One day it's good news, the next day it's bad. Such is life in the canyons of Wall Street lately at least as it pertains to economic data, be it weak jobs growth and retail sales or improving unemployment and surprising GDP.
Amidst this swirl of conflict, with a backdrop of unknown outcomes flowing from Washington and the Fed, Bob Doll, chief equity strategist at Nuveen Asset Management says investors need to be a little patient.
"The story for stocks in my view is that the next noticeable move will be a leg up," Doll says in the attached video, "but it can't come until we get some acceleration in revenue and earnings."
Until it does, he says one key area of assistance will come from overseas, where foreign markets are suddenly outperforming and outgrowing the U.S.
"If global growths improves, the US will participate, (but) we won't lead the way" he says, adding he is "still of the mind that you have to have some money in the US, but in the short run, the global growth trade is catching fire in other places that have been so depressed."
While he believes we're not going to have a robust economy, he is of the mind that we will have a slightly better one, that "believe it or not may have a three-handle on real GDP at some point."
Just not yet. For the time being, Doll takes comfort in the manufacturing trend, the gradual gain in capital expenditures, and the purchasing manager surveys.
"They're all ticking up, not just in the U.S., but around the world."
So while we wait for better economic visibility to arrive on our shores, Dolls says, "to the extent that you agree with a global pick up" you want to own Industrials (XLI) and other global cyclicals, such as Tech (XLK), while staying underweight defensives, except for Health Care (XLV).
He also recommends that investors keep an especially close eye on housing data, saying that "in a fragile economy like we have, you cannot have a 100 basis point move up in interest rates (^TNX) in six or eight weeks and expect nothing to be touched."
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