October historically a bear market killer, strategist says

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Foreign markets and the fed and surround sound let’s bring in carson group chief market strategist ryan dietrich ryan great to have you here with us this morning all right first and foremost we just got to get your perspective on on what we’ve been discussing more broadly here in the fed and this comfortability in kind of spurring a recession and how deep long

Or protracted do you believe that that recession could be you guys want to start start off with something a little easier no good morning thanks for having me i mean listen i think the fed is hinting that there may be okay with a mild recession and although we don’t think we’re in a recession right now you don’t have three and a half million jobs created you

Know be on a session in our opinion the truth is again things are clearly slow and we all get that right so nine months from now we might be in a mild recession um you know you look at it though historically the fed hypes until the fed’s funds rates above cpi right now that’s 3.25 versus 8.3 so there’s still some room there we still think inflation is going to

Come down fairly quickly i know we have that sticky cpi number of producer levels prices paid you know chicken wings so there are some things really coming down on the inflation front but the truth again the federal problem the fed’s seen the history books maybe last comment the fencing the history books right i took a double dip recession early 80s to stop that

Runaway inflation we don’t think we’re gonna necessarily need that but they know you might need something besides just hiking rates and that could be drastically slowing the economy maybe to a mild recession and that could be kind of what stops inflation and honestly guys the stock market’s pricing in a mild recession as we speak down 24 maybe making new lows for

The year on the s p as we speak today you know that’s pricing in at least a mild recession so from an investments point of view there are potentially some positives ryan uh thanks for the hot tip on on chicken wings i though you know i may not be able to open a home but i’m gonna go buy those in low and just storm in my freezer my plate because that makes a lot

Of sense to me but look uh i push back on this you know i think this market is starting to now price in more than a model recession you we are looking at potential testing of the june 16th lows on the s p 500 around 36 let’s say 3 600 and then the floodgates open after that you can see the s p go below 3 300. is that a reasonable scenario if we start getting some

Really bad economic data if we start getting really bad economic data it’s possible and let’s not forget 3500 is actually a 50 retracement of the entire bull market so that’s a really big kind of number to be aware of 3 500. um but again you just talked about it brian like it’s price again some bad stuff right you know look at that aaii cinnamon poll i know you

Guys talked about it more than 60 bears last week only four times in history all right near major market lows like every time that’s happened so again everyone’s thinking all this bad stuff’s out there and trust me we’re aware it is when you look at bonds down 14 for the year and stocks in a bear market this is like the worst year for a 60 40 portfolio only once

Was it worse in 2008 when stocks dropped 40 so it’s a terrible year for investors at the same time so much bad stuff is being priced in when you look at all these cinnamon poles and things i would like to see the vix a little higher i would like to see put the call ratios a little bit higher but again last comment october is a bear market killer right 84 94 98

2011. for whatever reason october tends to be a bear market killer we wouldn’t be we just be open to the idea that that could be happening potentially once again this october the tad more weakness and and then you know that seasonal strength around the midterm election into the third year of a presidential cycle especially under a first-term president that third

Year usually lives really well we think you know investors should be thinking about that at least is a defensive portfolio the only play right now is there is there some other type of strategy that investors can employ yeah well good point with stocks down this much we’ve been you know a little defensive your utilities and staples but honestly start looking at some

Of those cyclical areas right your financials and industrials i mean i know they’re down a lot and they’ve underperformed but honestly financials are industrials are starting to do a little bit better so so we can kind of have a bar belt approach right here for an investor makes sense because if you all in defensive right now so everybody else is kind of doing and

Again look what happened last week right energy energy has been doing awesome energy is down nine percent last week right i think one of the things you need for a major low is to shoot everybody and honestly now that they’re shooting energy in some of the previous leaders that could be a good thing to finally make some type of a major market low here uh what point

Uh ryan do you jump in and buy big cocktep i meant mentioned apple at the top of the show it is now leading this market low on microsoft down over 11 in the past month apple down nine percent these are huge declines in household names of companies that are still showing double-digit sales and profit growth impressive cash positions is now the time to jump in even

Under the the assumption that maybe we lose another five percent here yeah i’ll tell you what ryan we don’t really like large cap tech here we’re still underweight that group um you know we think some other areas we like small caps actually i mean we think small caps could be a little better in large caps going forward at the same time for somebody who’s looking at

A one to two to even longer term verizon there are some incredible companies you just kind of talked about there making a lot of money that are still they’re not going anywhere that again you know if everybody’s thinking like somebody isn’t thinking that’s the quote i like to use a lot from patton a lot of people don’t want to touch anything here so maybe there’s

Some opportunity and some of those could still do fairly well longer term we’re just we’re not too warm and fuzzy tech in general here honestly still carson group chief market strategist ryan dietrich ryan always a pleasure to get some of your insights especially kicking off a new trading week here thanks thanks guys

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October historically a ‘bear market killer,’ strategist says By Yahoo Finance