market folly

Strategist Jeff Saut is out with his weekly commentary in which he touches on drivers of the American economy in the private sector and how improvement in housing will be the key driver going forward.

Saut notes that we may be seeing a transition in the private sector, a changing of the guard per se.  He feels that exports and manufacturing have waned while housing and residential construction has surged.  He points to home prices rising and a resurgence in housing as the key to employment numbers.

While he argues that manufacturing and exports will regain strength once the fiscal cliff issue is resolved, Saut thinks that "housing looks to be an undiminished theme over the long run."

He doesn't like the homebuilders quite yet, but his real estate analysts have recommended Rayonier (RYN) as a play on housing, noting:

"We reiterate our Strong Buy rating on Rayonier following 3Q results, as we believe RYN shares offer one of the  most compelling risk/reward profiles in our REIT coverage universe.  We view Rayonier as a special situation  within REITs, driven by compelling growth prospects for its performance fibers business and a growing dividend  (+33% since 2009), which also offers investors a unique way to play improving residential construction activity."


Embedded below is Jeff Saut's weekly market commentary:




You can download a .pdf copy here.

For more from Saut, check out his piece on how investing performance is determined by how you manage losses.