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Well when it comes to markets my next guest says that the only thing that you can count on is volatility over the next few quarters.
During -- with the few ways to navigate the choppy waters this conference senior equity strategist with Wells Fargo advisors Scott.
Thanks so much for joining has.
You know I was I was looking your note your pessimistic compared to other analysts you have a very conservative -- 25 to thirteen 75.
By the year and your earnings growth is pretty conservative as well 5% earnings growth why do you feel this way.
Well Melissa you know I think that we're going to obviously see.
Some slow growth in Europe if not you know mild recession but we're gonna have slow growth here.
Maybe 2.2 percent something like that but certainly well below trend.
And I think it's just a point in the cycle where earnings growth slows down we have tougher comps coming up we had.
You know -- of good growth here in 2011.
Something like that but.
I think these emerging markets as well are going to be slower so your and -- and an overall slower growth but type of atmosphere.
When we do our work we can't really get above that thirteen thirteen and a half PE valuation on our on our number so I think a lot of things are combining.
To -- to really cause us to continue to be rather cautious but but positive and after last year.
But doesn't look too bad to be up.
Five to 7% maybe by the end of the year.
Anything -- coming election will compound the volatility right entity could go one way or the other the markets would react right -- you -- you know bomb.
Reelection might be bad for the markets.
Well I think once we know -- the front runner is and certainly for the Republicans it looks like it's going to be Romney and world will know we'll get a better idea that over the next.
The next couple of months but once we know who the Republican nominee's going to be.
I think that if -- The Republican nominee has a big lead over President Obama the market's going to like it if pres Obama has a big lead over.
The but the thing that that I think were trying to tell our clients is you know that's it two or three months kind of an effect because really if you look back -- these past election cycles.
Within a couple of weeks three weeks after the election the market's going to get back to trading over.
You know what's the fundamentals going to be over the next twelve to eighteen months what's the economy going to do.
What are earnings going to do so I see it as a as a temporary.
Type of thing but it's certainly going to cause some volatility especially if it's a neck and neck race I think OK I'm going down to the wire which seems likely.
Danaher is one of the your picks here and the company recently said that it -- that choppy economies.
Would hold 2012 sales growth to two.
Between two and 5% -- are you positive on this company.
Well I think for one thing if you look at the performance of Danaher it's over the course of course last year or so it's done.
It's done very well against the S&P 500.
One thing I like about -- Danaher a couple of different things is about 50% other revenues come from overseas I mean we want companies who have.
Exposure to emerging markets exposure to overseas.
Another thing is that they have besides -- industrial products they have some consumer products as well that are more defensive so they've got that combination.
Types of products as well -- something this defensive so.
I think that company has a lot going for -- They may have adjusted their of their numbers down here a little bit lately the market has really I think been anticipating that and -- continued to outperform the S&P 500.
And Walgreens on the other hand has been down about 17% over the past 52 weeks but that's a stock that you like how come.
I think the valuations -- that's for sure.
But certainly this Express Scripts controversy has has put pressure on the -- but I think they are going to be a -- big.
Beneficiary of this patent cliff situation and make more money.
Off of generics and so I think that that that that Walgreens at this valuation.
Looks attractive and really for us right now Melissa we want to have a good mix.
Defensive and cyclical exposure -- not leaning real hard right now.
Toward the cyclicals but I anticipate as we approach the second half of the year.
We're gonna only harder because we think this global economic recovery is going to continue it's not going to be super strong but it's gonna be strong enough to push -- these major averages up.
By you know mid mid to upper single digits over the course of the year I think.
OK Scott -- -- -- interesting ideas thanks so much for coming -- we appreciate it.
Thanks a lot.
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