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The Long-Term 'Big Danger' for the Economy: Strategist

Monday, 9 May 2011 | 11:20 AM ET

There are “plenty” of near-term dangers out there for the economy, but the "big danger" down the road is what happens to the market when interest rates eventually begin to normalize, said Kevin Gardiner, head of global investment strategy at Barclays Wealth.

Investing on a Global Scale
New data suggests the real global threat is coming from somewhere other than Greece and Portugal, with Kevin Gardiner, Barclays Wealth head of global investment strategy.

“That’s starting to happen very slowly in Europe at the moment because the European central banks worry more about inflation than the Fed might have to,” Gardiner told CNBC Monday.

However, Gardiner said the valuation of large-caps in the US is “pretty compelling” and has “very good value.”

Gardiner said he likes oil majors, techs and consumer discretionary sectors.

“When the Fed eventually begins to raise rates—which we don’t think is likely to happen until next year—investors might see that as indicative of the economy being out of intensive care.”

On the commodities front, Gardiner said while demand is robust, precious metals such as gold and silver look expensive.

“We don’t think the world is scary enough to warrant gold and silver prices being at the levels they have trading at as of late.”

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Scorecard—What He Said:

  • Gardiner's Previous Appearance on CNBC (May 6, 2011)

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More Market Intelligence:

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CNBC Data Pages:

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CNBC Slideshows:

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Monday's Top Dow Laggards (As of Mid-Morning):

Intel

Bank of America

Travelers

Home Depot

JPMorgan

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Disclosures:

No immediate information was available for Gardiner or his firm.

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Disclaimer

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