DISCLAIMER: THE FOLLOWING "Cashin' In Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cashin' In Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Who will be elected president one year from now? That could depend on the stock market. When President Bush (search) was inaugurated, the Dow was at 10,587. Since then, it has fallen off to 9,809. But 2003 has been a big rebound year for the Dow, with the help of tax cuts and a growing economy.
So will the market be a friend or foe to George W. Bush come election day next year?
Gretchen Morgenson of The New York Times says that the market will move higher next year, especially if the economy keeps on its current track. We’ve had some drifts downward lately, but the market is still on an upward trend. The only “caveat” is that if the economy is too strong, will interest rates have to go up and potentially kill the housing bubble that so many people have enjoyed? Jobs are very important too – we need to see employment get better for the economy to keep on moving. She says that government spending is a big part of this recovery, so she wants to see business spending return.
Dagen McDowell of Fox Business News says the market doesn’t need to go up that much to help President Bush; single digit gains will help. The Democrats will throw any mud they can, so a good stock market will be one less thing for them to criticize.
Hilary Kramer of A&G Capital thinks that the Fed and the administration have created momentum – consumer confidence is up, and if employment returns, then Bush will be well on his way to a second term. Hilary also says the threat of terrorism is still with us, and Bush would stay in office if that threat remains at a high level.
Wayne Rogers of Wayne Rogers & Co echoes the sentiment of former Clinton aid James Carville, saying “it’s the economy stupid”. The election has nothing to do with the stock market; it is all about the economy – and we’ve had good numbers over the past three months, helping the market along. Wayne says a rise in interest rates could mitigate some of the strong economic growth, but certainly not kill it. And in terms of investing, you’ve got to look for individual stocks, not at the “stock market” as a whole.
Jonathan Hoenig of Capitalistpig Asset Management says that “he’s no Brit Hume”, but he isn’t too impressed with either the Democrats or the Republicans. He is buying stocks, but sticking to his theme of buying overseas companies. The momentum is with stocks, but he just doesn’t see good stuff in the American companies. And you can’t buy the index; the market made up of “mini markets”, and you have to look for the individual stocks that are compelling.
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Jonathan says Espirito Santo (ESF) will go to $30.00
Friday's close (11-7-03): $17.78
This is a Portuguese bank, and another international company that Jonathan loves. Jonas doesn’t see the attraction, in that the stock hasn’t really done anything over the past five years. Jonathan countered by saying long-term performance isn’t an indicator of short-term performance, and he sees this stock as being successful in the near future. Wayne doesn’t like the overseas banks. He does say that the local banks in America are a great way to play the financial sector.
Hilary says Hain Celestial Group (HAIN) will go to $26.00
Friday's close (11-7-03): $21.01
This is a health food company (maker of Celestial teas), and the health food business is becoming a more mainstream business. Jonathan isn’t too thrilled about this one.
Jonas says Providian Financial (PVN) will go to $14
Friday's close (11-7-03): $11.32
This is a credit card and consumer lending business, and Jonas says if you have faith in the consumer, then this is a great play, as consumers will be going to their credit cards. Jonathan thinks that this is a strong area, but doesn’t love the stock. Wayne says this is an “o.k.” stock, but on the whole he doesn’t like the consumer lending businesses as a growth area. Hilary says MBNA (MBNA) is a better play.
Wayne says Universal American Financial (UHCO) will go to $13.00
Friday's close (11-7-03): $9.86