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Wall Street Trader Outlines Market Trends Ahead Of Health Care Vote

KELLY MCEVERS, HOST:

Since the election, the stock market is at record highs. And that has been a good thing for President Trump. But the market is now seeing its first jitters under Trump. Yesterday, the Dow Jones Industrial Average was down more than a full percent, and today the market was flat. To understand what's happening, we have Ted Weisberg with us from New York. He's the founder of Seaport Securities. He's an active trader and a longtime market watcher. Welcome to the show today.

TED WEISBERG: Thank you.

MCEVERS: So tell us what happened today on the markets.

WEISBERG: Well, I mean, today was sort of interesting, actually, even though almost a flat day. Though, there was - the S&P was positive, and Nasdaq was quite positive. The Dow was just off a few points.

When one looks at yesterday's performance and all the jitters, market watchers everywhere were expecting a much more negative day if you will, and I think were pleasantly surprised and maybe, perhaps, even fooled by the lack of follow through today.

MCEVERS: Why has the market been going up like it has since President Trump was elected?

WEISBERG: Well, I think, you know, you could probably even go back prior to the election. I think market watchers everywhere were anticipating a better tone to the market once we had the election no matter who got elected.

Clearly, the Trump election came as a big surprise, which the very initial reaction was negative. But then when the dust settled, became quite positive because with Trump comes the very real prospect of some very positive fiscal changes that will have a positive - hopefully, positive impact on both the U.S. economy and the world's economies. And this was probably not in the cards if, in fact, the election had turned out differently.

MCEVERS: I mean, there seemed to be some competing theories about what could happen next. Some investors are counting on, you know, stimulus through tax cuts and deregulation, so they're pretty optimistic. But then other people see, you know, a possible failure to pass the health care bill and the tax cuts that come with it, and so they're bracing for a correction. Which do you see happening?

WEISBERG: Well (laughter), well, trees don't grow to the sky, and clearly the market has had a very dramatic move since the election, much more than I think anybody had anticipated. And a lot of this market move is anticipatory, you know, looking for these fiscal stimulus changes that hopefully will come out of the current administration.

The risk is, of course, that it doesn't happen. And I think what we saw yesterday was there was very real concern and, perhaps, valid - we won't know till tomorrow - over the simple fact that maybe this health care reform was in trouble in the House.

Now, we simply don't know how that's going to play out because we'll have to wait till tomorrow. But the one thing the market does not like is the unknown. And if all of a sudden all these legislative initiatives come into question - you know, will they happen; won't they happen - clearly, we're ripe for a little bit of a sell off. And we kind of saw that yesterday.

MCEVERS: Do you think the stock market is experiencing a bubble?

WEISBERG: No. No, I don't think it's a bubble. I would suggest to you that there's nothing rational about stock markets whether - when they're going up or when they're going down. Markets tend to always overreact because so much of stock trading is emotional, and that's very hard to define.

But I think on balance, certainly, the markets had a big move and, perhaps, there's a correction in here somewhere for whatever reasons. But I think the lines of least resistance for the market are in fact higher, not lower. And, you know, perhaps, we've gotten a little ahead of the curve. But I don't think - I don't think it's a bubble.

MCEVERS: OK. So that's your prediction. And you're comfortable with a general trend line going up? Is that where we want to leave this?

WEISBERG: Yes. That's my story, and I'm sticking to it. Yes.

MCEVERS: OK (laughter). That's Ted Weisberg of Seaport Securities in New York. Thanks so much.

WEISBERG: My pleasure. Transcript provided by NPR, Copyright NPR.