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Exencial Wealth Advisors CIO Tim Courtney and Cantor Fitzgerald Co-Head of U.S. Equity Trading William Nichols on the outlook for the markets and wher...
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It's time for a street fight for the bulls we have Tim Courtney is exact -- wealth advisors chief investment officer.
For the bears we have -- -- he is Cantor Fitzgerald co head of US equity trading -- bill I wanna start with you if you don't mind.
A lot of focus on the -- I just that I don't like to call it another stimulus because.
The past fed actions have not stimulated the economy the economy has gone down only in growth since.
The first stimulus begins I think stimulus is a misnomer and and Romney Mitt Romney was actually asked about this spiral Peter Barnes earlier in the day.
I just want to play that sound -- Korea and then get your reaction -- play it.
You know I don't think QE2 was terribly effective.
I think -- QE3 another another.
Federal fed stimulus this is not gonna help this economy I think that's the wrong way to go.
Bill does Wall Street share that view.
I would agree with Romney I think that at this point you know any further stimulus you know is not really doing much.
I think the markets just a little bit overbought short term -- a nice 12% rally since June 1.
And you're single -- -- -- pullback it's only natural I don't think really the Fed can have that much effect right now.
Bills are fair but let's bring in the -- now while we can talk -- we can talk whatever a direction you'd like to go went right now but.
You cannot deny that today the markets are down and we start to see people questioning what the federal -- is that should that be at the forefront of investors' thoughts right now.
Well yeah I I I think we've elected like but said we've had a good run up in the market but Saddam overall we.
You know we like where the markets are priced at right now.
I'm not deny that there -- lot of risks out there and a lot of bad news but the good thing is that that bad news is priced into these markets.
We have a saying that you know you don't get paid to be comfortable and markets you get paid for taking on risk.
And right now companies have a pretty low -- across right now that are.
Profits in the S&P for every hundred dollars investing S&P.
You're getting about seven dollars and fifty cents and profits compared to three dollars for a real estate investment trust for a dollar and change for treasuries so.
As -- companies meet these these pretty low expectations we expect the market to continue to do well like it has your today well bill you think the opposite view -- the market is overbought what.
Leads you to that conclusion that it is overbought bill.
What's really just the -- of the rally I mean I I would agree with the other -- and that you know at this point.
From valuation standpoint the markets probably -- we've had a big run when -- up 12% yes and pays her three month period.
This time to take a live a little bit of a breather so I think short term could see a pullback.
And I think on the fundamentals -- remarkable all the fundamentals.
But -- where you telling your clients to put money and surely not just cash.
I think typically when you see around like this kill more defensive names -- -- consumer products did not really outperform in today's sell -- is sold at a farm out performing Telecom.
Those cut the sector is a little bit better when the market pulls back but I think you know the big picture business in a big run up in -- I recently with Hewlett and -- the last couple of days we've seen a reason to sell.
That's -- the haves and have -- you really haven't seen selling an apple so it's really stock by stock you know you can't just pick out one sector.
I think that the race have already been priced into this market and that's why it's still has more room.
To grow but do you think the -- say of an Israeli strike against Iran has been priced in this market -- the market react negatively to something like that.
Yes I'm and I do think facilities these one off events that that are.
You know clearly maybe the market is not expecting -- maybe there's low probability of these things happening those are not priced in selected certainly affect markets in the short term but.
Longer -- they look very very attractive especially international stocks which because of the low growth that is occurring in Europe and and elsewhere.
Those stocks are priced even not even like why lucky enough -- -- be specific -- Sure international small companies especially European small companies are priced at a huge discount they're priced at about.
A forty to 50% discount from -- book value right now so those look very attractive also international real estate is actually trading below its book -- -- those -- quality and cheapest -- of the market.
Okay we've we've got a couple of ticker symbols -- DI SBX and VA DD accent and I guess someone -- just pushing here on this when you look at these two it is entities.
Particular.
Is -- an opportunity to say these -- baskets where you can you can get more exposure without having to go into the weeds of individual research.
Exactly exactly I mean we think right now the market is so.
Under valued relative to other assets you can buy you don't we would recommends even spending the time.
I tried -- -- here I don't more attractive I -- four as a time.
Right right and so we would just -- and if you go by you know of diversified basket of stocks because school is on average.
They're all very very inexpensive and you're gonna.
Appreciate.
That the market returns as as they occur.
Bill final question is the election go to affect the market.
The election will definitely affect the market but I think once we get through that the market will probably be OK I think and -- -- money and how well I -- ask you to be specific bill in what way will the election affect the market.
Well I think -- the market does not like uncertainty so until we get a final result the market will probably be you know chopping around the once we get a final results.
I think really either way it'll be better I think obviously -- Romney winning you'll be better for the market but I think either way just the certainty of the you know getting -- -- -- the way.
How will alleviate one more uncertainty in the marketplace which is always bad for the market.
Historically.
The markets have done very well -- election -- no matter who wins so what's fascinating to watch good to see about Tim Courtney and bill Nichols we.
