LIZ: THE STAGFLATION ALARM BELLS
ARE SOUNDING AFTER BANK OF
AMERICA GLOBAL RESEARCH CONDUCT
ED A SURVEY WITH
INVESTMENT FUND MANAGERS THAT
FOUND 77% OF THEM SEE THE U.S.
ECONOMY TRENDING
TOWARDS STAGFLATION THIS YEAR.
THE MAJORITY POLLED IN THE
SURVEY SAY THAT THE U.S.
ECONOMY IS BELOW
LOOKING AT BELOW-TREND GROWTH,
THAT BE STAGNANT GROWTH, AND
ABOVE-TREND INFLATION, RISING
PRICES.
SQUISH THEM TOGETHER YOU’VE GOT
STAGFLATION.
NOW, WE KNOW THAT INVESTORS HAVE
BEEN WORRYING ABOUT GROWTH,
RIGHT?
NOW THE 10 YEAR YIELD AT THE
MOMENT IS SHOWING A LITTLE BIT
OF A FLIGHT-TO-QUALITY HERE A
LITTLE BIT OF A FEAR TRADE AT
2.757%, SO THE QUESTION BECOMES,
ARE WE ON OUR WAY TO STAGFLATION
, ARE WE ALREADY
THERE, OR SHOULD YOU JUST RELAX
IT’S GOING TO BE SOMETHING
DIFFERENT THAT ONE OF OUR GUESTS
TODAY CALLS SLOW-FLATION.
LET’S BRING THE RIGHT GUYS IN,
JOINING ME IN A FOX BUSINESS
EXCLUSIVE ARE THE MURRAY BROTHER
S UBS FINANCIAL SERVICES
MANAGING DIRECTOR JONATHAN
MURRAY AND RETIRED CAPITAL GROUP
COMPANIES AND AUTHOR OF "TWO FOR
THE MONEY" DAVID MURRAY.
DAVID WHERE ARE WE YOU GET TO
START FIRST.
>> WE’VE GOT A DOUBLE WHAMMY,
LIZ.
THIS IS PROBABLY THE BEST WAY TO
REPRESENT WHAT’S IMPACTING
CONSUMERS RIGHT NOW.
THIS IS A RECEIPT FROM OUR
BREAKFAST THIS MORNING.
LIZ: HOW MUCH?
>> GUESS.
>> SCRAMBLED EGGS, BACON, TWO
ORANGE JUICES AND ONE POT OF
COFFEE THAT WE SHARED.
>> NEW YORK.
>> $163.
LIZ: WAIT, WHEREIN NEW YORK?
GO TO DUNKIN’.
>> NICE HOTEL.
>> $163 FOR BREAKFAST TO
WHETHER IT’S UBER, AIRFARE,
RENTAL CAR, THE CONSUMER IS
GETTING HIT, SMALL BUSINESS IS
TAKING THEM ON THE CHIN TOO.
LIZ: OKAY, ARE WE, OKAY, BUT ARE
WE --
>> RETRENCHING.
LIZ: ARE WE STAGFLATION?
>> WE’RE GETTING THERE.
I’M THINKING WE’RE GETTING THERE
ASK CONSUMERS HOW THEY ARE
FEELING AND THEY AREN’T GOING TO
SAY INFLATION IS ONLY 8%.
IT’S A LOT HIGHER.
LIZ: YOUR BROTHER JONATHAN DOES
NOT AGREE.
>> I HAVE TO GIVE CREDIT TO MY
EMPLOYER, BUT OUR VIEW IS THAT
WE WILL NOT FALL INTO A
STAGFLATION SITUATION,
UNEMPLOYMENT IS STILL REALLY
REALLY POSITIVE UNLIKE THE 70S,
REMEMBER IN THE 70S, LIZ,
UNEMPLOYMENT WAS EASILY IN THE
DOUBLE-DIGITS.
UNEMPLOYMENT TODAY IS ALMOST AT
RECORD LEVELS 3.6% OR SO, SO WE
DO NOT THINK WE’RE GOING INTO A
STAGFLATION.
WE DO THINK INFLATION IS WITH US
, AND COULD BE HERE STICKY FOR
A WHILE, BUT IT SHOULD BE
SLOWING DOWN, SO A SLOWFLATION
ENVIRONMENT.
LIZ: I MEAN, DAVID, YOU’RE
BASICALLY SAYING ANYTHING THE
FED DOES IS NOT GOING TO
WORK, AT LEAST IN THE SHORT-TERM
>> I’M SAYING HOPEFULLY THE FED
ISN’T GOING TO HAVE TO BE AS
AGGRESSIVE AS THEY’RE
EXPECTED TO BE, BECAUSE THE
ECONOMIES GOING TO BE
SLOWING DOWN ON ITS OWN.
ASK ANY SMALL BUSINESS OWNER.
RIGHT NOW WE KNOW THAT SMALL
BUSINESS OWNERS EMPLOY 90% OF
BUSINESSES OUT THERE, THEY ARE
HARD PRESSED DEALING WITH LOWER
SALES AND HIGHER COSTS, AND
THEY’RE WORRIED ABOUT THEIR
BOTTOM LINE.
