Market Ideas Late February 2015

We fully expect over the next 10-15 days we could see the S&P 500 at 2000 or below,said Matthew Tuttle of Tuttle Tactical Management,because:
1.Greece hasn't been solved.
2.Vladimir Putin.
3.The Fed is the 800-pound gorilla.Once the Fed exits,investors will go with it.*
Ultimately,crude probably does go lower,adds Dennis Gartman,editor of The Gartman Letter.We've broken some down-trend lines.Actually,I own a couple of oil companies to hedge my own position.
The fact is,stocks are going higher.Anybody short of stocks has been in a very difficult position,and will continue to be.The beach ball is still going higher.There's no reason to believe otherwise.A lot of people have been bearish-very smart guys-and they've been wrong.*
Steve Milunovich,IT hardware analyst and managing director at UBS,has reiterated his buy rating on Apple,with a 150.00 price target.Apple is reportedly working on an all-electric minivan type car.We do think the Apple ecosystem is increasing-very important.The change is,Apple is becoming pervasive in consumer lives.It still primarily monetises through its devices,but services is the glue to the story.
CEO Tim Cook has done a tremendous job of putting it all together.If they really do expand,the less they depend on the iPhone,and that's helpful.If Apple goes up to 160-170 dollars per share,it will have a market cap of a trillion dollars.*
Apple Computer(AAPL),iShares Core S&P 500 ETF(IVV),Chevron(CVX),Valero Energy(VLO)

Advantage View:High Risk and Havens

Not every analyst was swayed by the easy cheer so prevalent on the trading floors in recent days.The news out of Europe clearly is driving the market,said Jeremy Zirin,Chief Equity Strategist at UBS Financial Services.I think the market will continue to be driven by the news flow out of Europe.We're actually not that inexpensive.The rally that we've seen has really evaporated some of that cheapness.
I expect S&P 1100-1250 range-bound conditions.I think the risk-reward after the rally is to the downside.You want to have a more cautious disposition:staples,utilities,telcos,and tech with its high cash balances and emerging markets exposure.
The catalyst for a breakout would have to be a resolution in Europe and a resumption of strong U.S. growth.It seems unlikely given the uncertainty of our own fiscal policy-let alone Europe.The outlook is increasingly uncertain.Some multinationals are starting to see one of the problems is business uncertainty and market uncertainty.It's very difficult to make multi-year investments in capital goods or in labor when you can't be sure of the landscape.
On the surface,this earnings season looks similar to the past 6-8 quarters.What's really different is,forward-looking estimates are being cut at a dizzying rate.Below the surface,it's deteriorating,Mr.Zirin cogently observed.

Central Banks Seek Growth

Central banks are cutting interest rates in hopes of sparking flagging economic growth.The Bank of Canada was first last week,cutting its overnight rate a quarter of a point,from 4.5 to 4.25.As late as July,the BOC was worried about inflation.Now it is concerned about deflation and the prospect of a failing economy.The Bank of England followed suit.It cut its key rate to 5.5 from 5.75.Growth has begun to slow,though the upward risks to inflation still remain.Credit tightening poses a risk to the Gross National Product.Slowing demand growth will ease pressure on capacity.The European Central Bank left rates unchanged.That may amount to a concession,since the ECB has been a hawk on inflation,and might prefer to raise rates.Today at 2:15 PM Eastern,the Federal Reserve will issue its decision on interest rates.It is expected to cut as well.Bill Gross of PIMCO would like to see the Fed cut all the way down to 3%.To restart the near-recessionary economy,we will need that.The Fed needs to reduce steadily and significantly.There has been a breakdown of the modern banking system.The tangled web of subprime loans has created a shadow banking system.The banking system must be shored up.Home prices may fall another 10% over several years.The banking system exhibits a freezing up of liquidity and a reluctance to make loans to the vital part of the economy.The Fed must use all means to provide liquidity.Troubled Swiss bank UBS has written down another 10 billion of subprime securities,following an initial write-down of 3 billion.To cover this,it has sold a stake in itself to the government of Singapore and a secret Middle Eastern investor.Shares of UBS rose on the news.Longterm investors are building positions in such financial stocks,which are trading at a big discount,although they could well drop further before recovery.Similar holdings are HSBC(HBC) and Citigroup(C).