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Scott Wren, Wells Fargo Advisors senior equity strategist, on his call for a market pullback and how investors can make smart choices during this peri...
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Our first guest thinks that there's more room for the stock market the bid to -- the lower but he says he should use the pull back as a buying opportunity joining us now discovery and Wells Fargo advisors senior equity strategist.
Scott we hear a lot of times you know buy the dips then I guess in a perfect world I would buy all the -- to -- on the -- out of -- big make it tablet better than the iPad.
How much -- and I'm I'm only really really -- audit outside how much are you looking for where some people start to look about.
Well you know Charles I would love to see the market pullback to big technical support that's in the 280 to thirteen to twelve AD to thirteen hundred level in the S&P 500 that it represented from the hi I have couple weeks ago that'd be at 810% type of pullback.
We would love to see that certainly long term investors you couldn't argue with with putting some money to work in here.
But but we always like to take advantage of opportunities I think the market's come a long way in a short period of time.
And I think we're due for a little bit of pullback.
Yeah there's definitely no doubt about it of course are coming off the worst two weeks in a row for the market and a couple of the worst sessions I think this market -- shown some remarkable resolve.
What do you think -- in terms of near term catalyst that to the downside in that they could just be sort of rush in other words.
Europe still a concern China's still a concern can't we sort of grapple with those things to get that 8% correction and that sort of have them in a rear view mirror.
Well Charles I think there's a cut a couple of things going on one -- -- -- tomorrow this this tenure Spanish auction.
Could be big and it could be a trigger.
That that contributes to a little bit a downside here although I think I think you can rest assured that the ECD's been on the phone with.
Every Spanish bank and probably a few other eurozone banks the last few days.
Twisting arms in lining them up to to participate in the Spanish auction but.
But you know Spain and Italy have a lot of debt to to auction off the rest of the year this ten year Paper that's -- -- gets a little Dicey wouldn't surprise me at all to see some.
Some bad auctions there that's gonna create an opportunity more fears over China slowdowns emerging market in general slowdown.
Those kinds of things are going to.
To spark some opportunity I think but.
You know the US growth even -- always it's it's very modest I think it's very dependable and so I think there's there's some support here under the market.
And I think that global investors.
Are going to continue to come in and buy this market it's almost like a safe haven equity play.
Because even -- we're below trend growth.
It's getting more and more dependable people are more confident that.
Employment going to improve.
The economy is not going to slip back into recession so that's got to help -- market it's gonna provide a cushion.
And hopefully we will get some -- -- forgot to put money to work at a little bit lower level.
OK so -- to you're talking about putting up money to work what do you a buyer -- noticed in your note you said that you are looking for stocks.
That are sensitive to the global economy it seems like and that's a little bit more of our risky play what do you a buyer -- right now.
Well should -- and I think that.
What what our theory is this -- we just we've just been passing through the middle part of this cycle volatility.
-- not going anywhere 2011 there wasn't much going on other than a lot of volatility.
But.
But we want to prepare our clients for the next half of this cycle we think the economic recovery here in the states and globally is going to continue modest growth -- inflation.
Stocks can do -- -- that are they going to search probably not but I think they can grind higher.
And we want to make sure that our clients are in the market in those sectors industry groups and ultimately the stocks.
That are gonna benefit from that continued growth so.
Material -- something like diversified metal and mining.
Those stocks have gotten hammered here because people are afraid that emerging market growth is going to collapse.
You know those stocks look good to us so you know.
We want to be players in the continuation of this recovery I think I think the US economies probably going to expand at least through 2014.
So.
-- we have a couple years ago here at least and and yeah you cannot sit on the sidelines and do nothing or sit on a lot of cash in my opinion anyway what I need to take advantages -- You are talking on mining and and material stocks as we were just showing Scott -- a lot of these are dependent upon commodity prices -- their performances.
Are you -- -- commodities as well considering these are so closely linked.
Well I think commodities probably have a little bit more downside because I think there's still concern.
Over.
How much the emerging world is going to slow I don't think it's going to slow all that much and I think that.
That if you have any type of of view that's further than twelve months out.
Picking up these stocks that are sensitive to commodity prices I think that's a good idea other some industrial industrial machinery within the industrial sector.
You know there's there's some good things going on there the consumer discretionary sector which has been performing well.
Definitely some good industry groups there but you know if you look at materials industrials those have really been hit.
Because of the fear that emerged the emerging world is slowing.
And I think that's a little bit over done and we're definitely keeping our eye on those sectors and stocks in those sectors.
To pick those up so that we can play in this for the next couple years in this recovery.
You know I got to tell you -- -- 1000%.
Scott -- -- Wells Fargo advisors thanks a lot we appreciate it.
