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US Economy is 'Sugar Shocked': Chief Investor's Warning

Some strong earnings news and positive economic reports helped boost markets on Thursday. Should investors be preparing for a rally to finish the week? Jack Ablin, CIO of Harris Private Bank, shared his market outlook.

Ablin said he is concerned that the US economy is being powered by artificial stimulus from the government.

“A lot of it is a 'donut-based recovery,' where we’re operating an economy sugar-shocked with donuts,” Ablin told CNBC.

“The good news is we have about eight to 10 donuts left in the box. So my sense is as we move through the next few quarters, we’re slowly going to be taking this patient off of life-support."

"And what we end up with, we’re not going to know until the middle of next year.”

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“The patient’s ultimately diabetic—we’re addicted to sugar, unfortunately—the question is, if I look underneath the surface right now, I’m not seeing net new jobs being created…and not seeing [positive] sentiment among small business owners,” he said.

“Small business has been passed over with all the stimulus programs and that’s where we need to see jobs and need to see some sentiment improve, and I’m not seeing that yet.”

Ablin Likes:

SPDR S&P International Small Cap

WisdomTree International SmallCap Div

Ablin also likes the materials, financials, technology and consumer discretionary sectors; and small-cap ETFs.

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Disclosure:

No immediate information was available for Ablin or his firm.

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