COMING OFF THE WORST YEAR SINCE 2008. CHIEF INVESTMENT OFFICER HANK SMITH IS HERE. HANK, MATT MURRAY WAS TALKING ABOUT TECHNOLOGY. CAN OTHER SECTORS PICK UP THE SLACK?>>YEAH, ABSOLUTELY. FIRST OF ALL, HAPPY NEW YEAR, DAGEN. DAGEN: I DON’T MEAN TO GLOSS OVER THAT, BUT — IT’S NOT SO HAPPY IN THE MARKETS RIGHT NOW. CONTINUE, HANK.>>ABSOLUTELY. MARK TWAIN WAS CREDITED WITH THIS QUOTE, HISTORY DOES NOT REPEAT BUT IT OFTEN RHYMES. AND I THINK TODAY IS QUITE ANALOGOUS TO WHERE WE WERE EXACTLY THREE YEARS AGO WHEN THERE WERE FEARS OF A GLOBAL RECESSION, MAYBE EVEN THE U.S. GOING INTO A RECESSION. CHINAHARD LANDING AND OIL COLLAS TO $26 A BARREL AND THE FED ON TRACK FOR FOUR RATE HIKES AND TODAY WE HAVING SIMILAR GOING ON. WE THINK LIKELIHOOD OF A RECESSION MATERIALIZING IN THE U.S. IS VERY, VERY SMALL AND WE THINK WE’RE GOING TO GET STIMULUS FROM CHINA. WE DON’T THINK THEY’RE GOING TO GET THREE OR FOUR RATE HIKES THIS YEAR. PERHAPS ONE OR NO RATE HIKE. AND THE MARKETS WILL ADJUST AND SO WE REMAIN QUITE POSITIVE, DESPITE THE YEAR-END SELLOFF AND THE NEW YEAR SELLOFF THAT WE’RE EXPERIENCING, ABOUT TO EXPERIENCE TODAY.>>HANK, IT’S MATT MURRAY. HOW MUCH UPSIDE DO YOU SEE FOR THE CONSUMER RIGHT NOW? THERE’S A LOT OF THINKING THAT ONE OF THE ISSUES THIS YEAR WILL BE THE U.S. CONSUMER HAS TO PICK UP MORE OF THE SLACK FROM THE CORPORATE SECTOR BUT THEY’RE PRETTY WELL POSITIONED TO DO IT WITH WAGES COMING UP LAST YEAR. WHERE DO YOU SEE THE CONSUMER RIGHT NOW IN THE U.S.? WHAT ARE THE UPSIDE OPPORTUNITIES? WHAT ARE THE RISKS?>>WELL, LOOK, THE CONSUMER IS FINALLY GETTING WAGE INCREASES NORTH OF 3%. THAT’S A GOOD SIGN. THEY’RE ALSO GETTING A TAX CUT VIA THE DECLINE IN GAS PRICES. LOOK, IT’S COSTING ME UNDER $50 TO FILL UP MY TAHOE. I HAVEN’T HAD THAT SINCE THREE YEARS AGO. SO THOSE ARE POSITIVES. AND THERE’S THIS NOTION THAT LOWER OIL PRICES IS A BAD THING. I WOULD LIKE TO COUNTER THAT BY SAYING THAT FOR MOST OF THE DEVELOPED WORLD THAT RELIES ON OIL, LOWER OIL PRICES IS ACTUALLY A GOOD THING AND IT’S PARTICULARLY GOOD FOR THE CONSUMER. SO I THINK THE CONSUMER IS IN PRETTY GOOD SHAPE GOING INTO THIS YEAR.>>WHAT ABOUT HOUSING? HOUSING’S THE ONE AREA WHERE IT’S BEEN ROCKIER FOR CONSUMERS, EVEN GOING INTO LAST YEAR AS THINGS WERE BOOMING. DO YOU SEE THAT LEVELING OFF?>>RIGHT. THAT’S THE RISE IN MORTGAGE RATES AND THE PRICING. NOW, LOOK, I THINK THE CONSUMER WILL ADJUST TO MORTGAGE RATES AND MORTGAGE RATES ARE STARTING TO COME DOWN A LITTLE BIT AND THIS WHOLE HOUSING RECOVERY FOR THE PAST 10 YEARS HAS BEEN ALL ABOUT ONE STEP — TWO STEPS FORWARD, ONE STEP BACK. WE’RE HAVING A ONE STEP BACK NOW. AND SO I DON’T THINK HOUSING IS GOING TO BE AS BIG OF AN ISSUE THIS YEAR AS IT HAS IN 2018. DAGEN: 20GEN: 2018N: 2018.: 2018.CHERYL: WE’RE GOING TO TAL 2018.CHERYL: WE’RE GOING TO TAK ABOUT HOUSING LATER ON IN THE SHOW, HANK. YOU SAID SOMETHING ABOUT STIMULUS FROM CHINA. I’M WONDERING WHY YOU SAY THAT AND HOW MUCH STIMULUS YOU COULD BE LOOKING FOR. WE’RE IN THE MIDDLE OF A TRADE WAR WITH THIS COUNTRY AND WITH THE MANUFACTURING ACTIVITY THAT WE SAW FALLING, WE HAD TWO BIG REPORTS FROM THE CHINESE, ONE OF THEM A GOVERNMENT REPORT SAYING THEY’VE GOT PMI PROBLEMS. I DON’T UNDERSTAND YOU HOW MUCH THE STIMULUS WILL BE AND WHERE IT’S GOING TO COME FROM FROM THE CHINESE. HANK?