>> MARGINS ARE A KEY ISSUE BUT
LOOK AT HOME DEPOT’S REPORT MUCH
BETTER THAN TARGET’S SO I THINK
CONSUMERS, THEY’RE FEELING THIS
INFLATION NO DOUBT ABOUT IT
BUT THEY ARE SHIFTING PRO BUYING
--
LIZ: HE’S INTERRUPTING YOU.
>> I KNOW.
>> THANK YOU, LIZ I APPRECIATE
THAT.
>> THE CONSUMERS ARE BUYING
LESS THINGS, LESS STUFF AND THEY
ARE TRAVELING.
OUR HOTEL TODAY WAS PACKED, THE
TRAIN WAS PACKED.
RESTAURANTS.
IT’S REALLY GOOD.
IT’S NOT A STAGFLATION.
LIZ: AND DAVID SORRY TO BEAT UP
ON YOU HERE BUT IN MY OPINION,
YOU’RE MISSING ONE KEY PART OF
THE EQUATION, AND THAT IS NORMAL
LY IN STAGFLATION, YOU
HAVE A LOT OF UNEMPLOYMENT.
WE HAVE VERY LOW UNEMPLOYMENT
RIGHT NOW.
>> EXACTLY.
MY CONCERN IS LOOKING FORWARD IN
THE NEXT TWO TO THREE QUARTERS
WHERE EMPLOYERS HAVE TO START
CUTTING COSTS, INCLUDING
EMPLOYEES, BUT YOU’RE RIGHT.
FULL EMPLOYMENT --
>> WE’RE GOING TO GET THROUGH
IT.
>> AND WE’RE HAPPY TO GIVE
THOUGHTS ON HOW TO GET BY WELL
IN YOUR INVESTMENT
PORTFOLIO, WHETHER OR NOT THERE
IS STAGFLATION OR SLOWFLATION.
LIZ: I WAS TALKING TO A BUNCH OF
VERY SMART CEO’S AND THEY GAVE
ME THE STAGFLATION EQUATION.
THOSE MAY DISAGREE BECAUSE IT’S
SOME ECONOMIST FROM BERKELEY
WHOSE GOING TO YELL AT ME BUT
YOU’LL HAVE STAGFLATION IF YOU
HAVE GDP, GROSS DOMESTIC PRODUCT
, LESS THAN 1.8%, AND
INFLATION MORE THAN 2%.
>> WHAT IF INFLATION IS 12%,
WHICH IS WHAT IT IS.
>> COME ON.
>> IT’S REPORTED 8% BUT UBER
COSTS DOUBLED, AIRFARE COSTS
DOUBLED.
IT’S A HUNDRED BUCKS TO
RENT-A-CAR.
LIZ: IT’S WAY WORSE.
>> MY DAUGHTER JUST MOVED TO
NEW YORK HAD HER RENT INCREASED
25%.
SHE JUST MOVED HERE A YEAR AGO.
LIZ: I WAS IN AUSTIN, TEXAS AND
BOUGHT DUNKIN’ DONUTS AND IT WAS
A SMALL COFFEE AND EGG BITES AND
IT WAS $10.
I’M THINKING WHAT PART OF THESE
TWO THINGS --
>> THAT’S AN 8% RAISE.
>> DIVIDENDS MATTER I THINK ARE
THE ONE AREA WHERE WE CAN GET
INVESTORS.
LIZ: WHAT ARE THE BIG
SUGGESTIONS AT UBS?
>> WE LOVE DIVIDENDS, WE WERE
THE DIVIDEND DUO WAY BACK WHEN
WE STARTED WITH YOU, LIZ, AND
WHAT WAS TRUE THEN IS TRUE TODAY
IF YOUR TOTAL RETURN OBJECTIVE
IS SAY HIGH SINGLE-DIGIT, LOW
DOUBLE-DIGIT, NINE, 10, 11% PER-
YEAR RETURNS AND YOU CAN
CAPTURE THREE, FOUR, 5% OF THOSE
IN THE FORM OF A DIVIDEND
YOU’RE HALF WAY TO YOUR GOAL.
>> NO MATTER WHAT’S GOING ON
WITH THE UNDERLYING STOCK PRICE
THAT REINVESTED 5% DISTRIBUTION
CAN REALLY ADD BUOYANCY TO YOUR
PORTFOLIO.
LIZ: YEAH, AND THERE ARE EFT’S
THE DIVIDEND APPRECIATION EFT
THAT WE JUST PUT UP ON THE
SCREEN AND GUESS WHAT WHILE
YOU WERE TALKING THE DOW PUNCHED
INTO POSITIVE TERRITORY.
>> IT’S THE CLAYMAN FACTOR.
>> IT’S THE MURRAY TWINS FACTOR
>> WE’LL GET THROUGH IT AND NOW
IS A GREAT TIME.
LOOK THIS IS WHAT BUYING LOW
FEELS LIKE.
IT SUCKS.
IT’S REALLY HARD TO BUY LOW, BUT
FOR YOUR VIEWERS TO AVERAGE
IN THE GOOD REALLY GOOD
HIGH-QUALITY GROWTH STOCKS.
LIZ: THAT I COULDN’T AGREE WITH
MORE BECAUSE GREAT FORTUNES ARE
MADE DURING TIMES LIKE THIS.
THAT’S EXACTLY WHAT HE’S DOING
ONLY BUYING ON DOWN DAYS.
GENTLEMEN GREAT TO HAVE YOU.
>> THANK YOU, LIZ.
LIZ: JONATHAN, DAVID SO