tv Wall Street Week FOX Business August 20, 2016 9:00am-9:31am EDT
email email@example.com. my work is done but my love has just begun. 2:00 p.m. eastern. good night from new york have a good weekend everyone. >> the show has never been so right about investments. we have talked about everything that affects people and their money. from fox business headquarters in new york city the new "wall street week." >> welcome to "wall street week" the show for long-term investing. i am anthony scaramucci. >> i'm gary kaminsky. the markets remain at or near all-time highs but some billionaires are making big debts against stocks.
many hedge fund managers are shifting money into investments like gold. >> george soros has said that's it that i'm put options with the s&p hundred map means the more the index goes down the more money he will make so is the smart money being smart? we turn to our guest liz ann sonders chief investment strategist at charles schwab and kevin kelly at recon capital. >> not longer-term but i think our view has been you want to stay to long-term location to take advantage of all a till of a and make tactical moves around that and to the extent you have written this rally up in your overexposed to target allocations i would certainly think it's an opportune she pair back some of those gains. >> are they paying back their stock? >> sentiment trader has a wonderful index and it looks that the cohorts of those areas and looks at what these investors are actually doing. it's not an attitudinal
measurement and the so-called frat money is actually quite pessimistic so it may include types of investors that you mention in the so-called short-term traders are much more optimistic. in the past when you have seen a widespread like that you've had a little trouble in the near term for the market so it's been a sentiment driven rally from the pessimistic flows of brexit. the fact that we are the opposite of the spectrum are now in terms of optimism suggest we might see a bit of a pullback here. >> kevin all the bear steps that have been made of gotten a lot of press this week. these bearish bets were made in the early part of the summer. if you had an index fund you have outperformed 99% of the hedge funds out there so we are talking about smart money but really the smart money has not been smart at all the entire year. >> the smart money is doing what it does best and hedging their portfolios whether they are starting to get into gold which is a national hedge for their
portfolio or the news of george soros protecting his dashing getting into longer protections like liberty broadband that are economically sensitive so he's doing what he should be doing as well as the cost of insurance has gotten she persons the start of summer which is kind of funny. he has actually put on more of those options so basically investors need to figure out where they want to be and a lot of the sectors have been welcome the leading sectors, technology. technology is performing well especially in this earning sector. some of the biggest sectors are pushing this market. we haven't seen financials come and that they may be the next to make the market higher. >> lives in code the markets went down dramatically. do you think it would recover this quickly? >> we did put notes out of the time saying hey as was the
opposite of what we talked about which was an opportunity to bring exposure back up but the rapidity with which we so the improvement was a bit more swift. >> is this the classic look with the driven bull market that continues to be sustained by interest rate cycles? >> i think it's the liquidity component but as i mentioned not only this most recent rally but this is a classic wall of worry type of market to me market to me look at the attitudes of investors in the retail side switches or bailiwick the skepticism has been pervasive this entire time. a rodney dangerfield bull-market a writ of into college. any kind of catalyst says there is no alternative market. >> we have some people who watch the news who may not know who rodney dangerfield is. >> sorry, we are showing our age. >> kelly let me ask you the question about the bull cycle in
the liquidity driven. our president bill dudley is going to start raising rates in you have folks like carl icahn who are getting out of the market due to the risk of exposure. >> a lot of pessimism that we hit peak earnings so we are in the six quarter where earnings have come down a piercing valuation starting to get more stretched so we start looking at a lot of the staples and walmart 17 times earnings and can they keep growing at that pace? to support that valuations others concern on the valuation site as well as sustaining those earnings that they have had. >> liz ann anthony mentioned one of the stories this week was the idea that we may be back in a cycle again maybe because these guys are walking and talking. financials have had a decently gone a relative basis. should people be buying financials now? >> we have a rating and there's
a wrinkle in the near term because s&p is going to pull out its own gigs at third. it will be the 11th sector and that is where a lot of the yield is so some of the money money that is going to financials that his yield chasing money they be doing it in a yield that may give an opportunity because although we do think we will move again this year and we are therefore officially in a raid rising cycle it will be of the very slow friday but we think valuations will become compelling enough in the whole sector will be thrown out so we are sticking with our performance. >> is an important run next president is? >> let's call it the unique aspect of this question leave it at that. i think it's been a volatility factored will continue to be. you know you talked earlier about gridlock generally being a good thing but i think i really goes back to an era where you
had counterpoints and you have that balance but there was also reaching across the aisle to get things done. to get nothing done i'm not sure is positive for the market. >> does the market care about the next president? >> the market cares about certainty uncertainties are right now it's priced into the election that hillary clinton is going to get elected. >> we will deal with that after the break but stay with us liz ann and kevin and we will have more on how the election gridlock actually looks going forward. coming up if you are voting your wallet wide new evidence suggests the ter
liz ann sonders and kevin kelly entering the commercial crate -- break. we talked about it in eight a lock.otion out there that we have a number number of. >> guest: mona they say hillary clinton will be good for the stock arcade because they know what to expect that there is also some strategy out there that says when you have one party both in the white house and in congress that actually markets do better. your thoughts on this. >> gridlock is not good especially for the markets because there's a lot of uncertainty in a lot of policies can't be effective. we are in the ever evolving fast moving global market environment seeing policies change fast globally and we are not able to react and we are kind of going slow to gridlock. you look at the historical returns you need unification that the government and you need all branches working together so the market will want to see an effective government that can actually make changes. >> anthony this is data compiled
bye bye s&p capital iq and they have shown the stock market does better when you have one party in control. why is candidate trumps not focusing on back? >> i don't understand the question because i do think he spoke a sing on it. raising money and the republican national in many which is building a ground game for the senate and house races so i i think he's focusing on it. one of the problems candidate trump is having is that there's a media distortion prism so every time he says something they are doing the best they can. be "the new york times" has come out and said listen we have dropped our objectivity on this thing. we want to go after this guy viciously so one of the things that has happened as a result of the campaign as we have now expose someone in the mainstream media for who they really are which is a lack of objectivity and it's a huge bias. i think the american people are onto it. >> let me ask a question that is market related. in the event that there's a republican president and a democratically-controlled senate or vice versa, what do you think
happens in terms the ability to get a budget deal done, infrastructure spending in the types of things that dr. baron bernanke or janet yellen would like to see from the government in terms of helping create growth and economy? >> in. it would be a great thing and i think when people think about a divided government they look back in history and they see it as having been a good thing both for the economy and the market. you have to go back to air is like o'neill and clinton gingrich where there was that cooperation across the aisle. you got things done. you got opinions and voices from both sides. the problem is we are so polarized right now that even in a practical situation where you have one party in the white house and another party in one or both houses of congress i'm not sure the political landscape is such that you will get the kind of cooperation that needs an 80s or 19 environment that you had when there was that willingness to sit down and hash things out enough my
frustration. >> important thing that investors need to take away as we want to unify government to enact fiscal policies. we are seeing monetary policies have run their course and losing their efficacy and we are seeing that from a lot of the federal governors talking about that. they are saying we need fiscal policy so one of the ways to enact those fiscal policies would talk about especially lowering the corporate tax raid, think about this. the uk they had a referendum but guess what they are doing? they are lowering their tax. to 1 b2020 hoping to lower to 50%. that's going to be great or business and our economy. >> let's wrap up the market in the election. both of you agree that whoever wins in november that the market fundamentals are going to drive what happens to the s&p over the next year or is it going to have some impact on the election? >> i think there's going to be
an impact from the election especially initially because people are going to try to figure out our regard to have more of the same from the last four and eight years or is there going to be a change in how were we going to an estimate type of an barmaid? weisser recently from a fed survey showing 20% of corporate executives are going to do job cuts because of certain regulations for the affordable care act. trish: keep in mind in an eight year cycle which we have now where we have the outgoing president having been in for two terms if you look at every eight year cycle year eight is the worst for the market so in a normal environment and a gear like this where you have no incumbent and you ask essentially have two unknown candidates, argue that's not the case aliso for one of them that has always been a volatility matter for the market and i don't think he will be different this time. >> listen i'm super worried about the interest-rate cycle and my guess is that we are growing fast enough now and there's enough inflation that will start moving and when they
start moving if there is no other year like fiscal stimulus or some type of infrastructure i think it's more for rollover. >> i can't help but think sympathetic to the camp albeit small that may be at this stage of the game think the excess ease and liquidity of u.s. monetary policy has been a deterrent to economic growth. it's a counterfactual. you can't go back and say if the fed hadn't done as much as they had done and started raising rates a couple of years ago maybe we'd be in better shape of the confidence channel the fact that we have a central bank trading the economic patient like it's still in the trauma room i'm not sure that hasn't been a boost. >> dr. bernanke and chairman yellen have finally said they really needed help on the congress and the executive branch and they don't feel they have gotten it so that's why we have got the patient on the gurney.
>> if you look at the fed allen sheeted has $4 trillion on it into liz howes when she got up with -- brought up a great point. it's not working in japan or europe and we do need polities polities -- policies per at one of the biggest concerns we have is the average baby boomers turning 65 and we have $55 trillion in unfunded hitting the balance sheets. >> i was at a bank yesterday with my wife and all i can tell you is there are millions of people in this country that hope that you are right, that if interest rates are going to start to have a real cycle tightening and go up you have millions of people that follow the rules and they should be retired and they should be living on a fixed income. they shouldn't have to put money into the stock arcade and those people have been punished for the last eight years because they follow the rules and they have not been able to get any kind of fixed income.
>> they are showing up disaffected in the polling booths. >> in the aggregate there's more money in the economic system for current interest income than the paid interest expense so i just don't see another 25 basis point increase as economic armageddon. >> the scary thing is the s&p 500 is yielding more than the 10 year treasury in the fixed-income market is telling you there are worries on the horizon. >> are thanks to liz ann sonders and kevin kelly. more "wall street week" after this. >> is the economy rosy or are we dying on the vine? 1-800-call-fbi, at ally bank, no branches equals great rates. it's a fact. kind of like bill splitting equals nitpicking.
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>> americans are spending less and wearing more. consumer sentiment rose less than forecast last month while retail sales fell flat. for ground-level look at the state of the american consumer let's bring in jim mccann founder and executive chairman of 1-800-flowers.com. thanks for joining us. tell us how is the consumer? >> i think the consumer is doing fine from our perspective. we deal with absolute consumers at 1-800-flowers.com and across our brands that i was listening to your segment. i'm a main street kind of guy and i think the consumer is doing better all the time. i think finding it harder and harder to hire people. that's good for the overall economy and tougher for us so those are the headlines we face but the consumer in the previous segment anthony austin is gridlock good for the economy? for the last couple of years
when you had gridlock where sterling to get the 2% growth but if you put it in contrast to the rest of the world that's pretty good. i think if we had a better regulatory environment and a little less can as we could see the economy grow. that's without any great change and fiscal policy. >> water one or two regulations that you would like to see the government do away with? >> cabin in the last segment talks about the tax rate to what's going on in london and what has happened in dublin. clearly lowering the tax rate stimulates the economy today have concerns on several nobles about artificial changes to the minimum wage. by mandate. there started a lot of pressure on wages happening naturally and if you have artificial changes like in one city or one state it tends to disrupt it, make so i think a change in the tax rate at the corporate level would be important and rather than punishing companies we try to manage their tax rate. let's do it right good fiscal
policy. >> you are about to celebrate your 40th year is the founder of 1-800-flowers. has this been a difficult time for you on a relative basis or an easier time? >> easier because our brands are all solid and we are appropriate. we have big terrific customer base that we have accumulated great axes to give us flexibility in managing the company has kept us in the forefront of convenience commerce using technology and you saw some signs of that in the last couple of months where we had the deals with amazon and a big deal with facebook, a big deal with ibm watson and uber so we are staying at the forefront of changes in technology that make it more convenient for customers to access our products and services. >> i hear a lot of bankers and a lot of wall street come on in they say this is the worst environment to start a business. you are asked with starting a
business and in running a business and building a business so if you start a company right now and what has been described as a terrible predatory environment you could do it today as same we did 40 years ago? >> ago? >> i don't know if will be the same way. that hope i have learned a lot in those 40 years. the financing is much better. 40 years ago we didn't use the term entrepreneur. so i think the culture and the environment and society have morphed and celebrated embracing entrepreneurship so it's a much better and healthier environment now with more infrastructure to help support the formation of businesses and help them to overcome the barriers that regulation puts in front of them. >> if you try to borrow money and interest rates are lower would you be able to borrow the money? >> as a small business, no. >> of small to medium-sized business of banking and garment
is very good for us because rates are low. the banks have more reserves in land or money and make less money and don't take any risk. there seems to be a conflict in those mandates as a small-business person we benefit from the environment and frankly when i hear you talk about the fed rate base i wish they would raise it so i don't have to hear you guys talking about it all the time. >> it's a good point and i wish they would. talking about the entrepreneur and the advice you would give to not be nor today or to yourself, and the younger version of yourself 40 years ago. >> while i think what we try to do in our business which we hope is still entrepreneurial is look at half -- where the changes are and where is technology changing the business? we use the word disrupt but it's not ours to disrupt it. sometimes it's just evolutionary and if you look at taxis have been around for a long time but
good night from new york have a good weekend everyone. >> the show has never been so right about investments. we have talked about everything that affects people and their money. from fox business headquarters in new york city the new "wall street week." >> welcome to "wall street week" the show for long-term investing. i am anthony scaramucci. >> i'm gary kaminsky. the markets remain at or near all-time highs but some billionaires are making big