tv Wall Street Week FOX Business January 6, 2018 3:00am-3:30am EST
i'm jamie colby for "strange inheritance." thanks so much for watching, and remember -- you can't take it with you. night. ♪ from fox business headquarters in new york city, the new wall street week. maria: welcome to wall street week, the program that analyzes the week that was and helps position you for the week ahead. this week, a special program. a look ahead for the investment to tus of 2018 we're joined by a couple of wall street originals. he first appeared on this program back in 1978. he has predicted dow 5000, dow 10,000, dow 15,000 and dow 20,000. we're going to talk to him about 25. jason, another wall street regular has been buying into the record for almost as long.
both will join me to talk about dow 25,000 with new ideas for the upcoming year. buy ro byron is with us. plus tax strategies with a new tax code. we'll discuss important changes to make as a result of the new tax law. first the big head lines impacting everything from wall street to main street. the records keep oncoming on wall street. the dow joins industrial average had a huge week this week, cracking another huge milestone of 25,000 for the first time ever. that happened on thursday. the dow is now off nearly 7,000 points since president trump's election. that is more than 35%. the dow is up 25% year to date. and it has gained $6 trillion in market value since the election. dow dupont, ibm, general electric all helping to push the dow into new territory, above
25,000 this week. technology also a big participant continuing a strong run with all four of the so-called fang stocks hitting record highs. that helps start the year in the green in a big way. the northeast is digging out after a massive snowstorm clobber them the week. every state from florida to maine receiving snow. the blizzard conditions and well below freezing temperatures forced airlines to cancel more than 4,000 flights flights withg tens of thousand passengers stranded. oil was a big topic. the commodity rallying in the days leading up to the storm. and crude oil back up above $60 a barrel. the december jobs report on friday. the u.s. economy reading 148,000 jobs last week. that was below the estimates which called for jobs of 190,000. still a good number. the good news was wage growth is picking up, a sign that the
economy could be reaching full employment. unemployment is 4.1%. it was a solid jobs report for the economy between job growth and stock market and wages on the rise, the economy is on solid footing. but what does 2008 have for the economy and the markets? ananthony chan kicks us off on that. give me your take on the jobs number we saw on friday and how the economy is shaking out as we kick off the new year, 2018. >> well, maria, this employment report was actually pretty good because everybody is concerned that the economy will overheat, we'll have a lot of inflation and the federal reserve will raise rates aggressively. we didn't see that. wijs are rising as you indicated, up 2.5%. we got a slightly downward in the last month.
but this means no overheating. we continue to create jobs. we've had 87 consecutive months of positive job gains. that's pretty impressive. we haven't seen that in many many decades, almost 80 years that's a very good number. in terms of the unemployment rate, it didn't go down but we're still creating jobs. and one of the reasons believe it or not, maria, you were talking about the hurricanes. hurricane maria is causing a lot of people from puerto rico to come to the u.s., some suggest 250,000 have come into the united states and that means we get an additional increase of workers into the labor force. without necessarily pushing wages higher because obviously they're very anxious to get the jobs. this i they is hack chully actug and creating space for the federal reserve to continue to raise rates but not at a fast
pace to cause the economy to slow down. this is a very good report. maria: there's a lot of implications as a result of this report. you mentioned wage growth and the federal reserve. that's one of them. also the job creation that we saw. most sectors saw job creation with the exception of retail. so do you want to invest along those lines? you saw construction jobs up, manufacturing jobs up, certainly services jobses up, not retail. is that where you want to allocate money? what are you telling clients in terms of what this report means for investing? >> this report tells us that the economy is continuing to grow. we're going to see fast growth. the atlanta fed is already projecting economic growth in the fourth quawshter of quarte. that's a very very good number. we have a tax package that will stimulate economic growth this year, in 2018. that's very positive. yes, the federal reserve raising
rates subtracts a little bit. on a net by si basis it's posit. we like the technology sector. we know that regulation is continuing to go down and the financial sector. so we're very excited about the financial sector. you mentioned some of the job gains. the health care sector created 30,000 jobs with bullish on the health care sector at this time. so there are a lot of sectors out there that continue to do well. and if the economy does well, we're going to see the industrial sector, a lot of the cyclical sector wills do better. some related to rising rates will have a negative impact. like real estate, we've seen the real estate factor losing a little momentum. the defensive stocks, like the consumer staples and telecon not as exciting. believe it or not, let's not forget that the international equity markets are also exciting which we're telling our clients
