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Should investors expect stocks to rise in the week ahead.
Sky high street -- today's today's bearer is like capital managing director Peter Kenny today's -- was Raymond James co head of equity trading.
Michael -- Michael let me start -- -- the -- but.
You do have concerns about earnings particularly with -- -- regard to revenue.
Revenue does -- seem to be slowing up that's -- concern.
Yeah we've we've where it looks like upside -- upside beats and revenue this -- about 42% long term averages 62%.
Yeah we've got challenges with the would earnings -- challenges of revenues we've got uncertainty over the the fiscal -- the election etc.
But I think the market price now.
In a situation where we don't we have limited downside I mean what we're gonna put on this market the thirteenth or connect multiple on the downside that's where -- bottom and 2010 without -- my collapsed.
So even if that you've got -- market that still in the mid thirteen hundreds.
Which is not too far from here on the downside if we get some resolution on the fiscal cliff which I think we will our chief economist thinks -- good fiscal cliff next year's about a 1% dragged.
We still -- 2% GDP growth next year.
You give me fifty -- only upside -- got an S&P above 15100 so the risk reward looks compelling to me.
Okay let's get to Peter you know.
Michael just really kind of outlined some really positive or or at least don't be afraid -- scenario so -- sit that you see out there that keeps you so concerned.
Keeping in mind too that the past nine months -- who was worried lost out on his rally absolute.
Please analytical at the index is -- -- in a very good year S&P 500 NASDAQ -- all positive very very nicely 1412%.
Some great performance year to date of the last -- afford to give us a bit of a pullback and a lot of that has come from what really should fundamentally drive the market and that is earnings.
And more specifically revenues revenues have been a in the in the broader narrative out of a very much of a disappointment and if you've pointed out -- year earlier that's a great example multinational that.
Quite frankly is speaking to the fall -- in revenue as a result of the use of the EU as a headwind is still very much.
Real it hasn't gone away it could get worse fiscal cliff.
We could see some clarity and some sort of result there watching.
-- Peter let me just jump in here what do you say about an Expedia which is is solely based on people's.
Discretionary income and -- how much they spend on travel when they're going to the islands or wherever they choose to go they did beautifully in their numbers.
-- they did beautifully that speaks to consumer confidence and you're always gonna have some pockets of strength regardless how weak the overall market is.
So I'm not saying that were falling off a cliff you know what I'm simply saying is that guidance forward for earnings.
Is anemic there are a lot of there's a lot of wave headwinds that I'm not sure that we've got a whole lot of room -- the upside between here in the unity journalists we have a -- a little bearish in a bear that's a little bullish just -- -- a good except Michael let's.
Let's focus on one sector and and that's take a lot of focus this week which is technology.
We have a major shift going on we have what what apple is trying to do -- getting into the -- iPad.
Some people say that for the first time they're following rather than leading technology in their habits.
Other people look at what Microsoft is -- -- Walt Mossberg for the Wall Street Journal had this.
Terrific review of surface they're new they're new tablet.
Which he says it's a real game changer so you have Microsoft the software company.
Gideon very successfully to hard work -- -- it were and one of these major shifts tapping in in technology house and all gonna shake shake out.
But its average daily through importantly to a technologies doing force and what -- driving.
And I think -- that that continues to play out I think fit that you have this shift that's going on.
I think this bodes well for the technology space especially companies that are supplying.
These bigger companies that are producing these products and if you look at the tech space in general you've got.
Record cash on the balance sheets they're all generating a ton of cash flow and -- willing to share that cash flow in the form of stock buybacks and dividend increases so I think that that.
Puts that sector.
In a very opportunistic -- -- that's let me ask you Michael and I know I know you all back.
I know you don't like to be specific about stock picks but if if I have cash I'm wondering how all this major major shifts in technology gonna play out.
Where would I put my money more in that more in the companies that focus -- -- hardware or the ones of focus on the software.
Onyx software better I think part -- -- tough environment right now but I think you've got a you've got to be a little bit more specific -- down to the areas of the market.
That are involved in the handsets the companies that are supplying the the two pieces of equipment that go into the tablets into the Smartphones.
That's the area if you go back and look -- all investors is -- -- earnings reports.
You can see clearly the companies that surprised or get better guidance than some of their peers for the ones that were focused on that area.
And that's where we would be looking.
-- just one quick second I wanna know from Peter that the names that you really like right now.
Why I love the consumer Staples because the dividends because the predictability of performance because the demographic.
About trends that second that sector can build on I also love large cap have for for well over a year and a half.
Mom and to your question earlier about hardware or software look for a company that can do both well that's a migrating its cultures towards strengths and both.
And which has a dominant position in more than one of the other -- Already -- sounds like you're talking about Microsoft I again I -- -- wanna you wanna focus on particular sucks but that's exactly what Microsoft is doing.
It's an interesting story.
Talk practically here so it away and indeed -- -- a lot of people are doing different things in summer succeeding his summer not Peter Kenny thank you very much Michael gives good to see you both gentlemen have a great weekend --
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