Tags: steve ballmer | stock | market | bubbly | trump

Former Microsoft CEO Steve Ballmer: Stock Market 'Feels a Little Bubbly'

(Svitlana Zakharevich/Dreamstime)

By    |   Wednesday, 31 January 2018 01:33 PM

Steve Ballmer, the billionaire ex-Microsoft CEO, warned savvy investors that he thinks the bull-run stock-market rally "feels a little bubbly" despite seemingly endless record highs being set on a daily basis.

"I don't know if we're in a bubble or not," Ballmer told CNBC.

"I would have told you stocks were expensive when Microsoft was the $70s, and I would have been wrong. And I thank goodness I held onto my Microsoft shares. And in addition I own a bunch of index funds," he said.

"But I'm actually not a trader. In the long run, I believe in index funds. In the long run I believe in what my boys and girls at Microsoft can do. I'm pretty excited for the long term," he told CNBC. "Since I'm not selling, we'll see," he said.

Meanwhile, he thought President Donald Trump's State of the Union address was lacking on actual hard number targets.

The way to measure economic success is "numerics," not just to tout the passing of laws, Ballmer said.

State of the Union speeches are "kind of like a quarterly earnings call; what did we do, what are out plans and what are our forecasts," Ballmer said.

"We were light on forecasts. What exactly is the jobs target? What are the plans to get there. Where are jobs today? Just as an example, and this is not particularly about this president. It's a general point about where we are."

Meanwhile, a surge in Boeing led Wall Street out of a two-day slump on Wednesday, but U.S. stocks pared gains in early afternoon trading as investors awaited the Federal Reserve’s comments to gauge the future path of monetary policy, Reuters said.

For his part, Trump basked in the glow of several bright spots in the U.S. economy, Bloomberg reported.

“Since the election, we have created 2.4 million new jobs, including 200,000 new jobs in manufacturing alone,” Trump said in his first State of the Union speech Tuesday. “After years of wage stagnation, we are finally seeing rising wages.”

The labor market remains strong: The unemployment rate is the lowest since 2000, and applications for unemployment benefits are near the lowest level since 1973.

Still, there are many soft spots, with paychecks a prominent weakness. A sustained acceleration in wage growth has remained elusive -- averaging just 2.2 percent during this expansion -- even though businesses have been adding jobs at a steady pace, Bloomberg reported.

But a robust jobs market is gradually putting upward pressure on compensation, with other data on Wednesday showing a solid increase in labor costs in the fourth quarter.

The Labor Department said the Employment Cost Index (ECI), the broadest measure of labor costs, increased 0.6 percent in the fourth quarter after an unrevised 0.7 percent rise in the third quarter. That lifted the year-on-year rate of increase to 2.6 percent, the largest gain since the first quarter of 2015, from 2.5 percent in the third quarter.

Private sector wages and salaries rose 0.6 percent in the fourth quarter. They were up 2.8 percent in the 12 months through December, the biggest increase since the first quarter of 2015, and followed a 2.6 percent gain in the third quarter.

Wage growth is expected to get a boost from the strong labor market, which is forecast to hit full employment this year. Economists expect the jobless rate to hit 3.5 percent by the end of 2018.

A $1.5 trillion tax cut package pushed through by the Trump administration and the Republican-controlled U.S. Congress in December is also expected to bolster compensation growth. The tax cut has resulted in some companies either paying out one-time bonuses or raising wages for employees, Reuters explained.

(Newsmax wire services contributed to this report).

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Steve Ballmer, the billionaire ex-Microsoft CEO, warned savvy investors that he thinks the bull-run stock-market rally "feels a little bubbly" despite seemingly endless record highs being set on a daily basis.
steve ballmer, stock, market, bubbly, trump
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2018-33-31
Wednesday, 31 January 2018 01:33 PM
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