tv Wall Street Week FOX Business January 28, 2017 12:30am-1:01am EST
lou: good night from new york, have a great weekend. [♪] >> announcer: from fox business headquarters in new york city, the new "wall street week." gary: welcome to "wall street week," the show for long-term investing, name gary kaminsky. maria: i'm maria bartiromo. the dow jones finally smashing through the 20,000 for the first time ever this week. i was on the air with stuart varney when it happened. the new president acting on nearly all of his campaign promises, signing orders that one republican lawmaker calls a
dizzying pace including on trade, immigration and obamacare. gary: next week will be a true test with an onslaught of economic data with the consumer confidence and jobs the jobs report. and thursday it president is expected to announce his nominee for the supreme court. maria: characterize what we saw this week. >> when you talk 20,000 on the dow, it's not a great measure of the economy swroafer all baits many only 30 stocks. but the s & p and the nasdaq closed at new highs. there is an enthusiasm that has come through.
we saw -- we were talking earlier, the mexico news came out yesterday. it doesn't stop the market at all. there is so much optimism right now, and it seems tough to stop. with all that said, people have to be careful here, and one thing i would advise the retail clients is don't go all in right now. go in slowly. and that's something people have to be careful of as the enthusiasm starts to grow. gary: holly, you deal with sophisticated investors. when the dow hits 0,000, do clients call and even gang differently? does it mean anything? let's talk in more general terms. what have your clients been saying to you since the beginning of the new year in terms of what they want to do as a result of the enthusiasm. >> i think my clients are concerned the market is hitting new highs every single day, and
they are wondering can this continue. the market is pretty in line with long-term averages so we are not concerned it can't continue to how much. but we are concerned when increased volatility. you have got to be cautious. there will be entry points and pullbacks, that's normal in a healthy functioning economy and that will provide the investor with an opportunity to increase their exposure. maria: i would like to see what this means to earnings. one thing that drives the stock market is corporate earnings. >> i think it consensus is 12% for this year. and it's an aggressive number. it can happen. the devil is in the details of where this reform will come out with trump. earnings will grow. it may not be 1%. it won't be 20%, but they will
be significantly higher. >> as i listen to the earnings calls there is a different tone in what the ceos are talking about. if you think about the earnings calls 9 months ago we were we think we can continue at this pace. now, we see growth rates. jamie dimon talking about asia improving. some have talked about the strength of the dollar hurting them in the future. but the overall tone has been we see growth opportunity in a way we haven't heard in a long time. gary: you both have joined week * in the past and we -- joined "wall street week" in the past and we talked about the fed. does the fed not matter anymore? do you not have to pay attention to what is happening out of the federal reserve. >> you have to pay attention,
but the expectation is rate will rise. the question is it will be two think ties year or three times this year, as long as they keep pace and they are responsible and don't do anything too quickly, the market will continue to grow. >> i do agree with that but there is something about this year. the last two years, if you summarize the year, they are fed-driven years. we are in a policy-driven economy. they were always the 1a story. we are now out until may until we have a 50% probability of a rate raise. there was nothing else to talk about so to speak because when didn't know what was going to go on. the president was on his way out. there is new policy. he single day something comes out that drives the market. the fed is 1b. they don't have a history of surprising the market necessarily. i don't think that's going to change. so yes it's interesting but it's
no longer the mainstream. maria: there is a fed meeting wednesday. >> you said earlier you want to go slowly into this market. i assume you mean selective picking. construction companies on fire on the expectation the infrastructure president trump will implement will lift their fortunes. financials on fire. have they gone the ahead of themselves? would you buy those two groups or where do you allocate capital? >> when i talk about allocating. the other thing i want to make sure i'm clear about is not going 100% of your capital in right now. rather than going in a poring of their investable assets. but to answer your question, i feel financials are good and the primary reason is because they touch everything else. with that that's the main area
they want to be focused. they are going to get such a break in the tax rate and they were a late player in the game. i.t. had a tough time. when the other stocks were rallying at the end of the year, i think the i.t. sector, particularly those involved in hardware and software produced overseas. although that may be strange because of some tariffs, but they will get a chance to repatriate. maria: somebody has got to fund this sufficient. these private-public partnerships, that's going to be the banks. gary: financials and technology? >> we are getting back to what j.j. said, it's interesting, i learned preparing for the show today, the first february of a new presidential cycle, new administration, 80% of the time
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gary: it's week one but president obama is take big steps in his vision to rebuild the american economy. maria: one was the with montreal from the trans-pacific partnership called tpp. i spoke with the ceo of fedex. a back away from trade. >> the united states may cut off from trade would be like trying to breathe without oxygen. it's an essential part of our economy. the decision to pull out of tpp is unfortunate because the real beneficiary of that is china. the real opportunity is to get china to take down their barriers for american goods. maria: we are back. your reaction to that. one thing he mentioned was 80% of purchasing power for the world is outside of the united states. >> absolutely.
i believe that's something we have to keep in mind. when i hear about some of the things being proposed. politics is about negotiation. and some of these things could be said to be bargaining chips forther things. obviously the tpp, when have gone the out of that deal. so that's not a bargaining chip anymore. the president is a pragmatic man. you have to understand we still need a lot of these trading deals. gm, 48% of their sales are done directly in china. you can't cut that pipeline off. gary: if you weren't watching you were missing in the morning. i sat and listened to frank smith and we talked about this off camera. isn't it crazy how the market seems to not be impacted by any of these things that could
create potential trade wars. why is all of this being overlooked? >> i think people are believing the president and his optimism and his views, and you know, the first half of the trump rally where we saw everything go up since the election has been great for the investor. also, there will be volatility. the second half of this rally will be sector-specific and company specific. active management will be key on when to give in and what to buy. >> one of the issues is people are focused more on the other parts of the economic plan like the tax reform plan. and the rollback of regulations. gary, how many times have we heard from ceos that businesses are so focused on compliance, regulation. they have been spend their time, money and energy on rule making. now they are feeling like the shackles are coming off.
