNOW
WHAT THAT MEANS FOR THE NEXT 2
WEEKS WHEN A LOT OF TRADERS DO
GO ON VACATION FOR THE SUMMER.
BUT IF I LOOK OUT MAYBE 3 TO