- Tony Dwyer, Canaccord chief market strategist, told CNBC on Tuesday that record levels of cash in the economy are even higher than 2009, making a bullish case for markets.
- He said “the amount of money that’s floating around the system” as the global economy rebounds off historic weakness tells a compelling story for what the next few years will look like.
- Dwyer’s bullish case came from a chart that showcases record levels of Fed-supported excess liquidity.
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Tony Dwyer, Canaccord chief market strategist, told CNBC on Tuesday that record levels of excess cash in the economy are driving his bull case for the market. “The amount of money that’s floating around the system at just the time that the global economy is beginning to pivot off of historic weakness is really kind of a compelling story for not the next 15 minutes or 15 days … it’s for the next 15 months and couple years,” the strategist said.
Dwyer referenced a chart that showcases record levels of excess liquidity in the market right now. Excess liquidity in his terms is “money you can get out of the bank today or tomorrow against what is needed for economic growth.” He explained that in the summer of 2009, after the Fed opened up the “QE spigot” and fiscal policy supported the economy, there were never-before-seen levels of excess liquidity.
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The same quantitative easing policy is happening today, except this time the resulting excess liquidity is “even way bigger” than in 2009, according to Dwyer.
“You have an economic problem when you have a need for more money and very limited access to money,” the strategist said. He called the global monetary and fiscal stimulus “extraordinary given COVID-19,” and he told CNBC that as long as money is available, investors should take advantage of the historically weak economic levels. “Weakness is to be bought, not sold, or feared,” said Dwyer.
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