jonathan: kathy jones, thoughts on that? y: we are not investment grade, but we have been moving up and doing that for quite some time because the spreads were narrow and the premium you got for taking credit risk was low. i would agree to some extent. the other problem is timing. you don't really know when the cycle turns until it turns rather abruptly. we think it is time to dial back the risk. today,n this market things that we worry about our liquidity and crowding. i cannot think of a better example of where we have doubled the risk been bank loans. you have a tremendous amount of people who own that asset class who frankly don't understand it well. the second thing is the liquidity is not good in that market. it is terrible. you get crowding and liquidity, and that is what we would sell. timei don't remember a when corporate america has had more financial flexibility. i certainly wouldn't be a seller of credit here. i think the horizon looks good. when you look at credit spreads, high yield in particular, you can build

jonathan: joining me around the michele, bob michael -- kathy jones and douglas peebles. thy, this doesn't quite compete the picture that everything is ok in the u.s. economy. kathy: first is always a little soft and we had a pretty good fourth quarter in terms of consumer spending, so i think what we are seeing is a normal retrenchment you see, particularly a lot of credit card debt was run of over the past couple of months. there is a tendency to recoup. in general, the economy looks pretty good and that drives it. jonathan: bob, are things maybe not as brilliant as they seem? bob: things are awesome right now. jonathan: welcome me through why. capacity, look at small business optimism. it posted the second highest reading in history. the highest was september, 1983, during the reagan reform years. look at wage gains, they are starting to pick up. and you look at the central banks. they are being slow and gradual and normalizing at a glacial pace that we in the markets can easily absorbed. jonathan: doug? douglas: i think people are looking at the wrong place at inflatio

jonathan: kathy jones, your thoughts? we are not underweight high-yield investment grade, but we have been moving up in credit quality, and have been for some time because spreads were so narrow and the premium you got for credit risk with low. -- was low. i would agree to some extent. the other problem is timing. you don't really know when the cycle turns until it turns abruptly. we think it is time to dial back the risk. bob: i think when you look at bank loans, and this market today, things that we worry about are liquidity and crowding, and i can't think of a better example of double the risks than bank loans. you have a tremendous amount of people who own that class who don't understand it well. the second thing, the liquidity is not good in that market. it is terrible. you get crowding into liquidity, that is what we would sell. bob: i have been doing this 37 years. i don't remember a time when corporate america has had more financial flexibility. i certainly would not be a seller of credit in here. i think the hori

joining us from new york is kathy jones from carl schwab.ene is still with us from manulife. do you expect, if anything, coming out of the ecb? asked not expecting any big surprises because they're walking a difficult line between growth being robust and inflation still too low. i do not think draghi will indicate exit from the qe program suddenly. i think he will try to drag it out a little bit. david: to continue on that point with you, kathy, how is -- how important is it for them to give guidance? >> i think they have given a fair amount of forward guidance. they have said they may exit in september for further purchases. i think that is as much as they would like to do. what are markets expecting with guidance going forward of when the ecb could taper? gottene have already some inkling of how the ecb is thinking about on purchases over the past couple of months, and the markets have adjusted off the back of that. the ecb has suggested it might be more hawkish than it originally thought. we can expect some change in how they talk about w

steve wood of russell investments joining kathy jones. this is bloomberg. mom, dad, can we talk? be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around. ♪ jonathan: i'm jonathan ferro. this is the countdown to "the open." ♪ jonathan: coming up, it is risk off, u.s. stocks snapping a 10 month winning streak. investors waiting to see if j. powell displays the same optimism over the senate, and china is sending one of its top advisers to washington d.c. as president trump is close to unveiling -- the weakness continues and when we turn high, up about a 10th of 1% on the s&p 500 futures. is still sticking in treasuries down by two basis points on a u.s. 10 year. the main event, stocks cap in their biggest month of decline in two years with back-to-back losses, la

you see it with funding pressures whether it's libor fed rates are 1.7% kathy jones with charles schwabout fed funds are now above the inflation rate for the first time since the crisis so the fed is tielgtenning monetary policy -- tightening monetary policy. this is when you see the potential for strains in the credit markets when you see the moves that are somewhat sudden and steep it gets your attention. >> we were talking about tesla's credit issues. everybody has known they will need money, but at some point the market just starts to roll over on their thoughts about whether or not this company can do it. are you seeing signs within the credit markets like this libor situation or anywhere else that makes you worry about the equity market >> i guess overall if you look at the combination of a variety of indicators, financial conditions are still relatively easy in the u.s. very easy. i'm not sure things are tightening much. certainly they have ticked higher, but in general a ten minus two year treasury spread has been affected by monetary policy central banks tried to push down long

. >> thanks, steve joining us is kathy jones key income strategist at the schwab financial research andm riemd e raymond james, i'll get to you in a weekend is reading the notes. jeff, it's like, things are good stocks are going up. what could go wrong? nothing. that's sort of in a nut shell what i saw in notes. have i got that right? >> yeah, you got that right. i think we're still in a second ju lar mark. i did talk to your producer yesterday afternoon after the fed announced it with the dow up 250 points said typically oust an announcement like that, the first prove is a wrong-way move. >> that's true you think --py question earlier was so we fought a 40% move once we got an administration that was more business friendly in terms of regulations and tax policy and everything else the market like moved quickly, quicker than any 81 thought up to 25,000, is that it or are they going to keep going or do we get everything that we already deserve for being in a better environment >> well, the mark had a heart attack in february we were actually on your show during month of january saying th

jones industrial average reversal to earlier low was down 262. down, on the dow earlier joining us right now to talk markets trade is the ceo of deloitte, kathy goodorate executives today in terms of policies out of washington. >> number one they are all looking for sustained economic growth, and tax reform regulatory reform infrastructure will probable help a little bit you saw wage increases one time bonuses, investments in facilities are they looking for a little more certainty and stability absolutely but obviously trade is complicating things for them i think we have 36 million of our jobs, here in america are very important export driven, trade is 27% of gdp a little stability around this would help. >> i haven't been able to find one person to say yes this trade tension is probably going to take a cut from economic growth expectations, i am just -- people are not going there. even though all this worry. >> i mean look i think any kind of trade activtariffs are a tax it is going to cut into economy i think what we have seen maybe you have seen this too kaths kwai we talked about this before trump puts his big chess piece forward kind of ramp