U.S. Most Obvious Place to Invest in 2014: Purves

Your next video will start in

Recommended Videos

  • Info

  • Comments


Jan. 3 (Bloomberg) -- Bloomberg's Deirdre Bolton and Michael Purves, chief global strategist at Weeden & Co., put 2014 markets in focus in "On The Markets" on Bloomberg Television's "In The Loop."

On the markets.

I am joined by michael purvis -- bloomberg television on the markets.

I am joined by michael purvis.

What the stocks are doing supports your longer-term view with the s&p 500, the dow, and the nasdaq moving higher after yesterday's close lower rate you think they have more to gain.

Why is that?

We can make lots of arguments, but the biggest allocation is happening in lots of markets and there is one logical place, u.s. equities.

Some will end up in international equities and other asset classes, but u.s. equities are the most logical places to absorb these types of flows.

Michael, the dow was up 26%. the s&p 500 was up 29% had people say this is -- 29%. people say this is overvalued.

There are over valuation arguments, but the overarching principle is that flows will keep multiples expanding.

Whether people are right or wrong, stocks will continue to move higher.

Right, and the key is to learn how to invest in that climate because it is somewhat inevitable.

The torrent of fixed-income flows might not be in a mess every months, -- might not be enough this every month, but it is steady.

How do you see europe versus the u.s.? the gap has narrowed.

I think the u.s. will trade better than europe.

Europe is getting anxious.

We have some stress tests coming up that might cause ultimately some deflation trends in europe.

Right now, i think the u.s. will continue to be the most obvious place to invest.

When you talk about stress tests, it is hard not to make a reference to the banks.

How do you see u.s. banks versus european banks because it seems the fed is on a different path than the ecb?

Right now, if you stand back and look at the ecb versus the fed, there is one major difference, they have not done the aggressive quantitative easing.

They have had the lt ro.

They have had little types of things, and we might see more of that which could put downward pressure on the euro relative to the dollar.

I think our tapering framework will be gentle.

We will have more tapering, but it will be done in the way it was done a few weeks ago, gently, and i do not think janet yellen will want to rock the boa t too much.

We are not in a wonderful economic environment here.

Monitoring financials.

What other sector do investors have to watch?

Tech has been a huge out performer of the broader market, and there are several reasons i can continue.

There are value components capable of showing growth.

In a growth-starved world, investors will flock to that.

Good, old-fashioned value stocks, which had done poorly for many yearsif you think about it, allocators getting money from the bond flows will want to find good stocks at good valuation since the market is not that cheap.

Thank you for coming in.

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


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change