On Thursday’s Power Lunch Fast Money trader Jeff Macke stopped by for some quick Q&A. We thought you might be interested in what he had to say.
Harriet asked, “since consumer discretionary is historically one of the earlier sectors to turn after a recession when should investors start getting long?”
“It’s too early to buy,” replied Jeff Macke. “We’re seeing a failure of both stocks and fundamentals of the highest quality (retail) names. Costco had a horrible quarter, McDonald’s is good but the stock is breaking down and Target is an abomination. The fact is, scared people don’t spend money and that’s why you can’t buy these stocks."
Mitchell asked, “is now the time to buy preferred stock in money center banks such as Citigroup, JP Morgan and Bank of America .”
“No,” replied Jeff Macke. “The banks are exhibit A why you can’t possibly make a fundamental argument for this market because they constantly change the rules. I don’t know what the cost of capital is for Citigroup so how can I buy the preferred? I like Morgan Stanleycommon and nothing else.”
First Stock To Recover
Chris asked, “For the current recession cycle, which cyclicals should be the first to rise during the breakout phase?”
After Jim Cramer suggested owning cyclicals levered to China, Jeff Macke added, “I like China but I like Japan more. I think Toyota is the Godzilla of autos. The rest of them are road kill. I think you can get long Toyota . The stock behaves well and it’s come way off its highs.”
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