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Quincy Krosby, market strategist at Prudential Financial, on the impact of the Moody’s downgrades of major banks on your investments.
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Confidence in the sector are joining me now is Quincy Crosby Prudential Financial market strategist thanks so much for joining us -- Thank you thank you so.
We are seeing today -- that banks are bouncing back largely because these moves were telegraphed and they were well priced into the stock but why do you think they're not good long term investment.
Investments.
No I mean -- -- look you know -- -- uses a trading vehicle there's no doubt about that and today I think what you have is that you know market like certainty.
They got it it's certain now and then and they could move on.
What what we need to see is the the longer term investor feeling comfortable.
About the banks and the economy -- the US economy because after all the banks are.
A major reflection -- barometer of what's going on in the economy.
I think that's what's keeping US investors away plus -- lack of the dividends that US retail investors in -- there's so many years.
But I do think I really do think.
That if you are a long term but -- what is long -- need -- -- for most investors it's it's two months three months.
But you if you wanna hold the best agree.
In the financials and hold them for a year two years I think that you're going to be very well rewarded although I mean like you should.
Economy is very weak you know -- of -- reporters Charlie -- I was on earlier making the point that.
You know a lot of these banks do have a ton of exposure to Europe we don't really know what's gonna happen -- your balance sheet can change almost overnight based on that exposure.
Why do you think they would be good investments but if you were willing to hang on to for two years what's gonna get some.
About.
Woman wasn't -- I think the US economy it it despite or in spite of what goes on in Washington.
It economies heal themselves at the most micro level.
And there are banks which have any any closer relationship with the economy -- this is not be.
We're not suggesting that investor -- in -- by the whole basket Warren ET after.
But do your homework and this is where.
A sector differentiate -- -- up.
There are different parts of financials.
There are insurance company is there are the large.
A global banks there are regional banks there are best of breed with in each of these sectors and it's and those are that are gonna do very very well.
You know we we make so much of this.
But the fact is you would've thought that this downgrade was the most important -- an immediate late breaking inches Marquette.
Not only did the share prices go up the credit defaults -- just the insurance none of -- -- down the Mexican.
We knew about -- I -- museum the most basic level macro level that economies.
Heal themselves.
Those are free markets I mean those are markets that are free of excessive regulation and taxation I mean.
-- out what happened what if we -- part of the reason why we haven't seen things improve as quickly as they might have it in other pullbacks.
Is because there has been so much tightening in regulation taxing when new -- that doesn't change.
Yeah I know look I do agree with that but I would have to say that the managers of the banks have done a very very good job.
Of of of getting rid of noncore assets cutting costs yes sticking to that their -- -- focusing.
And watching the bottom line MI and you don't look -- part of this industry.
But we are seeing we are seeing a paring back of cost like I have never seen and that ultimately.
Is going to mean stronger banks -- they have your head -- absolutely.
Absolutely they face headwinds -- you know what they -- But the good ones are doing a very very good job in -- and keeping those posture changed and you will be more of it.
But don't think that it's in spite of but yeah in spite of Washington quick ticket coming -- we appreciate it have a great mayor did -- give -- I appreciate it thank you tipped by.
