You're watching...
Robert Keiser, S&P Capital IQ vice president, on earnings season and how the fiscal cliff will impact the numbers.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
The ran -- the closing last week at a five year high the start of the earnings season.
Weighing on investors' minds -- joining us now the for the kind of give us a full cost Bob Kaiser S&P capital IQ vice president Bob thank you for being here.
I thought I'd read my mistaken that the the estimates of the next round of the earnings were -- -- Back on October 1 and they've been ratcheted down and down and down when it comes to.
You know earnings growth why is.
They've ratcheted down quite a bit now beginning of October -- looking for basically doubled their digit earnings growth in the fourth current 10% 103 point 4%.
Right on top revenue growth so big cut its huge -- I think just a rationalizations.
Expectations given that the economy is still remains relatively -- and we're still dealing with.
Large amounts -- -- you know -- Fiscal clip which could -- his current market are most -- drag.
Well you know we've we've been taking a really big picture view of the fiscal cliff -- -- and we've always thought that it -- is unthinkable that we go over the course.
-- that the consequences of -- to mortgage.
And congress unfortunately dealt with first step which was the tax policy tax code.
And -- -- equal more uncertainty with what they're underground.
Reform.
And it's just a huge question mark and we've been looking for congress -- sort of wrap this up -- And produced a report what we've been referred to as a stimulus for -- trying to boost confidence and optimism in the economy.
And frankly congress doesn't -- -- there are two very strong start it's what we look at sectors that you think we'll have some positive results which ones feel like.
Can consumer discretionary financial -- be very strong this year but that's going to be predicated on the economy continuing to build momentum around the housing sector.
And it really -- We're taking -- cautious two week we have yes and he could end up at 16100 this year okay based on more of the same the economy continues to grow about Obama doing along and a half percent exactly.
But the fiscal cliff when everything's said and done he recalled the cliff but it's tightening its fiscal tightening -- and you have to ask yourself what's going to offset fiscal tightening.
And the Bernanke fed is already doing everything they can -- they've gone all in on housing.
So we're looking to signals from the housing sector starting in February and march when he -- -- -- There will -- -- is seasonally slow but by February march we should start to get some clear signals as we put the put behind us if the economy is gonna ramp up.
And start to produce that double digit earnings growth at the end of this year.
Which was originally expected showed a quarter pulling out not to companies have a lot of cash on hand at that they -- -- waiting to you know invest in capex and and and hiring what have you but.
It's 2% payroll tax hike hurts everyone -- so that must -- consumer discretionary and in some formal fashion it well unless.
You know if it's 2% readjustment of the payroll tax yet and a wealthier households are gonna pay a bit more let's just that that the consequence of this political situation room.
But the economy the housing sector could yet be a huge engine of growth you know if it doesn't get -- rails.
And it really comes down to confidence and what the economy and particularly the unemployment rate is going to do.
Because we're bumping along -- to seven point 8% unemployment rate for resumes moving lower at 75 by June July August something like that.
You have reasonably how things gonna do better in housing can overcome.
The fiscal right machinery interconnected it very much so -- -- uninteresting gets -- special thank you so much for thinking about it.
Thank you.
