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Auerbach Grayson managing director Charlie Gushee and Wells Fargo senior equity strategist Scott Wren give their outlooks for the markets.
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The -- could be standards -- that whole -- ladies.
It is about the Fed everybody looking like they are gonna -- the course.
But -- benefits here.
The bulls are the beds for the market -- bulls and the bears for the markets joining me now Scott -- Wells Fargo senior equity strategist impairments to -- for the our -- -- -- -- Auerbach Grayson managing director.
A global.
Equities sales tell us start with you on this this this that situation I mean you know we know what they're gonna do with rates are gonna stick through weapon until 2014.
All they can do is comment about jobs.
All they can do is comment about the economy.
Get the markets seem to be really powering higher -- -- I I think it's time to buy equity not sell equity I mean the Fed's not gonna do anything that's clear.
We're in low interest rate environment they're gonna stick to that as long as they possibly can.
And you've had a long series of data points today's retail sales just being the latest they've gone a little bit better in the US the GDP estimates in the US -- taking up.
So what's the US driven marketing your opinion absolutely OK and what does different than what's been the last four years which has been.
Global equities Asia.
Those other markets it's more about -- the United States now -- interest.
That's right it's the world's biggest economies the US is going better then a lot of other things are gonna gonna following correlate.
OK let's bring aunts got -- -- -- those from Wells Fargo I'm curious got if you agree with that assessment that -- it is about the US economy now.
We're gonna see a -- more of a positive -- markets are telling me that today what -- Well you know -- I think so far what's happened is the US stock market much like.
Our bond market has always been has turned into a safe haven.
And growth is very uncertain obviously in Europe it's you know how better recession are we going to have.
Brazil and China just lowered their growth rates.
How much is -- merger -- market going to slowdown we're not gonna get much out of out of -- so.
I I think right now the US as historically it's played the role of the lead sled dog pulling the global.
Economy forward.
I think that's the case even at 22 and a half percent growth so but I think you need to keep that entity into perspective where.
You know growth -- slow.
Earnings growth is very slow.
Lots of on certain things going on around the world so we've had a nine plus percent gain so far this year.
I think you know we could trade a little bit higher here but as far as the notes I've been writing to clients I've been saying traders.
Should be taking some money off the table here.
You know valuations overall 1224.
Month plus outlook.
You know stocks aren't expensive but I think for traders you know it might be time to lighten up a little bit.
OK all of -- quick Scott I wanna stay with -- -- for 12 here because we're looking at fresh new highs again for the S to be the last five sessions for the S&P in the Dow.
We're saying strong gains recipe in particular that has been a lot of calls.
For a strong year for the S&P but you're so sure that we're really gonna -- the levels but most analysts say that we're gonna -- what do you say.
Well you know it just like last year Sheryl I think I think we're going to trade above and and and below our year end target range which is thirteen 25 to thirteen 75 so.
You know some of the work we're doing suggest -- will see something in the low fourteen hundreds that likewise you know will also this year see something.
Maybe in the low to mid twelve -- so I think volatility is likely to pick up.
I don't think it's going to be a one way street I think the -- below fifteen is pretty unbelievable there's a lot of complacency out in the market.
I don't think that's going to I don't think that's the trend that's going to continue so.
While were you know we look ahead.
The economy I don't think there's probably going to be a recession until 2015.
We want to be long stocks but as far as this year goes I think we've seen most of the gains.
You know Charlie we're looking at the -- -- -- but also the other story Charlie has been bullion.
We haven't seen really the strongest of volumes a depending on the -- you look at the session that you look at does that play into our favor or is that work against us.
Well the people at the technicians have been highlighting low volume as a reason to avoid the rally but of course it hasn't stopped the rally and I think what it means is -- still ahead.
Used you had bond.
Fund inflows.
Still in Q1 overall which is amazing -- it just tells you how big -- actual fear is of investors out there.
And the level of equity volumes across the board not just US fed you know that you -- markets in particular.
The Q1 volumes were lower than.
Any quarter in the last ten years including you know the near death experience in 2009.
So I think it's all still ahead.
OK -- you've got some sectors that I want to point our our viewers' attention to because you are.
Saying that if we're gonna look at equities and he's he's gonna make -- up on -- correlation in the first quarter -- up.
But it's got you -- -- some sectors that we really need to pay attention to it.
Well I think that what what we've been telling our clients or at least what we've been recommending that they do.
Is certainly we want them leaning a little bit sick sick quickly so another words industrials materials we like those types of sectors if you think.
The global economic recovery is going to continue.
Then you know those -- the types of sectors you wanna bitten -- -- not happy with the editing was -- up from -- What about how to package truth you know obviously I think right now -- you know we're in the middle portion of this cycles so so right now you don't wanna be leaning too hard one way or the other if you look at the way the sectors have really.
Played on a weekly basis here lately.
From the October lows until about a month ago it was all the cyclical sectors.
Then lately here -- -- a lot of churning some of these defensive sectors have been doing better so you're in the middle of the cycle you wanna be a little more balanced you don't wanna -- too hard one way or the other so things like industrial machinery which is -- industrials obviously.
Packaged -- with that which is a staple you need to have some defensive exposure here.
To Staples to health care but you don't want to be.
You know zero exposure something like that this middle portion of the cycle as we saw all in 2011.
Very volatile net net not a lot of change I think we're still in that period I think we're going to get.
There at some point probably 2013.
-- couple years beyond that but you need be a little careful right now and that's why.
The B groups that I -- nights -- forwarded it to you you know -- are very cyclical summer more defensive.
One -- -- both did you agree on our on our viewers I was the mining sector both of you actually.
Are bullish on the mining sector Charlie look what -- Chief if you look at some new classes of metals we highlight platinum has to keep play I -- the it's been hit by high increasing inventories last year and a half we see that reversing out.
You're gonna see that pick -- who along with automotive demand with a growth has been.
Far better than expected and a lot of the equities that play into that are just on extreme.
Cheap valuations.
All right lots tell you -- -- a lot of different opinions about.
Of what the Fed should do but tell markets are liking it no matter what today anyway Scott ran at Wells Fargo Charlie's gonna stay with me of course for the rest of the hour we're gonna customer -- -- trolley coming up.
