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Here's one thing that has really moved ahead at his -- shaking off what's going on in Washington DC and it is house it's clearly in recovery.
Given the recent data on things like sales new orders and prices.
And then we see auto sales in the -- market have also picked up considerably shown tremendous improvement over the past year case in point.
Let's just -- December auto sales numbers on your screen.
Looking great right both Ford and GM -- gains and were all about helping you make money here.
Everybody did Chrysler Japanese are looking pretty decent so is -- way to invest around.
What appears to be this trend.
Which by the way Phil Orlando spotted.
A year ago and told you you should be investing in equities at this point he -- Federated Investors chief equity strategist 370.
Under his wings and that you know I'm so happy to have -- because it was a year ago you came on.
And you said.
-- out all of that fear whether it was Europe Greece and invest in equities and sure enough TC double digit percentage gains for the markets but now do you really see.
Of -- -- with housing and the auto industry how to why investors.
Well our our overall economic outlook for next year or this year I guess now is somewhat tepid our GDP forecast to one point 6% is.
Below consensus and half of what trend -- at one point 6% -- point 6%.
Trend line is 3% roll the consensus is around 2% two point 1%.
But there are two sectors of the market that we think he would assist disabled bottom a couple years ago.
And are looking strong uptrend in Mosul are autos and housing and we think we're in the early stages of of big long term notes which you go with the pure play.
Housing construction companies with the housing and the homebuilders or would you would you look at sort of second derivative plays when it comes -- housing yes.
Yes and yes it.
The answer is that the big homebuilders companies like what nor should have done well will continue well all the companies.
Home Depot's equal products.
Fortune -- sit so well after hurricane sandy -- made me wonder this is not a name a lot of people have been talking about but.
Obviously they have the products in the materials that builders need to -- exactly and and again we're in the very early stages of what we think is a multi year recovery him.
And multi year and so as we look forward to that that's an area you feel safe about so once again -- -- while a lot of people might be thinking they're saying.
-- now we're in the clear we do have certainty we know was president we know what that at least the tax structure will look like the market should take off.
You're saying the opposite its -- -- -- week of what it in terms of the near term will be gone over the last couple days market -- 5% on on this fiscal -- deal but we're really only got half -- -- What we got was the was the tax side of the equation we have on the spending side of the equation we did the easy -- we have -- the hard part.
And the hard part is gonna come up come up over the next couple months we've now got a essentially a march 1 deadline.
In terms of the sequester and and and spending cuts and entitlement reform and that sort of thing and so were thinking that the next couple months.
You don't could be a little ugly so we're we're a little cautious here OK so let's go to the auto makers and I'm just gonna look at General Motors at the moment in agreed to sink about a two and a half percent came here Ford is looking good as well up one and three quarters percent.
Up to do just.
Go with again at the auto makers -- -- -- it's well our our our favorite domestic name is is for our favorite international name would be -- what bands.
But but focusing back from -- there's sort of a tiny into the housing market here as well because Ford their best product their most important product is to pick up truck which tends to be bought by a lot of homebuilders look at -- construction guys that contract so there's a correlation between how -- properly housing is doing and how will or how poorly.
Ford's pickup trucks are going and that's an important contributor to -- to profitability and you're seeing a pickup in pickups and absolutely.
Right I mean the -- Pick up is a well.
How about them -- -- strategist got a little a lot of those shall I think an Ohio back but I -- -- Cleveland Columbus but you don't.
As we as we just wrap this up -- as I've mentioned you were so last year it was a great year for your company wasn't because you went bullish.
Who we we did well and and we we we think there's some potential -- sloppiness -- of the next couple months largely related to Washington.
Named the number one trap that an investor watching right now shouldn't get caught it but might well fit the stock markets -- 5% the last two days and in the trap is that that you think that the market's gonna run right to 16100 right here that there's the potential for some a situation much what we saw in the second half the 2011.
Stocks dropped 20% when we had the debt ceiling fiasco and the credit rating downgrades.
That potential exists over the next couple months.
Don't know that's gonna happen but we're certainly cautious were watching it out watch the credit ratings but again it didn't kill us the last time.
Well and and the potentially that would be -- buying opportunity we get past this next set of of speed bumps if you will Washington.
We think from there you you've got -- -- treatable real apparent fire outlook fear don't flip out and get nervous on how to -- when something bad happens that's your that's your child and what the blood in the -- was happy new year crediting you could see we'll see many times I don't think they're much Phil Orlando of Federated Investors he's the chief equity strategist -- we're don't.
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