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Dowbull U.S. market strategist Marc Pado and LPL Financial Chief Market Strategist Jeff Kleintop give their outlook for the markets.
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-- -- that -- -- -- out of congress leaving town despite the fact that no deal has been reached to avoid a fiscal cliff at the end of the year in.
You have reports of businesses and some investors are bracing for increased taxes with the fears.
That we could slide back into a recession -- To talk about that.
Today marked paid out from my -- -- US market strategist and Jeff -- top LPL financial chief market.
Strategists look to start with -- markets -- uninteresting because we have and I think we may have been the first people to report this and a lot of people filed think -- businesses.
Anecdotally and then some.
-- data supported this are are pulling back and say hate I I'm not sure I wanna commit.
Here to hiring and things like that if I don't know what congress is up to.
Look at the stock market off to the races and yet again today up seventy points of what do you make of it all with congress not getting anything done.
Well I think we we see saw between the uncertainty.
Of the future.
And earnings and how we're actually performing so -- actually earnings and fundamentals.
When you look even at a hundred dollars for the S&P first 112.
And normalized.
Fifteen times earnings that is long term historical multiple.
-- end -- with 15100 trading at a huge discount to that.
So in the focuses on earnings the markets able to move up right and the market focus -- on the uncertainty.
Of what's gonna happen in the next two months the market moves down and that's what we've been doing possibly -- within a range.
From high to low everytime get -- low -- it seems to be a buying opportunity.
Kind of interesting -- -- -- and in -- -- referring to S&P 513 97 today.
You know pull Thorne at that 15100 number as it.
In a may be more fair valuations again and we would have more room to run -- are you.
You wake up but I do you worry about the fact that congress can't get its act together or people like -- -- playing that up too much what's your view on it is an investor.
Increasingly this is going to be the biggest issue facing investors contrast this first couple weeks of August -- -- last year remember last year we had the debt ceiling debacle that downgrades.
All that's coming that's deal.
Only six months from now instead of right now in August until investors are now so short term oriented Wednesday -- seems like the long term when Jeff is the market stock markets -- the forward looking.
You know mechanism to some degree so when -- be priced issue Jeff.
I think you're gonna see October really becomes a big issues we get close to the election remember the markets -- -- see one party in control of both.
Houses of congress that the only way we need the agreement to a her going over this fiscal cliff.
That's gonna happen if we're not on track to that the market may not like it but if we are we could see -- further rally in this market as we get later this year you think that's right market is kind of interesting is it LR.
Markets right now.
Predicting anything about the election in terms of who will control congress in terms of -- will be in the White House at a some.
Wall Street strategists have thrown out theories that you -- subdued somehow market.
Our rallies telling us Mitt Romney's gonna win or maybe somebody said the opposite the do you think there's any pop prediction being made by a market.
The the only prediction is this too shall pass.
Once we get past the November December timeframe.
We will not with the tax structure is right we will know whether or not they -- the debt ceiling higher.
So it's uncertainty.
That unravels markets certainty we can deal with if it's a higher tax structure we know that we can deal with it.
If it's if it's that -- -- stick with the tax structure and make it permanent then great -- let me ask you.
So it's the uncertainty that hurts market -- yes.
One question you both answer it just real short because we spend so much time we've -- it now focusing.
On everything that's wrong -- could be wrong and again and stocks continue to go up this got to be something that's right.
Jeff first then mark what makes you.
The most -- what's the one thing that makes -- most optimistic that's a bullish sign for you.
Our outlook has been -- to 12% gains this year what are those reasons the housing market looks a lot stronger than it did a year ago right back in support some gains remember central banks around the world including in emerging markets are cutting interest rates they were hiking them last year that's a positive.
I think we actually will get a break through here in Washington we will -- begin to take a step towards fiscal solvency that's a big plus mark.
I think that as you look forward don't fight the Fed and and that's really held true all the way since 2009.
And that we even though we're growing at 2% -- finding ways to have higher profit margins and in that environment we're seeing earnings rise as far as earnings are going up stock mark.
-- could still have a higher market even with.
Rough economy or slow growth environment mark Cato and I Jeff -- -- thanks to the.
