This transcript is automatically generated
Market panel now joining us is Paul Desmond Lowry research corporation president -- -- -- The curbing wealth management president and founder Mike I wanna go to you first about this jobs report what is the meaning of the jobs report.
As concerns my portfolio in the folks out there who have portfolio.
The well David good afternoon what you suggested earlier with new jobs being somewhat in line with consensus was really largely expected.
What we saw as a big surprise was the ratchet down and unemployment rates.
And -- you know you have to think about it is it really something that can continue to be sustainable.
You know you look at a lot of the seasonal work -- in the near the underemployment rate remains pretty steady at fourteen point seven.
And it is a concerned there's a lot of mixed economic signals out there are obviously the jobs were initially thought of -- reasonably for favorable today.
We have the Fed continuing to us stimulate to become a little bit more aggressive with that.
Even housing was was very positive consumer confidence is at a four month high right now.
So you have a lot of these favorable things out there but it you have to consider there's are also a lot of factors that it.
-- -- have to protect the downside.
Earlier we saw GDP ratchet down to one point 3%.
We have concerns around.
Some of the yeah factory slowdowns.
There's there -- a lot of serves a lot of concerns of course we have less wealth as a nation people have less money in -- pocket they can't go out to spend as much Paul Desmond.
I gotta ask you are you buying into this drops figure the new seven point eight jobs figure enough.
Well and the jobs -- -- alone is is only one factor out of -- a million different reasons why you should be buying or selling an island and I think in over time it's not gonna have a great deal of importance.
What's more important is that.
-- in spite of all of the bad news -- spent around.
-- we've still seen as strong bias towards.
It that this is expanding demand and diminishing supply.
Within investors and so.
Investors seem to be seeing some light at the end of the tunnel and they seem to be saying that.
Things look bad now but we think perhaps they're gonna get better and and -- -- -- some some good strong broad buying enthusiasm in here.
You know the market -- -- -- it wants to perform its dying to perform on on both of production in the consumer side but Paul I have to ask where in the 43 month.
Of a bull market now bull markets generally run about 39 months it's getting old isn't it.
It is getting old and it's time for investors to become very watchful.
And to be looking for the signs of deterioration always proceed import market tops and that's what our clients.
Are looking to -- -- and watch Jolie's various classic warning signs and and one of the most important ones is this.
Is the C a deterioration.
In the breath of the market.
In other words.
Individual stocks start to fall off into their own bear markets wanted to time almost like the -- the the leaves falling off the trees and -- And it generally starts with the stocks that are being watched the least which are generally the small caps of the the micro cap stocks and we're already seeing that taking place particularly on the NASDAQ market.
For the New York.
That we're seeing some deterioration for example you can see -- in.
In defect in the transportation stocks and and there are some weakness going on in the utilities area that.
These to be -- -- bottom line should refer hurry here bought the Paul but I wanna get -- -- again the bottom line is the last thing to go any situations.
Are the big cap stocks -- -- focus on the big gaps right.
That's that's right and I think we're seeing that in the in the it ended in the Dow Jones Industrial Average today that is up and where -- the rest of the major market.
Good point -- that's a perfect example that Paul.
Let me get dismissed as some specific picks -- you have you have one net.
-- met if they do fracking equipment why do you think that's a good pick right now.
Well we're seeing goods are started and he -- for Michael excuse me Michael let your credit -- sure you're well with with the main.
Mix landscape that we see right now David one of the things you want to do is protect the downside but yet not miss out on potential rally.
And that in order to do that we really see opportunity and high dividend yielding stocks.
Stocks that have extremely strong balance sheets relative to projected earnings relative to existing earnings.
And stocks that also maintain an abundance of free cash flow.
This gives in the likelihood to be -- maintain that dividend payment also provides a lot more resilience in the event of a -- -- I have to ask you here though well Michael a fact is that we we have this fiscal cliff coming up.
In which all of the he had the breaks that that we've been able to get from dividends Michael way we might see a double agreed to more.
Of that tax rate on dividends might that not hurt.
At that that's a great question and a couple things that we look for once we have these fundamental requirements met.
Requiring that the prices up trending this helps us out better refiner purchase decision -- the same time provides -- a potential out with a cell site disciplined.
In the event that the market turns against us into your point we could see a lot of volatility later in the year if this stuff fiscal dysfunction if you will remains.
It's a concern of a lot of business owners a job creators.
And it it it is -- certainly something to keep our eyes on.
Hey guys ever have a great weekend we have to leave it at that we got a lot more coming up Michael Gerber Paul Desmond good to see both of you gentlemen thank you.
Appreciate what --