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Wells Fargo Chief Portfolio Strategist Brian Jacobsen argues that equities are a good investment for the long haul.
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In the newsroom for us and while Wall Street -- -- says is paying attention to those jobs numbers very closely.
Our next guest says it's an expiration of the tax cuts that we really should be worried about in terms of chief portfolio strategist.
At Wells Fargo and maybe make -- little bit of money good to see you Brian thanks for coming on.
Is it mean that the -- stock market which are about the the job market may be not being if -- should think is the same true in the stock market.
Like -- that the stock market might not have as much support as perhaps what we would -- to have.
You can see that the market runs up and then it pulls back it seems like we do have some fairly good technical support but what I'm really concerned about is the fundamentals support.
For the market as far as earnings going forward and valuations.
-- if we have an expiration of all of the bush era tax cuts the payroll tax cut unemployment insurance all these other factors that could possibly hit the economy at the end of the year which I referred to as the tax wall.
I and I think that could actually really stifle growth next year India not only detrimental to the economy but he can also create quite a bit of a pullback in the market.
All right so you're preparing for that now because we're way out ahead of that and in this debates and a boy we can just the rich -- and I think alluded to this a few minutes you vote you really.
We know what's gonna happen I'm sure you could predicted -- go down to the wire again they'll be one of these midnight deadlines and -- debating in the congress all be wondering whether they'll extend it or not but you prepare for that now in terms your investments if so -- Well in the Wayne which I would prepare for it is to actually be a little bit more defensive with my equity exposure.
I still do like equities for the long term I think that based upon long term projections.
Equities are still the place to be.
But I -- to be a little bit more defensive with my selections they're looking -- so is say consumer Staples or health care.
And some of those the bigger names within the technology industry those companies.
Who can actually harness growth for the global economy and aren't solely dependent upon US consumers.
The market -- says we're looking at it as you speak pretty good today and in them -- update on the SP and -- And the Dow's been up by triple digits just below that right now up ninety some points but job.
The companies and their earnings which you just mention a moment ago.
And the reports coming in pretty get.
ROK but the outlook.
Concerns you from which companies in particular because as I think you pointed out you're you're worried much more about future earnings that what companies have done in the past where you seeing in the most.
Signs or maybe red flags that should worry.
Sure a lot of the red flags I think they're coming from more of the smaller cap companies that are giving a rather dour outlook for the future because they don't necessarily know.
Whether or not consumer spending is gonna stay as robust as what it's been.
And so that's actually one of the things that is informing my investment decision is trying to look for opportunities.
But probably not necessarily fishing in the small cap pond as much as -- and the big caps CE.
And then another area that and trying to stay away from a little bit.
It's more on the consumer discretionary side.
I think that we still have some significant problems with consumer -- -- increasing if you look at -- year over year for the first quarter.
Median what -- earnings for your typical worker only increased by one point 9% from the year before.
Yet inflation was two point 8%.
So that your typical -- holds.
That's a bigger story that maybe we and give -- credit for real talk about it enough but you're actually right Brian Jacobson Wells Fargo thanks a lot -- appreciate it.
Thank you.
