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Raymond James Chief Investment Strategist Jeff Saut on efforts to reach a fiscal cliff deal and its impact on the economy and markets.
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Beautifully -- thanks for that let's continue the discussion on the markets.
Stocks of course headed for a fourth straight loss on the -- fiscal cliff concerns.
Jeff sot is the chief investment strategist at Raymond James joins us live from saint Petersburg Florida where the weather is much better there I'm sure -- it is.
Here these days Jeff welcome to you.
What do you see happening if we do go over the cliff Nicole gave -- this brilliant description of where investors minds are today.
But what's the next step.
Actually -- -- inside the DC beltway when things had to happen they typically happens so if we do go over the cliff and I haven't totally given up on last minute some kinda staged in agreement.
I don't think it'll be for very long that said.
That was confirmed yesterday by our short term trading index so would not it would not surprise if we go over the cliff to see something like -- three to 5% pull.
Okay you're the most optimistic person I've spoken to heard from at least in thirteen days.
Do you think that -- craft something and not necessarily.
A bad deal and other words -- deal that just -- that 250 K threshold for for earners but really encompasses.
You know so many the other issues that that are dressed in the fiscal cliff and the spending cuts as well.
Yeah I'd I'd do as I said having lived inside the beltway when things absolutely had to happen they typically happen.
I am somewhat surprised that we didn't get they staged in agreement.
Prior.
To the December 31 date it looked like that was in the work she had some very high senior staff Republican -- start popping into the news like.
Austin Smith then thou Lexus -- Brandt and when they start popping in your close to agreement but it looks like that totally fell apart last Thursday.
All right -- Jeff how are you position your clients here into the new year.
We have some cash.
Not a lot we have about 20% cash right now.
And the stocks were into the most -- dividend paying stocks that are not in the market correlated as much as some of the big names that most people talk about.
And they are away from the economic sensitive sites the names like Covanta which.
Collects waste from cities and burns and turns it into electricity.
Okay that's a good one appreciate always appreciate against stocks hit from he would is staying away from what you paring back on right now you mentioned a dividend payers that you -- and guests are also telling us boy you know with the tax changes are -- increased dividend taxes capital gains taxes and whatnot boy you know you might -- -- lighten up here before the year ends.
Yeah I don't think if they if they go up I think the capital gains and the dividend tax will lock step up to.
Twenty to 25% not the forty some percent that a lot of people worried about on the dividend tax.
The only sector I've really staying away from as the one that a bunch of players have been hiding out in because -- -- -- And that would be the consumer Staples and on historic look they look pretty expensive to me.
So what are your thoughts for 2013 in terms of let's just.
For -- metrics hate.
Where is the S&P going to close -- the next year and my second part of the question is.
Will we be able to refocus on the fundamentals of the stock market and not on politics not on DC.
I do think -- do think that's where you gonna go I think once they get they staged an agreement looks like it's gonna come after January 1 now.
I do think attention will revert back to reducing the deficit.
And the debt ceiling.
And would we get through those that I think the debt tensions will turn back to the fundamentals which.
If you look at what's going on in the housing market you look what's going on the auto market you look at the improving employment numbers.
I think the economy looks okay.
I -- to leave -- on a bright -- Jeff thank you so much happy new year.
Merry new year mean I'd love to stop right -- -- it's up.
