Discussing economic growth and if there is a disconnect between markets and the economy, with David Katz, Matrix Asset Advisors CIO, and Tom Porcelli, RBC Capital Markets, chief U.S. economist.
David Katz: Will See Significant GDP Bounce In Q2
David Katz: Will See Significant GDP Bounce In Q2 – Transcript
we think the earnings are going to be pretty good. we think it’s like the last two quarters, which is at or modestly above expectations. not looking for reburst growth but slow growth has been pretty good for the stock market. we think more volatility but the markets should have upward buy. tom, it’s strange to have the jobs report on a thursday, because of the holiday shortened week, i would think this would be a biggie given the fact we had 3% decline in economic growth last quarter. yeah. look, what i would say is this. q1 wasn’t reality anymore than q2 is going to be reality. the fact is you’re going to see a significant bounceback in the second quarter, gdp growth up to 4% growth by our estimate. you know i think people are sort of looking through the noise of the first half of the year. once you start to get into h 2, the underlying trend growth will continue. we think the payroll report will be consistent with that as an idea. david, a blistering attack over the one by the one financial institution who correctly warned the financial problems we had leading up to the last crisis, bank of international settlements. it said financial markets are euphoric in the grip of a search for yield but investment in the real economy’s week and future remains uncertain. they say a puzzling disconnect between the market’s buoyancy and the economic developments around the world. are you concerned by that warning, david? we disagree. we think the proof is in the pudding and what we’re hearing ceos and cfos spending more, feeling better about the economy, seeing a great deal of takeover activity. seeing the acquiring company go up on the news as well acquired company. all of those things are bullish for the economy and bullish for the stock market. stocks are selling at 16 1/2 times earnings, in line with historic averages over the last 50, 60 years. so we’re actually comfortable with things. tom, there’s also in this bis
