Defensive Names Still Catching Bids

 | Jun 12, 2013 | 3:42 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

mrk

,

jnj

,

gis

,

bmy

I am not crazy about today's action. Hated that opening. Hated it. Way too many people are leaning the wrong way and we know that it is hard to mount a rally when you are in the hole from 10:00 a.m. on.

To me, you still should be in a raise cash mode on anything that's cyclical. I don't care much for oil right now either.

The defensives, though -- the ones that rally when we are going into a recession -- are still catching bids because there is going to be a fear of recession if rates keep going up. I want to buy Merck (MRK), Johnson & Johnson (JNJ), General Mills (GIS) and, yes, Bristol-Myers Squibb (BMY) on any weakness.

Now, let's go back to my view that the macro ultimately won't will out. I think that people have to be more defensive and I sure as heck don't think we are going into a recession. I just think that when we get closer to earnings, people will be petrified that the CEOs are going to talk about the interest rates going back up and how much it could hurt.

I also think that the losses are going to be so great in these bond funds that we are going to see more selling in those funds. That will elevate rates even more and many institutions are not set up for that. They were still thinking that Bernanke was in control. He's not right now, deliberately or not. That's the big change and it isn't going back to the way it was.

Finally, I think the emerging markets are still perilous and if you have exposure to those markets, you are whistling past the graveyard.

Columnist Conversations

FCEL closed trading at $2.24, down small with IV30™ up 8.1%. This is a follow up to a story I posted on ...
Lang:
The chart of Delta looks very good and we have seen good option flow recently. This airline stands out among ...
mark mobius on market watch (dow jones) says buying baba is "not a good idea" due to his take on baba's corpor...
Mike Paulenoff's comments on Tarrget (TGT) prove once again how fast investor sentiment, and stock prices, can...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.