Market Weakness on the Horizon a Buying Opportunity?
UBS Chief U.S. Equity Strategist Jonathan Golub on the outlook for the markets.
- Duration 6:47
- Date Feb 28, 2013
UBS Chief U.S. Equity Strategist Jonathan Golub on the outlook for the markets.
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Now let's take a look at stocks from an equity strategists point of view Jonathan Pollack is with UPS he's been watching every -- of the -- -- -- he's here to talk about.
I don't when you see up thirty points we came within spitting distance of hitting the all time high.
-- Reagan -- either you don't have a crystal ball but what does it mean once we do that we retreat event or this is the gift that keeps on giving.
You know the market has really been on fire since mid November but we're pretty cautious because.
What you -- -- as the economy getting stronger you saw that today he GDP report was revised up only.
You know only a fraction above zero so while there's a lot of positive momentum a lot of euphoria about -- hitting those high is.
We think the markets actually gonna take a breather here Jonathan -- striking.
Concerned -- one of those on cautious but slightly optimistic because.
I've heard that for a year from a lot of people standing right where you stand.
And the markets just dominant shot.
What if you look impressive is why is the market going up and I think the reason is is that the end of the world scenarios the you know the 2008.
Those are really falling away and and you saw that with we got over the fiscal -- we got over the debt ceiling.
And the market was legitimately.
Issue -- excited that we we avoided the worst case -- you've got the central bankers all piling in everybody operating market but who cares why it's moving up we know what's right there the question is aware from here to understand what what happened.
But you at some point you have to have growth and we have an economy that's growing at about 2%.
Normal growth is about 33 and a half percent the real question can -- get to that 33 and a half percent growth with Al.
The government manufacturing and buy all the stimulus if you can the markets way higher I'm just a little doubtful OK so how do you invest right now -- you've got a little bit of dry powder a little bit of cash where would you be -- in the market.
I think that -- so two questions one is if you're looking at this is a timeframe.
In the near term I think that the market's gonna take take a breather if you're an investor to three -- horizon.
You gotta be in stocks and you gotta like it I think is okay -- got a -- stocks you've got elected which area okay.
I like the consumer I think that these low interest rates allow consumers to spend less on their mortgage.
Less on their credit card financing.
That helps consumers -- but they also have the payroll tax cut that's been eliminated right so -- seen and it's we just wrote a piece on this the other day it is which is.
The debt we think is a near term hiccup if you will to this week this you had restaurants and -- and some retailers like Wal-Mart saying that there's a fall off.
But we think that's -- kick up.
In a positive long term trend -- little bit of a buying opportunity not it could be a buying opportunity we think this week it's a probably last for another several weeks or several months.
As people get it with gasoline prices and taxes beyond this pick up -- we like the consumer -- you know somebody has.
A kid and they want to put some money away so that there -- some -- for the college fund eventually or.
At least for life in general because we know that we can't depend on the government to take care of us any -- when it comes to things like social -- is not going to be there for us.
Would it be best to put an index funds that just basically follow the S&P is that an easy way to go or do you like ETFs that are a little bit more target it.
Well -- and it really depends of New York if you're professional investor your portfolio manager.
You have the ability to make those decisions the -- consumer -- industrialist moved tactically.
As an individual you really have two choices.
Either turn it over to professional investors who can do that for you or bail on the payments and it's gonna go -- the market however this one.
Yes and I think I speak for a lot of people out there.
People have been paying financial managers and they have underperformed.
The market if they look at their portfolios they say -- this guy I've been paying 1%.
Couldn't even be what is on our screen right now the S&P spdr the financials look fantastic.
S&P up more than 7% year over year over the past four years the NASDAQ up a 180%.
-- individuals to better than some of these probes you know.
I think are the most important thing that your financial -- are probably you know doesn't -- -- I -- to institutions and hedge funds are big mutual companies.
But they're more likely to keep the youth in the game so it's not a matter whether the picking the right stock in your portfolio which would be great if they do that well.
What if they can keep you from bailing on the market 2008 and keep you -- Or when -- right now everybody's looking to get really -- -- look how great the market's been.
Now on the -- the wrong time if they can keep you wanna path with a program they've done way more good than anything you can do want picking your company of the company did okay.
Let's talk specifically about some of the hiccups that you foresee that are short term what we've got.
The tax increase that we already talked about little bit of -- free -- what about higher.
Commodity prices like gasoline right in the gasoline is in the short run has it is clearly an issue when you have this kind of trifecta -- Yet delayed refunds you have higher taxes and gas prices it's no surprise that Wal-Mart says hey we're having a little bit -- weakness in the short run.
The question is where does it -- we think gasoline prices will be lower between now and the end of the year where do you think gold will be between now on the and I don't think it's gonna be hired -- -- -- why is it's.
Because ultimately I don't see this inflationary pressure you have -- is -- central banks printing.
But gold has been down commodity prices are -- you're not seeing inflationary pressures.
We're really means is they really slow growing world.
With a lot of excess labor a lot of excess capacity.
You don't necessarily get inflation even if you have a lot of money printing as we mentioned Melissa Francis is gonna have this exclusive interview with Jamie Dimon -- 5 PM eastern and he has been very pro the housing market saying it has come back.
Do you like the home builders -- like -- -- her do what the derivative plays where there are.
Materials companies that might there right so so when you looking at housing I think -- a bunch of questions.
The homebuilders are pricing in.
A huge run up in housing so all because you think housing is gonna do well.
And that makes people feel better because your primary accident up in value it -- -- -- homebuilding stock is gonna do well.
If it's overvalued so we we think housing will continue to run.
-- -- of the homebuilders are going to be big winners given how much they've already done so far while they're down today.
The market is up as we take a look at the big board now up just sixteen points when we had been up more than sixty folks we have that.
But come close to fumble -- Nearly all of the lead product I don't know do you see that as a negative or do you see that as that we're just not quite ready yet.
-- you know ultimately is investors I'm not sure that we have a a magic number in our heads and a lot of -- if you know technical guys like to look at this peak I think the ultimate question is do you believe that the economy is gonna continue to grow if you do even if it's a slow pace.
Then didn't they were gonna move through this number the question is if you know -- is when.
But if you believe as I do that it viewpoint these tax which is this a quest ration is going to just feel kind of a wet blanket on the market for a period of time as we move through it.
I think the near term is a little bit less -- -- the -- the intermediate to -- the intermediate looks pretty good product -- great to have you thank you so much -- -- -- -- --