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Janney Montgomery Scott Chief Investment Strategist Mark Luschini on how investors can plan for a potential fiscal cliff.
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-- -- More on stocks earlier today the S&P 500 and NASDAQ traded above their fifty day moving -- is this for the first time in more than a month.
But an unexpected contraction in the US manufacturing last month sent them back.
Below those levels so for more on where where headed stocks are headed -- everything in general -- Cheney chief investment strategist.
At Janney Montgomery Scott I'm glad you're here with us mark it.
It's it's so touching go and we're seeing now a lot of people pull their gains into 2012.
So does that mean 2013 just up the bad price going to be shot.
Well I think you're seeing a little bit of that and certainly that has the potential to put a little bit of pressure on equity prices.
Today's reading on the ice in manufacturing is actually compared it to a lot of the other -- we've gotten of recent which is to say.
Business conditions have slowed somewhat -- business owners have said so much stepped in anticipation of the fiscal cliff -- not knowing what's going to mean to the economy.
They've been basically -- in business spending and -- so.
I think actually it sets up for the release of pent up demand if you will in 2013 which could help the economy -- accelerate.
Mark you know it seems to be like we've never been farther apart and with what Geithner said this weekend that the only way we have a compromises if the Republicans raise rates.
On the rich.
I'm just wondering are we gonna go off this cliff.
Well that's I think we're likely go off of that the question is whether it's rendered into a slow vs a cleft.
I think at this juncture seems unlikely given the fact -- a lame duck congress were twenty days and counting until the end of the year that actually the trigger the fiscal class.
-- and obviously as you said increasing acrimony across party lines as opposed to that happy talk that we heard I just after the election so.
I think so if the market saw that there was at least a down payment on the fiscal cliff something that's agreed to be picked up after the first of the -- Then I think equity prices would be relieved if in fact we see.
More -- reporters Asian leading into the end of year without any sign of anything getting done that -- -- -- at that would weigh on equity prices.
Let's talk about about what we -- should be doing because I think -- -- kind of under the notion that -- is not gonna have until December 31 what we do before that should be thinking about moving -- -- dividend paying stocks into my retirement account.
We can do that under the subject to limitations to how much you can actually put in a retirement -- in any given year and predicated upon where the work for an employer.
Or self employed so that's one avenue -- if you will of sheltering.
Those -- us stocks from -- taxation at some later point is going to do much to help you this year because in order do that you have to actually sell them.
And then moved to cash into the yacht tax sheltered.
Vehicle law but that said.
You know I think it's prudent at any time to consider where you have sizable capital gains.
Taking some off the top if you -- -- looking for opportunities to reinvest in perhaps other.
Undervalued securities and increasingly we find better opportunities away from the US in companies that are -- much cheaper valuations.
Then we do here.
Mark if we do go over the cliff wolf stocks plummet even more than they have an if they do should be -- I think you know in terms of -- technical reaction thirteen eighty is kind of a line of demarcation under which thirteen fifty kinda comes into play so.
I would suggest that we probably could stand.
Haircut -- equity prices something like we saw just about a month ago where we -- down flirting in the mid thirteen hundreds.
I think more than that though would only be on the back of really worsening economic data because after all the fiscal -- is a man made issue.
And I think it actually resolution -- probably be taking a little bit from both sides in coming somewhere in the middle.
Which would likely translate in -- may -- -- one to one and a half percent haircut to GDP in 2013.
Which is not enough to thwart the economic expansions that we have underway.
All right I guess political and economic expansion.
-- -- with Janney Montgomery Scott thank you mark thanks and non-GAAP.
