For more and the tough week, i want to bring back paul riley.
Joining us on the set as well, along with matt, michael ballack and hank smith at haverford trust.
As we went to break, you said there are a lot of reasons to be optimistic about the economy.
What would you say?
I think we will have job growth and corporate oath in earnings -- growth in earnings.
It may not be as fast as we would like.
We have a lot of money with nowhere else to go.
That makes me nervous.
All this money out there with nowhere else to go.
I have worried that we are in danger of creating an asset bubble because people feel like they have been pushed so far out on the risk curve.
People feel like they have been pushed out, and the fed is very conscious of that bubble.
I keep going back to bill dudley, where he let the air out of the tires on biotech.
I expect the fed to get -- make more comments like that.
I am with paul here.
Optimistic on stocks.
We are getting into an exciting week next week with a lot of economic data.
The ism, the chicago pmi, and the jobs report on friday.
The first quarter, which was so terrible for any number of reasons.
I am looking to see if these numbers can back up where stocks are now.
Can they catch up?
I feel optimistic.
The trend has been better to the point where i turned the corner on u.s. growth.
What do you think about the fed jawboning an earlier than expected rate increase?
People read so much into the board.
I don't think they have the wherewithal to raise rates yet.
They would never admit it, but they are concerned about prices.
They are concerned they have blown up asset prices too much?
Eventually they will, light go back a year.
Ben bernanke was talking about tapering.
It turned out to be the right thing to do, but it made yields go up and you merging markets go haywire.
The fed doesn't want to repeat that.
They will have this communication strategy.
What will they talk about next -- loans, credit markets?
We will see.
Hank smith, i was encouraged to see bullard say positive things about the economy and indicate that rates might move up sooner rather than later.
The kind of thing we should want to hear in this kind of environment, right?
That things are getting better?? i think so.
We have a goldilocks economy.
Not too strong that it will create the traditional excesses you might see in inventories and inflation, yet it is broad and strong enough that a recession is highly unlikely.
So look, i don't think there is also a lot of lead in this market.
There is still money going into fixed income.
Anyone buying bonds today is not expressing optimism, euphoria, confidence.
They are expressing anxiety and fear, and they are willing to earn almost nothing for the safety of fixed income.
So we are a long way away from worrying about bubbles here.
When was the last time we had them on the show?
Does that make you concerned?
Whenever you have this groupthink, so many people agree on the same outcome, is that in and of itself enough to make you nervous at all?
You absolutely worry about that when things are overpriced.
I think stocks are fairly priced.
Everyone is worrying about an interest rate rise.
What happens if short-term rates go up?
Banks and other institutions make more money.
Investors start having cash flow to retire.
People go get homes because they will get off the fence to avoid a higher mortgage.
When rates go up too high, it is a problem.
But when they go up a little bit -- a really good point.
Here's the thing.
I can remember before all hell broke loose in 2008, being pretty concerned.
Going back a year before, and starting to feel nervous.
Six months before lehman went down, feeling really nervous.
To the point where there were voices -- it almost feels like we could be in a 2006-ish type of environment where everyone is, it is good for the for siebel future.
Who knows -- foreseeable future.
Maybe the next 15 months ago.
Look to were three years ago it was nothing but bearish and worrying about macro concerns.
There is more balance here, and i go back to looking at what people do with their money.
Not just how they respond to polls and surveys.
What they are doing with their money does not reflect bullishness yet.
What a goes down to, trish, julie, a goes down to -- sentim ent is positive.
I would not say it is frothy.
The bears are certainly among my clients, people i talk to.
I was recently with nouriel roubini, gary shilling -- they were all like, stocks are going up.
Who knows what is going to happen down the road, but for the for siebel future.
They are going.
I will say guys like that are throwing their hands up in the air and saying, this is so manipulated, fixed, -- does that make me more nervous?
But the bears are out there.
That keeps us awake.
Some people think a correction might be a healthy thing.
The jobs report coming out next week -- another good one?
It will be as boring as possible, in line with may.
On thursday, because next week is a holiday week.
Fourth of july.
I am in a bullish camp.
I think a pullback of 1900 on the s&p would be very healthy.
That would be the time to load up.
I don't know if we will get that, but i would love to.
The right question is, where will stocks be three years from now?
They're going to be higher.
That is investing, not trading.
We talked a lot about the idea that we are not seeing wage inflation and the same rates as other economic indicators have improved.
There has been concern about the income inequality thing.
Five years down the road, do you have a problem where 50% of americans are still making less?
Maybe they never will again, i don't know.
You have to get enough of a healthy employment rate and wages will go up.
We have a lot of people not graduating from high school in this country.
We have to do a better job in our education system.
There are plenty of jobs available, and we have to focus on education.
We are using paradigms from 2005 and perhaps earlier to think about what employment is.
That needs to be rethought and rewritten, and i think five years out i am bullish.
I see higher stocks and real assets, but a lot will go down to wages -- are they going to be able to pick up?
That is what paulis a is alluding to.
You need some strong-willed public policy to get that.
A guest from pimco the other day said the fed is in a trickle-down economics kind of mode, trying to help asset prices which then help the wealthy, which hopefully filters through to everyone else.
We do have some breaking news on blackrock.
We want to go over to julie.
I am trying to figure out exactly what to make of this.
Blackrock advisors received a note from sec staff, notice of a completed investigation.
Apparently the sec made a preliminary determination for an action, having to do with someone named daniel wright, who works for blackrock, retired in 2012. it is not clear what exactly this involves at this point, but i do know that the stock is pulling way back.
You see the headline, and as an investor you tend to get concerned.
Blackrock advisors received a notice from the sec staff.
That sets off an algorithm, right?
Forcing a sale with a computerized trading system.
Just a wells notice, and we will not know more until we hear from the sec or blackrock.
Over our euro bullish for the next 3-5 years?
Sounds like you are bullish for the near future.
I would love to see a pullback, but i am very constructive.
What is your -- i am looking for an in-line report that will be in line with may, and i think that will be enough and kind of a goldilocks-type report.
Keep moving up a little more.
Just keep grinding.
That is where it is.
Keep moving higher.
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