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Janney Chief Investment Strategist Mark Luschini explains why he welcomes a market pullback.
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Against stocks are off to a slow start for today but our next guest says that a pullback is actually a good thing -- chief investment strategist -- -- -- How -- you say that that really January was too far too fast.
For the markets but that a pullback would be a good thing for psychology what do you mean by that.
Well I mean if you consider the fact that at this juncture were up over 6% to about six weeks seeing allies set out there's a 52%.
Rate -- return simply put.
But that seems a bit unrealistic so I think what would be somewhat healthy.
-- to have what I think is probably overdue at this point in time -- to be a corrective phase in which the market may be.
Backs off 47%.
That don't think that would be life threatening and might restore some value in cash and invite some sideline cash.
Mark that's a big hit down in the Dow gained -- muted the -- -- what about 6% I -- 45% and that's.
That's erasing most of the month of January I mean that I would think would actually.
Had the opposite effect on investor psychology and they'd think you look something's wrong I got to get out.
Here we go again.
Well I mean I think it's rarely speaking you would invite some sideline cash into the market that might be at this.
Juncture be put aside by the fact that we've come out so far so fast that it is unsustainable and are waiting for an opportunity to put some of that money to work at perhaps.
Better valuations than what we have right now even though equity markets don't necessarily have.
Demanding valuations.
Nonetheless to see this kind of move is a bit implausible as the best start in fact in January alone since 1997.
Mark what do you make about the fact that in the commodities markets right now we're seems silver actually outperform.
Gold and gold wasn't exactly shining star for 2012 but to see silver.
Get ahead in those contracts -- -- on -- -- there.
I think this encouraging I mean if you look at the silver or gold ratio which is simply doesn't dividing the price of one by the other.
The fact that silver's leading gold at this point usually is indicative of an uptick for the anticipatory uptick at least.
The industrial activity in global activity.
So I think that's signaling that one we have sturdier economic conditions domestically but it paints a healthier picture globally as well so.
With gold selling off another eighteen dollars -- so at this juncture today once again sort of up playing into the lack of.
Real quick I -- you're looking at a few sector of one of the that -- top performing sector of 2012 was financials.
And you still like financials but for how long have had a couple analysts come on the show.
And say first half of the year fine second half of the year you're not gonna wanna be and financials what -- -- Well it's encouraging to see -- doing well typically their leading sector in in a bull market so they're confirming that.
But we continue to like the financial services sector but within that particularly regional banks -- even asset managers regional banks in the back of the recovering housing story.
An asset managers as asset prices slipped earn more fees on those dollars so we think both of those are a longer term story beyond just the first half of this year.
And -- Americans are going to regional banks to get home loans they're they're fed up with the big banks and absolutely at a point we do on Friday for real estate -- -- bush Cheney thank you for being here -- -- -- you -- thank you Sheryl.
And present.
