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Mark Luschini, Janney Montgomery Scott chief investment strategist, on how European debt and volatility are impacting American markets.
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The negative influence in Europe joining us now mark -- Cheney's chief investment strategist for -- Montgomery Scott.
Mark it's still all about Europe isn't it.
Well I'm afraid so -- I mean and any given day no matter what that data points are domestically we seemed to be changed to what's happening -- -- Europe.
And it's for good reason I mean obviously the problems over there clearly have not gone away they continue to manifest in different forms.
And as long as they remain on resolve that means our equity markets are -- -- Somewhat subject to the winds -- policy makers activity or lack thereof or in the Euro zone.
Yeah I guess because it.
25% unemployment Spain tax invasion in -- these are big issues that they are struggling.
To get a hold on let's talk about what's going on here at home now we do have unemployment -- we just heard that the median income for that regular households.
Is fine precipitously.
So.
How -- -- -- it it improve the economy here.
Well Fisher answers jobs I mean they cure all for -- making what we have now in terms of this somewhat feeble economic expansion into one that self sustaining.
Its job creation in -- necessarily that won't fix the still anemic pace of wage growth.
Which on an after inflation basis continues to be negative at least it would.
In June engender fuel more spending power into the economy in the aggregate and -- consumer space -- don't always 70% of economically to the United States.
That would help to fuel economic growth and one then ultimately be -- the other.
I -- and that seems to be really tough thing for our politicians to come up whether release are corporate that corporations as well these days -- suck about these markets you know June 30 coming up a lot of mutual funds closing their books.
Lot of end of quarter activity going on -- biggest he would -- more maybe money coming into this market.
Well certainly we've been holding out hope we'd be able to see -- be so far it's primarily institutional investors is individual investors or retail that continue to unfortunately believe assets out of stock mutual funds.
Into fixed income securities whether it be cash or bond mutual funds.
Unfortunately I don't think just turning the calendar from June 30 to July 1.
Is going to be any kind of magnet to why investors -- suddenly turn around.
Their attitude with regard equities I think it's going to take more prolong lift and equity prices in some relief and these big macro issues which continue to weigh on investors psyche.
-- you're not sitting on the sidelines right I -- you do you do add interest and in particular in mortgage -- can you just -- about -- us about why.
All -- -- -- has been quality -- in -- you know low growth world and particularly income from dividend producing stocks.
And little less known space known as mortgage real estate investment -- -- pretty interesting vehicles.
Basically these are -- -- instruments that are registered as real estate investment trust or -- That basically by mortgage securities in the open market may borrow very cheaply to -- self.
And so that spread that people tend to lever from six to eight times the portfolio of value of their holdings produces a double digit yield to investors.
You may not necessarily see much -- growth in share price but starting with a double digit coupon it's an interesting place to generate an overall return.
It sure isn't especially as long as the dividend tax -- stays -- it's kind of attack homer on tax wise to.
Even more let you go I know you like energy sector what in particular is it drilling is it natural gas.
What's a little -- to -- we think obviously energy prices have been clobbered in the house -- see higher prices going forward is emerging market activities continue to be the primary consumer.
Of oil demand that said we -- -- to play if you will Chevron -- high dividend payers so once again quality high dividend.
For -- recovery in global energy prices and Halliburton.
As a way to get exposure particularly North American shale and energy production it's good stuff -- she -- -- Montgomery Scott thank you said -- --
