Tags: Saut | stocks | gold | S&P 500

Raymond James' Saut: Stocks Will Drop 10 to 12 Percent; No Quick Upside in Gold

By John Morgan   |   Monday, 22 Jul 2013 08:30 AM

Jeffrey Saut, chief investment strategist at Raymond James, predicts the stock market is headed to a decline of about 10 to 12 percent from its fresh all-time highs, and he is also bearish on gold for the moment.

Saut actually had pinpointed July 19 as the intermediate market top, so he may have been off by a day, as an all-time intraday high of 1,693 was set by the Standard & Poor's 500 on July 18 instead.

"It's just a question of, is this thing going to end with a whimper, or is it going to end with a bang?" he asked rhetorically in an interview with the King World News.

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"The shorts have been absolutely destroyed here. We could see a blue-heat move that carries the S&P 500 somewhere between 1,700 and 1,730. That would be the ideal pattern, but they don't operate the market for my benefit so you have to take what they give you."

As the top investment mind at a company that has $360 billion in assets, when Saut opines, people listen. He called the current market rally "the longest buying stampede I have seen in my entire 50-year career."

"I have been raising cash for the past few weeks, and I think this correction in the stock market will be roughly 10 percent to 12 percent."

As for gold, Saut sees no short-term upside.

"I don't think there is any rush to get into gold. I've said this to you before, gold is like a heart attack patient — it's not going to get up off the gurney and run the 100-yard dash. So I am watching gold, but am I participating in gold the way I did from 2002 to 2008? No."

U.S. stocks fell on Friday, as disappointing earnings in the technology sector — including those from tech stalwarts Google and Microsoft — discouraged investors.

"We are clearly seeing a mixed reporting period," Peter Boockvar, chief market analyst at the Lindsey Group LLC, told MarketWatch, adding that 64 percent of companies in the S&P 500 that have reported earnings so far have beaten estimates, which is lower than the trend of the past few years.

While gold prices have taken a beating in 2013, gold mining stocks have done even worse. The FTSE Gold Mines index of gold equities has plummeted 46 percent this year, according to the Financial Times.

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