Jan. 1, 2019 - Steve Pieczenik
05:18
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| Time | Text |
|---|---|
| Hi, this is Dr. | |
| Pachenik, and I want to talk a little bit about what I think is going to happen in 2019. | |
| And I'm going to be a bit optimistic about the stock market. | |
| And the reason for that is several things, and I'm going to explain why. | |
| Number one, Trump understands that his mercurial personality has had a major effect on the stock market. | |
| I think he's smart enough to understand that he has to maintain a steady attitude towards the economy and he can't berate Jerome Powell, the head of the Federal Reserve. | |
| In turn, I think Jerome Powell of the Federal Reserve will not increase the interest rates as many times as he had in 2018. | |
| More importantly, I think Trump will fulfill a promise that he made a long time ago, and that is he will make a trade agreement with President Xi of China. | |
| I think that's in the works, even though the boys and the team who do not like China, Navarro and others, have agreed that there has to be some kind of quid pro quo with the Chinese in order to maintain political stability both in China And in the United States. | |
| Furthermore, I think there will also be an agreement with Kim Jong-un. | |
| As Trump had promised, he said, I want a nuclear agreement, a disarmament with Kim Jong-un. | |
| And Kim Jong-un has just signaled that he was interested in having an agreement with Trump. | |
| All of those factors will lead to a very positive stock market. | |
| At the same time, we have to understand that our market is really quite strong. | |
| It's much stronger than any of the other markets around the world. | |
| And what do I mean? | |
| An exceptionally viable economy. | |
| Our growth rate is 3.45. | |
| Our unemployment is the lowest in the world. | |
| In contrast, and this is what we have to worry about, Brexit is a real problem for England. | |
| The pound will fall very quickly. | |
| It may affect our markets. | |
| It may not affect it. | |
| But nevertheless, our technical stocks will still rise very quickly. | |
| The second part is that France, Italy, and Spain will have economic problems, and that will have an impact on our economy, but not as much as many people have warned about. | |
| In short, we have a very strong economy, and the only concern that I would have and some others is not a prejudice. | |
| Let me make this clear. | |
| I'm not prejudiced, but I have a major concern, and that is When the Democrats come into the House of Representatives, they should not reimpose rules and regulations that Trump took out. | |
| The reason for that is very simple. | |
| The market will not tolerate it because it's not pro-Republican, it's just pro-market and pro-capitalist. | |
| With people in the House of Representatives who are in the 80s and 85 and the late 70s who do not understand the gyrations of the market, if they reimpose regulations and they reimpose all kinds of restrictions on businesses and other elements that will affect the stock market, the stock market will pull back. | |
| That's not a dire warning. | |
| It is a major, major concern for me. | |
| On the other hand, I have to tell you that I think we have done exceedingly well during the past year. | |
| I know it has been very tough. | |
| I know for most people we lost money, including myself. | |
| And the reason I go into the market is very personal. | |
| And it's a reason I think most of you should think about. | |
| And that is, I want to know what I'm investing in. | |
| And I want to know if I'm making money or losing money. | |
| For the most part, I can lose money. | |
| But I have that kind of tolerance which will tolerate that loss of money because I expect to make that money that I lost. | |
| For most of you, you have mutual funds, you have pension funds. | |
| But I do warn you, I think you should get involved with your broker, with your pension fund, and understand some of the basis and basic issues that are related to the stock market and how your fund is adapting to that market. | |
| Now you have to remember one important thing. | |
| In this year, 2019, and in the past 2018, the stock market had 40% of its gyrations due to nothing more than algorithms. | |
| That means mathematical models that went up and down very quickly. | |
| So you have to be able to tolerate that. | |
| Let me give you a very positive note. | |
| Adam Smith, the father of American capitalism, said the American economy is very, very tough. | |
| We can tolerate a lot of abuse. |
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