Dow Erases This Year's Gain Amid Global Selloff

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July 31 (Bloomberg) -- Stifel Nicolaus' Kevin Caron and JPMorgan Funds' Andres Garcia-Amaya discuss today's selloff in U.S. stocks with Trish Regan and Julie Hyman on "Street Smart." (Source: Bloomberg)

Me.

That is the question, are we now going into an environment where people see good news, four percent on gdp and a little wage inflation is kind of a good ring.

That means the fed will act sooner rather than later.

You have to take into account what is known and unknown.

Up until now there were some things expected.

There was an expectation argentina would come to an agreement that would pass through default.

When you look at the fed, the fed has talked about being lower for longer.

It has become ingrained expectation that interest rates would never change.

Now with the unemployment rate going down, going down to the lower end of the fed range and also wage pressure, which does not make sense given the context of the lax in the labor market, it does seem the market needs to think about pricing and higher interest rates and has not done it.

We always criticize the fed for overshooting.

The market overshoots, two.

Do you think it is a little bit soon -- we will see more tomorrow with the jobs report whether there is wage inflation there.

Too soon to get excited about this happening?

We think so.

If you look at history going back, usually the markets overreact of expectation of rates going up higher.

It becomes noise.

Ultimately the reason the fed is raising rates is because the economy is improving, that is good for stocks.

If the fed is raising rates because inflation is well above two percent, that is not good.

At this point does not seem to be a huge concern yet.

I will share with you a market note from someone recurrently on the show pointing out we may be in a situation where smart money is starting to get out the so-called mom and pop retail investor money getting in.

If you watch the retail inflows simultaneously happening, pe shops getting out.

That's something to be worried about right now?

I would not take that point in and of itself and extrapolate from it but i think you need to be mindful of trends in the economy.

As we see an improvement in the labor economy, that is something to celebrate, not fear but ultimately valuations to matter.

We have come a long way fast.

Be back with the close of trading right after this.

See you here.

?

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

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