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Richard Peterson, Standard & Poor's Valuation and Risk Strategies director, gives his predictions on upcoming earnings growth.
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At what earnings season begins today there's a lot at stake in the market's been -- taking a beating after Friday's miserable job support and of course continue worries about Europe's debt crisis.
And despite it although analysts are predicting double digit growth for the quarter.
But -- being too optimistic well joining me now with his predictions is Richard Peterson is director valuation and -- -- strategies recipe.
But first -- -- given your overall.
We think that overall thing is gonna be when these earnings come out.
What we're seeing from the capital like US withdrawals was a very solid quarter.
For corporate earnings but we're expecting the S&P 500 to grow about four point 9%.
This quarter that's -- represent the seventh consecutive quarter of double digit percentage increases.
Right now we're root for -- -- for a full year of 2011 but you.
But you're more optimistic more recently an army and 12% and -- did that some percentage gain but it feels like.
It feels like we're beginning to grind into -- it is true the F we've had and ratcheted down slightly if you look at numbers.
And -- numbers for about 15%.
But we're still seeing strong numbers -- economic sensitive sectors like materials.
Up about 40%.
Energy expected to -- 35%.
Industrials up 30%.
-- all all we're seeing good you know double digit earnings growth in many key sectors.
Why would they why would -- do so why he seems like -- -- they would be sensitive to the economy the economy is slowing we might have had a quote on quote soft -- How -- those areas that are -- enjoying such robust growth.
What you flew reflecting who at the price for -- even if look at you're going to find that the price -- old enough to report miles per barrel.
Now about 95 for dolls per barrel but we'll see you look at just the global growth theme.
Even though the US has grown one point 9% in the fourth quarter look at other sectors around the world -- to Asia Latin America.
-- -- -- -- And growing if -- better than the US.
Okay we've got here is your would be winners on the screen let's talk about some -- -- Areas that bomb might be disappointments.
Well I think we're looking at utilities and in Telecom.
They're -- can see declines in growth -- our earnings growth.
In the second quarter we look at financial never -- -- numbers and JPMorgan reporting on Thursday.
Citicorp on Friday.
Back -- -- expectation for financial for about 13% natter about 5%.
Plan assembly that -- -- of numbers down by more than half.
I mean debt of the financials have been to -- absolute nightmare of late.
And it do you think history is even how to help you know when I see something fallen apart like this in the you know they've adjusted themselves -- -- I think it seems like probably there's still will be -- more disappointment than not they report.
While the board -- that's local folklore for financials in May be room for upside surprise because you look at and an activity -- strong.
-- -- -- buoyant debt underwriting buoyant for -- from you know the capital markets.
We're doing a good quarter a good first half -- trading and trading it was a bit.
Let's let's talk about valuations here for a minute because you know.
Valuations a lot of people including myself believe that overall valuations are low.
Do you agree with that -- so with that justify the market moving higher from one fact our group -- -- -- standard imports.
To do some research looking at where we -- in June of 2009.
Look at when that recession ended looking at the twelve month forward PE.
We S&P 500 that's how we're trading lower expectations for a thirteen point seven -- you look at the end of the twelve month.
Ford.
For a let you go you're so what are your titles -- risk -- strategy director okay.
People watching -- show how would they and manage their risk what's the risk strategy right now that the average -- watching the show can implement.
Well again considering at the S&P 500 can expect our -- nine dollar.
Per per share or -- and 112.
In 2012.
I think yes and 500 is that.
Acceptable risk -- -- -- think is relatively it's relatively cheap.
That's part aren't so we're gonna -- bottle out of stocks because -- -- though thanks live Richard Peterson really appreciate it from recipe.
Well there's so much more ahead this hour including my three -- stocks in this day of steep losses and Google's first lives there.
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