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Advisors Asset Management Senior V.P. Gene Peroni and Spectrum Management Group Managing Partner Bob Phillips on a potential market correction and sto...
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-- Scott let's bring in our market panel people -- -- and Bob Phillips OK gentlemen.
You both believer in -- short term correction yet this market continues to to figure out ways to get around that news.
What a difference a year makes right but -- what happens it what a -- a correction are you expecting and then does it shoot much higher.
-- -- why do I qualify my expectations of a correction.
Our of the garden variety type in other words we don't think there's going to be more.
The next three to 5% correction until the Dow reaches at least a 141000.
500 level conceivably could get to 151000 before we see a significant debt corrections so I think this market has real momentum.
It's have been very good about navigating through a lot of the yet challenging headline news over the last year and more.
As some of that bad news ads and the market can once again address the monetary.
Environment the earnings outlook I think it's gonna work continue to.
Move higher and to that movement of cash off the sidelines in equities.
I think is going to begin to accelerate here especially as a moving to new high territory.
Hey Bob we're talking about equities were talking about -- what we ever talk much about gold what happens if gold.
Falls below 15100 I heard that's -- support level.
Yeah it's forget what will 15100 David in the bottom below that could easily be the 1250 -- 14100 dollar range.
-- I'd be very surprised to see that happen what still is going on that we don't -- -- -- of is that.
All the major central banks around the world are printing money still has not stopped so.
The supply goal relative to the supply of money.
Is actually going down but for whatever reason right now to the down -- that may go quite a bit lower.
So Bob what is your recipe target for this year what do you expect this market to do pull out the crystal ball.
Little we will be surprised to see a trade up above 1650 in the S&P 500 sort of another -- about five out of sixty for what okay -- -- I was gonna say thought hello it's.
It's as Jeanne mentioned I wouldn't be surprised to see a correction for is actually we think.
When you look at the move in the market twenty days into February 20 you know the breadth of the market was amazing that.
80% of the stocks in the S&P 500 were above their fifty -- -- thirty moving average.
And that obviously bodes well we believe for the market for the rest the year I do you think it probably indicates they'll optimism is very very high right now.
Are likely to see some kind of single digit pullback but the pullback should be used as an opportunity to buy and buy -- by investors and not done so yet.
-- let's get your stock picks if we cannot wanna start or Discovery Communication I've heard a lot of people the past couple weeks talk about discovery.
Why do you think it's a pick right now at this price.
Well it's a pick individually -- -- the -- and characteristics they company itself has been growing very nicely here.
But most importantly the group looks very good so we don't like to participate in an individual stock unless the entire sector looks very strong.
And -- -- gonna get very strong case that there are other media related tech companies that are similarly attractive but at discovery.
Looks very good here I think it's gonna still move higher is -- -- above average job market performer for the remainder of the cycle.
Okay what else though I mean -- -- looking at some of your other picks you've got an opportunity where you feel that a company like Allergan for example is a good health care -- Health -- has done incredibly well lately so as we look at some of the other ones that you like.
Belmont Ametek -- what it is about our -- makes you say you know what this is a positive silver lining to the affordable health care act.
Well here again.
You know I know that this concern about obamacare with that might -- but they health care group.
Generally has been performing extremely well one of the better performing sectors year to date.
I think will continue to do very well so I wouldn't really be disarmed by -- Worries about from Washington Jan what -- the obamacare might mean fact is that a number of sub categories of health -- doing very well.
Whether it's the bio -- the large pharma is companies like our gonna have kind of a niche type play.
They have medical devices -- clinical testing all these sub categories -- very good.
-- -- -- -- trending toward new high territory.
Very consistently of course well known for Botox and so on.
But I think right they continue.
To have a very good -- growth potential again over the longer term.
OK Bob last -- continue with health care and J&J which.
Is known for a major reorganization of the management structure it's got some incredible drugs in a pharmacy pipeline.
And -- Portuguese pays out that dividend.
What about 3.3 percent right now.
Right David and that's one of the reasons main reason we like if you look at Jane.
Made a big investment and their pharmaceutical -- are indeed the last several years that we think is now paying off.
And what we really like is -- -- how they treat their shareholders they've increased that dividend.
At a compound rate of about 9% plus for the last ten years we think that we'll continue going forward.
Bob Phillips Jean Brodie guys thank you very much thank -- to tips -- -- -- thank you thank.
