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Strategas Research Partners Managing Partner Jason Trennert and Mainstay Capital Management President David Kudla on the market’s outlook and its im...
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But actually 37 years old a mislead very bright individual and we'll continue to follow that of course -- get back -- -- street fight.
We heard from David as the -- let's hear from Jason the bed Jason.
Durable bearish on -- are you expecting any major pull back any time soon and what worries you the most.
Well -- think.
The most is that there -- these macro overlay is for the the range of outcomes is so wide that it's very difficult for other businesses or investors to take any risk and whether it's Europe or whether it's the fiscal -- -- whether it's our own election.
It seems to -- the closer we get to.
The November election them less likely it is that anyone's going to do much so I I think.
In particular it worries me the most is that you're gonna have a significant number of earnings downgrades.
As a relates to 2013.
Now I will say from a valuation perspective equities are.
Your private best house a bad neighborhood cliche but they're clearly much there's much more value and equities than there are.
In bonds obviously but by the same token I think your unfortunately I think your pride get.
A better entry point on equities at some point in the next six months -- David that.
Obviously you guys have different perspectives you're saying now is the time but where what are the best ways.
To worm your way into equities at this point nor is there another area that you would like I don't know corporate bonds anything.
Well we do we do like high yield bonds -- other people reaching for yield right now with the ten year note near record lows again.
So we're looking at preferred -- as an opportunity that's where investors can get some safety.
And also -- good environment.
The ET FTF south.
Of about 13% this year good environment for for for for preferred is looking at reits with a dividend without high yield there.
And you know the opportunity that we have been in that area -- financials.
Jason of CO very defensive right now how should investors play this market saying you know from now until the end of the year just in that time.
For a really if you have -- back.
Kind of timeframe I don't think there's anything wrong with having higher than normal levels of cash -- and I think -- staying in this environment and again in the range of outcomes.
I'm an investor Soviet I don't like to have cats is usually a dirty -- burdened by the same token I think discretion is the better part of valor.
I I would give.
Excuse things much more towards the tourism offensive side which would -- utilities or consumer Staples all the rest of that.
I I really wouldn't go pioneering in terms of Europe -- financial store.
US treasuries.
Well -- financials are awfully scary but it David you know that everyone's looking for yield everybody's looking for some real return here is it's safe to just go into companies that.
Maybe have a pretty decent dividend and that are well known consumer and it -- -- Spicer Johnson & Johnson.
-- -- Yeah we you know there's some opportunity there you know -- would Jason through certainly over the next few months or in a volatile environment continue traveling in Europe.
And with this election uncertainty but we're -- a period here is look at the last seven of the last eight sessions of the Dow's down.
As -- -- looking in those defensive sectors high quality blue chip stocks.
Paying a dividend there's opportunity there and is Jason said you know cash is dead money.
And treasuries.
The -- risk of a negative real return.
And a real opportunity for capital depreciation.
Very -- holding period so if you valuations for stocks the lowest in years very -- know valuations can stay low for a long time.
But there's certainly through this environment -- -- going to be some buying opportunities.
And stocks -- since -- what you started -- just quickly let Jason finished Jason what one trigger would tell you things are looking better now.
Well it's you know normally employment is a lagging indicator I think this time around deployments gonna wind up being a leading indicator just the extent to which companies have done more with less and and margins have reflected that profit margin reflected that but I think.
You know hiring employees in this environment requires a lot of confidence and I think business confidences is going to be the thing that gives you some indication that better times are ahead boy that'll get attention when companies start even hiring one employees -- it -- -- about David and Jason thank you.
