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CBO Warns of Recession

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  • Description

    Raymond James chief investment strategist Jeff Saut gives his outlook for the fiscal cliff and the markets.

  • Duration 2:55
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Street Arnold thank you.

It this country falls off that fiscal cliff at the end of the year tax rates shooting up spending gets caught -- -- the US economy.

Goes back into a recession the Congressional Budget Office saying that just a short while ago.

-- sought is here to weigh in on that and so much more he's chief investment strategist at Raymond James the stock market near four year high certainly is not.

Acting like that's gonna happen.

Got the most hated rally I've been up here all week seen institutional accounts and everybody seems to be unhappy that they that they are not able to keep up with the -- the Dow jones' got killed but should -- be worried though because a lot of this is it hinges on.

Congress and congress acting by the end of the year.

At least down postponing tax increases and spending cuts and should that maybe the market isn't worried enough you say into that people talk about being more -- But didn't the markets are not saying -- think the markets are sniffing out when it comes to the final hour.

I think what you're gonna see is a postponement of the mandated spending cuts and I think you're gonna see an extension of the books -- bush tax cuts.

Nothing market sniffing that -- If individuals and institutions both hate this rally somewhat charges on -- just unsure of that.

Where is their money going that well then retail investors have been liquidating domestic equity centric mutual funds since 2007.

And they're piling into bond funds even look at the full -- statistics.

And there's MBS like 235.

Billion dollars every week -- -- -- -- US -- if she is times change and it's it's one of the reasons I think that the stock market -- do better than most people believe because when the recession doesn't show up.

Just like it has in the past two years I think you'll see switch out of fixed income and the dividend paying stocks -- is it gonna call is it going to a carbon cause people start suffering losses in -- fixed income funds which.

People don't Willie.

They they can't quite get their head around that actually happening -- if interest rates backup significant I don't think interest rates are gonna back up significantly I think the Fed is still worried about spending the may have sent real estate recovery back into -- death spiral.

So I don't think interest rates back up all that.

All that much but I think when you come to the realization.

That you're not going into another recession.

I think the stock market lifts between the presidential election year and does that happen after the presidential election end up not think it happens now we had -- I've been telling people for weeks that the rally was probably going -- -- the April highs at 1420 to 1420 to.

And you wouldn't make it through on the first attempt it usually takes two or three attempts but I think eventually we're gonna get through that 1420 level.

And rally stronger than most people think Jeff good to see -- how much -- -- come back.

You don't have five care but you're welcome here and you don't think they do more judicious seduction yes and had to go last I don't -- goes away now.

That -- delivered a big house just huge pay for good good good man it to.

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