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Does Dow Have More Room to Run?

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    Ameriprise Financial chief market strategist David Joy gives his outlook for the markets.

  • Duration 4:00
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Okay the Dow marching not -- higher today after hitting at all time high yesterday so -- correction just around the corner or is there more room to the upside.

Getting -- M -- friend David joy chief market strategist for Ameriprise Financial -- it was great see you.

You know.

All right so again this week been stating -- the Dow is building on that record close yesterday do you think what's your outlook is the Dow -- about its best levels.

For the year for 2013 -- are significant -- room to run.

Well I think there's moral -- I don't know how much blog but I don't think that rally has succumbed to an end.

Obviously it is a moment of introspection if you will anytime you regional high you have to sort of -- examine whether or not your assumptions are accurate but.

Mean I think that this market is still are attractively valued earnings -- still growing there's very little inflationary pressure.

And the Fed is very active -- tends to stay that way so.

I think that there is there room to move higher hot much I don't know and of course you can get a correction it any time but.

I like stocks here and I think the a trend is set to the upside.

What -- the message do you think David that the Dow finally hit this record after flirting note with it for weeks.

After the sequestration cuts went into effect.

Well.

On the sequestration.

Issue I think to some extent leave move beyond sort of a calamitous.

Expectations of it in some quarters.

When you consider the size of the cuts being made relative to the size of the economy.

It's pretty clear that while there be some hardship in certain quarters it's really not that big -- deal in my opinion.

At the same time there is a certain positive message that's being sent by it to to the extent that we will.

-- what we do it wisely or not we will not make an effort to get our fiscal house in order and that sends a certain message of confidence to the investment community so.

You know -- six sequestration.

I think is is actually a net positive in this market and you know we'll see what happens with the budget debate coming up.

We're not out of the would you not.

Now that'll -- fiery that's for sure David C mention the Fed to -- in the last minutes.

Gave us confidence that the Fed's gonna keep on with this easy policy for the duration.

Really but the mark have to have more than the Fed fueling it when you confirm fundamentals right in terms of the economy we had -- Eighty -- private sector jobs report a revision upward for January better than expected number for February this next government -- report out on Friday.

DC more real economic fundamentals supporting the rally.

I I do and -- -- absolutely right the Fed can only do so much.

We can prop up this market this economy.

Only to a certain extent those.

We need to see strong fundamentals and as you point out rightly we've gotten -- we had very good ISM numbers.

We've seen decent.

Job numbers housing is doing well also.

But we need to see this -- continue.

We're growing at an underlying rate of about 2%.

I think we need to see numbers that are consistent with about that rate of growth in order to keep this market propped up.

I think we're going to get -- I think there is that underlying momentum.

But there are risks in the short run there's no question that the sequester is a little bit of a -- as is higher taxes payroll taxes.

Gasoline prices behaving well but -- are higher than -- so there are so -- short run considerations here right we do need to see.

Good economic data that can -- continue to -- So in our remaining moments here that David how would you advise investing around these risks.

Well I think first of all you have to be oval weighted equities vs stock obligation -- Not much value there may be a coupon earning type here in the bond market.

In stocks I think you need to be well diversified I still like dividend stories but I think if we see better activity.

Globally.

The cyclical names could lead the way in the second half of the year you gotta be overweighted stocks at this point.

Cyclical -- second half the year looking better for the economy it sounds like in your view David thank you as always.

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