OF ECONOMICS AND FOX BASE
CONTRIBUTOR BRIAN BRENBERG.
GREAT TO SEE EVERYBODY THIS
MORNING.
LUKE, KICKING IT OFF WITH YOU
THIS MORNING, WHAT’S YOUR TAKE
ON FIRMER TONES FOR MARKETS,
EARNING SEASON WINDING DOWN, DO
YOU SEE THE BACKDROP FOR
INVESTING IMPROVING?
WE HAVE BIG NAMES REPORTING BY
THE WAY, CISCO, COCA-COLA, PEPSI
AND TWITTER.
WE WILL PROBABLY SEE THAT, GIVER
US A BIG WINDOW INTO MAKE
BACKDROP.
YOUR EXPECTATIONS?
>> I EXPECT EARNINGS TO CONTINUE
TO BE ABOVE EXPECTATIONS.
WE ARE STARTING TO SEE
VISIBILITY INTO THE SECTORS AND
STOCKS THAT WEATHER THE STORM.
EARNINGS HAVE BEEN CRUSHING IT
IN TECH AND HEALTHCARE SPACE AND
THAT’S WHERE I WOULD STAY
OVERWEIGHT.
STOCKS AM AMAZON, GOOGLE, MICROS
MAKE UP 20% OF S&P 500.
THEY KILL IT.
JEFF BEZOS WITH CLOUD SERVICES
CEO, TECHNOLOGY AND CLOUD IS
GROWING FULL FORCE AND
TECHNOLOGY IS A PLACE YOU HAVE
TO BE FOR THE FUTURE.
IN HEALTH CARE, STICK WITH
STOCKS LIKE TANDEM DIABETES,
THEY AREN’T GOING AWAY AND
PINNED UP DEMAND FOR THE
PROCEDURES AND ISSUES IN 2021.
IF YOU ARE LOOKING TO ADD ALPHA
IN 2021, STICK WITH SMALL-CAP
SPACE.
MARIA: SMALL CAP STOCKS HAVE
BEEN AREAS WHERE YOU MIGHT FIND
BETTER VALUE GIVEN RUN-UPS IN
LARGER NAMES.
WHAT ABOUT THE STIMULUS COMING,
LUKE, THAT’S GOING TO BE MORE
STIMULUS THROWN AT THE ECONOMY.
WE ARE TALKING ABOUT $5 TRILLION
IN STIMULUS JUST IN THE LAST
YEAR.
WHAT DOES THAT DO TO AN ECONOMIC
BACKDROP IN THE MARKETS IN YOUR
VIEW?
>> WELL, THAT’S DEFINITELY
PROPPING UP EQUITIES OVER THE 9
MONTHS AND I’M GLAD THEY ARE
LOOKING TO TIGHTEN ELIGIBILITY.
I DON’T THINK THEY ARE LOOKING
IN THE RIGHT AREAS.
BEST THING DEMOCRATS CAN DO IS
OPEN THE COUNTRY FULLY BACK UP.
MORE STIMULUS, HIGHER MINIMUM
WAGE AND RAISING TAXES TO PAY
FOR IT IS NOT GOOD.
GOVERNMENT INTERVENTION IS
ALWAYS A BAD IDEA.
THE SAD PART IS, THE MIDDLE
CLASS IS USUALLY THE ONE THAT
GETS BURNED AND PAYS HIGHER
TAXES.
WE NEED TO PROTECT THE GOOSE
THAT LAYS THE GOLDEN EGGS AND
THAT’S THE SMALL BUSINESS.
IF THERE’S STIMULUS IS FOR SMALL
BUSINESS.
I CERTAINLY DON’T THINK THAT’S
GOING TO BE THE CASE ANYMORE.
WE NEED TO LET THE FREE MARKETS
WORK EFFICIENTLY AND PROPERLY
AND WHEN PARTS OF THE ECONOMY
ARE SHUT DOWN, IT CAN’T FUNCTION
PROPERLY.
MARIA: THAT’S TRUE, THE SHUTDOWN
IS GOING TO CAUSE PROBLEMS FOR
GROWTH, THAT’S FOR SURE.