to be excited about. when you look at the low markets without necessarily encountering a bear market, look at the european equity market, the japanese equity market and emerging markets, they're basically in line with what we have seen. the u.s. equity market, if you look at our market relative to the time that we haven't seen a bear market, it's 3.4 times longer. but again the fundamentals are getting better. bottom line here, maria, these other markets international seem to be a little bit -- a lot less overextended that u.s. equity markets. investors should be paying attention to those markets. maria: always a pleasure. thanks so much. anthony chan joining us there. >> stay with us, wall street week will be back. the bulls continued their stampede into the new year. can this continue? can this continue? the
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maria: welcome back. the record role for if stock market continues this week. incredible unchartered highs highlighted by the dow jones industrial average cracking the 25,000 mark for the first time ever. will the bullish ride in the black continue this year or should we expect a correction. with more now we have jason and ralph, director of technical researcher. honor to have you both on the program. good to see you both. thank you for joining us. ralph, a real honor to have you as you were really one of the originals of this program, "wall street week." how are you doing, ralph? >> doing fine. and you're doing a great job. i know lou would be very very happy with what you're doing with his old show. congratulations. maria: you and i go back a long time and i got to give you kudos here. it all started in june of 1995 with your 578-page report
entitled "dow 7,000". you called dow 7,000 when the dow was at 4,000. a lot of people said he's nuts. i don'i don't believe it. we got there, six months later you raised your target to dow 10 nows. you were so right. your firm gave you a little red corvette. you took me for a ride in that car. i remember. >> yes, we did. we went down broadway. maria: since you predicted dow 4 thois, dow 7,000, 10,000, 15,000, 20,000, let's talk about dow 25,000 which we reached this week. can this continue? >> yes, i think so. in fact, my very short term target when i did it a couple of weeks ago was 25,900. i think that's a given. but my secondary target for this year, maria, is 28,700. i think that's very doable. maria: why? what to you see out there that
makes you so bullish? >> that's a great question. it's not what's happened in the last couple of days. although impressive. it's what's happened in the last half, the second half of 2017. maria, it was such sector rotation, so powerful and so impressive, money coming back into areas that were depressed like energy, financial had done well but even doing better. there's an old ad aj that reads rotation is every bull market. i'm a momentum guy and i'm impressed. maria: jason, you have one of the best researche research shoe street. how do you see ? it? >> i agree with ralph. an old friend. good to see you. in some ways i think we're just
beginning -- a lot of people think this might be the end of the business cycle given how long the expansion has been. but in some ways it's just the bebeginning because i think central banks, while they were helpful at the beginning wound up getting in the way at the end. and i believe there are people that are po o-pooing the tax cut. personally i think it's going to be highly stil stimulative for e average person that pays taxes. and i also think for business investments. we're just getting started. chronologically it seems quite old. in my opinion we're just getting going. and i also agree with ralph. i think you're going to zeroation into the more encyclical value oriented sectors of the market. maria: i think you make a good point. the last leg of the bull market really in the last eight years was really do to easy monetary policy. there really weren't a lot of alternatives to put your money. you had to put it in the stock
market. but this time, this year we see rates beginning to go up. so monetary policy is taken away and now we've got fiscal policy driving the buck. >> and the net result of that -- the overall market might not do as well as it has, let's see, last year. but the opportunities to make money in the market i think will be greater. i think it's much better for active managers because there's going to be greater dispersion of returns. and i think you're going to see stronger companies consolidating a lot of the weaker companies as interest rates rise. it's a very good environment in my opinion for investors. maria: what about that ralph? how do you make money in this market then in. >> i totally agree with what jason just said. you know what, jason, correct me if i'm wrong. i think the market is looking beyond the next quarter or two. i think it's looking out into the end of this year and perhaps even into 2019. it's a long term view that the market is taking.
you know, the lifeline of the bull market that had in the late '90s, maria, was low inflation, low interest rates and that's what we have. that's the fertile ground for this. i love what jason shad to say. it kind of fits in with my long term feeling. as far as buying anything, i would look at stocks that haven't performed, like exxonmobil, big blue chip dow stock, hall burton, a drilling company. they'll take advantage of the strength in energy. banking stocks. i think it's just starting for companies like citi group and bank of america. i would be investing in these guys. maria: you make a great point. it's been a lot of tech that's been leading here. >> so i think people -- when economic growth is relatively low, people would pay up for growth, earnings growth and economic growth. now that economic growth will be
more diffuse, more apparent, i think investors will find growth in other sectors. and i'm very much in agreement with ralph. i think energy and financials in particular are two great place to look for financial benefit a lot from regulatory reforms and energy is going to benefit from a strong global economy. so i think the outlook is quite good. maria: thank you so much. guys, please don't be strangers. >> thank you. maria: stay with us. "wall street week" will be right back. president trump ends his first year with the bang. the most sweeping tax reform package in 30 years. so how does the donald follow up so how does the donald follow up his amazing first act?
