Rotating From Treasuries Into Stocks

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March 13 (Bloomberg) -- Weeden & Co. Chief Global Strategist Michael Purves previews today's markets and discusses his investment ideas with Betty Liu on Bloomberg Television's "In The Loop." (Source: Bloomberg)

Year but did not see it pan out.

The flows were talked about for several years.

The great financial crisis sort of came and all the quantitative easing came in interest-rate pressure came.

In terms of the actual flows, you're starting to see real steady flows into equities.

No one really knows how much cash is on the sidelines.

Knowing from concept to reality is a very important thing.

If you look at some of the key sectors like biotech, there are fundamental arguments of why the stocks would go higher.

The rally was crazy, extremely strong.

That was ultimately because cash had to go into the stocks.

Then why don't you see yield spiked more than they have?

Good question.

At the end of 2013, people were very positioned for equities and really cynical on bonds.

There was a lot of resetting in the first six weeks of the year.

I think right now you have geopolitical tensions coming out of ukraine, the china issues -- balancing that out a little bit?

A little.

But i would expect to see pushing up of 3% of that comes about.

The treasury rally has taken a lot of people offsides and surprised a lot.

I think at some point later this spring, we get some of the economic data -- we will start to see that.


i know scarlet has been looking at another area you been watching, which is oil.

Oil is considered a risky asset, which means prices fall when we get signs the economy is not growing as fast as estimated.

But demand for crude and oil products is said to be dropping seasonally because of frigid cold weather is thankfully on its way out.

Expecting west texas intermediate to fall in the near time, right online with a two-year average.

Almost a 10% correction from its high this year.

The story a strong growth will lead to supply.

You disagree?

I don't disagree with that, but i do think one of the concerns i am focused on from a macro perspective is if we do get a spike in geopolitical risk premium in oil, brent, not wti, that can weigh --you can see the price go up, particularly, in japan, once the yen starts to weaken again, i'm concern on the macro side.

Wti is a u.s.-specific phenomenon.

You have to watch it carefully.

Michael, what are your stock x -- one of your stock picks is zynga.

Julie has been digging deeper into the online gaming company.

It has had a nice bounce back and people have been betting on a turnaround fueled by the ceo who came over from microsoft.

In part, the company and the shares have rallied after the company announced staff cuts and that it was buying a mobile app company.

Part of the bed does have to do with the migration of -- part of it does have to do with the migration of mobile, gaming on mobile.

The chart looks great, but if you go back to the ipo of zynga, it doesn't look so great, does it?

It is still way below.

The concern remains, even though you are bidding on a turnaround, many folks are betting on a turnaround, the concern remains are people still willing to pay for those extrasv in a game like farmille whether mobile or on the web?

There has been less willingness on the part of consumers to do that as gaming has evolved.

What about the changing pace?

Just to be clear, i'm not writing on zynga perse.

What is interesting and stocks like zynga or the energy space is this market is expensive and investors are coming in with capital to allocate and they need to find interesting turnaround stories like zynga.

It zynga can execute, you will see -- the stocks will go up.

You will see a lot of cash going into those markets.

There is no shortage of turnaround stories right now in corporate america.

Thank you for joining us, michael.

Coming up, republican senator mike crapo is a busy man.

He is about to question stan fisher.

First, he joins me on "in the

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