Europe’s Earnings Environment Improving: Lacaille

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Oct. 16 (Bloomberg) -- Rick Lacaille, global CIO at State Street Global Advisors, discusses his outlook for European earnings and whether markets should be concerned about bubbles. He speaks on Bloomberg Television’s “On The Move.”

Global environment, about the headwind that you are seeing.

Talk to me about earnings.

A lot of these enemies like -- companies like danone -- it was a hiccup.

Should they be seeing more like emerging markets committees?

Some of them have a strong emerging-market element.

That is why they can do well even when european economies are not doing so well.

The fundamentals have got worse which is a little bit of a headwind for some of those companies.

At the same time, u.s. economy is recovering.

You have low costs in europe.

The environment is improving a little bit.

But expectations are getting ratcheted up erie are you concerned -- we are growing much quicker than he thought but if there are concerned that these companies are charging to spend before they are ready?

Long-term growth is limited by population growth.

There is going to be a short- term pop as we begin to see a bit of a recovery.

Europe has got a wider periphery than just spain and italy.

It has a wider economy that can grow pretty rapidly in the short term.

The problems are longer-term.

From an investment standpoint, you are buying at a reasonable price and you're going to see some improvement.

That improvement may continue for some time.

The u.s. economy doesn't falter too badly.

I want to get your take on the nobel prize in economics.

The recipients on monday were three guys that worked -- ursula bubbles.

Our bubbles i concerned?

Always.

Farmer really is not so much on bubbles but identifying where risk is being rewarded.

That is great for investors.

Schiller is the bubble man.

He has poked at bubbles before.

He puts a little bit of a different slant from farmer on markets.

We should be concerned about bubbles always.

People have a tendency of forecasting too many bubbles.

He has provided a great methodology for rationalizing why bubbles should exist and helping us to understand them a little bit better.

Are you concerned that there are bubbles at the moment?

If you use delayed even further, then bubbles will continue to form and may burst at some point.

I would be less concerned about risky bubbles.

I am concerned about safe havens being overpriced.

Overpriced safe havens are where you basically bleed to death.

You are afraid of risk.

You are in an overpriced safe haven that turns out not to be very safe.

London property prices.

That is a little bit close to home.

I think the very short data, they very expensive treasury securities that you find around the world that people rush into -- they can get overpriced.

One last question.

What would you not buy right now in the market?

Safe havens.

German long dated that that -- debt that appears safe but doesn't reflect long-term growth.

Thank you so much for all your time.

Rick lacaille there.

This text has been automatically generated. It may not be 100% accurate.

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