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If S&P breaks record, it will go even higher- Sam Stovall

Tuesday, June 07, 2016 - 03:30

S&P Global Market Intelligence's U.S.equity strategist Sam Stovall talks with Bobbi Rebell about the rising stock market- and why he is watching energy stocks so closely.

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Let's talk markets with fans still thought he is the US equity strategist at S&P global market intelligence great to have you sir nice to be your body. So what are investors paying attention to today. Well today I think they're focusing on oil prices back above fifty dollars a barrel. Which is positive because the implication is that the global economy is strong enough to. Be pushing up oil prices but also there could be beneficial impact to 2016. Earnings estimates. Because the higher oil prices go the better off energy earnings are likely to be and they currently are the biggest drag on the S&P 500. C get the bad news out of the way things move higher. The broader market moving higher. Almost near record highs what's your take on where we are right now are are we gonna push through there. I think we will I think right now investors have a singular focus on that 2131. Level. Which is the old high set back on May 21 of 2015. And once we get back to that level than innocence. We have nothing holding us back in the market can continue to move higher. History says but does not guarantee that. After getting back to breakeven from corrections declines of ten to 20%. We advance about nine and a half percent on average. After getting back to break even so that would imply. That we get up into the 2300. Area of the S&P 500 before falling into another decline of 5% or more. And that's parasitic now we usually here or sell and make oh wait not so much this year or having it pigeon so far. What's your advice to investors in terms of the possible speed bumps that could be ahead what it will look out for. Sure I'm and I always tell people you don't want to sell in May and go away. You don't want to retreat but rotate is okay. Gravitating toward the defensive sectors such as the consumer staples and health care. Historically has improved your performance since 1990 while reducing overall risk. In terms of what are some of the speed bumps well I think certainly the video vote. By Britain to leave the Euro. Could be a major one. I think most on Wall Street believe that they will not end up leaving the Euro zone. Other concerns could be revisiting of the Chinese. Economic growth stumbling. Whether there could be more geopolitical problems military. He got to etc. the the problem with unanticipated events is that they're hard to anticipate. It just indicate. That when you think it could be especially in the context of hearing Allen's remarks yesterday. Well I think that that your gently on really wants to be raising rates they've missed a couple of opportunities and they don't want to miss anymore of possible. Historically there is a one and a half percentage point difference between. CPI. And the Fed Funds rate so meaning right now. Fed Funds should be closer to three point 7%. Not the point 37%. Where we are today. So I think they're gonna raise in July. They might even raise again in September and for those who think that they will never raised just before an election they've done it six times. Lap all right thank you so much fan my pleasure. Our thanks to stand still like US equity strategist at S can be global market intelligence and got your belt this is writers.

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If S&P breaks record, it will go even higher- Sam Stovall

Tuesday, June 07, 2016 - 03:30