Neil Cavuto was joined by Jim Rogers, president of JimRogers.com; Gregg Hymowitz, founder of Entrust Capital; Michelle Girard, Treasury Market strategist at Prudential Financial; and Bob Sellers, host of FOX News Live.
Those horrific Beltway Shootings are not only killing innocent victims, they’re striking widespread fear which some say may be the sniper’s real intent. No one’s feeling the fallout from that fear than businesses in the Washington, D.C. area. Now The FBI is looking into if Al Qaeda may behind all this. So what if it is terrorism and what if the terrorists put a few more snipers in a few more major cities? Could that shut down the U.S. economy from a consumer standpoint?
Jim thinks the market and economy would initially fall in such a scenario. But he also believes both would rebound and that we can deal with such a threat. He points out that many countries have had terrorists and have adapted (i.e. Ireland, Israel, Colombia, etc.).
Michelle does not think the Washington sniper is a terrorist, just some madman who will soon be caught. If the person is a terrorist and these kinds of attacks became much more widespread, then it would certainly have a negative impact on the economy. But she believes this economy is on better footing than it’s getting credit for and that it will take a lot to jeopardize it.
Gregg thinks the sniper has very little impact on the economy except maybe at a small, local level. If it turns out to be a terrorist, we will only know after he is caught and therefore any market damage may have already been mitigated.
Stocks vs Homes
One downside to the market’s nearly 15 percent jump the past 10 days is higher interest rates. And the higher rates go, the less people will be able to afford to pay for home mortgages. So, if the bulls continue coming back to Wall Street, will homes on Main Street pay the price?
Michelle says home prices and sales may slow a bit as rates go up, but she does not think the housing boom will go bust as result. If rates do continue going higher, she recommends buying Adjusted Mortgage Rates (A.R.M.) Funds because their yields will increase whereas fixed bond funds or closed end funds will not.
Jim says home prices are peaking. He believes there is a housing bubble and recommends investors to sell Closed End Bond Funds and Bond Futures.
Gregg does not believe there is housing bubble, but believes housing will slow significantly if rates continue to rise. He recommends selling home builder stocks such as Lennar Corp. (LEN) and KB Homes (KBH).
Bob believes there is a housing bubble, but it will not burst like tech stocks did. The prices of homes will come down a bit and it will slow the economy more than we would like it to.
Head to Head
There’s an election in a couple weeks, so guess what? Congressman Dick Gephardt wants to give taxpayers back $75 billion to goose our economy. Neil Cavuto says it is a good idea but it does not go nearly far enough. Bill Wolman, contributing editor for BusinessWeek magazine, who is a Democrat, says it goes way too far and that our lawmakers should be concentrating on boosting spending on education to help the economy.
FOX on the Spot
Gregg predicts the rally holds and that stocks jump 10-20 percent by the end of the year!
Bob says the Dow will dip below recent low of 7286 on war worries.
Michelle thinks there will not be an interest rate cut by the Federal Reserve at their November 6th meeting.
Jim says sell Indonesian investments now! The recent Bali bombing leads nation break-up.
Neil says Democrats will paint a bad economic picture as the election nears. But it won’t work, the GOP will control both the House and Senate.