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First Asset Investment Management Senior V.P. John Stephenson and Raymond James Chief Investment Strategist Jeff Saut debate the outlook for the marke...
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Let's get to our street fight now for the polls we have Jeff sought Israeli James chief investment strategist at front of errors we have John Stephenson.
First asset senior vice president portfolio manager and John last time you were here.
You suggest yes we could go was low as 800 now you're is kind of revise that to SB twelve wondered.
That is a huge -- -- a change of 66%.
On the downside of where SMP could go why the change of heart Jun.
While David I'm still very bearish on the S&P overall -- and the markets in general.
I think the reality is the European.
Union has shown that they're they're willing to get at the eleventh hour come up with a solution.
But I think -- -- you know the fact of the matter is this is still look a failed chemistry experiment.
It may not blow up and a massive scale about a predicted a month or two ago.
But it certainly gonna fail I -- and all they've really created is a common monetary union.
A free trade zone and ultimately there's just too many catalysts to send this thing up in flames.
Attempt if he if you believe all that you sat on the sidelines you missed a 12% gain year to -- and the S&P this year thus far.
But people be really happy with that right now do you think the market's moving up.
On fundamentals or is this is to QE3 rally.
I think it's a little bit of both I think that the Euro -- thing's been taken off the table least in the short run I've said for the past year that bureaucrats.
Politics.
Politicians and bankers -- the same in Europe as they are here they don't want to lose their power and they're gonna try and paper over this thing.
Whether they can fix it in the long run like Johnson is worried about is a great question but I think in the near to intermediate term it's taken off the table.
I do you think the markets have put rabbit ears on for Bernanke's it's addressed.
Friday morning and I think there will be some disappointment if there's not some kind of policy change.
While John you have you have missed out on a rally if you if you -- your your money dry from June odd.
At the rally really began in early June are you willing to -- -- a little -- -- -- are you afraid you might miss a little more of this rally.
No I think the rallies stalling I think -- you're better off to -- -- -- short either through index puts his was mentioned before.
Or just sitting cash look I mean we've had oil up 25% corn up 19%.
We've had the S&P up almost 11%.
Basically on no fundamentals and and strictly on the speculation that central bankers -- ride to the rescue that is just a premise in my shorts on jobless let me push back a little even short term okay I understand your long term concerns frankly I have a lot of them myself.
But short term to fight if I got in early in June I'd have good return of my cash right now.
Absolutely I think -- you know you have to you have to be someone invested and certainly if you were all cash wouldn't -- missed out on that we were 25 to 30% cash throughout this period.
So we have lots of powder we get a pullback to to reinvest again.
But I think at this point going Ford for the next few months I would be very I'm very bearish and very cautious on the markets.
Let's talk about putting your money in this market Jeff what would you be buying right now.
I think non correlated to the US stock market on the way to go I've mentioned companies like of the timber company renew your timberlands with a decent yield -- they just.
Increase there dividend.
Distribution by 10% that a few weeks ago.
A Johnson & Johnson is another name both my fundamental analysts have favorable ratings on both those stocks and they're basically non stock market correlated issues.
What about the way you also mentioned Covanta I don't know if we get any of these stocks up -- Covanta -- -- They take energy from waste products tells a little bit about that they take date yet they take they take waste -- that they have a big plant just south here of campus.
And they take duo waste if you will garbage if you will and competent to burners and burn -- and generate.
Very cheap electricity and -- looks like the cycles gonna play they haven't really decent cash -- flow yield.
And they've got a decent dividend yield I think it's again and non correlated stock that my fundamental analysts as a strong -- funds stocks good debate both sides of the issue represented by Jeff Sutton John Stephenson gentlemen it's great to see a thank you very much.
Thank you I appreciate.
