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Morgan Stanley Smith Barney Chief Investment Strategist David Darst on why the economy and markets are facing a soft patch, but not a full-fledged dou...
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Q for -- rebound at least that's the message from my next guest who is here with some ideas to help you cash and -- When it happens but you gotta be position before it happens joining me now in the first on fox is generally David -- The chief investment strategist at Morgan Stanley Smith Barney one point seven trillion in client assets.
People got -- last week David and they thought oh this is the beginning of a long summer correction is it.
Liz manufacturing.
Consumer confidence housing and jobs all four of those last week.
We're very weak and that basically says to us this is a soft patch we think it's not going to go negative -- become a double dip we think that.
This is a time to be very careful and defensive -- owned defensive type type names three names that we like are Pfizer.
Procter & Gamble and PepsiCo.
-- yields three point 7%.
PepsiCo yields 3.2 percent -- when he says -- that means dividends that's about it but stopped as you get paid -- right.
We we think that this is a time -- -- -- group to be careful.
-- we gonna basically.
That there's something that you've got to wait for which is July 8 not July 1 that's that's for -- second Friday this time in July for technical reasons it'll be reported then that's the job numbers that you all have been.
Talking about -- on Fox Business Fox Business -- we want Michelle Yeoh.
The train we all wanna take on the subway -- -- -- Liz claimant frank.
LC OK -- -- -- that's the dolls that's the subways so we wanna put these magnets on river expert relative grain and that's right that's right -- claimant train but.
Coming back -- we think this is a soft patch we do not think that it is a poll.
Set back.
We -- so double dip no double dip -- Pfizer for except -- Far has a good PE -- you're not paying too much for price earnings ratio is -- nine yet they've had some management changes Jeff can work out how the new -- doing what they do about the pipeline and -- Lipitor which is the largest selling dog of all time they sell twelve billion dollars a year billion that's about showing off patent right.
But as you know they've acquired Wyeth and they've acquired King Pharmaceuticals.
King Pharmaceuticals is pain management Wyeth has -- larger suite of drugs and we see date the efficiencies the savings.
Hot and the pipeline being filled up by these two acquisitions health care stocks with a market up only 2% this year they healthcare stocks are up 11%.
Now I -- this as waterproofing a portfolio for the summer storms that may be comment PepsiCo why not Coca-Cola -- Pepsi well we see the PepsiCo has very good momentum in the domestic market they're putting in more money into the ad spending.
We see the international part which is -- -- then the international part of off Coke.
The pet the F PepsiCo is 31%.
Exposure to emerging markets which is less than Coca-Cola -- As you know list.
40% of their sales are Frito-Lay.
And there they have they are twelve times bigger than the number two player.
So they are dominant -- that -- was a very high margin product practical food not necessarily to drink that's right see on the national scale and Procter & Gamble with the that when you basically have seen management.
Has showed down low world they've had rising commodity prices which we talked about before that cut into margins we see -- increasing their spending.
-- increasing their and this is another one of these huge ex emerging market exposure place 176.
Years old touches three billion of the six and a half billion people on the planet every day.
Congress claims and now we're looking sort of at the macro picture that they will come to a debt ceiling.
Deal by July 4 -- and if it doesn't.
Liz I would love to see that because as you have reported here Moody's.
Has said the standard and war is actually downgraded the outlook the -- US credit rating.
To negative from from stable.
-- Moody's said this past week.
-- action unless unless -- we get some movement here by July they're actually going to have -- put out a note on the the credit rating of the United -- so that's putting a little pressure.
By the July 4 holiday when people go -- recession.
I think these congressmen and women.
In the senate and the house want to go home.
And not have this hanging over them.
Because it's -- it's a concern to everybody now.
Right before July 4 weekend oh -- is slow time anywhere within volume David is with us all day long Pfizer PepsiCo proctor and gamble or -- tour.
