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What worries Recon Capital's Kevin Kelly about this rally

Friday, March 11, 2016 - 03:09

Recon Capital Chief Investment Officer talks about the red flags he sees in the market, and what he expects to hear from the Fed next week. Bobbi Rebell reports.

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Energy shares giving the US stock markets age all US crude hitting a record 42016. After a bullish report from the International Energy Agency hearing Marc Kevin Kelly chief investment officer at recon capital partners. Great to have you base wrapping it right so once again oil is higher it's been a turn for a few weeks it's within the markets talking about the. Market yet shocker right I mean we have the US markets trading correlation at 90% with the price of oil now that's not really healthy for the markets that we note that. We've seen over nine billion dollars in secondary issuances from energy companies to. Bully their there. She's right so they actually can meet their capital requirements others on the debts artery in the dividends so this is actually seems to be kicking McCain on the curb a little bit longer so why. Are so tied to the stock market will. I think it will continue actually for the for see able future -- market's really trading on fundamentals have a lot of central banks intervene into the markets right now and that's why you're seeing why he'll move so we go back and look at this entire year we had 2060s. Out of 46 days. Where the markets traded over 1% that's never happened actually dating back to 1936. For a 1938 for an entire year. And in 2000 EU actually was. 54%. 56 retreating so there's like two hour. There's a lot to worry about especially if central banks can't meet investors' expectations there's really that Central Bank put right now that people are really relying. And so. If they miss those expectations that's what the markets moved out so it's really hard to gauge what's going to happen dated date because it's not trading company news. Right and we get the ECB cut yesterday and Thursday and we do have a fed meeting on Wednesday has elected next week what you expect to see there were you watching for. Or watching fours relief for the Fed to see the independent write in and actually. Give indications that they there's still possibilities for rate hike if you look at the Fed Funds future rate. It's up trading above 66% right now that there's going to be at least one rate hike and the deepest supports that actually so the market I think would actually it's point of that didn't do that because that would worry that the it has gotten that that. It. That's an excellent thanks for people what factors like fast. Yes so people wanna state sort of US centric because there's a lot going on the globe right now who can start looking at needs like Costco. Southern degree utility that's country's history behind you look at music that if you wanna go to the tech sector which actually is doing very well in this global environment you can look at Microsoft which is paying more than ten year treasury is treating you know seventeen times earnings in those early reliance because growth. Overall worth our had a short term. I think over the short term we'll trade probably within 5% range from here and actually think it's that outside. Because. Central banks all the actions are spurring global growth so global growth still is slowed me. We will prepare their case for having me. I think kids having Kelly chief investment officer at least on capital partners and Bobbi Rebell. This is Reuters.

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What worries Recon Capital's Kevin Kelly about this rally

Friday, March 11, 2016 - 03:09