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Mainstay Capital Management CEO David Kudla and Wells Fargo Advantage Funds Chief Equity Strategist John Manley on the outlook for the markets.
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Let's bring in our market -- we have John Manley and David could look good to see you both guys David first to you.
As and we we'd begun to see this acceleration of the move out of bonds into stocks and there are some concerns there that if there's a a bond collapse we may see interest rates spike up.
But perhaps before that happens we may see the big sell -- we've been hearing about on stocks it looks like that may be what's beginning today.
It well I think the volatility today started with the elections in Italy and it may -- near near the very end of trading.
There was word that the congressional leaders we're gonna be coming out speaking which that always send some jitters through the market and we saw that accelerated.
Sell off near the end of the day.
But with the sequester just like with the fiscal cliff debate at the end of the year there was lot of grandstanding political posturing right up until the eleventh hour.
As far as the elections in Italy.
Whether Berlusconi is smiling or not tomorrow I don't think has a big impact on the markets.
Not even as much as what happened.
In Japan last night.
Jun eat do you say that we're gonna have some quick pullbacks in stocks 5% here and there -- -- You're relatively bullish for not only 181013.
Year S&P price target there.
Is 16100 what you're saying 2000 as the level for 2014 you're still standing by that time.
I am I mean these are very typical of selloffs in them in a bull market mean.
Usually in bear market you have.
Quick sharp upward rallies.
You -- out of -- stream in in bull markets -- this is classic bull market correction.
In that respect I also think the fundamentals are still reasonably good things are coming through the Fed is still positive stocks are not unreasonably -- where you gonna go for yield.
I've never qualify percent correction in my life correctly and everyone seems to be doing it right now.
Well David let's let's get specific here and and where you go particularly within stocks now you've you've got a couple of examples.
Some interesting examples one at JPMorgan has an Algerian MLP.
Master limited partnership tell us about this.
Well it's a it's a play on energy without all the volatility with.
The MLP it's structured his name is need TN -- -- protected tax standpoint tax reporting standpoint tonight nine vs K one but.
The the advantage of this is it's it's like -- told woods paid to move gas.
-- around the country and with -- energy use expanding.
With infrastructure expanding.
We continue to get a good yield.
In this investment and a good total return -- also.
When we look at our Barbell approach we've talked about on -- before high growth on one side high yield on the other this is an addition to our high yield side of that -- -- Real quickly David your thoughts on financials and then John your response to that.
We like financials that's our most favored sector.
42 point thirteen we know we've we've seen a sell off here recently.
But we think that regional banks financials financials in general do very well 2013 coming off -- incredible low from a few years ago done.
The -- -- -- -- all right but I think you still have to worry about regulation fundamentals are okay valuations are okay spreads with corporate other corporate bonds have narrows you don't have that anymore so.
I'm not particularly positive on the overall financial sector thank you John Manley -- a couple of thanks guys good to see you both little --
