Here We Go Again: S&P Hits Another Record

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May 27 (Bloomberg) –- Green Square Capital Managing Director Lincoln Ellis, JPMorgan Funds Global Market Strategist Andres Garcia-Amaya and Marcus & Millchap Chief Strategy Officer Hessam Nadji discuss the S&P500 and the housing market. They speak with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Another day, another record.

How long can this continue?

It can continue as long as there are a lack of all -- a lack of alternatives.

It seems like multi-family apartment rentals and the s&p 500 continued to be the favorite asset classes.

Because where else are you going to put your money, right?

You certainly do not want to go into bonds these days.

Although the 10-year, one of the best-performing parts of the asset classes so far.

All right, so, then, people are just going to keep pouring money into equities until maybe the economy catches up enough that the fed has to pull back?

I think it is part of the business cycle.

You have to look at where you are.

We have a couple of more years, and our economy will grow a little bit faster.

We are looking at college mid to high single digit returns on the s&p. that does not sound that appealing, but when you look at the other options, back to your earlier point, that is why money keeps flowing in.

The underpinning of our overall economy right now, very much tied to the overall net worth thinking.

You follow it pretty closely.

Where do you think the housing market is right now?

Great to be on the program.

The deceleration we are seeing in prices is to be expected.

We are moving away from a distressed dominated marketplace to a more mobilized marketplace where you have fundamental demand, job creation, household formation becoming the driver of the market instead a distressed sales.

We now have foreclosures at half the rate of sales from pete thomas but more importantly, i think the recovery is sustainable because of the fact that we entered the recession with 2 million units of oversupply, and now we sit at 3.5 million units a pent-up demand coming into the marketplace, so i think the recovery is sustainable.

Is the average homebuyer able to access the capital that they need in order to buy a home right now?

That is an important component.

Twofold answer.

Clearly qualifications for loans are still very, very tight, and that is beginning to loosen up a little bit, but more importantly, the preference to rent is a very important issue.

Most apartment developers are reporting that somewhere between 25% to 35% of their demand is coming from indie nesters looking to sell victims -- empty nesters looking to sell their homes.

Remember, with 3.5 million units of pent-up demand, there's plenty of demand to go around.

We will continue to watch housing.

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


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