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OmniVest Group CIO Tom Sowanick and Nomura U.S. Chief Economist Lewis Alexander and RJO Futures Senior Commodities Broker Phillip Streible on the mark...
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Lewis Alexander to the conversation a gentleman.
Look we do have a very nice year to date performance of console -- you have actually been quite bullish.
In a very measured way and I'm just interested to know what I think really happens in the second half here I think.
We're gonna continue to have a good decent market that the Fed -- yesterday with respect of Bernanke or rather Wednesday.
That -- -- they're ready to move if necessary.
Otherwise they're to keep interest rates is at 04.
At least through 2014 at least that's what they said.
That earnings are coming in better than expected the economy is a -- modeled right here.
But I think that there's been enough to worry in the marketplace with respect to what's going on in Europe what's going on.
In the United States fallen off the cliff in January and the markets actually move that moved up that wall of worry and that's been positive on the other hand.
There's an awful lot of negative sentiment with respect to the equity market in part because people of -- this rally.
And there are from presumably looking for a place to get and I'm not sure that they will help -- Louis if you've been listening to Tom Hera -- Fox Business you would've gotten into the right -- -- he's been advising that there's really nowhere else to go with check treasuries.
Giving out nothing -- the whole treasury market might explode -- in the next couple of months.
Where else is there to go but the market.
Well obviously there is emerging markets there's other things overseas.
I do think.
Has the economy sort of picks up.
The bond markets not necessarily the place you want to be obviously credits had a very good run we still think credit fundamentals look pretty -- really pretty good.
There's no question that as long as earnings hold up equities are gonna be a good place to be.
Philip equities have been a fantastic place to be even as so many people have.
Sort of sounded the warning signal and said watch out watch out.
The Fed will stop the Fed will keep going and Europe is going to have to fall off a cliff somehow all of these things despite that have not made the Dow NASDAQ recipes stumble which.
Area do you see -- the fast money really going into down on the trading floor.
Well we're still seeing a gold directly into the equities I mean into the yes and you 500 you got a clear line in the sand down at thirteen fifty -- -- -- hold their.
Prices should be okay back to -- to the outside I mean we're start to see also -- European investors are shifting their money out of any eurozone it seems like issues over and Spain are continuing to grow and he got unemployment at 24%.
There.
These guys are looking for some safety US is a little bit ahead of the recovery curve psychic anywhere within the SP 500 you'll -- okay.
While -- a lot of you have an instrument in which you can park some of your cash if if you just wanna hedge yourself against volatility we we know that may is a is a pretty volatile month of you can pick.
A period during which you think there's gonna be more -- you have some calls -- -- which is a place where you can put your money sort of is ahead now.
But we -- -- most investors are afraid of CPAs it in because that it's a commodity trade using futures but what we found is a mutual fund.
Families -- actually offers a mutual fund of CPAs and it's an excellent way of betting.
I guess a a hard drive -- Way what we're looking at right now forgive me Tom but this is how these CTA's on the right in the Green have performed.
When there have been pullbacks and as you can see when there -- a pullback you want to be in these instruments go ahead.
Corrected if it's account or a counter trades to a sharp fall in the S&P and we we can what we've been reading and hearing of the last couple weeks is that you know.
This spring summer will be just like last year -- just like the year before where the market fell hard in about a terrorist then this is an area where -- thank you could.
Not only -- -- some defensive plays but you also have some.
Upside potential.
As a go to Lewis can we put that back up their those numbers were rather stunning -- if somebody happen or not it would.
Seeing this look at this now since 2008 as the S&P fell 41%.
This at this instrument EQQCX.
Up ten and a half percent -- you see the rest of the numbers so.
Do you expect what Tom expects -- and that is -- somewhat of a rough and tumble summer here.
Oh look I think in the near term the trends in the US there are gonna be weak.
You saw that we've had weak numbers for the end of the first quarter and I think that's gonna continue.
Moreover I do think we are coming into a period on the risks in Europe -- gonna see more Q.
We've got elections coming up in Greece on May sixth but I think that's going to be another point of volatility.
I think looking beyond that though my I think we are quite comfortable with the outlook for the economy -- and we think going ahead it's going to be more positive but there.
You know the next month or two I think is gonna -- Now -- going to be challenging and and and this just a lot of let me go back to confidence time that there is this this alignment between.
What the market has been doing which has been spectacular over the past three months and what the economy's been doing which is much less than spectacular -- Does that this alignment concern you at all.
No because the what would hurt the economy was.
What was the over leverage of the economy and the leverage was a nationally -- corporate level it was at the consumer level.
Corporations where in great shape to to move through that -- that the downturn.
They were paying paying off their debt earnings for getting strong in at same time the consumer was we're rebalancing their balance sheet I think we're pretty far through that process now.
Everybody's waiting for the housing market to improve and I think they're waiting for the wrong trade.
What's happening in the housing market is that we're seeing a great deal of improvement coming through investors buying distressed mortgage product.
That I think is a real leading indicator with perspective how strong this economy yes.
-- but let me bring up the -- of volatility -- fear index a week ago it was brushing up against twenty look at it today.
While up slightly is now at another low level sixteen.
Doesn't appear to have a lot of fear in this market do you see trades as it pertains to fix what our day and when it's extraordinarily low like this sometimes that signals a market -- -- -- not.
-- an absolutely a way to play the downside of the market -- time when soccer portfolio is to look at the volatility index for the outside.
I needed you see that -- start to fall apart.
-- start to move up aggressively now we know all know that the banks as the gonna go to zero but the -- big trend down a little bit but I don't think will be hurt as bad.
-- is being you know shorting the -- with -- aggressive move upwards.
Tom I I I know the answer because they asked -- agree -- apple life as to whether your bought apple.
As it pulled back last week you said not but you still think it's a hold if not abide this price correctly.
I think it's a -- I think it's something that you just need to our -- You know as a group you know we're gonna see the new phone coming out and this is gonna be a game changer in in many people's opinion and I think that that.
Apple is just like American pie when it's there you -- that.
-- -- -- Good to see all of you Tom Lewis and Philip by the way we'll see you in just a few minutes for the -- of the --
