If you missed this morning’s CNBC interview, you can click here for a replay.
Interviews generally follow the talking points provided to the show’s producers the day before the event. Occasionally, however, the interview will take a turn and focus on something else entirely. This was the case this morning with Goldman Sachs. While we do what we can to prepare ahead of time, you still have to be quick on your feet.
For those that might have an interest, these were the talking points I submitted yesterday.
1.) Outlook for 2010
- FOR 2010, THE ECONOMY SHOULD BE STRONGER THAN THE STOCK MARKET, THE REVERSE OF WHAT OCCURRED IN 2009.
- We believe the economy will continue to show strong progress through the remainder of 2010, with AN EVENTUAL AND MORE DEFINITIVE IMPROVEMENT IN UNEMPLOYMENT.
- We would then EXPECT THE FED TO BECOME MORE AGGRESSIVE IN REMOVING THE STIMULUS it has provided, but not likely until this time.
2.) Are you more bullish or bearish on the markets and why?
- WE REMAIN BULLISH, but are mindful of the strong run we’ve had off the lows.
- THE PRIMARY SOURCE OF OUR BULLISHNESS LIES IN THE STRONG CORPORATE PROFITS RECOVERY AND ULTIMATELY, WHAT THAT WILL MEAN FOR CORPORATE SPENDING, INCLUDING EMPLOYMENT.
- A REASONABLE YEAR END TARGET FOR THE S&P 500 WOULD BE 1250, roughly the level it traded when Lehman collapsed eighteen months ago. While the market could get through this important resistance point and then move as high as 1350, this would require a continued acceleration in leading economic indicators as opposed to a simple continuation of economic strength.
3.) Where should you invest now? Favorite stocks and why you like them.
As 2010 has progressed, we have gradually been:
ROTATING TOWARDS LATER STAGE CYCLICALS, which include ENERGY AND INDUSTRIAL NAMES, SECTORS WHICH SHOULD OUTPERFORM AS THE RECOVERY TRANSITIONS TO AN ECONOMIC EXPANSION.
NARROWING OUR FOCUS WITHIN THE EARLY CYCLICAL CONSUMER DISCRETIONARY SECTOR TO AREAS THAT HAVE GENERALLY LAGGED the huge gains experienced by that sector as a whole. In particular, WE’VE BEEN FOCUSING ON LAGGARDS LIKE THE HOMEBUILDERS AND AUTO SUPPLIERS, which should begin to outperform as employment improves.
4.) Anything you are avoiding right now?
- AS LONG AS LEADING ECONOMIC INDICATORS CONTINUE TO IMPROVE, DEFENSIVE SECTORS LIKE HEALTH CARE, STAPLES AND UTILITIES WILL LIKELY LAG THE OVERALL STOCK MARKET. At the margin, we’ve been paring our strong gains in early cyclicals, including the consumer discretionary and technology spaces in favor or later stage cyclicals.
- THE TIME FOR INCREASING DEFENSIVES IS CLOSER, but perhaps not until later this year.
, but perhaps not until later this year.