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Bring in our market panel as I mentioned Brian debt Turkish shapers investment research seniors technical strategist Joseph Keating is centerstate bank chief investment officer.
OK -- you just heard a very bullish call from Larry show over yet you're saying that you expect.
Little or no growth in 2013.
Why well -- the the economy's underlying growth rate is about one and a half maybe 2%.
The possibility clearly exists with with consumers -- holding back because savings rates are so low.
With business is holding back on business capital spending and hiring because of the uncertainty -- fiscal cliff that I think the downside exist more than the upside for growth -- first half of the year.
We're not it's -- our forecast that we're going to not -- grow our forecast we're going -- one half percent but clearly.
The risk is there are surrounding the fiscal cliff -- used.
A lot of time looking at options contracts -- by looking at those contracts you think you found some key indicators.
That tell you that a big rally is coming explain.
That's right David that we've obviously had a feeling good move recently last two days specifically the question is -- we can't continue there are two reasons we think you can hear -- first first off short interest -- look at short interest it's as high right now is was back in June.
In the member June big downturn in a big up move lot of Schwartz's those Schwartz uncover recover -- -- The -- -- higher so again that's very bullish on the funniest stuff you're right here because -- rally that we've had a past couple days if it continues -- have a lot of short covering and that will lift the market a lot of money's gonna come into the market.
Yes cliche to say but that's absolutely right so many bearish bets are out there that we all know the news if you follow the news you wouldn't -- -- the market a strong position of falling prices that much more advantageous.
Now all -- talk about option activity.
You know we look at put the called bearish put call ratios and in a nutshell our work is hedge funds institutions have drastically miss this rally we think they're extremely under exposed and again that's another reason they can play catch up and again yes we're spoke over -- over -- that they can keep going with the finger at.
Show as cautious as you might be about actual growth you still have your your hands in the pot I mean -- still investing show us the money.
Tell us where you like to invest and how right now.
Sure well -- we think from the market but I'd I'd be a little bit less have you about the market next year than the other -- -- and we we think maybe high single digit gains for the year primary reason being.
That nominal GDP growth is going to be in the four to 5% range next year and so therefore it's going to lead to -- earnings growth in the mid single digit range.
So what we would say is -- is some companies that are really doing a great job.
Turning out investment income because with the financial repression.
That's coming to all investors will be vis a vis the Federal Reserve you know let's go with a company like PepsiCo that has a three point -- -- dividend yield.
They've grown their dividend twice -- percent over the past four years they're expected to -- -- about 15% in the next four years a great place to be.
Told of a sector the Teva Pharmaceutical the largest generic pharmaceutical company in the world.
A much lower yield two point 1% but they've grown their dividend pay out 63% over the past four years looking to go to -- 57%.
Look out for those are those guys sit there isn't -- -- actually raise the dividend quarter after quarter excellent in your back in -- with Pepsi they've raised their dividend forty years in a row.
Housing were about to talk to -- Hovnanian right here of course she's going to be talking a lot about his particular company but you've got some housing picks you think this housing.
Boom is here to stay at least for the next couple of years -- starting with -- why do you like -- right now.
That's right David I've.
I wish I was looking up I was on because December 15 last year -- like housing now a year later that had a big -- ever anything new we think so.
You talk about Lamar will begin to look at the option activity there's a lot of bearish puts coming in -- are also increasing shorter interest what does that -- -- -- listening.
Well that tells us again lot of bearish bets.
-- that wall of worry still a lot of money in the sidelines -- looks good look at longer term chart a lot of these housing socks yes throw a 100% between 15100% for the year they're still nowhere near their highs from you know 56 years ago so again that tells us yes is good news keeps coming that negativity upward price action housing still could be an area can outperform for the rest of this year and potentially next year.
Show would you like any of the sort of second derivative plays in housing may be some of the materials guys.
That would be absolutely I mean I think housing is a great place to to be invested in today.
-- but I think actually the most attractive place to be today list is -- pipeline companies.
That -- -- go into and -- limited partners abide by companies get distribution yields in the 78% range they're gonna draw that distribution about.
6% what I -- -- different tax strategy after the first of the year regardless that's what I was wonder about a -- -- we always concerned about that but you know if they put a corporate income tax -- these companies as opposed to treating them as pass throughs -- partnerships that's gonna raise for three to four hours worth of the budget deficit.
I'm an annual basis it's just not worth and finally Ryan a consumer seems to be a little more confident that doesn't always track enters a retail sales you go -- now.
Even before you get the figures -- from the holiday season right.
That's exactly right look at the XRT the larger utility up it's up 20% year to date again if you look at the news and look at how much negativity is out there people -- never know that.
Again a lot of these -- Abercrombie & Fitch is one we like ANF.
That recently it's in good earnings goes higher -- again lots of -- slots a bearish puts coming in the XRT specifically a lot of bearishness on that also in the options world so that contrarian indicator -- goes higher people don't like it that's what we're looking for would stick with retail and betting on the US consumer still here.
And look at the options markets folks for clues as to how to -- equities thank you guys good stuff.
Thank you Brian Patrick at -- -- well debt.