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WSJ’s John Hilsenrath, Dent Tactical ETF Manager Rodney Johnson and Eisner LLP’s Tim Speiss on the lagging economy’s impact on the markets.
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Our if you're just joining us today markets plunging the Dow down more than 500 points.
And that is the tenth biggest point drop on record.
We're back with our all star panel John -- wrapped with the Wall Street Journal in DC writing Johnson of the dent tactical.
Is with Eisner LLP welcome back all.
I guess -- go back to you would John.
I will was one of the most interesting things about the day was what happened the -- it went down I'm not used to gold going down a major markets sell.
Well you know I think it's a symptom the fact that people are marking down their expectations for economic growth and maybe they're thinking that inflation risks.
Are coming down with it you know if you look again.
Inflation protected securities.
Treasury bonds.
They actually been selling off a little bit too you know if you look at expectant for expected inflation in that market called the tips market that's come off.
It had been on the high end of the range recently and that started come off the last couple of days I think the market is pricing in a softer economy for the foreseeable future.
Do you agree.
I definitely agree with that.
Now I think that when you look at the GDP growth which arguably barely.
Is your growth at all through June 34 tenths -- -- corner and you know originally we came into this thinking we're going to be 3.2.
That's to be very difficult to make up so I agree with the fact that this can be -- to be re pricing.
But I also think the law a long term investor and we -- we saw this from the -- march of 09.
Anyone -- cash at that time.
Even giving back with they have over the last ten sessions still is far away end of where they would have been.
Well it's very tricky indeed and let me just point out something that smart that individual investors dead they actually pulled out of the market ten point four billion out of equity mutual funds in the last week.
So I and -- in some ways a lot of people out there are a lot of individual investors are not the pros are having the last laugh.
-- -- -- -- -- you made a smart move this week what you give.
We did we saw some weakness in the technicals and some of the leadership in the last week and Monday and so we -- 70% -- on Monday.
Now what was it specifically that -- you make that call.
Well you're seeing the volatility rise in the marketplace you were seeing the numbers come off in terms of the leadership of technology small cap mid cap.
And then we saw the bad economic report on Friday that can't be overstated what a big revision we had in GDP for the first quarter.
From up one point 9% to only up zero point four as you mentioned a minute ago.
And so we're looking at in thinking this this just doesn't make sense it looks like there's more downside ago.
You know lately if I could throw something in order -- I think that puzzles me about this that the selloff is clearly the US economy the domestic economy is very weak right now in Europe is also.
But out corporate profits.
Have do we have been doing pretty well in part because they've invested so aggressively and developing economies over the last dot.
Decade or two you know I just wonder if there's some good news -- to try to find some good news out there.
And the fact that you know companies -- -- better shape to weather a downturn in the US economy right now.
Then American households and you know maybe the stock selling is getting overdone I'm just gonna throw that idea out well.
We saw a lot of the Dow starts S&P 500 stocks that is hitting 52 week lows a lot of -- -- know and love I think.
Tomorrow could be a buying today for a lot of professional investors out.
I was gonna say you know going to 7% cash.
Which was very -- but they really the next question is how do you amortize that backing and do you start tomorrow.
Do you wait for some other than.
-- go ahead answer the question -- I mean like people think that this is the thing to do to be out of the market on a bad day like this.
But -- begs the question what do you pay to get back into the market and how do you get there.
And -- and that's that's the hard part right it's it takes to trades to be brilliant one trade only -- actually good for a minute you gotta get back candle a brilliant.
And so what will be looking at us tomorrow I think there could be a bounce because everybody's priced in such a negative jobs report I'm no fan of government statistics I think they've overstated them for awhile.
-- even I look at this and think you know what we're probably so far overdone on the indices.
We'll get a little bit of a bounce but I'd still like to see some sort of floor put in.
Get us back up through May be 1260 on the S&P before things start to look like I wanna jump back.
Are -- -- that's the last word thanks guys appreciate your help today John -- and ten great job thank.
