Private sector is ‘TAKING OVER,’ market strategist says

TWENTY-FOUR HOURS OF 11 SORT OF A DILEMMA FOR INVESTORS AND IT SEEMS LIKE MONETARY POLICY MAKERS OTHER TALKING ABOUT THE INTERSECTION OF THIS AI BUILDOUT GROWTH AND INFLATION, JIM THORNE, CHIEF MARKET STRATEGIST, WE GET GDP NUMBER, A RESPECTABLE NUMBER DRIVEN BY THIS, THE BUSINESS INVESTMENTS AND A LOT OF BOOKS ARE SAYING THIS IS DRIVING INFLATION IN THE NEXT ACT, BUT IT SOUNDS NUTS. WITHOUT THIS WE DON'T GET THIS, AND THERE'S SOMETHING ON THE RESIDENTIAL SIDE, SHOULD WE FIRE THEM X, I DON'T UNDERSTAND THE BROADER IMPLICATIONS OF WHY WE CAN'T BUILD FOR THE FUTURE IN THIS SHOULD BE OKAY YET THIS IS WHAT HE SHOULD BE HIKING RATES. >> WE HAD THIS PLAYBOOK WHERE IT'S BACK BECAUSE ECONOMICS ON WALL STREET AND THE BED WAS DRIVEN AND WHAT YOU SEE IS REALLY INDICATIONS OF PRESIDENT TRUMP'S SUPPLY SIDES AND YOU DON'T GET INFLATION, BASIC ECONOMICS AND WHAT PEOPLE DON'T UNDERSTAND IS, WALL STREET IS BEHIND THE CURVE IN THIS ONE IN THE PRIVATE SECTCTOR IS TAKING OVER. KEVIN WARSH HAS TALKED ABOUT IT AND INTEREST RATES ARE BEING SET BECAUSE BIG TECH HAS GONE FROM PROVIDING SAVINGS FOR THE ECONOMY TO DEMAND CREDIT. RATES ARE GOING HIGHER, SO THE FED HAS TO CUT 100 BASIS POINTS TO STEPHEN, THE YIELD CURVE. WE ARE EXITING STAGNATION AND A LIQUIDITY TRAP YOU AND I HAVE WITH THE GLOBAL FINANCIAL CRISIS. YOU AND I HAVE TO GO BACK TO WHEN WE FIRST MET IN THE 90s AND 2000 WHEN THE PRIVATE SECTOR RULED. >> LET'S TALK ABOUT THIS, THE MARKETS HAVE GONE DOWN FIRST FEW MONTHS OF EVERY FED CHAIR IN THE INTERESTING THING IS MONTHS OF THE HIKE, IT ONLY TOOK TWO MONTHS. I THINK SOME OF THEM REGRET IS IT SO IT FEELS LIKE THE MARKET IS TURNING TRYING TO PUSH HIM AROUND TO SHOW HIM WHO IS BOSS. I HOPE HE DOESN'T FALL FOR IT. >> HE WON'T, HE IS SMART. HE HAS GOOD CAPITAL MARKETS AND HE WILL STAY GOT AND THE N NEXT MOVE IS GOING TO BE DONE. >> I HOPE ARE RIGHT AND I DON'T THINK THEY WILL LIKE, I THINK THEY WILL GET WORKING GROUPS IN PLACE AND HAVE THE RECOMMENDATIONS AND RESET THE SYSTEM, BUT PART OF THAT WILL BE HOW TO MEASURE ELATION SO WE HAD MORE PC, WHICH IS 3.3 AND HE ALREADY TOLD THE SENATE HE THINKS IS A BETTER WAY OF MEASURING AND THAT WOULD PUT US AT 2.4% SO HE SAYS THE FED IS COMMITTED TO THE 2% TARGET, A LOT OF PEOPLE SAY HIS HAWKISH AND HE THINKS WE ARE ALMOST THERE, DOESN'T HE? >> WE ARE AT 2%. THERE IS NO INFLATION PROBLEM AND THAT'S WHERE THE RATES SHOULD BE IN NEUTRAL AND THAT THE PRIVATE SECTOR TAKE OVER AND ALLOCATE RESOURCES. THE ERA OF TECHNOCRATS DETERMINING WHERE WE ARE GOING IS OVER. >> YOU BEEN A BIG ADVOCATE OF THIS BUILDOUT, SOME OF THESE STOCKS ARE UNDER PRESSURE AND TODAY THEY ARE EXPOSING. CATERPILLAR HAS BEEN HAMMERED BUT IT'S A $98, STAY THE COURSE OF THESE NAMES? >> THE LIQUIDITY EVENT WE EXPERIENCED FOR THE LEVERAGING EVENT WE EXPERIENCED WITH PEOPLE TAKING LEVERAGE AND BUYING STOCKS, WARREN BUFFETT HAS A GREAT LINE, IF YOU ARE SMART, YOU DON'T NEED LEVERAGE AND IF YOU'RE DONE, YOU SHOULDN'T USE IT. WE JUST EXPERIENCED THE LEVERAGING EVENT. [LAUGHTER] WORKING BACK IN, THE NAMES HAVE BEEN IDENTIFIED, BY LOW AND SELL HIGH. >> VALEDICTORIAN AT 19, STILL SOMETHING TO LEARN WHEN IT COMES TO INVESTING. LONG-TERM CAPITAL AND EVERY TIME WE GET REALLY FOLKS A BUNCH OF MONEY FACING TO DO THIS. I CAN'T LET YOU GO BUT I'LL ASK YOU AFTER THE CLOSE BECAUSE I THINK YOU LIKE APPLE WHICH IS AMAZING PHENOMENAL. STAY THE COURSE WITH APPLE? >> I THINK YOU START TRIMMING. RIGHT NOW SHORT-TERM, IT IS THE GUIDE IN THE THINK PEOPLE ARE MINDING APPLE BECAUSE THEY WERE CONFUSED ABOUT THE AI TRADE AND YOU GOT AMAZON OF THE. I'D BE BUYING AMAZON. THE STOCKS SOLD DOWN ON NARRATIVES THAT ARE WRONG AND THAT'S WHAT YOU DO IN THE MONTH OF RESEARCH AND USE A MOTION AS YOU GUYS WHERE YOU ENTER AND EXIT. >> AND THE IRONY IS TIM COOK ALREADY TOLD YOU BECAUSE THEY HAVE TO TAKE CHIPS AND I THINK THEY WILL TALK ABOUT PRICING PRESSURE AND OPERATING MARGINS. A SHORTER-TERM GUY, AND WITH APPLE LOOKING FOR THESE NAME