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Markets React to ECB Report

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    Hank Smith, Haverford Trust CIO, on the market reaction to the ECB’s report.

  • Duration 3:03
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Bottom -- the trust chief investment officer Hank Smith.

Joining me now thanks so much for joining us OK let the latest room up.

Coming out of Europe releasing the coming out one and -- maybe every thirty minutes of the ECB may be looking to place some tax on those bond yields.

How long is this gonna drag on and how long is that gonna impact the markets here in the US.

Well I think the European situation is gonna drag on for quite awhile I don't know of its gonna take the 28 the plane ninth and thirtieth summit to finally get to a -- market credible resolution.

-- think it is moving in that correction in our view is.

We take drug.

Until we finally get some resolution that's not going to be quick.

Not going to be quick in the meantime what happens to the markets here because.

It's all doom and gloom and and all of a sudden missile going to be you know sold whether it's the EC deal of those the Bundesbank agreeing to all of this.

How do you plan on this side of the -- -- Well you know you're right it is all doom and gloom and in fact if you look at sentiment.

And you look at what investors are doing as opposed to what they're saying piling in the cash -- no return piling -- -- with little to no return.

That is indicative of fear.

Indicative anxiety and I would say from -- sentiment standpoint the market.

Looks more like a market low that a market top there's no euphoria that is for sure so we think the best way to play it.

If you're concerned about the volatility.

Is the number one opportunity and equities -- that is using stocks for yield.

Stocks that -- dividend yields greater -- fixed income -- and that opportunity has been with us for three years and it continues to be with -- Despite the gains off of the bottom.

How do you see it towards the end of vehicles were waiting we've got the fiscal cliff that search continues to get closer and closer we have big.

Obviously the presidential election which could change things just a little bit.

The general consensus though is it will get better towards the end of the year you -- -- you say that -- the markets keep wanting to go higher anyway but do you.

Buy into that theory.

Well I think what the equity markets are suggesting is that.

After the elections and a lame duck congress they're gonna take -- -- the path of least resistance and that it is.

Extend all of the current tax rates.

I'll suspend the sequestration.

Of spending cuts and whether that's for two quarters or for a year.

All push it into 2013.

And let.

Of the new congress and what ever administration takes over the White House.

Let them deal with.

Comprehensive tax form.

Because I think that's going to be the number one issue in the first half of 2013.

We were very close last year.

I think it gets done in two in the first -- the 2013.

Very good stuff thank you so much Hank Smith have a good thank you for joining us.

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