BRIAN BRENBERG, JUMP IN.
BRIAN: WE HAVE A FASCINATING
DEBATES AMONG DEMOCRATS LIKE
JANET YELLEN WE HAVE TO HAVE
$1.9 TRILLION AND LARRY SUMMERS
ON THE OTHER HAND SAYING WAIT A
SECOND, THAT COULD SPARK
INFLATION.
WHERE DO YOU COME DOWN ON THAT
ON LOOK?
ARE WE IN FOR INFLATION IF WE
GET A STIMULUS PACKAGE LIKE THIS
ONE?
>> YEAH, INFLATION IS A WORRY
AND SOMETHING I’M CONCERNED IN
THE LONG-TERM.
WE HAVE STIMULUS COMING OUT AND
INTEREST RATES REMAINING 0%, WE
ARE SEEING ISSUES IN THE ECONOMY
AND ESPECIALLY IN THE
ENVIRONMENT WHERE MONEY IS
ESSENTIALLY FREE TO BORROW, THE
HOUSING MARKET IS STRONG,
EVERYBODY IS BORROWING MORTGAGES
AT 30 YEARS AND EVERYBODY HAS
MORE MONEY BECAUSE OF STIMULUS.
INFLATION WILL BE RUNNING HOT,
I’M NOT TALKING 2 OR 3, I’M
TALKING, 4 OR 5 OR 6% MAYBE 10
YEARS FROM NOW.
I DON’T THINK THAT’S A CONCERN
IN THE SHORT-TERM BUT IN THE
LONG TERM, SOMETHING THAT YOU
HAVE TO ACCOUNT FOR IN YOUR
PORTFOLIO, ABSOLUTELY.
MARIA: WELL, LOOK, YESTERDAY I
SPOKE WITH SENATOR RON JOHNSON
WHO WALKED US THROUGH PRESIDENT
BIDEN’S AGENDA, HE SAID, FIRST
WAS THE SPENDING PART OF IT.
WE SAW THAT WITH $1.9 TRILLION
WHICH IS LIKELY GOING TO BECOME
LAW AND NOW AFTER THAT IT WOULD
BE REV RAISING WHICH MEANS TAX
INCREASES.
LUKE, DOES THAT CHANGE YOUR
OUTLOOK AT ALL KNOWING THE FACT
IT’S GOING TO BECOME MORE
EXPENSIVE FOR CORPORATIONS AND
INDIVIDUALS.
NOT LIKELY THE 10%.
IT’S THE MIDDLE CLASS WHERE THE
MONEY IS.
WE WILL SEE TIGHTENING OF BELTS
LIKELY BECAUSE TAXES ARE GOING
UP.
DOES THAT SLOW THINGS DOWN?
>> IT DOES SLOW THINGS DOWN BUT
NOT RIGHT NOW.
MAYBE 3 TO 5 YEARS OUT, ONCE THE
TAX INCREASES OR CORPORATIONS OR
PERSONAL INCOME TAXES ACTUALLY
INCREASE, THAT WILL HAVE IMPACT
ON THE MARKETS.
II THINK FOR RIGHT NOW THE
STIMULUS IS SO MUCH AND PUMPED
SO MUCH IN THE ECONOMY AND MONEY
SUPPLY, THAT’S GOING TO OFFSET
THE INCREASES IN THE SHORT-TERM,
NOTHING IS FREE AND WE ARE GOING
TO PAY FOR THIS DOWN THE ROAD.
AGAIN, YOU TO ACCOUNT FOR ALL OF
THIS IN THE PORTFOLIO WHICH IS
HARD.
YOU HAVE TO TUNE OUT THE NOISE
AND I DON’T THINK A LOT OF
PEOPLE ARE TAKING THE LONG-TERM
PERSPECTIVE RIGHT NOW.
A LOT OF PEOPLE ARE JUST HAVING
THE SHORT-TERM PERSPECTIVE AND
THAT’S NOT HOW YOU CAN BE IN THE
MARKETS.
MARIA: ALL RIGHT, LUKE, WE WILL
KEEP WATCHING, THANKS SO MUCH P