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SFG Alternatives CIO Larry Shover and ProShares Capital Markets Head Stephen Sachs discuss the outlook for the markets.
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Thank you thanks Dan well let's bring in our market panel Larry -- -- joining us in studio effort change today and Stephen Sachs and Larry let's start with you first here.
-- -- other you saw that the Dow finishing in the positive for the week -- the S&P snapping a seven week winning streak.
I hear you can't compete -- that we may be in for a correction here in the stock market yes and.
-- I do believe it's well over -- that we're gonna have a correction I mean the bigger story remains in place.
Valuations are good the economy is trudging along I do believe we'll see 1550.
S&P by the end of the year -- we have gone up too far and too fast and we are overdue for -- -- Well and but Stephen on the other time every every time you sense that we're in for a pull -- like at the end of yesterday's trading session.
You've got -- push back up like today I how it's it's always this this pullback and then -- strong push up again usually on comments by the Fed.
Is that gonna continue.
You know I think that you know -- -- all that is second Larry that's for Steve alright -- I'm right next the F.
Us artists are less you know I did I I think sell you know what -- the pattern we've seen really for the better part of almost eighteen months now on the equity side of the equation is just that.
We've had corrections they've been fairly shallow I think the most significant one we probably had -- probably in the 6% area.
Just like we've seen this week were about 2% off the highs in the S&P.
In the sentiment on the street and that sickly and institutional trading community that I talked to a lot.
It really is that you know money's on the sidelines any pull back we get money is put to work quickly and that the pullbacks are typically very shallow so feels like it'll continue.
All right so guys act you know I think you need to focus on the positive -- you can say that we're -- for a correction all day long you don't feel good about how far we've come so fast.
O'Leary can you give me some place that we can look in the markets -- play our money.
Because before on the sidelines and when he twelve and -- it now.
Where where what kind of stocks you like right now.
Yellow right now the best thing to do was wait slow and steady wins the race and sometimes not losing money is making money so I would wait and wait for that pulled back.
1450.
In the S&P 500 a good place to get -- however I do like financials and materials I would get into JPMorgan.
Wells Fargo Freeport and also always -- these are great things -- gives you broad exposure.
To the housing recovery that we're gonna continue the -- and also the the great story him in Asia ex Japan.
With just continued urbanization I think it's just a great time to continue to get into those stocks however I would wait and get my shopping basket out waiting for a pullback.
Larry I just watch out you're one of those -- have -- -- Freeport McMoran -- you have silver and gold a lot of people say gold is gonna go down.
Much further than what it is now you have both Goldman Sachs and Eric -- say it's gonna go down at twelve under could go down.
To 12100 announced don't you want to wait until it it drops further to go in there.
Well I think it could and I love -- -- but I think at the reasoning of -- and others is basically an old story that.
Gold is trading well above -- cost structure for -- need to go to 12100 dollars an ounce but there's another story.
We're in the middle of experiment with monetary policy that -- never ever seen throughout the whole world.
There's a race to the bottom and I can't imagine.
That gold won't stabilize at some point the central back buying and also we have the India story with they've raised a -- to supply is -- But however when that supply starts to run out you'll start seeing Indian demand again to see some support and gold should rally from that point.
Stephen you you sort of have an idea that that Europe is a good place to -- money right now despite the fact that it contraction is expected still over there.
Aligned with what we saw with Citigroup today they're saying look at big international companies with exposure outside of the United States is that sort of the play that you're looking at.
Yea and it really is if you look at it first and foremost you know probably one of the better ways to play at a safer ways to play that are our US sectors that have.
Exposure to hear the international landscape particularly Europe but if you look at Europe you know Europe say no different and then what we -- facing here few years ago.
They've come through a lot they're still certainly some headwinds.
Obviously GDP growth this is an issue there.
But from a pure valuation perspective they have weathered a pretty big storm so again it's it's not something that he would look to go all went on.
But if you're looking to allocate particularly Europe for the longer term.
There certainly are better values there when then we saw just a few years ago -- wanna start looking for those values across that the macro indices in the sectors in particular.
And Stephen Sachs thank you very much at Larry's show over by the way Larry has -- -- ever wanna trade in options.
It is a very dangerous market to trade not there and nobody -- -- your your risk get a lot but to pay offs to be great to.
Listen Larry show -- -- -- Sandra is well look -- the leverage over he's got a book out for about -- trade in options.
In times like these options are meant to make the market.
-- as well that's true but again it's it's it can be a risky bet you want to have help when you're doing that and -- show over has a book to help you through it thank you guys appreciate it well.
