Oil will plunge further, says Michael Bapis of High Tower who adds that a capitulation in equities is needed before markets can steadily turn around.
Wall Street rallying with the F and 500 retaking the 19100 mark. And racing someone yesterday's slide let's dig deeper and Marco and Michael battles he's managing director of the Baptist group and I'd welcome Michael thank helping us investors buying mode today is it. Is it JPMorgan's earnings or is it really oil. There's a lot of reasons for investors buying and it's it's probably a bounce off the negative tempers start to the year obvious 500. You are seeing some technical support that roughly two medium is owner but it's more so. Bounce off of the horrible start to 2016 year so are you see this I guess senses a minor oversold bounce. Do we need to see a real capitulation. A real route before stocks can steadily climb. You may see you real capitulation for a stocks steadily climb. A lot is going to be. Examine this week two weeks owners season JPMorgan came out with pretty good results. That way though if that continues you'll see more about and you will if if we have a struggling earnings season. So you see investors that start to look at earnings but they've still got the hi this strong glance at oil yet you'd see oil going low lights. Look there's an oversupply. People stop oil oil can't underestimate the fact that China's slowing down. The demand for oil when it went up 200 dollars a barrel was driven by the growth in China driven by the growth globally now. We have a divergence. Monetary policy in the world the US is tightening. Looking to. That the rest of the world is still stimulating. You know make your zip ought operating negative negative rates. What you got to oil that is up today via boat down you get testing below thirty dollars this week. How low eighties. So I think you go to when he roughly. Zacks number. I didn't know that but yes. What are you advising clients to do right you unit dwindling dollars. We're revising our clients through. Ticket take a close look at the risk tolerance. Are you positioned with the risk. That you think you had your portfolio position. We looked for active managers we think active management news. By Florida outperform. Passive management. We are looking. If we wouldn't. Discuss the US I think is it. The US economy's OK I don't know sell on rallies are buying districting plan tips by India and other areas nibble on the GM side which is very Smart what countries. Very contrary and it is what's out there I'm looking it costs. South America Latin America. If you lived Olympics coming to Brazil. This summer and some of Europe. What do you think they're there or do for bouts. Well aside from the fact that they've gotten pounded over the last year there's there's some value there and we've we're a global economy. Our world is much different than it was 1520 years ago. We will be more volatile and it's not that. To open. But it's that's the equivalent of the statements that we're 5% 3% of a portfolio nibble but don't know if that all right exit appreciate. They are you Nextel Michael back as of hightower I'm Fred cut this is.