Reasons Behind the Surge in Equities

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Aug. 27 (Bloomberg) -- John Stoltzfus, chief market strategist at Oppenheimer, discusses the surge in worldwide equity markets and his subsequent investing strategy. He speaks with Scarlet Fu on "In The Loop." (Source: Bloomberg)


For more, i want to bring in the chief market strategist for oppenheimer asset management.

What you make of these sales ratios and the other measurements?

I've got to say, i think this is part of parcel of what we of been expecting for quite a while.

Very often, since we have been coming back, since 2009, march nine, it has a was been a question of how are we going to do it?

The job is getting done and it is accommodation of what the federal reserve has done, concerted efforts by central banks around the world, in, nation with industry -- which is working with technology, algorithms, robotics, and labor.

Which is very corporate of the terms of the cost of labor.

Moderate levels.

Things like outsourcing and re-shoring as well.

All of this in play, enabling companies to be profitable and to bump up that sales ratio we would expect going forward.

If you look at the landscape now, you're seeing the central bank diverge in terms of what the policies might be from the ucb to the bank of japan to the u.s. federal reserve, which raises the question, are investors prepared for the better be the first one to really withdraw when he see the balance sheet of the fat and the s&p run up together, they're pretty much in tandem.

Might we see some increase volatility?

I think we will see increased follow chile, and i think one of the reasons -- volatility nothing one reason is, simply any time you change the components of the equation and you start moving forward, there will be dislocations that occur.

I think the momentum is positive and i think will make it relatively smoothly than what might be expected.

Increase in volatility, very natural.

I think the offset is, inflation remains very well in check.

The real issue in europe is concerns with deflation.

In the u.s., disinflation remains an issue.

There are pockets of it everywhere.

You see more of a risk of that than inflationary pressures?

Yes, i do.

I think the big thing going forward here is to recognize that much of the jostling that we saw 30 something years ago when i got into this business as interest rates came down, we'll see jostling on the way up as interest rates normalize again.

But the rx expectations will be inflation will remain in check and primarily because labor is your major component to make inflation stick.

You can have commodity prices jump.

You could have dislocations relative to geopolitical problems.

Disrupt the supply chain.

But to make prices stick, higher prices stick for long, you need wages to cooperate.

You don't have this labor pricing.

I want to get to one of your kicks.

This company has seen six is to -- sales growth.

That is apple.

We have been talking about it not just today with this promise of a larger tablet, but also yesterday when best buy came out and said for the full year it will see sluggish sales growth.

Did not call out the iphone 6 by name, but the ceo did sort of hint at the idea that maybe the iphone 6 dement isn't going to be as high as anticipated because everybody are he has a phone.

And in many cases, pretty late edition phones.

They're happy with them.


Do you think that is a risk for apple at this point?

I think invariably risk lies aside, besides opportunity all times, but in this case, i love funny feeling that larger screen , whether it is going to be on the iphone in a few weeks or if it is going to be in the ipad in a few months, i think it is a big thing.

Generationally, it falls in a sweet spot for us baby boomers.

I can't wait.

I will actually graduate from a blackberry to apple iphone within the next couple of months.

By necessity.

You are still on a blackberry?

Yes, ma'am.

The bigger question of the day -- why is he still on a blackberry?

I asked that, too.

Thanks so much, john.

Great to see you.

Cheap management strategist at oppenheimer -- chief

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


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