"MAKING MONEY".
♪.
CHARLES: AFTER A MONSTER RUN
STOCKS NATURALLY MOVING SLIGHTLY
SIDEWAYS TODAY.
THEY'RE HIGHER.
MAKE NO MISTAKE.
FEELS LIKE THERE WILL BE A
ANOTHER HUGE MOVE VERY SOON.
THE BIAS IS TO THE UPSIDE.
WE'LL TAKE OUR CUE FROM BIG WEEK
OF EARNINGS DATA.
ALL TIED INTO THE AMERICAN
CONSUMER.
WE'LL HAVE EARNINGS RELEASES
THAT WILL WRAP UP THE ENTIRE
EARNINGS SEASON WHICH IS NOT
ONLY BETTER THAN EXPECTED.
THIS IS THE MOST IMPORTANT
POINT, FOLKS, THEY MOVE STOCKS
HIGHER IN A BIG WAY.
THEY CAUGHT WALL STREET
FLAT-FOOTED.
I WANT TO BRING IN ERIN GIBBS,
FIRST TRUST ADVISOR CHIEF
ECONOMIST BRIAN WESBURY.
ERIN, LET ME START WITH YOU.
LAST WEEK ALL I'M READING ABOUT
ALL OF SUDDEN MUTUAL FUNDS ARE
DIVING INTO THE MARKET, HEADING
OUT OF CASH, HEDGE FUNDS
CHANGING THEIR OUTLOOK,
WALL STREET SAYS GO INTO
CYCLICAL NAMES.
THE ECONOMY IS BACK, NO TALK OF
RECESSION.
I'M NOT SURE WHY WALL STREET HAD
THE EPIPHANY SO LATE BUT THEY'RE
HAVING IT.
>> WE HAVE ALL FINALLY COME TO
ACCEPT THIS IS THE TINA
ENVIRONMENT.
THERE IS NO ALTERNATIVE
ENVIRONMENT.
THAT YOU SHOULD NOT BE IN CASH.
YOU SHOULD REALLY BE IN U.S.
STOCKS.
IT IS YOUR BEST BET PARTICULARLY
LOOKING AT 2020.
I THINK WALL STREET IS REALLY
JUST WAITING FOR CONFIRMATION OF
WHAT WE WERE EXPECTING FOR 2020.
WITH THE Q3 EARNINGS, WE GOT A
BETTER SENSE WHAT WAS GOING ON.
SO NOW WE'RE REASSURED.
WE'RE ALL-IN.
BETWEEN, YOU KNOW, MORE
STABILITY OUTLOOK ON FED RATE
CUTS AND EARNINGS, THIS IS GOING
TO LOOK GOOD.
IT LOOKS GOOD FOR THE NEXT 12
MONTHS.
CHARLES: BRIAN, TO THAT NOTE,
INTERESTING THAT JAY POWELL MET
WITH PRESIDENT TRUMP AND SOME
KEY ADVISORS.
LAST WEEK HE WAS ON CAPITOL
HILL.
HE TALKED WITH CONGRESS BOTH
TIMES.
I NEVER SAW A MORE CONFIDENT JAY
POWELL IN THE ROLE YET.
HE WAS NOT ONLY CONFIDENT BUT
CHASTISED AND COLLIDED CONGRESS
TO DO THEIR JOB.
HE TOOK A VICTORY LAP.
HE MORE OR LESS ASSURED US, THIS
IS GOOD, WE'LL BE IN A GOOD
PLACE A LONG TIME?
>> I AGREE HE WAS CONFIDENT.
I AGREE HE SHOULD CHIDE
CONGRESS.
HERE WE ARE IN THE 11th YEAR
OF AN ECONOMIC RECOVERY AND WE
STILL HAVE A TRILLION DOLLAR
BUDGET DEFICIT.
EVEN JOHN MAYNARD KEYNES IS
ROLLING OVER IN HIS GRAVE.
HE BELIEVED IN DEFICITS, NOT IN
THE 11th YEAR OF A ECONOMIC
RECOVERY.
HOWEVER, I WOULD LOVE TO KIND OF
TELL YOU THAT I DON'T THINK THE
FED NEEDED TO CUT RATES TO GET
THIS RALLY GOING.
I BELIEVE THE FOURTH QUARTER OF
LAST YEAR WAS A CORRECTION.
IN THE MIDDLE OF THAT CORRECTION
WE WROTE A PIECE.
WE EXPECTED THE S&P TO HIT 3100.
IT IS OVER THAT NOW.
WE EXPECTED THE DOW TO HIT
28,500.
I THINK WITHOUT THE BOEING
PROBLEMS AND 737 MAX WE WOULD BE
THERE TODAY.
AND SO THIS IS FOLLOWED OUR
SCRIPT.
I DON'T THINK, REALLY, THAT WE
NEEDED THOSE INTEREST RATE CUTS
IN ORDER TO GET THIS.
WE WERE NEVER GOING TO HAVE A
RECESSION BUT WITH THOSE CUT, IT
MAKES IT EVEN MORE CERTAIN THAT
NEXT YEAR IS GOING TO BE A
GROWTH YEAR.
I THINK THAT IS WHAT THE MARKETS
REALIZING.
CONSENSUS EARNINGS ESTIMATES
RIGHT NOW ARE FOR 10% GROWTH IN
EARNINGS.
NEIL: RIGHT.
>> WE ALL KNOW THOSE CONSENSUS
ESTIMATES ARE TOO LOW.
I'M LOOK FOR 12 TO 15% EARNINGS
NEXT YEAR.
CHARLES: ERIN, WALL STREET SAYS
THE COAST IS CLEAR BUT THE
MARKET IS AT ALL-TIME HIGHS AND
THIS HAS CREATED A DILEMMA
PARTICULARLY FOR FUND MANAGERS
THAT WERE SITTING ON THEIR
HANDS.
WE'RE SEEING A LOT OF BUYING IN
NAMES THAT HAVEN'T MOVED.
THEY CALL THEM VALUE.
SOME SAY GO WITH THE VALUE
NAMES.
CYCLICAL NAMES ATTACHED TO THE
ECONOMY BUT HAVE BEEN BEATEN
DOWN.
AND THIS WEEK WE GET A GOOD
SENSE OF THAT.
WE GET A LOT OF RETAIL EARNINGS.
FOR SOME REASON ON LAST WEEK,
MACY'S AND GAP STORES WERE AMONG
THE TOP 10 WINNERS LAST WEEK.
EVERYTHING ELSE THAT WAS UP LAST
WEEK WERE UP ON EARNINGS.
SO, I MEAN, IS WALL STREET IN A
DILEMMA THEY'RE GUESSING, TRYING
TO GUESS?
PEOPLE WATCHING THE SHOW, SHOULD
THEY TRY SHOULD THEY ROLL THE
DICE ON STOCK LIKE MACY'S WHICH
HAS BEEN UNMITIGATED DISASTER OR
GO WITH PROVEN WINNERS?
>> WHEN IT COMES TO THE BIG BOX
RETAILERS, I STILL THINK THERE
IS A LOT OF CONSOLIDATION THAT
NEEDS TO HAPPEN IN THE SPACE.
YOUR NORDSTROMS, YOUR MACY'S.
I'M NOT READY TO JUMP ALL IN.
WHAT I'M MORE SECURE IS
COMPANIES LIKE WALMARTS,
TARGETS, PUT HEAVY, HEAVY,
SPENDING INTO IMPROVEMENTS,
E-COMMERCE, EXPANDING THEIR
FOOTPRINT INTO GROCERIES, OTHER
BUSINESS LINES.
THESE TYPE OF RETAILERS AS WELL