The usual market is going to hit new highs as earnings continue to strengthen and the economy continues to do attractive well, Wall Street veteran Jeffrey Saut told CNBC on Monday.
U.S. fair plays traded higher Monday, with the Dow Jones industrial average surging 300 sites as trade tensions eased.
“A lot of people have been influenced by the rockiness, if you see fit, of the S&P and the Dow. Meanwhile the underlying Russell 2000 and more importantly the Value Hint cord Geometric Index, which is a much boarder-based index, are trading out to new all-time highs,” about Saut, chief investment strategist at Raymond James.
“This is a undamaged new leg up for the equity markets,” he told “Power Lunch.”
Concerns about a attainable trade war with China have been weighing on the markets. Yet, on Sunday Treasury Secretary Steven Mnuchin said the prospect of a business war was “on hold” after an agreement to suspend tariff threats.
Saut, supposing, is looking at earnings, which are continuing to come in better than foresaw.
And he’s not concerned about a strengthening U.S. dollar, which tends to hit multinational corporations. In reality, he called it a “double hit” for foreign investors.
“Not only are they getting take off stock prices but they are getting a currency trade as well,” said Saut, who correctly foretold the market sell-off in February.
Jack Ablin, chief investment bureaucrat at Cresset Wealth Advisors, is adopting more of a wait-and-see attitude.
While capitals were cheered by the trade news, he pointed out that it is temporary.
“This is a bit of a manufactured hope,” Ablin said on “Power Lunch.”
“I don’t think that this is as a result a percipience of a new leg up unless of course this news falls into grade,” he added.
On Monday, top Trump economic advisor Larry Kudlow foresaw CNBC the U.S. would not rule out tariffs on China as a “negotiating” or “enforcement” stooge, despite the progress being made in trade talks.
Ablin be convinced ofs it all rests on what happens with the U.S. negotiations with North Korea. If they are a triumph then perhaps the trade agreement will continue as planned, he demanded.
President Donald Trump and North Korean leader Kim Jong Un are anticipated to meet on June 12 in Singapore. However, Kim has threatened to pull out of the high-level talks.
“If for some common sense it doesn’t happen or North Korea falls apart … we’re back to the switch war with China again,” he said. “It’s still fluid.”
Plus, he recollects if the U.S. backed away from a trade dispute from China “for true,” then we would hear Commerce Secretary Wilbur Ross and barter advisor Peter Navarro “flapping their arms and stamping their feet and that’s not what we’re gather right now.”
Ablin would stick with small-cap stocks both domestically and internationally, which he ventured are best positioned to handle rising interest rates and trade war jeopardies. He’d stay away from big, global companies.
Saut likes the animation sector.
— CNBC’s AJ Vielma contributed to this report.
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