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00:00YIELDS COMING IN FOR BASIS POINTS TO 2.53. WE BEGIN WITH OUR TOP STORY. GETTING HARDER, NOT EASIER TO SELL. > > IT DOES NOT FEEL LIKE SOMETHING YOU WANT TO FIGHT. > > GREAT ECONOMY, GREAT GDP. > > WE COULD SEE A WALL OF MONEY COMING TO THIS MARKET. > > TOO MUCH MONEY IN CASH. > > CASH STILL ON THE SIDELINE. > > MONEY CONTINUES TO LEAK INTO THE MARKET. > > COMING UP A LARGE CORRECTION. > > REMEMBER WHERE WE WERE THE FOURTH QUARTER. > > WE ARE PRICING BACK IN REALITY. > > THE U.S. IS THE ENGINE OF THE WORLD. > > RISK ASSETS ARE STILL A BUY AT THIS POINT. > > MORE ROOM TO CAUTIOUSLY RUN. > > ROOM TO RUN. > > ENJOY THE RIDE. JONATHAN: JOINING ME TO DISCUSS OUR STEPHEN PARKER, KRISHNA MEMANI, AND MICHAEL HUNT S. LET ' S BEGIN WITH KRISHNA MEMANI. ROOM TO RUN. CAN WE DO WITH THAT CLICHE LINE, CASH ON THE SIDELINES? KRISHNA: YOU CAN SEE THAT IN MONEY MARKET FUNDS AND THINGS LIKE THAT BUT THAT IS NOT THE MOST IMPORTANT POINT. THE MOST IMPORTANT POINT IS THAT TALKING ABOUT RECORD HIGH IS MISSING THE POINT THAT THE MARKETS HAVE NOT DONE ANYTHING FOR SIX OR SEVEN MONTHS AND THE ECONOMY HAS CONTINUED TO GROW. PROBABLY NOT AS FAST AS WE WOULD LIKE BUT THE BACK HALF OF THE YEAR IS GOING TO BE MEANINGFULLY BETTER AND AS A RESULT THE MARKETS ARE GOING TO LOOK TO THAT AND MOVE HIGHER. NO DOUBT ABOUT THAT. JONATHAN: DO HAVE THAT CONFIDENCE? STEVEN: I DO. THIS HAS BEEN AN UNLOVED RALLY. YOU SEE MONEY MOVING FROM STOCKS TO BONDS AND PEOPLE ARE ACTUALLY PUTTING MONEY TO WORK IN THE STOCK MARKET AND THE DEFENSIVE SECTORS. $5 BILLION INTO THE DEFENSE SECTOR. $15 BILLION OUT OF CYCLICAL SECTORS. I DO NOT THINK THAT BACKUP OF IMPROVEMENT IS BEING REFLECTED. MICHAEL: I THINK IT WILL BE BROUGHT ASSET CLASSES. IT IS NOT ISOLATED JUST OF THE EQUITY MARKETS. YOU ARE SEEING RISK SENTIMENT IMPROVED DRAMATICALLY ACROSS DURATION ASSETS THAT ARE SENSITIVE TO INTEREST RATES AND EVEN ON THE CREDIT SIDE, I THINK THE RELATIVELY TIGHT CREDIT SPREADS ARE ALSO INDICATIVE OF A DIFFERENT ENVIRONMENT ON THE BACK OF 2018. JONATHAN: LET ' S TALK ABOUT CAPITULATION. WHAT DRIVES CAPITULATION? KRISHNA: I THINK PRICE HAS A LOT TO DO WITH IT BUT THE FACT THAT HAS MORE PEOPLE EXCEPT THE FACT THAT THE FED IS OUT OF THE PICTURE, AT LEAST FOR A REASONABLE TIME, MARKETS KEEP GOING, THAT IS ENOUGH TO DRAW ENOUGH PEOPLE IN. JONATHAN: I WONDER HOW SELF-LIMITING THE RALLY IS. SOME PEOPLE BELIEVE THE LOSER CONDITIONS DEBT, THE MORE THE FEDERAL RESERVE -- THE LOSER CONDITIONS GET, THE MORE THE FEDERAL RESERVE WANTS TO GET BACK IN. KRISHNA: I ' M PRETTY SURE THE FED IS COMMITTED TO MAINTAINING THE SORT OF SUPPORT THEY HAVE RIGHT NOW FOR A REASONABLY LONG TIME. HOWEVER, MUCH THE WAY THE MARKETS DO NOT BELIEVE THE FED WHEN THEY WERE TIGHTENING, THEY ARE NOT GOING TO BELIEVE THE FED WHEN THEY CONTINUE TO SAY THINGS ARE OK AND WE ARE NOT GOING TO TIGHTEN. THE MARKETS WILL START PRICING IN SOMETHING AND THAT IS THE BIGGEST RISK IN MY MIND AS WE GET TO THE SECOND HALF OF THE YEAR. JONATHAN: WHAT DO YOU THINK? MICHAEL: IF WE LOOK THE EXPECTATIONS FOR THE NEXT MOVE FROM THE FED, IT IS A CUT. THE MARKET BELIEVES THE FED TO A LARGER DEGREE THAN THEY WOULD LIKE THEM TO. THAT REPOSITIONING WILL NOT GO FROM CUT THE HEIGHT. I THINK IT IS IMPORTANT TO GO MODERATELY IN LINE WITH THE PAUSE, NOT A 50 PERCENT OR 60% CHANCE OF A PRODUCT. STEVEN: I THINK IT IS A GOOD THING WE ARE STARTING TO PRICE OUT THAT CAUGHT. IN THE NEAR TERM, A DOVISH FED, POSITIVE SENTIMENT CAN PUSH IS HIGHER BUT LONGER-TERM IN VALUATIONS, EARNINGS WILL NEED TO COME THROUGH, THAT MEANS A STRONGER GROWTH, THAT ARE CORPORATE SECTOR. JONATHAN: I WANT TO BRING IN TAYLOR RIGGS TO BREAK IT DOWN. TAYLOR: IT IS A RALLY IN THE S & P

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Investors Ponder Holding On or Cashing Out of Record Rally

Krishna Memani, chief investment officer and head of fixed income at OppenheimerFunds, Stephen Parker, head of thematic equity solutions at JPMorgan Private Bank, and Michael Hans, chief investment officer at Clarfeld Financial Advisors, discuss whether or not it's time to cash out of the current market rally. They speak with Bloomberg's Jonathan Ferro on "Bloomberg Markets: The Open." (Source: Bloomberg)

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