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Janney Montgomery Scott Chief Investment Strategist Mark Luschini and China-America Capital Company’s Tim Mulholland on the impact of Europe and the...
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Bring in now modular -- not is this whole today's action all based on -- Friday's jobs report or is that something out of work as well.
Well I think that's something else that could potentially be as work as well is being.
Spanish bond yields rose today to about five point 8%.
Which is well above the below 5% level they stood at just within the last month so.
I think it's bringing your back to -- full -- above the fold to remind investors that that hasn't completely gone away and perhaps some of the complacency that investors have assumed.
Isn't it necessarily.
The proper -- -- -- do with regard to your investment stance in today's movement in the -- It's indicative of that it wasn't that long goes below fifteen and today of course is it rose above eighteen.
Well yeah and and Tim you know -- jump of 9% in the -- obviously indicate some real fear in the markets but where's the opportunity mean.
Where did you see the fast money flowing.
Well I mean the -- you know was coming from very low level of -- probably a four year low so.
You -- get given up because the -- -- three and a half percent sell -- from the highs but you know I think that they commodity story is still one.
And -- best in the agricultural sectors probably where people are looking at right now we have a big grain report out tomorrow supply demand report.
But I mean I think overall the market was due you know you -- -- your technology which is still I guess simply look at apple today.
But I mean I think -- in the world right now it's a real mixed bag here and I think it really shows how dependent these markets are.
Are fixed on liquidity and that's why continue to -- in the QE3 part of the equation here.
-- -- let me talk about earnings season getting under way -- we take a look at how the first quarter came through for these companies what are you looking for in particular what's the key element.
That you are going to look for to get some sort of -- -- of the health of the company in the economy.
Over the last four weeks is so analysts have been raising their earnings estimates for companies -- to report here at the end of the first quarter.
Although on a year over year basis.
Comparative.
Or earnings are only expected to be up less than about 1%.
There's not much we're gonna take away numerically if in fact those numbers are hit.
Rather all be focused on the color that corporate management -- over the top of the numbers relative to what earnings look like.
In the subsequent quarters because earnings expectations continue to ramp up in the second half of 2012 and if management speak fails to support those raising up of earnings expectations.
-- that can lead to some vulnerability in the stock market to really augment what we've already seen over last.
Week of trading.
OK but Tim vulnerability in the form of the one to 3%.
Perhaps correction yet -- ignoring the fact.
That that the S&P year to date are what it looks really good it's so -- the Dow Jones industrial so at some point.
Does it send -- sort of broader message that things are not as bad as some of the naysayers are really believe.
Well -- I think if you look back at about 20102011.
We could have said the same thing at this time and then we had a very bad second and third quarters and I think the comment on these earnings when you look at margins at an all time high around 9% or nine and a half percent.
Those who were good and reverses to the main so you really get any top line growth which is -- I think it is important to watch what this these forecasts -- -- earnings.
But there could be a very tenuous situation coming -- -- second half of the year we have to wait estate -- margins at a high analyst's expectations are still pretty high as well so let's look and see what happens.
But let's not talk about specific CA you say you like -- they've had a kind of a rough day today walked -- why you like financials and which ones in particular.
What we term are bullish -- -- financial services sector.
In the fall of last year is because the sector was completely bombed out in our opinion you saw.
Many -- universal banks Bank of America France's city who have not far behind so to get sixty to 70% of their book value so.
We thought if we -- any good news that would be enough to invite investors back to sponsor their share prices.
Fast forward it was now the best performing sector in the S&P 500 the first quarter this year.
We think perhaps gotten chip prices got a little bit ahead of themselves.
And we would welcome a correction -- -- names particularly in the regional space like in New York Community Bank right if I were to step into a universal bank.
It be something like Citigroup because I like it's -- -- footprint but you know you've talked about the energy sector in the past -- Looking at those names and there are quite a few of them Kennedy integrated oils there the drillers are the pure plays.
Do you have a favorite name here.
Yeah I do is that would be ConocoPhillips.
And -- of Philips they'll be spinning off there but -- call Phillips 66 refining operation refining our gas stations are likely later this month would lead to a smaller but more profitable enterprise.
That is conical which will be focused on exploration and production.
And support a 4% dividend yield so we like it both in terms of it being an energy play we like the complex overall.
And secondly -- valuation and high dividend yield offers additional appeal.
I'd much -- thank you very much for joining us Tim -- -- we'll see you again when the futures closed thank you both gentlemen.
