MARIA: WELCOME BACK FUTURE
SEARCHING FOR DIRECTION AS WE
LOOK AHEAD TO BE GOOD ECONOMIC
DATA THIS MORNING WE HAVE
8:30 A.M. AND THE FED MINUTES
OUT LATER TODAY, THE PMI
PURCHASING MANAGERS INDEX
IMPORTANT WINDOW INTO
MANUFACTURING OUT OF 945 THIS
MORNING, JOINING ME AHEAD OF ALL
OF THE COMMONWEALTH FINANCIAL CHIEF INVESTMENT OFFICER BRAD
CHIEF INVESTMENT OFFICER BRAD
MCMILLAN WHAT YOU EXPECTED ON
THE SHORT HOLIDAY WEEK.
IT’S BEEN A GOOD NOVEMBER FOR
STOCKS, DOW INDUSTRIAL% DO YOU
THINK THAT HAS LEGS GOING INTO
YEAR END?
>> I DO THINK THAT HAS LEGS.
WHEN YOU LOOK AT THE TYPICAL
CLAUSE RALLY WHEN YOU LOOK AT
THE FEAR THAT WE HAD AROUND A
WHOLE BUNCH OF THINGS ESPECIALLY
INFLATION AND WHEN YOU LOOK AT
THE FACT SOME OF THE NEWS SEEMS
TO BE GETTING BETTER BUT LESS
WORSE I THINK WE HAVE SOME LEGS
GOING FORWARD.
MARIA: WHAT YOU WANT TO LOOK AT
IN TERMS OF GROWTH WE HAVE THE
FMO IN C MINUTES COMING OUT THIS
AFTERNOON AT 2:00 P.M. FROM THE
NOVEMBER MEETING.
INVESTORS ARE EXPECTED A 50
BASIS POINT HIKE AT THE FED’S
NEXT MEETING THE FINAL MEETING
OF THE YEAR NEXT MONTH 13th
AND 14th HOW DO YOU SEE RATES
GOING HIGHER IMPACT TO THE MACRO
STORY AND THESE MARKETS.
>> IS GOING TO BE A QUESTION OF
WHAT WERE DOING VERSUS
EXPECTATION AND WE HAD COMMENTS
FROM FED GOVERNORS SAYING WERE
PROBABLY GOING TO SLOW IT DOWN A
BIT SO THE REAL QUESTION FOR THE
FED MINUTES IS GOING TO BE ARE
THEY THINKING ABOUT 15 OR GOING
SLOWER THAN THAT.
RIGHT NOW WERE CLEARLY
AGGRESSIVE HIKING PRICED IN AND
IF WE SEE ANY BACKOFF THAT COULD
BE A REAL TAILWIND BECAUSE AS I
SAY NOT NECESSARILY GOOD BUT
LESS BAD.
MARIA: WE SEEN AN IMPACT OF
THESE RATES, LOOK AT HOUSING 7%
MORTGAGE RATES HAS CREATED
MASSIVE DISLOCATION AND WITH AN
INDUSTRY YOU HAVE LAYOFFS,
LAYOFFS SLAMMING BIG TECH HP
IT’S CUTTING FOR - 6000 JOBS
GLOBALLY OVER THE NEXT THREE
YEARS THE STOCK IS UP 1.5%
GOOGLE PREPARING TO LAY OFF
10000 PEOPLE THEY ARE SAYING
THESE ARE THE POOR PERFORMING
EMPLOYEES THE STOCK IS FLAT RIGHT NOW AND WE SEEN OTHERS
RIGHT NOW AND WE SEEN OTHERS
WITHIN TECH, YOUR THOUGHTS ON
THE LAYOFF, IS IS GOING TO GET
WORSE AND 23?
>> A TICKET GOING TO GET WORSE
AND TECH THE REASON TECH IS
COMING OFF A MULTIYEAR RATE RUN
LEAVE AND HAPPY ENORMOUSLY
SUCCESSFUL AND THEY HAVEN’T BEEN
FOCUSED ON PRICE CUTTING, WHEN
TIMES GET TOUGHER YOU HAVE TO
TIGHTEN YOUR BELT.
FOR THE BROADER ECONOMY WERE NOT
SEEN THE LAYOFFS AT A LEVEL THAT
WOULD AFFECT THINGS WERE SEEN
LEVELS AT NORMAL LEVELS THIS IS
A SECTOR OF THINGS, THIS IS
ABOUT AN ADJUSTMENT AND NOT
SOMETHING WORSE.
MARIA: JAMES JUMPING, BRAD IS
HARD TO BELIEVE THE FED IS GOING
TO STOP HIKING UNTIL RATES ARE
AT LEAST HIGHER THAN INFLATION
ARE YOU EXPECTING A PLUNGE IN
INFLATION OVER THE NEXT MONTH OR
TWO OR THREE?
>> FIRST OF ALL I THINK THEY
WILL KEEP I COME OF THE QUESTION
HOW FAST BUT I DO THINK WE ARE
SEEING INFLATION ROLLOVER, IF
YOU LOOK AT ALL THE COMPONENTS
THEY’RE STARTING TO BE DOWN,
ENERGY IS SUBTRACTED FROM INFLATION OVER THE PAST SEVERAL
INFLATION OVER THE PAST SEVERAL
MONTHS BECAUSE YOU CAN SEE RENT
THE BIGGEST PART OF SERVICES
COMING DOWN GOOD THERE AND
DEFLATION IN SOME CATEGORIES.
WE’RE GOING TO SEE A SIGNIFICANT
ADJUSTMENT NOT JUST BECAUSE
THINGS ARE GETTING LESS BAD BUT
ALSO BECAUSE THE YEAR ON YEAR A
LOT LESS BAD THAN THEY WERE A
YEAR AGO.
MARIA: YOU WANT TO BUY STOCKS
HERE BRAD?
>> I’M OKAY WITH BUYING STOCKS
BUT I WOULD BE CAUTIOUS WE DON’T
KNOW WHERE INTEREST RATES ARE,
I’D STAY DEFENSIVE, CONSUMER
STAPLES ARE GOOD PLACE BECAUSE
AVERAGE PERSON IS GOING TO
CONTINUE TO WORK AND SPEND I
THINK HEALTHCARE IS A CONTINUING
GROWTH AREA.
I’D BE CAUTIOUS BUT I’D BE IN