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-- the major averages extending their gains as investors await the -- statement tomorrow joining me now with his prediction for what the Fed will do and why he thinks is going to be a bumpy -- -- Is Brian Belsky BMO capital markets chief investment strategist Brian thanks for joining us.
So what do you think the Fed will -- tomorrow lot of mixed messages and ankles Ben Bernanke really.
Putting the cat among the -- by suggesting they may be close to tapering what to expect to -- tomorrow.
Well at some point they're gonna have to taper but from perspective wise you have to think about what taper is right taper means gradually decreasing it doesn't mean -- increase saying.
Interest rates anytime soon and it and get to think about the pace of economic growth.
During this overall recovery has been slow.
Job growth has been slow.
In so the ammunition to change the the current policy we think is rather moot.
So we don't see any kind of major policy changes for at least the next two or three fed meetings.
Its interest -- -- and you'll also calling as I said just now for a bumpy summer what exactly do you think you are you expecting.
Well think about this you know trends in stock prices -- bond prices -- asset prices in general.
-- never Linear furlong.
In we seen the that the acceptance of this bull market.
Has been very strong the last couple of months.
In our view is that we've been bullish for five years and where is everybody -- well you want to buy stocks.
When fear is very high well -- is not high anymore and we don't all of a sudden entered a bit of a complacency.
Among institutional investors and they're just kind of waiting around to see what happens.
What the Fed.
In our perspective -- that's not investing that's not process that's not -- -- and any time in our 24 years experience on Wall Street you'll only see investors move away from process and discipline.
It usually means we're gonna see some sort of a pullback so we've been -- is the last couple of months.
And we think there are gonna get a better entry point but I no longer term perspective we think we've entered a fifteen -- one year bull market it's very exciting for equities.
And we think this again be very positive for US stocks in particular -- well with that in mind which sectors that you keying in on which ones you avoiding right now.
Well from the avoidance side of things in the defensive areas of the market especially the high yield areas are going to be heard we think -- especially Telecom utilities.
Not just because.
-- the next direction of interest rate -- higher actually we think from a fun and now perspective -- -- suffer especially with in terms of valuation and growth.
From a longer term perspective.
Been an intermediate term perspective we really like.
Energy and technology we think there -- other growth engines for the US economy.
As the US manufacturing Renaissance comes back in the second half of the year.
We do anticipate a very strong capex recovery.
Which will clearly benefit industrials in particular.
Very quickly almost out of time Brian you think the next leg up requires some sort of -- -- in the ball market.
But we're not really saying money pouring out of the bond market -- No we're not in fact we still see -- inflows -- so we don't see any kind of major great rotation out of bonds until we see.
Several months of bond fund losses and that's probably going to be a 2014 event.
Very good prime Belsky of BMO capital markets -- so much for joining us today.
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