maybe i'll take that business i was hoping to do off the shelf. gary: when you are sitting down as a ceo, it's new initiative dollars. if you don't have to spend them on beefing up your regulatory department in terms of legal compliance. you can do it on new initiatives. you said technology and finance. where are the areas you see the fastest growth as a result of the economy in all of these changes taking place with the administration? >> two things. finance because it touches -- they touch everything. one area that will grow quickly, it's interesting -- gary: it's not just regulatory relief. you see growth. >> for what you just talked about, companies are going to look to expands. they will need money. we are in a sweet spot for them right now. the pipeline sent a message and it was we'll take the shackles off.
we'll let you go out and invest. even if we continue on this course of rate hikes. money is still really cheap. we are in a really sweet spot for the next couple years for these financial services companies. it will be cheap to borrow money and it's a different environment. it's interesting with the pipeline, some of the statements the president made around employment, he's got momentum. some of the things may not even have to be enacted. right youth moan men actual of ceos trying to move jobs back to the u.s. when you have got it, you have got to keep pressing and pressing. it's like in sports, et cetera. hopefully the momentum will continue. gary: i want to ask about the pipeline business. what happened with keystone and dakota * this week, how do you have guys read this in terms of investing in the pipe shine companies. >> we are very positive on the
pipeline space. we are pro energy. we like the energy in general but that's very broad. if we were to picks a sector within energy, mid-stream pipe lines is where we would put our money. >> announcer: week one of the new administration and trump's america first agenda is already taking shape. high on his to-do list is making cars in america again. >> we are excited about working together with the president to create a renaissance in american manufacturing. this is the silverado special edition. this is one gorgeous truck. oh, did i say there's only one special edition? because, actually there's 5. aaaahh!! ooohh!! uh!
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>> he's look for policies that will spoke investment here in the united states. we said we would continue to do our part to drive economic development here in the u.s. maria: that was ford correct to mark fields talking about president obama's pledge to bring jobs back to america and discourage automakers from sending jobs out of the country. gary: he also had a productive, positive meeting with union leaders. tom sullivan and dagen mcdowell. union leaders come together white house and come out thrilled with the republican president. >> i think the union leaders got some religion during the election because leadership backed hillary clinton and many union leaders went for donald
trump. these are jobs that have been lost in the america not just last 8 years, but literally over decades. these were safe, secure jobs that gave people pensions and a fulfillment in life. that's number of one. but trump, in one of the many executive orders that he got done in his first week, he green lights the keystone pipeline. the unions have been clamoring for that. and it fell on deaf ears. but no more. maria: friday he said it's all about jobs. i said it's interesting to see you supportive of the president. he's a republican and you always think about democrats when it comes 0 unions. but trump is singing their song. he's talking about higher wages. tom: they are saying they moved
into our curb. that was our story. now they have to come up with something new. dagen: i want trump to focus on all jobs rather than focusing with carrier, union jobs, the auto makers union jobs. a ondoesn't have to be tuneonized for it to be a good one. tom: the jobs that have been created the last 8 years were bartenders and waiters. so you have need those average earnings to go up. unless you get that going up, those are the people that voted for donald trump and they will be looking for good-paying jobs. gary: we had 20,000 on the dow this week. j.j. and hollywood talking about the market enthusiasm.
everybody seems to be enthusiastic. there are very few bears, center few negative players in the stock market. you have been around and seen this for a long time. does that concern you? >> no, not at all. i think people are reassessing what it means into vest in america. when you have buy a treasury you are loaning money to the federal government. are you happy with the way the federal government is spending the dollars you are lending uncle sam? when you buy stock you own shares in 500 companies that make america great. i think that's part of what's going into the next four years. tom: i have a concern. i don't even know what today was. but how long has it been since we have had a good 10% correction? we are way overdue. so the market -- that will be the real test.
if you are looking at a 5-10 year investment horizon, there will be a pullback and there will be a correction. when that happens it will be interesting to see how everyone responds to what donald trump is doing. dagen: you buy and then you could just power right through it. if you are positive about trump you are not investing for the next six months. you are investing in america's future. tom: i was a retail investor for 30 years. that's what you ask people. i'm telling you people get brave until it happens. when it happens, they are on your phone calling me. gary: the whole premise of the show and the history of this promise you have to think past those corrections.
if you bring up the chart of the s & p 500. you have had dramatic changes. maria: for a little while it was a show-me market. he begins office and he's doing all this work. he's getting to work. so i think it's all about earnings. earnings in the first quarter expected to be 11% to 13%. when did you see profits up in the double digit. dagen: if the estimates come in higher than the market, if those earnings estimates keep going up, the market doesn't look as expensive. gary: dagen, you are not always so bullish. i think the viewers are hearing that. maria: she doesn't like labels. dagen: deep down i don't like loaning money to the federal government.
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>> i'm very capable of changing to anything wants to change to. down* i'm sick of both these people and sick of thege of the. most of what they will do will be bad. the best comes from the private sector. but people look to government. they think it's sharing. so when people propose better, private solutions, they get