On this morning’s Trey Ware Show, Karl discussed the economy, the stock market, and trade. It’s going to be a busy week including continued negotiations in China regarding trade.
Trey Ware: Karl Eggerss is joining from eggersscapital.com. Lots good news here with 3.2% GDP on Friday announced Karl, good stuff.
Karl Eggerss: Yeah, we continue to see this acceleration for several quarters in a row and we’ve had a couple of the same, the previous quarter, but we haven’t had any contraction and that’s been huge. Some of the people will be looking at this report on Friday and saying, “Well, it was more just a buildup of inventory and it would have in the ones had it not been for that.” But I think if you go back, every single report, every single employment report, GDP report, every one of those you can tear apart and look in the weeds and say, “If it was this then this.” Bottom line is, if you look at the numbers consistently, it’s a good report. It’s a very good report.
Karl Eggerss: We’ve got a huge week for economic data coming out. A large week. Tons of things coming out and then in addition to that, we have obviously trade talks with China picking back up. Our team’s going over to Beijing to continue those talks and there’s still rumors that Trump’s still willing to walk away if he doesn’t get what he wants in the steel and we’ve seen concessions on both sides but let’s continue to see progress on that. Earnings have been good so far this earning season.
Karl Eggerss: We still see the market continuing higher. Obviously it could pull back in the short term but we think new highs are still going to be here for the next few months. There’s too much good stuff going on the outweigh anything bad.
Trey Ware: Well and you tell me because you’re the expert on this but I think the stock market probably responds pretty positively on the economic news we got Friday on the GDP because a lot of that came from exports. It looks like now it’s starting to balance out a little bit where so much people were taking advantage of the United States and they were putting tariffs on our goods and taking advantage of this. Now that we’re starting to see some of that stuff change, and our exports are doing a whole lot better now.
Karl Eggerss: Yeah, and look, the longer our economy continues to do well, it gives President Trump and his team leverage in these trade talks. China’s starting to pick back up again but in general, we’re still the strongest economy around the world. Having said that, that gives us a tremendous amount of leverage and I think they understand that look, he’s started talking about tariffs more than a year ago and remember that. More than a year ago. He was not quick to do a trade deal just to get it done. I think they know he’s serious and I think ultimately you’re seeing some of these countries start to say, “You know what? We need to deal with them otherwise we’re going to get on the bad end of the deal here.”
Karl Eggerss: I think it’s positive and again, the good news is, the Federal Reserve, which is going to come out with their rate decision this week, is still going to be on the sidelines. They’re going to be on the sidelines so the economy’s growing at a moderate rate and it’s kind of a Goldilocks scenario as I’ve been saying for several months. That scare we had in December, we were consistent in saying that this is a correction, not a bear market and you’re seeing that bear fruit because we’re up over 20 something percent just since Christmas Eve. For the folks that got scared out, that’s why you got to have the long term plan because it’s been a complete V-shaped recovery in the stock market.
Trey Ware: You got to hang in there. All right, Karl Eggerss, eggersscapital.com. Every Monday at this time here on KTSA, thank you Karl.
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