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Dialectic Capital’s Tim Strazzini and TJM Institutional Services’ Daniel Stecich on the outlook for the European and U.S. economies.
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-- receive any he has ahead of trading at dialect thick capital wonderful to see you anticipate that the cinecast -- -- you have -- -- -- Europe of course is back in the sights to kind of get out of the -- -- but you say.
Germany is the only European nation that'll be -- move toward recession.
Yeah I don't I don't think that's a huge surprise me if -- -- at the upper one per limb growth every country with the exception of Germany you know an -- what's going on from a austerity measures.
Across every major country in Germany that produces anything -- you know exporting any GDP.
I would venture to say that even Germany's got a hard time eking out a positive number while I'm in terms of economic growth and and I don't think that's a huge statement and it.
A lot of says sounds huge to maybe I've been reading a lot of euros who are not quite as pessimistic -- have thought it.
Two months ago -- what's going on and economically sensitive stocks that export to Europe or that drive a great deal -- growth from Europe.
But you're starting to see it certainly in transportation.
Financial stocks -- -- -- in the sites again so I think you're gonna see this play out you know as we get further and it's like.
And corner -- S -- feels completely the opposite view key feels that he likes this market's still despite a couple of bumps and bruises.
You feel the opposite you feel -- what's.
Warm weather brought a lot of the demand forward into January February that was the entire reason for strong -- that we are seeing so I still think that there probably some sectors.
The you can look at in the US but.
I'm really cautious on energy transportation and I think there's a lot of spots where you have to be very careful.
Let's go back to get -- reaction because Dan this is the counterpoint to your argument although Wu.
You look at retail sales numbers today not too bad -- retail sector up tremendously today.
What do you think -- the fact that so many people say that the warm weather brought people out to buy stuff early on and now that is going to taper off.
Well it'll be interesting to see it's -- -- -- everybody's put forward their objectives you know.
Warm weather probably did help it did -- help that a 100% absolutely not.
If I look around it incidental indicators around their -- -- looking more positive and that's what I have to look yet.
Two days whether or not we -- dictatorship.
More mother may be but I doubt we'll see in the all the -- -- -- find out is look at the state over the course of time not a pencil point in time in that's how it's been going over time not like it.
-- yeah I think that there's there's an.
I'm a big part of what the warm weather didn't make people do things they would otherwise have done it just pulled for a lot of demand.
Into February that you would have seen in March and April so now unless we see a dramatic shift in the economy a dramatic shift in the employment.
Or something that gives -- consumer or or the company -- companies greater confidence in expansion are spending.
Then we're gonna see a real soft -- -- make me some money here what you like what don't you like right now.
Well if I -- to stay on the consumer side there are couple retail names have gotten our house in order I think.
Crocs.
Chico's and gap stores are all doing really well for -- volatile.
Absolutely immunity they worst single product company now they've -- you know they've broadened out a little bit they still sell mostly children.
They used to sell only in spring and summer now they sell -- a year round they've -- their whole inventory thing figured out.
Looked at stores is doing a terrific by the way I was surprised to hear about the turnaround effort -- because it was it was sold off for lost about a year -- now I think I think for the first time in in in the eight years I've been married.
I came home and my wife was showing me like a dozen things -- bought -- the gap.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Well.
Certainly transportation.
From anything related to you know light truck -- heavy truck -- class -- truck anything related to transportation in Europe.
We're we're a little concerned about in the US domestically.
The refiners have been a play that we've enjoyed from alongside for a long time.
But with WTI and Brent converging and frankly -- stocks have gotten a little ahead of themselves so we see there's more downside there.
And in the fracking space something you heard about it papers for months and months mostly from an environmental perspective but because it was so popular continues to expand.
Some of the more leverage guys in fracking.
Our our overexposed to kind of over capacity there and and we see further downside in that space -- the S&P level that we closed up thirteen 69 is that's up problematic that we didn't close at thirteen seventy.
Not it's too close of the levels to get into as volatile as this market is I'm not too excited about it.
Let's wait to see what that data gives us before we make an assumption I'm not a big technical guy you'd have to watch it.
And we could see a little bit of a right to some technical part but I think the fundamentals ultimately will override by the way to give me wrapped him I gotta ask you what quite natural gas I was thank you for who could benefit from the cheap natural gas which is practically -- -- what about power companies.
That do conversions from coal to natural gas -- few of those I would think they're big winners who had absolutely and and it and it has been a shift look people have been looking at -- names as potential value here because that shift is kind of done.
And it's gonna provide some copper bottom in the in the coal industry so.
Yes utilities I think are valuable here because people been overlooking them as a separate plan I think that's a spot for safety that people should be looking at there's some good value there and also perhaps Coleman's.
-- -- great to have your perspective -- -- thanks very.
