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George Schultze 3_Track1

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Another sector being pressured today, is the technology sector. We saw Microsoft, Amazon and even Apple declined by 0.20%. The company recently announced that subscribers of its music app Apple Music reached 36 million subscriber after it announced it reached 30 million in September. It might the biggest service globally, after subscribers growth rate reached 5% monthly, beating the main competition Spotify, which is considered the biggest globally in terms of subscribers. It seems Apple stock wasn't affected by this news today but more by the general decline in the whole sector indeed. To tell us more about that, George Schultze Founder and CEO of Schultze Asset Management is joining us to explain more. Hello and welcome George. What we see today in the markets, isn't what we are used to in these times not even in 2017. It might be something new in the markets, we see something very unusual. So is it the beginning of something bigger, or is it just a normal market correction? I think it's a departure of a bigger thing, the stock markets witnessed some exits, and interest rates increased in the main time, the stock markets declined, a lot of new developments, an increase in the US GDP, between 2-3%, unemployment claims are stable, 4% and declining, with new tax reforms and we expect those reforms to push forward and increase the GDP 1-2%, and even encourage return of capital invested outside US Along with that, the Federal reserve bank which is increasing interest rates today, Jerome Powell is to be announced chair of the federal reserve and with that, between interest rates increase the chairman is expected to continue with a tight monetary policy the contrary to a loose policy, in order to decrease US budget deficit, we are generally optimistic, also inflation is improving CBI average is at 2%, and we expect more improvement throughout this year. Generally, we would notice cautious trading and investments in fixed income. As for stocks, markets witnessed rises through the year so what we are at is a transition phase, where investments in stocks shifts. Some companies in certain sectors thrive in certain market conditions, and we notice that in comparison to leverage and shares market we reached new territory, due to very low interest rates and investors in fixed income need more revenue from their investments in fixed income. This in turn, is changing with the selling positions that we saw in shares markets. Just by saying that the interest rates are too low, lower than average, about 1% lower than average at 3.75% and moving forward, we expect a likely rates hike, and some companies would do better than others in such market conditions. In certain sectors, we consider that some companies and sectors will do better while other sectors and companies will not, companies with higher debts will need to improve their position, and will face many challenges, along with the new tax bills even the annual write offs has changed in the new tax bill, so we will notice that companies with higher debts will face problems. On the other hand, some sectors and stocks will keep a higher profile, for example, companies in charcoal sector, energy sector and oil and gas companies, will have a better than expected performance, off course oil and gas companies will benefit from the new tax bill, and moving forward, some sectors will perform lower than expected, like retail and telecommunications operators, in addition to those changes generally happening stocks with better performance will be picked and so Investment funds managers will pick those stocks, so it's very important to trade cautiously, and specifically in fixed income, but in stock markets, we should follow veteran investors working in different economic cycles. We are entering a new territory today, interest balance is bigger than before and remains untested in terms of power, again we consider this tight policy or the opposite of quantitative easing. This is our general opinion on our market investments as we move forward. Okay George, may be the question today is, after 5% depreciation from the top in DOW Jones, could we witness another 5%, is it possible? Do you think we could reach a downtrend with 20% depreciation from the top specially this year? I don't think so, probably this won't happen, this economic environment in US is encouraging, and remember that interest rates are still lower than it's all-time low, so it's certainly an encouraging environment for companies and growth is rising in US, as I mentioned, we have clear signs of inflation rising which will in turn be the main stimulant to the new chairman Mr. Powell, to do more than just a rate hike with his new position. We are witnessing a continuing decrease in budget deficit, off course it will have a negative effect on stocks in fixed income, we like to think there will be 20% depreciation. Many companies took new positions, and with the new tax reforms will make for a better position for these companies, we also have large sums coming from outside, about trillion dollars we have many numbers and statements about new companies and factories starting to work in the US. In general, it's a very encouraging environment and will lead to more growth, and based on it, stocks should perform better. But as I mentioned, there will be winners as there will be losers. Companies with higher debts will not perform that well. In addition, we consider it's likely that a new infrastructural plan will be passed in the US. History shows that investments in infrastructure in any economy was is USA or any other country, supports economy, and so some companies and some sectors will perform better with this plan approval. In general, we will witness improvements and all those watching us tonight, and everyone keeping an eye on USA, and labor union statement, you could notice that democrats were applauding when President Trump talked about infrastructural plan. Off course, those plans will be approved in USA which will boost its economy, with lots and lots of positive improvements, low interest rates, rising but still lower than its historical levels. Encouraging tax reforms, growth in the US economy, low unemployment rates, even an average acceptable inflation rate. This all are encouraging along with the new investment plan in infrastructure. Thanks George Schultze, who joined us from New York, he is the founder and CEO of Schultze Asset Management. See you after the break.

Video Details

Duration: 8 minutes and 53 seconds
Language: Arabic
License: Dotsub - Standard License
Genre: None
Views: 8
Posted by: wskolnick on Mar 5, 2018

George Schultze 3_Track1

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