The chief equity strategist at wells fargo.
Even you would admit that we are at the levels -- some people feel valuations are stretched.
Some strategists say look, the party is over in stocks.
One of them is the barclays chief equity strategist.
I want to read his report that came out -- he said we believe u.s. equities are transitioning out of a recovery rally and into a period of lower returns as the benefits of margin expansion and share repurchases through to the president -- proved to be priced in and the return to revenue growth becomes a prerequisite for another remaining higher.
Would you agree?
I do not think the party is going, and the champagne is not god.
The fizz comes from the fed.
It is closer.
It is closer than a year ago.
There is a famous quote -- greek tragedy -- what it means is we get crazy before it is all over.
I do not see any signs.
This would be an early end to it all.
What would be crazy?
The multiple going from 15, 16 times on forward fundamentals now to 20 times.
You have not seen one sector catch fire.
You have not seen a ball joint people had to get into the.
Back to the issue of margin expansion, i want to take a chart from berryman holtz, a columnist from bloomberg you.
10% growth year-over-year, the strongest gross -- growth since 2011. the upward surprise -- when you see that, do you think this is the time to buy, stocks are cheap, they will keep heading up?
That is a remarkable graph.
I do not think they are cheap, but i do not think they are overvalued.
We are in the middle by historical standards.
I think the earnings numbers are starting to get better.
Look at it, we have had no help from the economy, really, and corporate earnings have expanded genetically.
If they have done more with less, what happens when they get a little more on the top line?
I think there is more there.
What are the areas where the economy continues to struggle is retail and we saw that this morning.
It did nothing for them -- the corporate earnings at macy's. how concerned should we be about consumer spending?
I do not think that content.
My great grandparents came over here to buy things for each other.
This is the way america works.
We are playing to a national trend.
Retail is a funny area.
It depends on the context.
I go to brooks brothers.
I have gone there since i was 20 years old, i will not change.
Some things go in and out of fashion.
You miss the fashion.
You get it wrong.
I take retail, selling things to people with a grain of salt.
We're not just talking about clothing.
The tail sales verse, electronics were down, we're not just talking about close, other types of goods as well.
I would admit that there has been a bit of a slowdown in the housing market, but housing is always the igniter.
First of all, it had to be fixed.
It was a huge, gaping wound.
I think the fed fixed it.
It has to provide some sort of support.
It does not have to do what he did before.
I think the verve of the economy has sort of moved on up to the capital expansion side.
I would rather own technology stocks, industrial stocks, play energy td expansion of hydrocarbon capacity.
I think that is what is going to be marginally better.
That has not quite happened yet.
That is why i want to invest now.
Investors have been taking their cash and helping you as a shareholder, buying -- paying out dividends and doing buybacks, but they have not yet spent on.
Take deere this morning.
"yet" is the operable world -- word.
You've run into the problem where your competitors start to expanding you do not.
I think capital expansion follows, now leads.
When one starts to do it, and they start picking up market share, it can turn very quickly.
John manley, it sounds like you could find a bullish case for almost every scenario here, right?
I am curious, do you feel better investing this year than you did last year?
Last year, there was real fear.
I think we could make money as the economy goes from terrible too bad, bad from ok, ok to mediocre, and mediocre to good, and eventually from good to great.
And then from good to very good, to great.
The easy money is made when it is most painful to make it when you really have to go against the grain.
On the other hand, look at what happened to sentiment in the last month or two.
Look what happened to sentiment.
The expression, it is a mile high, but an inch deep.
You need to see more of a series of bull market corrections.
On that note, thank you for joining us, john manley, at the open, and of course, to olivia and julie as well.
Coming up, following the mcdonald's franchise fight, we
This text has been automatically generated. It may not be 100% accurate.