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Wells Fargo senior equity strategist Scott Wren and Kelly Campbell of Campbell Wealth Management give their outlooks for earnings season.
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The US home markets that -- really bracing for a couple of things in a big way and that is earning season it's gonna be taken off tonight with Alcoa.
How do you position your money and -- all of us got yesterday.
That we should be buying on dips we should see this -- opportunities see you're still bullish despite the numbers you're seeing right now.
Well I think so -- I mean you know earnings earnings growth has been not going to be very good in the first quarter year over year maybe get 2% out the -- something like that.
Earnings comparisons are going to be tough for all year long but I think this economy.
Is going to continue and certainly now you know we've had a three -- 4% pullback off the top which is really nothing but certainly.
It could easily turn into a little bit more I -- hope it does because so we definitely wanna step in -- get a little more cyclical cause I think.
This an economic recovery this economic expansion.
Is probably going to continue for a couple of years at least.
-- tell you think that the earnings surprises are behind doesn't mean we -- is ratcheted down forecast that we got back.
For -- the fourth quarter numbers you don't think that the analyst community is no realistic about what we're gonna get for first quarter.
Well I think the analysts are -- be little more conservative about -- -- anyway because when you do have a marketing goes up 12% first quarter you know and it has a pullback which everybody expected.
You know it's that it is.
They're they're gonna have to make some revision.
But I don't think it's gonna be written into the upside I think to be to the downside a little bit but again I mean we've got great things -- on the US that I think could.
Good guy in just as we've said earlier just keep going in the future.
I think that we do have a good stock market -- -- and great direction.
You did okay so overall -- significant comedy you're filling a little bit bullish let's does that some -- -- sector ideas for our viewers that a kind of see how that apply what could be.
A rock up next couple of months for the markets -- particular health care Scott wearing your right on the health care sector has always been a good defensive play the sector still building your today where you now without one.
-- -- you don't health -- we're underweight healthcare certainly in any kind of pullback scenario -- and anything even what we've seen so far.
Which hasn't been much health care is going to be an outperform.
Staples.
Utilities.
Telecom you can group those really together because we're not expecting some market disaster or anything like that but you -- you get a 78%.
Pullback you know in the scheme of things that's not much given the run we've had since the October lows but.
Health -- is one that that is certainly going to be an outperformer on market pullbacks.
-- we -- you mentioned consumer Staples -- take that the -- because consumer Staples had been a defensive play for last year.
But the group has not performed at that while this year it's kind of been leaving the other groups that have been -- taken off financials for instance what about the -- Actually you know -- I guess show if you think about us being I mean being -- more proactive and react would be proactive this kind of market is yes we have had to pull back.
-- we wanna look for two things one is Staples will keep us going and others we can use that is something is gonna help us gain some return.
Keep us from losing as well but remember we got to look at the opportunity here as well so not only are we gonna have Staples in our portfolios for that more portfolio but now's the time we're gonna start -- more growth maybe some mid cap and some small cap on this pull -- we've been waiting for it that it's happened now we're taking advantage.
OK so you're saying basically that -- we've got to be careful with got to look at certain sectors let me ask about something off that's material Scott because if you look at the materials sector overall.
You have liked it in the past but you're -- the group is down are you sticking with the materials sectors got.
Yeah -- Sheryl clearly materials are down on the perception.
Of that are the uncertainty really over how much emerging market growth is going to slow China and other countries as well so clearly that's that's a question mark out there but I think.
The growth in these emerging economies is not likely to slow as much as many analysts think.
I think that materials when you look out over the next.
The next year the next twelve months plus materials are going to be OK so they've certainly underperformed in here that I industrials have underperformed and here and it's on this fear that that.
The global economy the emerging economies.
-- are really going to slowdown the people don't know how much so I think this going to present an opportunity in both materials and it could be -- industrials as well.
That's a couple of things they are watching right now when you're looking at the issues in China you're looking at what basic let inflation data -- ask a little bit concerned out of China yesterday.
He's also got a still the potential of a recession -- what we're living in now the severe recession in Europe and in the jobs picture of those three things what -- Surge the month for now -- I think the thing that has the most impact for our future and our investors I mean our best is a retirees are close to retirement so we've got a -- make the best new -- I think the best thing can be a good jobs number the more we can focus in the US on getting those jobs increased getting that that unemployment number down.
The better that's gonna help not only the US economy but investors.
And it's also gonna help it -- that -- the general persons in general public the consumer.
That's going to be putting more money into the economy with the start getting everything going answer and that momentum going that's gonna help the economy and help you're.
Your investments when that it -- Scott we're showing our viewers the major indices right now I do a lot of went up the S&P is now below thirteen seventy that's -- key.
Psychological level at a key market technical level also.
In the innocent as a technical level any you know I guess as a psychological for for you and your colleagues -- outlook and talking up BS apparently quick.
Scott how concerned -- you.
Well I'm not all that concerned -- early I would love to see -- thirteen seven is definitely technical level.
But really what I'd love to see is that pull down to the next technical level below that which is right in that thirteen 1013 twenty type of an area so.
Given the run we had I don't think that's out of the question.
But given a few more uncertainties on Spain or something like that.
But we could be down they're pretty quick so thirteen seventy some some support I don't think it's a lot of support and I think it's very likely that we see -- market trade a little bit lower here.
Not a lot lower.
Lots of that as a buying opportunity in your opinion whether it's I think it is I -- I definitely think it is -- -- last word is as a buying opportunity as they see the market sell off.
We've been waiting for -- it's happening now the time to take advantage of our don't you lose it.
Guys thank you very much big market day for everybody of course we're gonna continue to follow the numbers throughout.
The afternoon on Fox Business got ran Wells -- -- equity strategist Scott I was gonna talk to you laws decorated -- Kelly Campbell barrel.
-- -- and that -- -- gonna stay for the rest of the hour with -- we have a lot to cover during a very busy -- Fox Business of about eight.
