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FBN’s market panel weighs in on where to invest in today’s market, plus an outlook for the fourth quarter.
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Lady in the heads of the CME beauty Chiang says bye -- quiet.
And Tim Holland tells us why you have to -- the best when their depressed.
Love that but let's start with John Brady at the CME -- look at the action today -- volume is certainly about 7% lower than the average for the month.
So we can't get too hyped up about this but what can we get excited about what you see in the flows that told you this looks good it looks significant.
And well -- or two things first -- -- was a tremendous amount of short covering today that loves to run until 4 PM eastern time balancing that we index futures settled her closing -- their highs for the day.
My question -- there was a large asset allocation out of treasuries on the treasury.
Curve steepen lot of selling in the belly in the long end of the curve and the receivables capital flows were risk assets not just stocks.
But commodities as well -- gold silver.
And with a lower dollar -- lower again I think the global investment community.
Has now -- born after a weekend of news and innuendo.
Suggesting the fizzled what this deal is gonna get done.
-- -- this rally in risk assets that started really come Friday may have legs to go further.
Specifically after chairman Bernanke's speech tomorrow we'll literally -- QE four and that's that's a question whether this is a fiscal or monetary downstate maybe it's a little bit of both but let's talk about the monetary balance.
Is is the market more focus on what Ben Bernanke is gonna signal tomorrow than they are about what's happening inside the beltway.
-- David if you notice the market's primary concern is certainly the beltway but if you notice.
The housing data continues to get better.
And now we're Fed Chairman Bernanke is gonna do if she's gonna supercharged he's gonna -- the far left leg and as you put the pedal to the battle.
With the Fed already buying mortgage -- securities.
Through 2013.
And other gonna buy treasuries -- -- long term yields continue to grind lower.
With the ideas to speed up they healing process.
In the housing market that -- let me just stop you there John letting -- -- -- -- -- -- how low can they go home -- you look at ten years.
Down well below 2% how how low do you think these these treasuries can go for where they are now.
I think ten years are probably go to one reporter David I think thirty year yields reply go to two and -- half percent.
But it's the trade of most paid -- -- -- those -- savers and betrayed the most pay for fixed income traders give a flatter yield curve lower volatility.
So bond traders -- bond deaths are.
Slightly board these days while also for consumers however going out and refinancing mortgages or -- should not new home or purchasing not durable good.
But marginal buyer will help the economy move forward 2013 well let's hope.
So let's hope so but with.
If as you say bond yields at about one and a quarter at some point what's better equities or yields we thank John Brady will see images -- few minutes with the S&P futures closed but -- of the big question.
Let's bring in our market panel we have -- Chang -- investment strategist chief trader.
And -- -- -- -- capital partners portfolio manager UD I wanna go to you first because there.
There have been a down mood there's no question about it among traders over the past several weeks.
That has led a down market but more than just the numbers the whole mood seemed to have been -- -- downward -- Has this one day rally change that mood.
Well I think so although like you're saying -- -- -- download I think.
Mainly because -- uncertainties over the election now of course the visible clutch bag actions pretty much over.
And the -- we're getting some good you.
And plus congress is out session right so there's nobody there -- the gave us the back comments.
Friday I agree with job earlier that Friday was a turning point already it -- eagerly every -- selling.
Today we have huge follow through to the upside no -- our work.
-- -- -- bull market since march of 2000 night spot within this bull move we have had.
Thirteenth ups and -- and reasonably we believe that we just went through another down cycle off seven point 8%.
Pretty much equaling the average we believe we've seen the bottom -- this particular move we've gone to start a new move to -- -- Now about longer they last they seen every five minutes but the fact is that and that -- David uses the term moved very correctly it was a depressed mood you say.
-- the best exactly when they are depressed talk about that and what you really mean.
Shirt and terror capital partners -- stock pickers were non market prognosticators so if you're going to be in the market if you think equities over time.
Create wealth and we think they do we take advantage of the volatility in the sentiment when he gets -- hour.
To back up the truck and by.
Better capitalized better run businesses in parts of the economy and they usually have more of it.
Tail and then -- -- and so we try to do the last eight weeks or so because it's been a pretty I'm pretty -- an eight weeks is take advantage of that volatility to the benefit.
Our clients -- buying great.
Businesses and even more attractive prices then we could have say 91012.
Weeks ago.
All right well UD I still think by the way that there's going to be some sell off before the end of the year with folks think that taxes are gonna go up Lotta folks want to take their gains right now but.
All let beside us for the -- let's get specific here natural gas is something that a lot of people are agreeing upon even.
It was some of the environmentalists are are saying well that's that's a lot better than cold so so maybe we can.
Move ahead on the natural gas front.
You have a specific play on natural gas and that's Devon Energy why is that the best play for natural gas right now.
Well this couple things on natural gas the first about.
The reason most you agree it's because we're seeing concrete data the youth that job natural gas to -- electricity has been up over 22%.
Over the past Wal-Mart I think that's a lot of these coal fire plants are shutting down to be replaced by natural gas plants.
As absolute and also don't forget you know dissuade us -- -- -- -- sludge and -- I was torn off.
-- doing switching between natural gas and -- of -- old beta why we don't -- that come version.
DeVon is it's actually more than -- a natural gas play is also a play on energy.
However natural -- is very much part of it.
And reason -- they've been pretty aggressive in purchasing and divert that -- themselves among different sources of energy and particularly.
Natural gas that's why we like that managing not just what a natural gas play -- very much a natural gas play but also and it's play in general.
I too -- and your prices have reached this cyclical low -- well along with the stock market him before we get your name's let's get your sectors and as you're talking about.
-- sectors we can pull up the names you like in each one but what sectors do you believe are poised to pop here.
Well we think the US economy the US consumer collectively are better shape -- the world's given us credit for so.
As stock pickers were bottom up and we focus on fundamentals and and valuation but we like businesses and more domestic facing parts of the economy.
There's -- -- been a lot of talk in the last couple minutes about the homebuilders.
So we like consumer discretionary we like consumer Staples we like.
Financial services parts of financial services and we've got an overweight in energy as well and I think the ongoing transformation.
Really the US into an energy superpower.
If you look at some the data of -- is is a fantastic long term.
Story so that's where we have found -- more more opportunity in the non.
Unity there is a magnificent.
Some people would say shift taken place in technology right now a lot of it would been waiting for this.
Where some of the old timers -- be replaced by some of the New Kids On The Block it's not happening across -- But as we shift from PCs.
To these mobile devices were seen this tremendous shift this is part of the problem -- -- of course.
Paul Otellini leaving is a big part of it is well but but you're seeing all -- -- you go for IBM which of course is one of the gold plays in technology.
Why is IBM poised to take advantage of this major -- -- shift that's taken place in -- Well couple things go well yeah IBM actually recently ass off far -- maybe 56 months ago.
Made a big play.
In not selling some corporate -- the two year note actually at a very very low interest -- 1% and they're taking this billion dollars to put up.
All over the world to take advantage of this -- off their business and that's why I like them I think I like the major conglomerate I actually think their business model was actually pretty solid.
In not the basic plays and also I believe they derive their income from all over the world which to me -- -- safer that they thought and at least a day in age so that's why like IBM and plus the fact that they do pay -- still.
A pretty attractive dividend and I think that's puts a little bit floor of the price and lastly.
Like ten with state IBM -- just with -- correction to the downside.
That's why at this price point I actually like -- a lot.
And by the best when they're depressed we do love that I crazier thank you very much you be checked him -- good to see both guys thank you very happy.
