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What's Up On Wall Street - Jeff Cox, CNBC.com

Feb 26, 2013|

What's Up On Wall Street - Jeff Cox, CNBC.com

Transcript - will not be 100% accurate

Hopkins down. Can tell you about the stock market yesterday the Dow was down a couple 100 points this morning the Dow is -- -- 125 points. I'm not sure -- housing data or that was the consumer sentiment numbers that just came out. But you know who does know is Jeff Cox from CNBC Jeff good morning -- doing. -- are growing very. Silly media we got good news at 9 o'clock great debt housing number came in stronger than expected. But I think I just saw consumer sentiment 69 point six as a big number was. Yeah comment I think you know Kyra flexibility growing trend I've been hurt bullishness you're on the housing market I think that you know -- workers continued deceit. You know continually I don't know progressed dramatically. Dramatic increases they're producing that you know little -- to keep that upward trajectory I do think that that's gonna form. You know that is the basic building block of of any economic recovery -- were -- -- of course the net you know it as told by his book that that's going to be reflected the confidence. It it it does I guess the that the question I have four is the right I'm. I'm I'm trying to figure out why. People are bullish on stocks you know eat because the in price to earnings has been very strong for the last four years. I'm not sure that companies can continue to grow their earnings at the same rate that they have for the last four years for the next four years -- what's your perspective on that. That this is just surely of monetary policy trade it's just all about liquidity from the -- I think if they're just you know. That they're afraid despite the central banks right now and so that's -- equity prices higher. I do believe that the last several -- of -- -- provider very instructive lesson. And that you know I don't think that we've seen. -- that -- huge move up portable which. Saw that you know really big spike in January people here aren't. I -- -- -- -- very good note out this morning just basically -- it was going to be. It's a market that it is not going to be particularly irrational. Going forward and it's going to be subjected to at that satellite this particular -- lot of these -- -- faced down 200. -- hundred -- 75 apart by. So I really think that there -- weren't airing a failure to relieve all of our for the market and I think investors really gonna have to be careful. And and watch out where they're committing money that duke lose to lower risk going forward there. So I try to get this if if you're looking at a time horizon at the end of the year. You know you look at the markets today do you think they finished them the year stronger than where we are now Jeff or weaker from where we. I would stay. Probably from. From mentally stronger than in the best case scenario I'd I would look for you know problem here a pretty strong -- and they go away trade. Where we've do you we give back some of the gains that -- racing here. In the spring time and you know aware that it it's going to be kind of you know every rep firms felt that we go into the final order. See what happens as far as being European headlines go and and and what happens as far as the that it Burnett and policy certainly don't see -- are all out of the market. -- I do believe that gains from here or what you're much more difficult -- and they had been. You know over say the last two months or so. You know that the housing number comes in this morning strongest it's been in since 2006. Is there continued strength in housing is my fear and housing is you still have a lot of people that are delinquent on their mortgage more than 5% mortgages. And there's still a shadow inventory of homes that have not been foreclosed on yet so I worry that it might be one step forward in two steps back. I think that there's a danger of that but I I do believe that. That that the shadow inventory is going to continue to creep into the markets that I -- I don't think it was you flooded. I can tell you anecdotally. I have friends in the real estate business which is the pit stop elections in business. And I. See that. There are more you if you're seeing more like you know competitive bids for -- -- more buyers coming into the market. Which is going to help people for I think under prices -- effect or -- alcoholic isn't. Reported that it -- being. That might be worried about and not been been Torre and that's going to kind of help you know impede someone's debut what would be an even stronger. -- -- Very distinct so the housing market could suffer due to a lack of inventory -- I didn't think we hear that for quite -- Yeah it's it is that we're concept that it because it is wasn't dialogue that we're talking about too much inventory and and now we had missed him that I did it -- investor and out of -- home. All fired her and has been primarily investors of the company and a lot of that buying. And you know and now it I think you know if you start deceit. You know that the residential fire command and maybe -- but the hard part time that they thought they -- in discussing the buyer's market for so long and you know maybe it's not going to be -- worst case going forward. Instinct what Jeff thanks very much time we appreciate it that's Jeff Cox from CNBC joining us you know in the -- that the challenge that I have now. In looking at us and a lot of time looking at data. Over the weekend and stocks have appreciated the price to earnings ratio and the S&P 500 -- about fifteen to one my difficulties the news. Scene where earnings are gonna grow how -- companies grow earnings in the consumer. Their customer is broke. The consumer is broke so how do companies increased earnings that is going to be tricked. For CEOs for the next couple years because -- is as you have austerity measures implemented in hired the president does. Is bound and determined to raise taxes and the Republicans are bound and determined to cut spending so the two of those both. If you implement both those that seems to be where were going -- you've got higher taxes followed by austerity you're taking money out of the current economy and done so how do you grow earnings how do you grow your business how does the pizza guy sell more pizza. How does that -- Take care more animals out as a farmer make more money I think it's tough across the board is it even possible is very difficult he -- it just. He put politics aside right. You've got taxes going up they've already gone. -- the largest tax increase in history the United States. January 1 and then alongside of that. In a couple days you're gonna have austerity. So how do you grow the economy how do you have a grow your corporate earnings -- you've got unemployment at 15%. And higher tax rates and fewer government benefits that's the trick in will be will be -- and I think. To just point that's what's leading to a lot of stock market volatility. If ill when we -- seemed to settle down a couple hundred points last week Monday. Up problem look at it now. Totally up -- -- up -- 103 point eight it's wild ride is awhile right if you want to a blade. Volatility. With your investment portfolio. 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