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Zachs.com Senior Equities Strategist Jared Levy and Surevest Capital Management CEO Robert Luna on the outlook for the markets and where investors sho...
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Ian many thanks Larry let's bring in our market panel we have Jared Levy has Zacks dot com senior equity strategist and Robert Luna.
He is sir sure -- capital management CEO and chief investment officer -- let me go to you first.
You -- that there was kind of a Romney premium that had been -- in this market that is the the idea in the last couple weeks of the campaign Romney was gonna win and therefore.
Tax rates wouldn't go up and everything it.
Is that premium that going to be sold out of the market.
I look at an amalgam of this in other words I looked back since Republicans started gaining steam you know and -- Romney himself sort of gaining steam in the polls.
I look at the correlation between that and -- the market was doing it and for me.
You know I I saw at.
At least four to 5% of sort of built in Romney -- if you will.
You know or or I should say Republican flop and and that's a good thing -- as we had to repeal but repeal Dodd-Frank and other beneficial.
Pieces to happen with the markets -- bottom line is yes I think that's coming out.
I think Larry hit on the head earlier we said that now.
We've got new uncertainties to deal with not only were not gonna get the benefits of perhaps a Dodd-Frank reversed or some other -- tax breaks for corporations we might get tax increases on cap gains dividends.
And you know what I'll I'll take you let I think that we do see at least -- -- -- 4% draw down its all about probability.
And I think it probably doesn't make -- -- taxation but something is going to come of the fiscal cliff.
-- -- -- have to -- has got to be compromised and the compromise is going to include taking something away.
From Wall Street I don't know what that's gonna be but that's that's sort of my -- my basic -- -- you will.
So Robert turning do you actor Jerry -- call for a potential three to 4% selloff in this market.
While you're not bullish you do believe that may be in the short term things are bit.
Over sold after this that big selloff last week and maybe -- a buying opportunity here.
Yeah you know I -- for the most part I agree with -- point I think a lot of the premium that was built in there -- the hope.
That Romney was gonna get -- not there has come out of the market and I think you've seen that.
That being said I would not jump in here in by the index is a whole.
But I do think there are some stories there that are being sold off because of the impending.
Capital gains hikes that are coming up in January that I think he could step into -- right now.
Companies like apple in companies like Disney right now.
I think if you have a -- those to you out performers coming into this -- this time a year this is a great opportunity for investors looking to take on new position there.
But Robert let me just follow -- on that if I -- in particular with -- it just seems that this -- hasn't -- been -- out of apple is -- is -- is it conceivable that stock could go down further.
I'll absolutely anything's conceivable but I think if you just look at on -- forward earnings basis and some of the opportunity that they have the tap into the emerging market consumer.
Long term -- I don't even think they've scratched the surface.
Right now you're buying a best in breed stock trading at less than a market multiple.
If you're looking for -- one to two week trade now might not be the time to get and apple but if you're a longer term investor looking out a year -- I think it's pretty good entry point.
Our rates a -- -- I know how it.
Works when you're trader you've got to do something to make money so.
Where do you see opportunity you put your money to work right now even though you are calling for -- fraction overall market.
Well again there are bits of their orbits of the market we can move to and you know where it's funny we're seeing this revolution out of utilities out -- the dividend players.
And I think the big bet if you were thinking about going into election was our.
What's gonna do well -- one places retail and I'm looking at a couple -- -- like target they report earnings on Thursday and by the way.
On Thursday we get Wal-Mart target and Sears.
-- none of these companies are actually counted in the retail sales because if we get from the government.
So on Thursday -- a sneak peek into what's really happening there in retail and I think right now consumer confidence aside.
Personal spending is up personal savings is down which tells me consumers are happy.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- How might that affect your play for commodities.
That's everything and -- say what in the near term -- see deflation actually being part of what's happening here IC.
Some commodities prices you look at corn you look -- -- I think there's continue to move lower and I think that's good for consumers right.
That's giving the price of goods and services down it's gonna help us in the near term but all the printing of money.
All that's going to be that's gonna be -- you know a year to year and a half from now I think right now.
Deflation let's make sure the CPI PP numbers are not going to be hot which I don't think -- will be and I do think that some of those retailers some specific stocks.
Can rally here you just gotta be careful when all the looting of certain.
These unbelievable to see corn still sitting pretty about seven box up -- so -- unbelievable as far as history's -- there is filler Robert now is your turn as the money.
Where should you put your money to work you're saying -- here at home it's.
Outside the US.
Yeah absolutely you know I mentioned a couple stocks Disney and apple but there's no reason to kind of pick through the rubble.
You know right now in my opinion the S&P 500 stocks are pretty much fairly priced and you look at the US as a whole new we're looking to eke out to two and a half percent GDP.
If you look at emerging markets though for the last year year and a half -- significantly.
Underperformed the S&P 500.
Valuations there are cheaper than the S&P 500.
And if you look at a place like India I think that's an investor's dream he got the median age over their 25.
Compared to thirty side of the 38 for the US you've got growth rates GDP coming in around 7% over there.
You've got an emerging middle class going from a hundred million to 600 million by 20/20 five.
You look at companies like -- -- they just invest in 2000000002 billion dollars in the united spirits over there.
That's the consumer that's you want to tap into you plenty of opportunities for long term growth in the emerging markets and much cheaper multiple that what you're finding here on.
Store and by the way this -- ticker symbols of -- and planed the China or India.
EPI for -- the wisdom tree India earnings and FX -- China broad based.
Index guys great to see -- Jared Levy Robert -- some very good advice thank you very much and thank you.
