Latest market sell-off is an ‘early Christmas present’
Relatively, the current pullback in fairness markets has created a gap for traders to purchase some shares at a price, the chief funding strategist at Capital Wealth Planning stated on “Closing Bell.”
“I believe you are getting an early Christmas present with this sell-off proper right here on Friday and at present,” Saut stated.
All three main market indexes fell on Friday’s shortened buying and selling session, every dropping round .4%, they usually continued their declines Monday, the primary buying and selling day of December. Buyers have been responding to less-than-stellar information within the U.S.-China commerce negotiations and disappointing manufacturing knowledge.
The S&P 500’s .9% decline was its greatest one-day loss since Oct. 8. The Dow Jones Industrial Common fell 264 factors, or 0.9%, whereas the Nasdaq Composite ended the session down 1%.
Traditionally, December has been the strongest buying and selling month of the yr, however final yr the S&P 500 sank greater than 9% through the last month. However the market has pieced collectively a 2019 rally, with the S&P up round 24% yr up to now. The Dow is up virtually 20%.
Saut stated he believes the sell-off could proceed into the center of the week, however that doesn’t shift his general angle towards the market. Regardless of the weak manufacturing studying, Saut stated he thinks better-than-expected retail gross sales can propel the market larger in December.
Saut has some firm along with his final-month optimism. CNBC’s Jim Cramer, for instance, additionally stated he does not assume the inventory market will drop in December prefer it did in 2018.
“Nothing worries me within the sense of on the lookout for an enormous sell-off in December,” Cramer stated Monday on “Squawk on the Road.”
Saut added that he believes the market can proceed to rise in December, even when a phase-one commerce deal between the U.S. and China shouldn’t be struck. Actually, he stated he does not assume there might be a deal by the tip of the yr, arguing the talks have “hit a stall” as a result of President Donald Trump signing legal guidelines in assist of the Hong Kong protesters.
The previous chief funding strategist at Raymond James stated there have been a number of sectors that stand out to him as robust shopping for alternatives for short-term traders: expertise, power shares and monetary.
“I believe financials are low-cost,” stated Saut, who added he believes small-cap shares even have room to run.
“I believe the small caps are getting a January impact in December,” he stated.