Jeff Saut Conference Call Recap


If you missed Tuesday’s call with Chief Investment Strategist and Managing Director of Equity Research for Raymond James, Jeff Saut, you can read the recap below. We’ve gone ahead and outlined the points that we found most relevant.

1. No indications of a coming US recession.

  • Both Raymond James’ Chief Economist, Scott Brown, and Chief Investment Strategist and Managing Director of Equity Research for Raymond James, Jeff Saut, believe there is very little evidence to indicate the US is going into a recession.

2. The market is expected to bounce back after the recent decline.

  • “Selling Stampedes” historically have lasted 17 – 25 days. We’re currently on day 13. Jeff also stressed that mixed in to those 17 – 25 selling sessions there are typically 1-3 “throwback rallies,” in which the market looks to stop the stampede.

3. Out of the S&P 500 companies who have reported earnings so far, 74% beat projected expectations.

4. Fears over China are misplaced.

  • China is not as big of a threat to the US as reported – only 7% of GDP exports are to China. Furthermore, Jeff does not believe that China will go into a recession, rather China is in the middle of an economic shift from an export economy to a consumption economy.

5. Dropping oil prices are a positive.

  • The cost of crude oil is not a good indicator of the strength of our economy. Jeff explained “too much supply” is causing extremely low barrel prices. However, the countries that produce the most oil like Russia, Iraq, and Saudi Arabia all need cash and will continue to pump oil.

6. The Royal Bank of Scotland’s response to “sell everything” is not surprising.

  • In response to some questions regarding statements from The Royal Bank of Scotland urging investors to “sell out” of the market, Jeff explained that the RBS have only been bullish (positive) on the economy once in his 44 year career.

7. The key to long term results in the stock market is more about the management of risk and  not  the management of returns.

The idea of risk is something that we stress often, which essentially is defined as how much downside are you willing to endure in order to have the opportunity to grasp more market upside. Every one of you has a different answer to that question and that is why we are here to help you come to a personal conclusion.

Although 2016 has not been a great start with the investment world, we are optimistic by the sentiments from Jeff Saut, a widely-respected professional with a significant amount of experience and wisdom. Our view is not based just on Jeff, but also on what we hear from many qualified investment professionals across the industry.

It has been projected that 2016 will be a volatile year but as we think back, this has been said of every year!

As always, we are here to talk further about your personal situation and anything that you would like us to discuss further.

All expressions of opinion reflect the judgment of the Equity Research Department of Raymond James & Associates at this time and are subject to change. Information has been obtained from sources considered reliable, but we do not guarantee that the material presented is accurate or that it provides a complete description of the securities, markets or developments mentioned. Other Raymond James departments may have information that is not available to the Equity Research Department about companies mentioned. We may, from time to time, have a position in the securities mentioned and may execute transactions that may not be consistent with this presentation’s conclusions. We may perform investment banking or other services for, or solicit investment banking business from, any company mentioned. Investments mentioned are subject to availability and market conditions. All yields represent past performance and may not be indicative of future results. Raymond James & Associates, Raymond James Financial Services and Raymond James Ltd. are wholly-owned subsidiaries of Raymond James Financial. There is no assurance any of the trends mentioned will continue or forecasts will occur. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Asset allocation and diversification do not guarantee a profit nor protect against loss. There is no assurance that any investment strategy will be successful. Investing involves risk and investors may incur a profit or a loss. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary.