Tags: Ablin | Iraq | stocks | Fed

BMO's Ablin: Liquidity From Fed, Others Will Likely Push Stocks Higher

By    |   Wednesday, 18 June 2014 01:30 PM

While worries about the U.S. economy and the Iraq conflict may have weighed on stocks in recent sessions, Jack Ablin, chief investment officer at BMO Private Bank, believes the market can resume its ascent.

"Up 'til now, most geopolitical developments, namely Crimea and Ukraine, have had very little impact on the U.S., but now because Iraq and oil are involved — oil prices rising with the potential for higher pump prices crimping demand — that is starting to spill over into the markets," Ablin told Yahoo.

"Even though we have these issues and the market is relatively expensive, we have an enormous amount of liquidity flowing into the market," he stated.

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Some of that is coming from the Federal Reserve and other central banks and some from private banks and lenders all over the world, Ablin noted.

As a result, "the search for yield continues, and that encourages risk taking," he added.

"That's probably the ingredient why the stock market was up 30 percent last year and not 10 percent." The S&P 500 generated a total return of 32.4 percent in 2013 and has returned more than 5 percent so far this year.

Even though the Fed is winding down its quantitative easing, "I still think liquidity is flowing pretty strongly and could help pull the market a little higher this year," Ablin said.

Other investors appear to share Ablin's bullishness.

"We're seeing the same thing we've seen for a long time, which is very little movement in the market," Joe Peta, managing director of Novus Partners, which advises hedge funds and institutional investors, told The Wall Street Journal.

"People say they are nervous, but they are still putting bids in [for stocks] when prices drop."

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

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StreetTalk
While worries about the U.S. economy and the Iraq conflict may have weighed on stocks in recent sessions, Jack Ablin, chief investment officer at BMO Private Bank, believes the market can resume its ascent.
Ablin, Iraq, stocks, Fed
306
2014-30-18
Wednesday, 18 June 2014 01:30 PM
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