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Dow Snaps Longest Winning Streak Since 1996

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  • Description

    FBN’s market experts break down the record run and whether now is the time to invest.

  • Duration 4:45
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Closed the week.

Meanwhile let's bring in our market panel John Buckingham and sandy lake in -- first to you.

Interestingly you don't see any kind of -- that we hear a lot of talk about up five -- -- even 50% pullback.

You don't see any significant pullback all of the in the near future.

You know I really I really don't David I think it's really an interesting phenomena right now we've got a lot of reason to think we get a pullback the fiscal cliff sequestration -- -- -- But stock markets are supposed to be a leading indicator after all so what are they looking -- so.

US retail sales were pretty good laid off auto truck sales pretty good you look at the consumer while -- survey was a little weaker today it may be due to gas prices at -- Consumer sentiment pretty decent you do have money coming back into the market corporate profits are beating expectations.

And yet in the mix that China's academy seems to be stabilizing at a decent growth rate exports improving.

You look at Europe maybe they get out of the recession late this year early next so I think that's the prevailing backdrop.

And is leading indicator just seems to be a little bit bulletproof it is sort of eerily reminiscent of the late 1990s.

But we haven't had all that much money really come off the sidelines -- -- just nine weeks.

That we had positive cash flow and equity mutual funds so.

We think there's there's going to be -- -- that it could come around the budget issue but so far the market seems pretty impervious sent prices don't seem that unreasonable relative to profits.

-- -- I gotta bring you -- here because you take a longer term approach to looking at these markets and you know we are talking about the fact that the retail investors -- uses -- showing up now that the Dow was up ten straight days.

Are you fearful in the short term that we could have a snap back in the stock market.

What you're always worried about -- any kind of a rally that we've had like this you know it's normal to have some kind of a pullback.

But I'm not really worried about too much enthusiasm from investors I just don't see it.

I know that we hear and you if you go out you find an actress here -- there though they'll probably come on your TV network and say you know that -- they're buying stocks but.

I just don't see the taxi driver giving me stock tips yet I don't see mutual fund flows being overly positive in fact.

The Investment Company Institute puts out numbers every week in US equity fund flows the last two weeks have actually been outflows negative.

I'm so I just don't see tremendous enthusiasm for equities yet.

And I yes there is a tremendous amount of money that's on the sidelines stale and or parked in in bond funds and bonds are still getting all the love.

If you look at fund -- it's not as if money is gone from bonds equities.

It's just there -- continue to come into bonds I don't lose any sleep voter sentiment right now sacked I think that's a reasonably optimistic sandy.

I have enthusiasm over her Stockbridge and the reason is the last February hear you -- ANG's list and Lionsgate which are up 59%.

And 33%.

Respectively see you gotta be got a good feeling about your broad and some stocks that aren't aren't really sort of household -- stocks.

One of -- -- our when financial tell us what that it has I know they deal with -- prizes kind of dangerous territory but why you like and now.

Well big deal on sub prime but there that there -- mortgage servicing and an American mortgage originators so.

They are dealing with sub prime both commercial and residential.

And the big banks want out of that business the investment bank's one out of business.

They pick up that business and they obviously collect mortgage servicing fees they collect late fees -- -- late payments.

They get paid if they help refinance a mortgage in any way shape or form so there's a good top line story there there's big -- business being acquired by this company.

It's only selling at about eight times -- forward earnings David so that's one of the reasons we really like it is well senior management has been around for years.

And this is a businesses battle may be one to two trillion dollars -- service and stuff that they could still continue to acquire so there's a very good persistent story although the stock has done well.

We still like it in here.

It in John that dare I say.

Apple may be looking attractive right now it actually went up two and a half percent today's trading up eleven box.

-- this is a stock that is not participated in the rally this year it's down 17%.

Are you starting to think that it looks attractive at these levels the -- PE is about and right now.

Right absolutely I think Apple's attractive bomb we just every recommended the stock -- our prudent speculator newsletter believe they're not the first time was in 2003 at seven dollars so we've taken a lot of money off the table but the run from 700 down to below 400.

In our mind makes -- stock really attractive here you get a great dividend yield of over two and a half percent and the potential for that yield to go up as they decide to do something with that cash.

As you pointed out that forward PE of ten.

I Israeli allows so I think Apple's -- name that people should be looking to buy today.

Job -- had sandy -- -- of a great advice thank you very much stuff have a great weekend coming up.

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