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Kim Foss of Empyrion Wealth Management and Janney chief investment strategist Mark Luschini on Washington's impact on corporate earnings.
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Well according to a new poll coming from Gallup 77% of Americans say.
That the political battles and DC are harming our country.
And as we gear up for fourth quarter earnings season how much damage as Washington's fiscal -- battle done to corporate earnings -- -- -- Cheney chief investment strategist is here.
And we also have Kimberly boss and carry on wealth manager president both joining me now and cannot wanna start with you you've been pretty bearish you've been writing about all the problems DC.
But as corporate America gonna tell us the fiscal -- hurt the bottom line.
Yeah I do I think that in the end certainty and it'd be dissemination between the political parties.
And the fact that they just can't get -- going to hurt the corporate profits because.
The bottom line is at what is for oppressing the markets today is really not earnings it's really what.
What federal service -- what the congress is doing are not doing.
And what.
OK mark what type of impact though if you do indeed agree with Canada announced today -- But if we are gonna see some type of of negative numbers coming out of corporate for me no corporate America these earnings what's happened numbers -- were talking.
Well I think that -- this juncture expectations are pretty low -- talking low single digit earnings growth expectations are comparative year to year basis and I do agree.
That in fact I think we're going to hear some commentary by management relative to the impairment.
To their earnings due to the fact that that basically business grew increasingly paralyzed by prospects of the fiscal cliff.
Leading up to the end of the year.
I think you'll hear a little bit more that from companies not so much today you know -- but those are more domestically oriented particularly the retailers the Macy's and Nordstrom's.
The targets the wal marts of the world.
But that'll be in the offing but I think between now and then you're gonna hear various iterations of the same theme which is.
You saw -- a headwind to profit growth due to the fact that business basically begin to stall in the second half of 2012.
-- Yeah I mean he makes a great point about the nation's retailers who came out and have some very disappointing December numbers.
So those aren't -- -- be one issue but also he points out -- about consumer confidence.
And that consumer confidence was -- in December.
Because the fiscal -- problems what does that do to some bigger name names that you -- in the consumer discretionary sector.
Yet it it's going to have back all those good bit that they discriminate -- eighteen key and the retailers as he said before however.
Three RDA is you know that the markets are still incredibly.
Opportunistic.
And so I think that -- -- corporate earnings being hindered.
And -- and and GDP going to be -- this opportunity to make money I mean look at the last year we had fiscal -- And it the end of the year the F and 16%.
The NF CI is up over sixteen point four Q percent he 6040 proposed for the clients.
Were -- over double digits with net of my case.
So I think they're still gonna be some opportunities he effective work a little bit more difficult and be disciplined and he and the market in order to get the rewards the market well.
Mark certainly if you look at bond market performance from -- -- the year prior not you address that in 2013.
It may -- -- that stocks are the best way to ago.
She's talking about MSCI that rolled -- that's and you wanna get your thought.
Mark on emerging markets if we can't get our our house together in the United States may be emerging markets overseas markets are better way for us to make some money this year.
I happen to think that's exactly right in fact while we don't necessarily think that US equity market is -- going to do poorly in fact we think on the back of modest if you will lackluster growth here in US is still fertile ground for corporate earnings in America to grow and equity prices to -- better than certainly returns on bonds and cash but we think better results will be found it in international markets particularly Europe.
Japan and emerging Asia slash China.
All right -- I do wanna ask you though about about you mentioned a couple of names that you mentioned AT&T for example do think that we are gonna stay with big US names.
We say what the safe names we stay with the AT&T'S -- -- the GE is the bigger name large cap dividend payers.
Yeah all live believe that you know you need to be a diversified portfolio insurance you know -- make friends and -- reported from countries over 121000 different securities.
But we have a home country bias and of course yes I think he'd be in big cap names you have dividend -- -- I get it and adopt the portfolio so -- can get a little bit of income there but that they can't answer going to be solid they have cash reserves.
And they can withstand some of the volatility that I think that we're going to -- down the line.
Because the reality isn't -- they -- congress get their act together and make some solid decisions about moving forward on the tax reform.
And spending and -- and and -- and that spending and dad expenditures.
We are not gonna see any kind have.
Stability so you're gonna have to be ready for that volatility but those big -- names we'll give you that threat and I think that -- gave you that portfolio income that my clients are looking for.
-- I've never seen you so bearish on DC anyway but I'm glad you're here Kim.
Mark bush Cheney thanks about the appreciate it thank you.
