Post date: May 09, 2013 5:43:40 PM
Reuters Market Access - Dow 15,000- look, I know these are just numbers but we also know that a lot of investors are not fully committed to the stock market, right?
BRIAN JACOBSEN, CHIEF PORTFOLIO STRATEGIST, WELLS FARGO FUNDS:
They haven't moved money out of bonds, they've moved it out of cash. Is 15,000 over the next couple of weeks and months going to mean anything to investors? Well, numbers do mean stuff as you pointed out. I think Thomas Schelling who was an economist talked about focal points, and this tends to be a focal point for investors. When it hits a new number, a round number, it can prod people back into the market or it can actually give them pause and say, "Hey, have things gone too far too fast?" I tend to be of the opinion that there's some firm foundation to the markets here and that I would expect investors will very slowly continue this slow migration that we've seen over the last few months back into riskier assets.
And when do we see really a full-fledged move from Treasuries into stocks or don't we?
BRIAN JACOBSEN, CHIEF PORTFOLIO STRATEGIST, WELLS FARGO FUNDS:
I don't think that we will, mainly because a lot of the data suggests that people have been sitting in cash and cash equivalents, and then slowly moving out into riskier assets both on the fixed income side and onto the equity side. But there's still going to be I think a fundamental demand for Treasuries. Maybe not as much as what we saw and I'm actually somewhat hoping that we see people continuing to move out of the money markets and into some of the longer term equity and fixed income area. Seasonally, the stock market historically does not perform as well in May through the end of the year as it does in the first couple of months.
Is it different this year do you know or do you think?
BRIAN JACOBSEN, CHIEF PORTFOLIO STRATEGIST, WELLS FARGO FUNDS:
Well, every year is different. And I- it's almost like talking about numbers as far as do they have a lot of meaning as far as the old adage about sell in May and go away, or how bad Septembers typically are for the markets. There are lot of these calendar effects, and I think that they're actually what I would refer to as just a relic of the data. Some month has to be worst. Some period of time on the calendar has to be the worst period for stocks, and it just so happens that it is the May and the summer doldrums. I don't think the equity markets are going to necessarily take a breather for the summer months. Big reason why is if you look over the last three years, we've always had some extraordinary factors built into at whether or not it was part of the recovery from the financial crisis which was stalling out, the tsunami in Japan, the debt ceiling debate- there is always some catalyst that cause the problems. And I just don't see the catalyst right now.