Stocks jumping, companies warning
Who should you believe?
- Duration 9:07
- Date Sep 22, 2012
Who should you believe?
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It's a new battle Royale over the economy yeah -- -- President Obama and governor Romney.
Between -- and big business stocks jumping.
Pointing to her recovery but major companies like that -- Intel and more warning they don't see things improving so which one should you be listening to answer could decide who wins the election.
Hi everyone I'm Brenda -- this is Bulls and Bears -- I can't let -- that bears his weight.
Kerry -- Smith Tobin Smith Jonas Max Ferris along with Jim what campaign Julian Epstein welcome to everybody -- Jim.
Who -- right about the economy the soaring markets -- skittish businesses.
Well big business is right about the economy and the like you can believe them or not but they have no incentive to tell you that things are bad it doesn't help their stock prices what's really happening here though if you look at the data points -- economy is slowing down.
New orders going down our trading partners are going to have manufacturing going to happen.
If planet friends are not improving so you listen to big business but here's the -- here's the change.
Bad economic news right now means good things for the stock market the stock -- not saying the economy's recovering.
They stock market is saying we're gonna get more stimulus from general bad.
More stimulus for Mario drug -- more money and that's what's driving stock -- not an expectation of an economic recovery.
Because those are all the central bankers are printing money and pumping it into the economy and I hope.
Making the recovery pick up but but tell the I would worry about looking at.
Individual businesses because individual things drive them and it may not be a good read on the entire economy.
And you worry correctly because if you look at -- as Intel will be Intel's reported lighted numbers why because of their butts kicked by tablets.
That's not -- economic indicator look at real economic indicators might favor one by the way is container board Jim.
The letter -- table which is stuff you have to put it debate stop it -- stuff.
So -- that's yeah yeah.
Number is up -- -- big -- autos are up.
Oil production is up job market is not up -- that -- Nothing really to do with this rip roaring or not economy that has to do with the fact we have six million jobs available the United States that can't be felt -- Dick Clarke tried the labor doesn't required meet the requirement.
We our economy is slowly getting better it's slowly getting better because housing is now getting better sort of that's the fact and it could be -- barn -- but it's not go -- We'll just let's look at the markets again Wall Street is called a leading indicator which is a fancy economic term for saying it looks ahead it basically does think it goes up before the economy goes up so what what does that -- -- bigger than any data -- people we've market rewards because again for closing their house than living color boxes on the street doesn't is it -- our -- are.
I thought am I will say companies to the other guest on publicly credit -- companies like you listen particularly like to lie about.
The state of the economy if -- earnings -- -- that's they don't have to take the blame themselves for the bad earnings he can't always go by what they say.
Also say companies in 07 before the death spiral the economy were very optimistic.
Thanks for making loans they didn't -- problems -- -- can always go by those service the stock market however is not perfect -- -- the most perfect lean economic indicator because.
It almost always starts to slide.
At or near or before the peak there in a business cycle and I we hardly ever had a recession with a market was down at least 10% before when they look back and say well he -- peaked at that point.
And -- that is not the case now we have definitely not entered a recession if you look at the stock market.
Gary be looking at the stock market your -- very famous for that in fact we call you the -- and because you look at charts you look at overall trend.
What is the stock market telling you about the economy is it going -- is it going down as a going sideways.
Well if you believe that the stock market is as you say a leading indicator you would think.
That the economy is going up I am not convinced I think that the the coordination.
The core relation between the the economy and the stock market is always tenuous.
At best the things I look out for the economy and -- state clearly that I'm.
Squarely in the middle -- I think the economy is -- -- moving sideways I think would been moving -- the things that count look unemployment.
You know we talked before is.
Inching down but it's still I think anyone would admit.
It's still a super high -- is a lot higher than the Obama administration thought it was going to be at this point.
And it's a lot higher than -- -- once at this point even that the ones that are the biggest admirers of the current administration.
The second thing is disposable income it is inching -- Right when you have a dollar more in your pocket now they need get back in 2008.
