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Our next guest says rising oil prices are creating more risk in the markets could see is equal to 2011 joining me now with the sectors that stand to gain in the is in the most.
It -- client top chief market strategist at LPL financial Jeff thanks so much for joining us.
Seen all the extra mile oil -- a real risk here ha.
Well you know once you get over a 115 dollars a barrel that has where we we is where we've seen -- in the past.
Negatively affect demand for oil but demand in the economy as well so we get very close to that -- Got given the fact that we're in what's really the shoulder months here we have been gotten to the peak summer months yet -- geopolitical -- doesn't Begin to fade.
-- we can be really seeing an economic impact in the coming months.
What do you think it would have to feed into an order for you -- feel -- about it being -- -- to the market.
Well you know I think if we got right back down did the ninety's again around a hundred dollars.
But that's probably the range it's in this year 9200 dollars for the most part that's probably the core where oil should be given the global demand outlook.
And I think we can cope with that that level of prices but.
You know it's an election year end certainly the from an electoral standpoint the president certainly doesn't -- -- see three figure number on oil prices.
Any say it's not the only headwinds out there there -- number of other lines the grease fire like -- -- maturity would use that -- yet budget bombshell what else is wearing a.
Well there are a lot of things pressuring the economy and and the markets you're one of them.
Is you know for awhile good data good economic data we got some -- from ADP was good news for the market but -- Data was good news too because it meant.
Well the Fed might step -- the ECB might take some action building indicated that there are off the stage they're not gonna be doing anything.
So bad news is now actually bad news the market can move in both directions.
That's not that's not a good thing -- might mean.
The biases to the downside the grease fires spreading sure -- find out later this week whether that issues resolved within Greece but Portugal's next in line we're certainly -- -- near the end of the line.
-- countries needing aid within Europe.
And -- we've got budget issues here in the US of course and we're in the middle of probably the worst earnings season in three or four years earnings -- are all expected to be up.
0% essentially flat.
Year over year that's the worst showing in quite some time I think stocks have a tough time making for progress in the coming weeks sue -- pretty pessimistic.
How are you positioning yourself as a result.
You don't we.
Don't think we've seen the highs for the year they -- come late this year but in the meantime you wanna be defensive we have twenty to 25% cash recommended in our allocation we also.
Hold some securities like SDS for example which is the inverse of the S&P 500 ETF in order to hedge some of our positions that we'd like like.
High yield bonds very cyclical.
And very attractive from a -- perspective but very economically sensitive -- hedging those positions.
With with the with the other securities or actually do well as the market perhaps pulls back modestly or let's say.
Within a range of maybe four to 10% over the course the next several weeks or months.
And you know that consumer discretionary and and refiners are gonna get hurt by everything that's going on would you short them.
You know if if we thought oil was gonna go over 115 which at the moment I don't given the demand outlook but if we started to close -- us threshold then yes.
I think you -- -- -- looking to refiners -- pay those high from feed stock costs and of course did the retail is Richard B nailed by you know just those higher prices at the pump.
Yet -- -- that the market has continued to defy logic -- even though the market and even on the economy hasn't expanded as much as some have hoped.
It continues to go up -- looking at 72 point -- what do you getting -- yourself in case Iran.
Yeah well I I don't think you wanna get very defensive here but I I think you when you know we were former optimistic at the start of the year looking -- -- eight to 12% gain for the stock market this year.
We were taking those profits essentially pocketing those are looking for the markets maybe pull back closer to the flat line.
To redeploy those assets so I you don't wanna get too defensive -- run for the hills I don't think we've got.
Bear market around the corner but I -- think you wanna play the play this volatility just -- -- -- protect yourself what we get this these moves and Peter 9% up to the upside.
-- pocket that and look for better opportunity.
Not super defensive just say that makes a lot of sense Jeddah on top thanks so much for joining us through -- I love it.
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