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J.P. Morgan Chief Equity Strategist Thomas Lee on why he predicts a market correction soon and what sectors investors should consider afterwards.
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Or didn't say so -- rates remain near zero again.
And quantitative easing still in the works what is the best way for you to make money.
One of the most respected people on the street JPMorgan chief equity strategist Tom Lee standing right here in studio we so appreciate you coming in thanks stimulus on where you spoke about the GDP number of what it put -- -- in front hence.
To the downside.
No and the reasons you know one -- from average GDP reports say yes based news -- we had fourth quarter numbers coming in as we speak.
And what we're saying is company's revenue growth accelerated from third quarter.
Earnings accelerated companies are beating numbers and we know payrolls throughout the fourth quarter we're actually positive.
Self government spending is negative and we have these kind of private sector numbers it's I'm okay with that.
OK so you came out with a forecast to the street that said.
Dow 20000.
But in four years.
Mark a few points on the calendar for us what do we expect mid year this year.
Four years is a long term get a long term outlook so what can we expect the sort of closer on the street here.
Well you know we we think we're still in a bull market -- start -- 09.
Thompson is the fifty year fifth fears are little tough in the first half -- a correction when hasn't come yet we think word maybe 46 weeks away -- -- -- Yes so I think investors shouldn't go to cash yet or get defensive.
There's still.
Serve positive momentum in the market.
We don't think enough investors own enough stock so that's why the market sort of levitate from here but -- -- not the time to sort of built up because in four to six weeks to expect how much of the correction well that's that's the tougher part you there's an irony to me they can be quite shallow near three.
4% which anyone can bear or could be more severe the 10% -- and I think it just depends on how extend weekend.
Over the next four to six weeks -- you.
You surprised that things settle down in Europe.
Settle down after the fiscal -- from at the end of the year and and that the markets still holding up well in light of at least headline news that looks a little frightening.
Yes and no I mean I think that the fact that we've had some bad news and the markets take in stride really is highlighting how under invested.
Most investors are so tell us how to get more invested once we're through that correction that you do predict where would you be putting money.
Well I think investors should think about housing strengthening Europe turning China stabilizing.
Which means you want to -- smokestacks.
Basic materials.
Energy technology stocks in financials things that are.
In -- with -- as -- economy start to recover so let's let's make that list basic materials financials.
Energy.
Technology technology yes what would you avoid them what I think what you want to avoid which will underperform isn't -- -- go straight down.
Are things that people have fought for safety so I think things with steady dividends won't -- as well.
Since utilities.
Telecom services.
I don't know -- -- here with somebody on yesterday's things still go for the dividend players.
And payers know if if they were today they be extraordinary lucky because in the fifth year -- market it's rare that those sectors actually were up have a seat that so figure -- S -- market.
What's we get through the correction for 2013.
Yes looking at that it it's that we're about what it's fifty to eighty points away from that correct yes and I think what what will do little bit sometime before the summer is -- -- will pull back.
And then 1580 looks like a big move because it's gonna represented double digit gains.
Now I don't know what's gonna gets their what do you think it's gonna test that I think it's possible that.
Investors worry about inflation is a possibility -- as a ten years or creeps towards to -- after mr.
-- was there some level here work maybe losses trigger.
People getting worried about -- owning assets.
The other the other could be just economic dated doesn't.
-- consistent if you change your forecast come running and screaming back to fox we've looked interior your ensure that thank you so much thanks for having me daddy time Tom Lee is JPMorgan chief equity strategist here.
On fox business and studio the close.
