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'The Little Book of Big Profits From Small Stocks' author Hilary Kramer on the outlook for the markets heading into 2013.
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It was a rough day for markets following Friday's big rally the Dow dipping back below thirteen thousand -- mixed start of the holiday shopping season in fiscal cliff concerns.
But my next guest says she remains bullish and that next month will be critical to determine the market's direction for 2013 here explain Hilary -- She is the author of the little book a big profit.
From small stocks December has a lot of issues here Hillary -- three tell you got the scope left.
End of the year rebalancing of portfolios what happens.
I believe that December will be a very strong Santa Claus rally.
The bad news has already been priced into the market Cheryl this third quarter earnings they really were disappointing.
And and moderate at best so the market.
Now is in a position to spring back from here except for specific sectors.
That will struggle in the coming twelve to eighteen months like unfortunately the defense sector.
Is in for a rough patch because -- so me defense cuts -- already begun to start much more so than anyone realizes.
Because the equation of the fiscal cliff.
It's it's the cuts that we're going to see not taxes rise.
Station I can understand but so you know we just finish going through earnings and yet if you look at the S&P 540%.
-- -- revenues it wasn't like these earnings were.
Blockbuster mean this corporate America at this o'clock a someplace.
Like that great yeah how what what's gonna make -- any better I'm wondering.
In the first quarter of 2013.
A lot of the a lot of the.
Earnings this quarter which by the way not only was it bad it was -- it was the worst quarter in the past five years that we see better.
So so going forward there was no there was a lot of inventory that had to be pushed through the pipeline there were -- layoffs restructurings.
They were expenses that were taken you know we've seen these massive layoffs you know -- very big numbers.
Mom and so whether it whether he twinkies or whether it be you know investment banks -- -- and and of course technology companies anything's gonna happen to Hewlett-Packard going forward it's so tragic.
-- how ever how ever.
We have so many innovations and so many areas that are growing and there are so important globally like bio attack.
Medical device is.
They're technology areas your previous -- talked about data mining and understanding data that's a whole industry into itself is collecting information.
-- -- App development isn't big shortage in this country of people that can develop apps anyway let's talk about Cyber Monday talk about -- -- -- and you wanna get to that would be what do you make of everything looks like Wal-Mart.
Macy's.
Did well lot of analysts today kind of beaten up on JC Penney and target -- -- -- right.
Well the retailers have really a rough day today Wal-Mart the problem they -- gonna see that 2% increase in sales when the when the four week comp sales numbers come out on November 20 ninth.
The problem is we might see up to fifty or sixty basis points so so with half a half a percent.
Of margin.
That's going to be that's going to be eradicated in companies like Wal-Mart because those retailers.
Had to cut -- we've heard this all day but the prices were cut so much.
And and and there was such a high cost for all of those inserts that we saw on our newspapers and yet they're not necessarily as effective today because people are on why they're not taking his time you know another company has been so -- up this is Sears but yet.
You know you're saying in your in your research note.
That people are going up -- things they need their knob on the luxuries about yeah apply to -- I've yet to Cheryl you're actually right.
This is this season not -- indulgence but the practicality.
It's about outerwear.
It's about yes appliances.
And of course it's going to be fixed small accessories.
You stocking -- so we're going to see even food product scope chocolates and and and I've already received -- -- big jar of cashing -- -- an -- usually sends me a star from a high -- on Madison avenue store.
And so we're going to -- any real switch here and -- clothing for for children not so much the Tories suck.
An off all right well Hillary made you very much -- -- -- toys is good to have you on the show all right.