>>EXCUSE ME. WELL, LOOK, DON’T UNDERESTIMATE WHAT CHINA CAN DO. THEY CAN CERTAINLY DO SOMETHING ON THE FISCAL SIDE WITH TAXES A AND CERTAINLY CONTINUE THE ONE ROGUE POLICY THAT THE — THE POLICY IN TERMS OF ADDED CONSTRUCTION AND SPENDING THERE. SO I THINK CHINA WILL STIMULATE. I THINK THE SLOWDOWN IS TEMPORARY THERE AND, AGAIN, I SEE MUCH OF THE SAME RHYMING FROM THREE YEARS AGO, THIS MARKET OVER-REACTING TO A RECESSION THAT WILL NOT MATERIALIZE AND THAT’S WHERE WE SEE OPPORTUNITY IN 2019. DAGEN: REAL QUICK, BIGGEST WORRY?>>LOOK, POLICY MISTAKES IS THE BIGGEST WORRY HERE. THE FED OVERSTEPPING AND ONE MORE THING, IF TRUMP DIGS HIS HEELS IN WITH RESPECT TO THESE TRADE NEGOTIATIONS AND DOES NOT GET A RESOLUTION THERE, THAT WILL BE A PROBLEM. BUT IF HE WANTS TO BE REELECTED HE WILL COME TO AN AGREEMENT VERY SOON AND THAT WILL PROVIDE SOME STIMULUS AND TAKE AWAY A LOT OF THE UNCERTAINTY THAT HAS BEEN BUILT IN AND YOU SEE IT IN SOME OF THE CEO CONFIDENCE INDICATORS. DAGEN: MANUFACTURERS HERE IN THE UNITED STATES ARE STILL WAITING FOR THOSE STEEL AND ALUMINUM TARIFFS TO GO AWAY ON OUR ALLIES. THEY’RE SITTING AROUND GOING YOU’RE KILLING OTHER BUSINESS HERE BUT THEY’RE STILL IN PLACE DESPITE A NEW TRADE DEAL WITH CANADA AND MEXICO. AGAIN, YOU WANT TO TALK ABOUT POLICY MISTAKES –>>ABSOLUTELY. AND THAT IS HIS BIGGEST LEVER IN TERMS OF TERMS SF TERMS STIMULUS. HE’S NOT GOING TO GET ANY MORE TAX CUTS. THERE PROBABLY WON’T BE A SE SEQUESTRATION IN SPENDING. IF HE CAN COME TO AN AGREEMENT WITH TRADE, THAT WILL BE A GOOD

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16 thoughts on “Likelihood of a US recession materializing is very, very small: Haverford Trust CIO”

  1. Trade war with China and tariffs will tank the economy and everybody will be layed off. 😞😞😞😞😞😞😞😞

  2. …likely hood of Fox News not cheerleading for Trump and the economy while heading into a recession, slim to none.

  3. I agree, low oil prices is a GOOD thing! Oil companies are still reporting very strong profits. Oil is still pretty high.

  4. Is this why a dunce like this guy thinks that profitable businesses are in danger of a recession.
    Will china go into recession as they can't sell their stuff in the usa anymore?

  5. These guys never know what the hell they are talking about. Lip service for their own interests only. Nothing for the audience here. The point of this clip is to get me to invest I haverford investments, no regard to whether of not it's a good decision in this environment. Such horseshit.

  6. HA HA HEE HEE HOO HOO . . . . recession is a joke? Layoffs a joke? Growing debt a joke? Why do the common-tators take this jokey hokey attitude to the market? Dears — this ain't fun and games!

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