-- Watson spent and.
Finally I think Tony mentioned housing prices housing -- are inching up but the fact is unless you bought a house before 2000.
You haven't made a diamond -- what we'll look at or scary.
Well I think that you just at the smile off my face I'm very depressed but that don't.
-- I see what you're probably like the 99 and I'd say you're here and absolutely okay.
And what happened to have to -- and I want to get to the fiscal cliff and all that stuff in a minute but but -- what is on your radar screen and what is it telling you about where the economy has -- it.
What you what you looked at all of the indicators if you look at where GDP was when Obama started we were -- negative nine.
We're now forecast to be north of positive too that's an eleven point positive swing we were losing 800000 jobs a month.
Where all the forecasts now -- that will beginning at least a 100000 or more.
That's a positive 900 vermilion swing per month and jobs we were at six plus in the stock market where that's now double.
If you look at investor confidence investor confidence is up consumer confidence is up.
Home sales are up home construction is up personal debt is down.
Of course you can find a few companies like FedEx that will say.
That things aren't as good for the reasons that Jonas said put the FedEx is looking -- other things FedEx is looking up trouble in the manufacturing sector it's not are also looking at global credit.
But it is impossible to look at the data and to say that things are not improving.
OK Jim Carey pop you take a look at -- -- the united possible.
-- -- -- of course I do look earnings are going to be down quarter year over year for the third and the fourth quarter so it's not just fed acts it's all a US corporation.
Earnings are down though that's the real data points and you can talk about job improvement if you want.
The fact is more people are unemployed now -- off the -- then when Obama took office things are not getting battered the labor force participation rate.
If the lowest that it's been in thirty years now are we moving north of zero.
-- -- But the fact of the matter is it's and stall speed and every time we've moved this -- in our history we've gone back into recession forget about the fiscal -- -- -- That's gonna create even -- and more problems so.
Well we probably don't really physical cliff but the point the point that I made before that you didn't respond to is that the Fed has now projecting.
That we will see GDP growth north of 2% that is not sideways they -- -- doubt that -- -- -- important alligator okay Toby.
And G-8 GDP growth of 2% what does that say about where the economy may be going well -- -- that yeah.
-- exist and that's one thing it it says is that we are recovering it also says that.
We could be at 4% if we hadn't shackled our economy with it would -- massive new laws and we're not you know go after the energy.
Business the way we could be doing you know -- -- look at the areas where we could unleash the economy we could be back at a three or 4% that's what -- present.
Ultimate payoff and it's north of to what somewhere between one point five and three record okay all right I got I got I -- to got a -- -- to get a read here.
We're not -- It is sluggish now but stocks might be anticipating growth that's we're -- could be wrong Sox have gone off before and in the market becoming ever -- along but it's very likable -- -- we're not a recession because out Stockton doing.
It would probably are going to be in a better situation in the year -- Based on the direction of stocks -- could be wrong.
We could have trouble much of -- right now that is your best guess if you use in the stock market which is more reliable and economist or serving CEOs took it last.
-- -- -- -- Well I just wanna get back to -- I just I'm -- in my head when Julian talk about how Rosie everything's our look at a real unemployment rate.
Close to 16% for -- -- that -- I got -- That's that's a cause joy of celebration there and -- -- hit the -- the government conscripts are money.
Your taxes and goes and spends on a million Solyndra -- it's -- bump -- GDP that doesn't mean there's a real growth there in real businesses and and will be putting words in my -- like that parents can I did not say Rosie I said -- tragically we're like hey -- -- -- friends are headed in the right direction OK we -- -- different I -- I -- -- Toby is kicking -- to the table because I -- say one thing.
It feels bad out there people don't have jobs say they don't haven't had confidence levels that are out.
And so incomes are down -- was Italian.
It it it says that many people in the United States are not participating in whatever growth that we're having -- and that is a fact that -- -- in comfortable okay.
Got a -- now -- are you get the last word -- all right.