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Jeff Saut, Raymond James chief investment strategist and managing director of equity research, on the summer market slowdown and how to properly inves...
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The markets are experiencing well military surprises some a slow down as investors worry -- may have been headed for another recession but our first guest says.
You know what -- the same -- we've had the last two years and come full stocks will -- -- Jeff sought.
Chief investment strategist for Raymond James thinks so and he joins us now with a look of where he's putting his money to work so look.
There's no incoming in fix -- -- right Jeff so where is the opportunity in this market right now.
Well they issues that have been working nationally have been the ones that are non stock market correlated names like Johnson & Johnson which my -- -- analyst has an outperform rating on.
-- timberlands which is basically a timber company with a high performance.
Division that my fundamental analysts has a strong buy on.
So while the market has been digesting its gain from last October into may -- this year in this trading range.
Those -- the kind of stocks are working that said we broke out above the top of that range a few weeks ago at thirteen 6213 seventy on the S&P.
I think the break outs for real I think we -- -- 14100 may be trying to pull back but eventually head higher will.
That -- yet there's so many people still in bond funds and we see even fund flows every week we see money pouring into bonds.
Out of equities why people not convinced that the equity markets at least to me.
Because there are always fighting the last war when them on the market bottomed in 1982.
There were net redemptions on on mutual funds domestic equity -- mutual funds for the next ten years.
And everybody's looking -- -- worry du jury and if the market is indeed discounting mechanism it's already discounted that this functionality of our government it's discounted.
The slowing economy which looks to us like it's starting to re accelerate by the way it's discounted Euro quake its discount to slowdown and -- in China.
But Jeff you gotta admit that there's certainly a fear out there that something terribly wrong can happen terribly spots.
Yes still a headline driven market from what I can see Europe just hanging over us like adopt cloud just won't go away I mean how can you convince investors.
To get back into the game.
Right you can't convince investors I've been in this business 42 years in the stock market is fear hope and -- only loosely connected to the to the business cycle so valuations are tracking fears -- lot of cash on the balance sheets there's a lot of cash on the sidelines.
I think -- it becomes apparent that were repeating the past two years.
With no recession showing up in the fall I think you'll get -- switch out of fixed income and into stocks.
But again be behind they -- right you know -- -- everything we are seeing as a rotation out of the defensive plays into energy into attack like I know you like.
Why do you think we're seeing that.
Because I think they're coming to the realization you've had the past three economic reports have been stronger.
Than expected the retail sales number this morning.
You had the ISM you had a decent employment report.
And I that I think -- it's very good point you make because when the defensive sectors are leading the market is they have been.
It's not the sign of a healthy and sustainable rally so the rotation.
That you so aptly point out into energy materials -- I think was the most significant event that happened last week.
All right good stuff gets sought thank you so much for joining us these keys glass and I'll let here is look at a lot of ads and -- --
