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Stock Trader's Almanac editor-in-chief Jeffrey Hirsch and Scott Wren of Wells Fargo give their outlook for the markets.
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All right ripe for a fall.
Volatility ahead those -- the words a warning from our next guest about the outlook for the markets in the fourth quarter Jeffrey -- stock trader's almanac editor in chief is well -- he's author of the little book of stock market cycles.
Also we're joined by -- -- Wells Fargo senior equity strategist.
Scott let's start with something simple here Dow thirteen thousand S&P 14100 will stocks be higher by year end.
-- -- -- Our year end prediction is for and it has been 1411450.
So I think we're at the lower end of of where we're going to be for the end of the year but I'm certainly looking for.
Some sort of pullback here give us another opportunity divide love to see a pullback.
OK and Jeff Hirsch yeah -- 141013.
Thousand shirt that's being higher or lower by a -- year.
Not much hybrid and a little -- harbor -- little blow weak spot up and I believe the into the third quarter and agencies insurance some portfolio restructuring and they after the third quarter.
-- triple -- is is but the for the week for a market it just Jeff how to -- investors play at all the election do you think I mean you have to decide -- they think Romney vs Obama wins and what you think stocks do is result you nor I don't think so because the post election year the last the year after the election is weaker across the -- -- matter who wins for Republican Democrat or.
Incumbent or new president so there's weakness that to be expected next year -- people -- probably up into the first quarter in the and be right for okay -- base got rental what what do you say it was stocks what they do doesn't matter whether Obama or loved.
Romney went.
Well Dennis I think what's going to happen is is in my experience anyway you know if one candidate or the other has big lead here.
Over the course of the next let's say two months going into the election you could see some fireworks there.
But after the election whoever wins I think the effect is going to be -- two or three week type of situation because really the market's going to get back pretty quick.
To trading off of hey what are earnings in the economy going -- going to do over the next twelve to eighteen months whoever wins.
You know it's tough to change the course of the economy quickly and I think the market.
The market will start to focus on that twelve month may be eighteen month timeframe are like these pictures of short term let's get your pace guys Jeff -- first.
Among the -- stocks you like you like this.
Nitrogen company terra nitrogen CF that's another fertilizer company -- they're related.
That -- Tia bid to NH that the terror ministry has a nice.
Yield of about 7%.
You know.
Owned partially by CF industries -- the you know totaling like that and and also 2000 such DR Horton and -- Mac which the mortgage maker penny Mac's -- ten point 2% yield right now and and HP he -- the senate both passed through to replace OK and also -- that -- for a third stop in -- Scott random you -- just this sectors such such as disprove this.
Consumer discretionary.
He likes of tech -- com.
Based on what because economy is gonna be stronger than it is now -- weaker.
Well -- I think you know I'm looking for continuation of the global recovery continuation of the US recovery I think it's going to be slightly higher let's say we go from 2% GDP this year to two and a half.
DO not not a lot of change they're still well below trend.
But I think a lot of these economically sensitive sectors.
Let's say materials -- -- something like diversified metals and mining.
You know those have been just destroyed it here lately and I think that the markets over pricing a slowdown in China and I think we're gonna see some opportunities because you know our -- I think the market's gonna work -- higher way higher here in the next.
You know two years you you wanna be -- -- -- cyclically sensitive got to -- bad thanks very much just got -- -- being with us -- Wells -- and -- excess should.
