Winter Stock Swoon is Over Says Elaine Garzarelli – Likes XLI, NLY, JNK

Elaine Garzarelli was the Market Monitor on the Nightly Business Report on Friday Feb 26. Back in the 1980’s Garzarelli was an extremely influential stock market analyst, after correctly predicting the stock market crash of 1987. Elaine Garzarelli was voted Wall Street's top Quantitative Analyst for 11 years in Institutional Investor, magazine's poll. She is President of Garzarelli Capital.

Elaine Garzarelli is bullish for at least the short term. She attributes the recent downturn to tightening in China, and overly bullish sentiment. Sentiment has now declined and her indicators are now at 73% from below 65%. 67% is a buy indicator.

“Inflation is not a problem,” Garzarelli said. “This is a business led recovery, with 18% real capital spending in the last quarter as opposed to a consumer led recovery which is reflected in GDP.” She likes the industrials.

She likes, Industrial Select Sector SPDR Fund, (NYSE: XLI)

She recommended 2 high yielding stocks, SPDR Barclays Capital High Yield Bond ETF, (NYSE: JNK) and Annaly Capital Management Inc (NYSE: NLY), which she says yields 17%. She feels that high yielding stocks such as these, will do well as opposed to Treasuries,until the Federal Fund Rate rises, which won’t happen for about 6 months or later.