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Dialectic Capital’s Tim Strazzini, Societe Generale Senior Economist Brian Jones and SFG Alternatives CIO Larry Shover on the state of the economy a...
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Bring back our all star panel we have -- -- -- -- -- trading at dialect -- capital Brian Jones of soc -- and Larry's -- over into pits of the CME -- Brian let me go to you first we haven't heard from you yet.
A let's first of all talk about these economic numbers which frankly -- -- -- was a little bit of good news little bit of good news from the jobs numbers but the durable goods orders down 13%.
This is that the low lowest its been since 2009.
January how does that affect the economy and when -- -- -- for the stock market.
For the biggest problems durable goods orders report was that the decline in aircraft orders was widely anticipated but the numbers that were extremely.
Yeah what do you what we call the -- non defense capital goods shipments at a orders.
Excluding aircraft both of those series -- used throughout to project the government's estimates.
Of of equipment spending GDP and they were extremely weak in the first two months of this quarter.
Now why is manufacturing getting so weak right now.
I think part of what was seeing in the core capital equipment components.
Does affect the businesses right now for -- -- headed into the national action.
And there's really no incentive for them to -- did so to pony up and this spend money on capital and right now.
Tim -- -- these GDP numbers -- ID one point 7% was bad enough.
One of the weakest I think it's -- weakest recovery that we've had since the Great Depression but now it's one point 3% the GDP numbers come down even further.
Are these the numbers that that's worst Ben Bernanke even though -- I don't think -- make it right move but is this what he felt compelled him.
To do all he did in QE3.
We've seen this week.
Third quarter GDP number of cents 2008 it's almost past cycles.
As were churning through what happened to our inventories into our economy in 2000 it's I think we're gonna live through that same cycle we've lived there in 2010 and 2011 so I.
I'm not really surprise I recognize that would with the PMI that we've had the last couple months with the durable goods orders were really looking at data that.
That I think you know.
Bernanke's right in some level our economic data looks like we're tenuous -- holding on to slipping into another recession here.
Even now the stock markets that seemingly all time highs are bumping up against levels where one wouldn't.
-- guessing that we're going to be seeing additional stimulus.
Well -- -- over what what I'm afraid -- what I hear a lot of people express their fears of is an October surprise that is some some kind of popped down word in October some big pop like.
We've had it before 1987 -- -- is anybody down there -- those.
Yeah they are into the some -- something happens today that was profoundly different than what we've seen in the past.
We see -- meaningful rotation out of utilities.
Out of consumer Staples and -- financials.
And energy and the technology.
That's scary that means people are really starting to chase to tape trying to get -- -- is this the beginning of the end of October -- -- off.
-- that started something no that's the argument it's going on the floor right now Brian what stocks are most vulnerable in this kind of environment.
That's a tough call I mean right general we stick to economics I generally don't talk about equities.
OK well I know that Tim certainly doesn't affect you got some specific stock -- here.
I know you have some -- as well but let's talk about the ones you expect to do well.
International Paper why do you think international papers -- good stock bubble container board space broadly seen pricing power so contrary to the weak economic data that we're seeing.
You're seeing names like International Paper -- have a fair amount of exposure -- the container board space really getting pricing parent able to raise prices to their consumers.
There you know their exposure there this could mean eight to 10% upside earnings that the stock you've seen it react already I think it's got more upside if I had known name and Pride International -- and Las Vegas Sands LBS I know a lot of pickers love this stock -- do you.
While you're still seeing strength out of Macau.
They also have fair amount of exposure to to an operation in Singapore about 30% of their revenue.
And only about 20% exposure to Vegas the numbers are just terrific you know the gaming table revenue numbers are great they've got a lot of land a lot of assets and the stock's cheap.
-- -- big dividend it does indeed to industry -- thank you very much Brian Jones great to see -- and Larry show over thanks for sticking around a little longer than usual we appreciate it.
