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Do You Buy the January Effect?

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  • Description

    Rob Morgan of Fulcrum Securities gives his outlook for the markets.

  • Duration 4:24
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You really doesn't know and the markets today the -- his job numbers the Dow crossing 1410107.

AM today a couple of hours ago.

We'll look what we're heading for a record high a lot can happen in the next four hours of trading joining us now she -- judges from problems securities rob Morgan and let's talk but technicals with -- if we can you consume literally hitting a big level of resistance not just on the -- but on -- -- and -- trying to get their 15100 trying to get to 141000.

It is it is one jobs report enough to keep us at these levels do you think rob well.

Well I think I think -- that from the standpoint of you know we that stocks have doubled over the last four years in the face.

Half a trillion dollars being pulled out of stocks during that period is now on January rent -- people pay for January and people wake up tomorrow morning it's a holy -- -- -- -- -- 141000 I've gotta I gotta get back into the stock market.

And so I think that is even though to psychological barrier -- you pointed out to some resistance levels.

Continue behind the January effect to meat if you look at history it -- you get a positive January 8% of the timing of a positive.

Year but the concern now on the other side of this has got to be history in the last three years -- shown -- Great start of the year here comes you know her comes August her come September and the wind is taking out of the -- Wolf -- and I have but I think a lot of that relates to the European crisis the our own our own debt crisis.

These shipment and Dennis and I were talking during the break he seemed to be somewhat off the table.

-- what it is a -- but that's down.

I asked about half those talk about it -- these record numbers because again we got Canada Exxon earnings -- -- and -- -- looking at those big tax burden -- for that company.

But also you're looking at some other companies that you like a besides ExxonMobil I wanna get results -- -- -- -- -- like Allstate insurance Europe on the bank.

Financials industrials kind of the sectors you've always come up -- Financial's first of the year fine second half of the year about.

You know I think we're gonna start to see.

It play out that these nation and -- like a bank in new York -- don't they don't do a lot of lending and and insurance companies they're -- kept that in the big banks they've they've kind of gotten ahead of themselves I think -- expensive even on like financials I'm not a big fan of right now of the Bank of America's and in the city so.

So that's I think if I.

I think financials are gonna have they did that the sector's going to probably have the best earnings growth of any sector any stocks are cheap -- It advice but a set of financials up because you that we've just gotten all the earnings while the big banks you look at Michael Wells Fargo -- JPMorgan and things are apparently on the what the -- -- situation -- I'm.

But at the same time you get again you mentioned Bank of America the seems to be this crazy split yeah good banks in bad bank debt.

Summer stock perspective and and I think and I think that's one reason that makes a big banks and at risk he's who invest in now with the good because the stock prices -- all run up big.

-- you have inconsistency in the margins and inconsistent and just the voluminous disclosures that are coming out.

I have so so yeah I that's I don't shine away from that.

Read too much -- that -- -- breaks to the 141000 number Robert at the same time and consumer sentiment that dropped.

GUGDP.

Contraction which ride shotgun opposed to grow by 1%.

Initial jobless claims yesterday we we we need one million more jobs yes -- -- or five years ago I can't -- -- -- and this is over sorry.

Well keep in mind even with all that Joni kind of pointed this out you know the four month moving average on jobs it has been revised upwards of 200000 -- so so for the last four months even with that the negative that economic news you pointed out.

This job -- stronger than we thought that's gonna feed in the consumer spending and that should help improve some of those other news consumer sentiment some of those other things you pointed out that such.

Companies and another medical device maker coming out yesterday saying we're gonna cut jobs that has been kind of the trend -- were saying.

Do you think that corporations are gonna really truly add to the books this year or have they learned to do.

-- -- -- -- Please I I think she you know at some points at this CEO's they're so lean right now and they have so much cash and they're -- be worried about the competitive position that it is in an expanding economy.

And I and even though Joni Dennis talked about -- temporary help at some point.

They need to really invest in in more in another health care for those employees is gonna be higher sure sure yeah I because I mean even even with that I think there's an advantage to permanent -- -- -- department.

Robert and good cash Bancshares right that is -- bullish.

-- up.

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