Mark Grant, Managing Director And Chief Global Strategist For B. Riley Wealth Management Was Interviewed On CNBC’s Squawk Box/April 6, 2020, About His Outlook For U.S. Economy And Stocks — “Make America Safe Again”
Mark Grant, Managing Director and Chief Global Strategist for B. Riley Wealth Management was interviewed on CNBC’s Squawk Box this morning/April 6, 2020, about his outlook for the U.S. economy and stocks. Mr. Grant does not see a quick rebound for the U.S. economy and said “we’ll be somewhere between a recession and a depression when we get through all this. About 25 percent of the U.S. economy is shutdown; and when we do start to edge back up — it is not going to be like it was before.” People aren’t going to immediately start to resume flying or going to events that involve lots of other people. It will take quite some time for things to return to any semblence of normalcy.
In recent discussions with the Department of Defense, Mr. Grant said he told them “we need to lose the Make America Great Again slogan and replace it with Make America Safe Again.” That means, he said, “we can rely on other countries for medical supplies, durgs, etc. and the essential things the U.S. needs. We need to make them in America, buy them in America, and if we have to pay a little more for that to happen — fine, they cost a little more — but we have got to be safe.
Mr. Grant said his outlook for the U.S. economy, as we come out of the coronavirus pandemic — “is none too good. People aren’t going to back to work and everything will be as it was.” People will still be cautious and afraid, not to mention the cascade of bankrupticies that are likely to occur. “You will see people out of work for a lot longer, you will see a U.S. economy that not only to make an economic shift; but, a psychological shift. Make America safe again so people can feel confident about going back to work in any normal fashion.” Resuming our worklife post coronavirus “is going to take much longer; and be much tougher than most people think.
Asked if he would buy stocks now, or sell? Mr. Grant said “the answer isn’t to sell now,” in his opinion. “What you have to consider is the timeline — from now/today, until we have some kind of medical resolution; and, some kind of economic resolution. Over a period of time, slowly, deliberately, you nibble at increasing positions in stocks that you own — that you believe have strong balance sheets and will thrive once we’re past the virus — and, secondly, you look at companies that you do not presently own; but, believe will emerge and thrive post virus. For those companies you identify, you nibble, and begin to slowly build a position, using selloffs to acquire shares.
Mr. Grant believes we’re within 5-10 percent of a low, if we see more selling; and, does not believe we’ll see anything close to a 50 percent selloff by the time the bear market ends. The DOW is down about 29 percent now entering Monday’s trading and Mr. Grant’s worst case is return to our recent lows, which would be between another 5-10 percent downside. That is why he is not recommending that his clients sell — if they like their positions — and instead, use any down days to begin to nibble and begin positions in companies they believe in, as we emerge from coronavirus. RCP, fortunascorner.com