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maria: welcome back. year two kicks off for president trump. the president ended the year on an incredibly high note economically speaking, signing the most sweeping tax reform bill in a generation into law. what can we expect in the second year of the trump administration and how does that impact our lives. joining us now is the blackstone group's private wealth vice chairman and a partner at pwc. gentlemen, good to see you. thanks for joining us. and of course this tax reform package, one of the big stories of the year and of last year. byron, we want to kick it off with you because you've got the ten surprises that you've come out with for how many years now? >> 33. maria: we've got your ten surprises. what strikes you as most important in terms of the ten surprises? where should we focus? where should we begin? >> well this economy has gone on now in the bull market, have gone on for almost nine years.
and my view is it isn't over yet. most people feel anything this long in the tooth has to run out of gas. i do think the market is vulnerable to a 10% correction somewhere along the line, maybe more than that, maybe 15%. but i think it's a correction, not a bear market mg so a correction is coming at some point? >> right. i think we're a year away or maybe more, but at least a year away from the next serious downturn in the next recession. maria: and in fact your number three surprise is the dollar finally comes to life, real growth exceeds 3% in the u.s. which coupled with the implementation of some components of the trump probusiness agenda renews investor interest in owning dollar assets. you think the dollar is strong? >> that would be a surprise. but i think that's the likelihood this year. maria: mitch, let's talk taxes for a moment. the tax package was obviously well anticipated. people were making changes amade
of it. we want to know what we need to do to best capitalize on the tax law. >> individuals or corporations. maria: let's start with individuals. >> the rates are down considerably. what would be are really interesting is to figure out how the whole pass through things works. the rules are complicated. but there are so many individuals who operate some form of a business, in addition to having a job they have something on the side and you can really get a bang for the buck if you're organized a, whether it with a partnership were llc or sole proprietor. maria: if you're in the highest nk bracket you're paying 37% but if you're a pooses through. >> that income gets a 20% haircut right off the top. maria: you've got the 20% deduction. but there are guardrails in place. >> there are. maria: -- to make sure you don't cheat. >> there are pages and pages of the guardrails. maria: you have to be a business.
>> you have to be a business. and they don't want who has wage and tries to find a clever way to characterize that as pass through income. that's what the guardrails are for. a lot of people are operating blind right now because they can't figure ow how the rules are written. maria: we've got the midterm elections coming up and yush number nine surprise is that the republicans lose control in the senate and the house in the november election. >> there are never people who think that the democrats have a good chance of taking the house but almost nobody thinks the democrats have a chance to take the senate. and i would say if the election were held tomorrow, that probably would be the case. the democrats wouldn't take the senate. but i think there will be events during the year, the mueller investigation and other things, that will cause the democrats to gain some additional momentum. and they don't need much. they just need to pick up two seats. maria: you also -- even though the economy is getting better? >> yeah.
no. look, trump has everything going for him. i mean, you could argue that trump has been a terrific president. i mean, obama struggled for eight years to get the economy growing at 2%. he's got it growing at 3%. you know, unemployment at an all-time low, lowering taxes, reducing regulation. he has -- you could argue that his first year has been -- maria: mitch, real quick on the tax tori. what other implications do you see? you and i have talked about the potential of an exodus of people in high tax states like new york. >> you're going to see that. there's been some studies that have come out talking about the home prices going down. but i do think you're going to see the continuation of the movement out of the new yorks and new jerseys, the californias into low tax state when you lose the benefit of deducting your state and local taxes. people are going to make housing decisions and job decisions
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maria: welcome back. now a look at some of the big market events coming up in the week ahead. consumer credit jolt, that's job opening, import prices and trade start the week off. later in the week we'll get the latest from the treasury on the federal budget and typical market movers like retail sales, consumer price index. another light week on the earnings front but we do get some big names because the financial services sector kicks off the quowrt quarter earnings period and that kicks off with jp morgan chase, well fargo reporting their fourth quarter earnings. that happened at the end of the week. coming up next week "wall street week" joining me, jamey diamond, my special guest. i'll be interviewing him at the
jp morgan health care conference. see you sunday morning, 10:0:00 a.m. eastern, live, catch me on fax news sunday. that will do it for us now on "wall street week." thanks for being with me. i'll see you >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real-estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now it's a different story. the american dream is back. and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip to the desert to show you how to explore the new landscape and live the american dream. i'm gonna help real people who are facing some major problems, explain the bold plans that are changing how americans live, and take you behind the gates of properties you have to see to believe. at the end of the show,