‘Tis the season for purchasing alternatives, Wall Road bull Jeff Saut instructed CNBC on Monday. And he wasn’t speaking about Cyber Monday deals.
“I believe you are getting an early Christmas present with this sell-off proper right here on Friday and as we speak,” 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 news within the U.S.-China commerce negotiations and disappointing manufacturing data.
Traditionally, December has been the strongest buying and selling month of the 12 months, however final 12 months the S&P 500 sank greater than 9% in the course of the remaining month. However the market has pieced collectively a 2019 rally, with the S&P up round 24% 12 months so far. The Dow is up nearly 20%.
Saut stated he believes the sell-off might proceed into the center of the week, however that doesn’t shift his total angle towards the market. Regardless of the weak manufacturing studying, Saut stated he thinks better-than-expected retail gross sales can propel the market greater in December.
Saut has some firm together with his final-month optimism. CNBC’s Jim Cramer, for instance, additionally stated he doesn’t think the stock 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 Street.”
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 just isn’t struck. Actually, he stated he does not suppose there might be a deal by the top of the 12 months, arguing the talks have “hit a stall” as a result of President Donald Trump signing laws in support of the Hong Kong protesters.
The former chief investment strategist at Raymond James stated there have been a number of sectors that stand out to him as sturdy shopping for alternatives for short-term buyers: know-how, vitality 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.