Tags: Welch | stock | market | economy

Jack Welch: 'You Are Trapped' in Stock Market

By    |   Thursday, 13 March 2014 10:47 AM

Many investors are enthusiastic about stocks with the Standard & Poor's 500 Index hitting a record high Friday.

But Jack Welch, former CEO of General Electric, views the market's rise through more jaundiced eyes. "The stock market is based on, where else do you go?" he tells CNBC.
"You are trapped. Every individual you know is finally saying, I've got to get in. I missed it. I have to get in."

Welch thinks the economy is stuck on a 2 percent growth track for now. GDP expanded 2.4 percent in the fourth quarter.

Editor’s Note:
250% Gains Bagged Using Secret Calendar (See Video)

"I just reviewed six businesses in the last 48 hours, and I would say that as of now, this economy hasn't changed in the last 12 months. We have a 2 percent economy," Welch argues.

"That little blip in inventory in the third quarter of last year didn't change it." Rising inventories helped growth soar 4.1 percent in the third quarter.

"However, there's a lot of optimism," he notes. "There's a lot of optimism that the commercial and industrial business, which has been on its back, will come back the rest of the year. . . . If that happens, we'll have a 3 to 3.5 percent economy."

Welch is seeing the most optimistic forecasts for the second half of the year in the past four years. "This is all happy talk up to now."

To be sure, there's been hope about the economy early in the year before — hope that has been dashed by reality, he warns.

"The toughest part you have now is that everyone is on to doing more with less. Capacity is being found everywhere," Welch explains. "The uncertainty about whether it be wages or this or that, people are reluctant to add people with Obamacare."

Uncertainty is the rule, Welch states. "They do think, though, no question, every forecast we had in the last 48 hours in our businesses calls for a pickup in the last half of the year," he said. "They all believe it's going to be there. They're seeing new orders, bookings aren't bad. But it hasn't changed yet. This is a 2 percent economy."

He sees a 60 percent chance that the economy accelerates to growth of 3 percent and a 40 percent chance that it decelerates to growth of 1.8 to 2 percent.

Others have noted an increase in business enthusiasm too. "There has clearly been a shift in attitudes on the part of business people, kind of a pivotal point," BB&T bank CEO Kelly King tells Bloomberg.

"People have become more confident, less negative, more willing to think about investing."

So he thinks economic growth will accelerate in 2014. "I think it will be 2.5 percent or so for the year. It may end up 3 or 3.25" by the fourth quarter.

Editor’s Note: 250% Gains Bagged Using Secret Calendar (See Video)

© 2021 Newsmax Finance. All rights reserved.


InvestingAnalysis
Many investors are enthusiastic about stocks with the Standard & Poor's 500 Index hitting a record high Friday. But Jack Welch, former CEO of General Electric, views the market's rise through more jaundiced eyes.
Welch,stock,market,economy
488
2014-47-13
Thursday, 13 March 2014 10:47 AM
Newsmax Media, Inc.
 
Newsmax TV Live
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved