WE'RE GETTING BREAKING NEWS OF A
POTENTIAL EMERGENCY MEETING OF
OPEC.
WE HAVE LPL SENIOR MARKET
STRATEGIST RYAN DIETRICH.
RYAN, I KNOW YOU AS AN
OPTIMISTIC PERSON, A OPTIMISTIC
KIND OF GUY.
ARE YOU STILL OPTIMISTIC?
COULD THE WORST BE OVER FOR THE
MARKET?
>> CHARLES, THANKS FOR HAVING ME
BACK.
YOU'RE RIGHT, CLEARLY, PUT IT IN
PERSPECTIVE.
I'M MORE OF AN OPTIMISTIC GUY.
WE SEE POSITIVES HEADING INTO
2019 LPL.
THE S&P 500 IS DOWN 1 1/2% FOUR
DAYS IN A ROW.
IT HASN'T BEEN DOWN FIVE DAYS IN
A ROW SINCE THE GREAT
DEPRESSION.
SO WHAT HAPPENED IS DEVASTATING.
IT IS HURTING A LOT OF PSYCHES.
THE BIG QUESTION, CHARLES WHAT
WE'LL GET INTO, ARE WE GOING TO
HAVE RECESSION IN 2019 OR ARE WE
NOT?
WE GET INTO WHY WE DON'T THINK
WE'LL HAVE ONE IN 2019 AT LPL
RESEARCH.
IN MARKET CORRECTIONS, YOU DON'T
HAVE A RECESSION, THREE OF THE
LAST FOUR STOPPED AROUND 20%
CORRECTION.
'87 HAD MORE OF A CORRECTION.
WE DON'T THINK WE'RE IN 87
SCENARIO.
DOWN 20% MORE ON NASDAQ, MORE ON
SMALL CAPS, I GET IT, YOU MIGHT
WANT TO BE MORE AFTER BUYER WITH
BETTER TIMES AHEAD IN 2019.
CHARLES: RYAN, WHAT ABOUT THE
THREAT OF THIS MARKET TRIGGERING
A RECESSION?
IN OTHER WORDS, BECOMING
SELF-FULFILLING?
>> WELL, THAT IS OBVIOUSLY A
GREAT QUESTION.
YOU KNOW, CAN THAT HAPPEN?
IT IS POSSIBLE.
BUT AT THE SAME TIME WHAT REALLY
DRIVES LONG-TERM GAINS?
WE KNOW IT IS EARNINGS.
I GET IT, EARNINGS ARE UP 20%
THIS YEAR AND MARKET HASN'T DONE
ANYTHING.
MAYBE 10% NEXT YEAR.
GLOBALLY EMERGING MARKETS ARE
LOOKING AT DOUBLE-DIGIT EARNINGS
GROWTH NEXT YEAR.
DEVELOPED MARKETS ARE POSITIVE.
WE NEVER HAD GLOBAL RECESSION
WITH EXPANDING EARNINGS MAKING A
ALL-TIME HIGHS.
THAT IS STILL A POSITIVE.
CAN THERE BE SELF-FULFILLING
PROPHECY?
MAYBE.
WHAT DO WE HEAR ABOUT PEOPLE
SPENT MONEY FOR THE HOLIDAYS?
AMAZON, RECORD HOLIDAYS.
MASS -- MASTERCARD, RECORD
SPENDING.
THE FED IS A TRADE CONCERNS
WE'RE NOT NAIVE TO THOSE BUT THE
UNDERLYING PINNINGS OF A STRONG
ECONOMY ARE STILL THERE IN OUR
VIEW.
THAT WILL NOT LEAD TO RECESSION
IN 2019 --
CHARLES: PRICE DISCOVERY AND
ROLL OF THE MARKETS,
PARTICULARLY AS HARBINGER OF
THINGS TO COME, THIS YEAR, 2018
THE KEY WORD FOR ME HAS BEEN
PEAK.
BEGINNING THE VERY BEGINNING OF
THE YEAR, EARNINGS REPORT, I
THINK CATERPILLAR, ONE OF THE
COMPANIES.
CFO MADE A COMMENT, THIS IS AS
GOOD AS IT GETS.
WE HEARD ABOUT PEAK EARNINGS.
MORE RECENTLY AT THE
GOLDMAN SACHS CONFERENCE, PEAK
CONSUMER CREDIT SCORES.
IS THE MARKET GOING THROUGH,
SOME SORT OF A IDEA, WE'RE
RECONCILING THE IDEA WE'LL GROW
BUT NOT NEARLY AS FAST AS WE
WERE GROWING.
HOW DO YOU DEFINE WE'RE NOT AS
GREAT AS WE WERE BUT NOT THE
WORST-CASE SCENARIO?
HOW DOES THE MARKET FIND THAT
EQUALIBRIUM?
>> OBVIOUSLY LAST COUPLE MONTHS
IT LAST BEEN A ROUGH
EQUALIBRIUM.
15 MONTHS, S&P, EVERYONE WAS
BULLISH, LOOK WHAT HAPPENED 12
MONTHS LATER.
WHAT ARE THE EXPECTATIONS NOW?
PUT/CALL RATIOS, HIGHEST LEFTS
WE'VE SEEN ALMOST IN HISTORY.
SENTIMENT POLLS VERY LOW.
THERE IS NOT A LOT OF REASON TO
BE OPTIMISTIC RIGHT NOW.
THAT IS GOOD THING FROM
INVESTORS LONG TERM POINTS OF
VIEW.
BUY LOW EXPECTATIONS, SHOULD WE
GET ANY OF POSITIVE, WE THINK AT
LPL RESEARCH WE GET POSITIVES
WITH THE TRADE CONCERNS.
IF THE FIRST QUARTER THAT COULD
BE BIG CATALYST, ACCOMMODATIVE
FED.
MORE FISCAL POLICIES, PERCENTAGE
OF GDP THIS YEAR THAN NEXT YEAR.
THAT IS SURPRISING TO MOST
PEOPLE.
THE BACKDROP IS THERE FOR
ECONOMIC EXPANSION THAT SHOULD
LEAD TO HIGHER EQUITY PRICES IN
2019.
CHARLES: FOR WHAT IT IS WORTH I
