It's been a roller-coaster ride on Wall Street. So are these turbulent times a sign of something sinister ahead? For the answer, Fox News Channel's Neil Cavuto talked to Alan Ackerman, a market strategist at Fahnestock & Co.
Q: Are we in something bad here?
Ackerman: I think we are heading into something that could be bad. We have an across the board corrosion of confidence. We have a dramatic slow down, it has caused a shock in both consumer spending and with capital spending.
Q: I don't think it is dramatic. We are still looking at respectable numbers.
Ackerman: There was an article in today's New York Post that says that we've got a 4 trillion dollar wipe out of the wealth effect. And I don't think that is something we can look at lightly.
Q: For the markets going forward what does that mean?
Ackerman: It affects the psychology of people that may be spending. Cisco's CEO said it all. He said that he sees some of their people cutting their orders in half over the next quarter to two quarters. How do we deal with that? The only way is to pull back, not put money no a market as uncertain as this.
Q: Where are you putting yours?
Ackerman: I think cash is king I'm pretty much following that line and have been that way for the last couple of months. However, that doesn't mean there aren't special situations that can be bought.
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Q: You do worry that we go overboard on the upside. We had analyst saying that the sky is no limit and it's OK these companies don't have earning because this is all new and now we are going the other way?
Ackerman: You have to look at the stocks with good balance sheets and good management. Take Budweiser for example it's not a big solid home run stock, but it is going to get you to first or second base and so many people now are looking towards that area as an area of a defensive shelter.
Q: I think we just hear all this negative stuff, and it bums people out and they keep hearing it and keep hearing it and we just assume it is the end of the world. But I just don't see it.
Ackerman: I think well trained athletes are told time and time again, you've got to play the game according to what the worst is.
Q: What would make you change your mind can commit money to stocks?
Ackerman: I think I'm waiting for and would make me commit for a signal from the Fed.
Q: What if it is a 75 basis point cut. I think that's what we need. Would you buy?
Ackerman: You bet I would.