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Schaeffer’s Investment Research senior equity analyst Joe Bell and Campbell & Co. President Mike Harris on the market outlook.
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Very much extend let's -- our market panel Joseph bell and Mike Harris Joseph I'll start with you you're bullish for 2013 but here come Q4 earnings.
It's not so much that that were worried about what the numbers would show in fact.
Good shock good percentage of the 27 or so S&P companies that a purported to actually be.
It's that downward revisions for the current quarter that worry us does that worry you.
-- -- -- -- -- I think when you look at the analysts' expectations of one thing you need to remember as well if you look back in October.
Analysts predicted a about a 9%.
Growth rate this quarter.
Fast forward to today what are we see in about two and a half -- and whose expectations have been brought down quite a bit.
As a movement of his earnings season and we also -- saw a lot of downward revisions as well early on in the earning -- I still think it's a little early.
But overall I think there's low expectations could be had good catalyst as it sets the bar that much lower.
To meet or beat those expectations.
And I think that could be a good catalyst the next few months.
Michael we talked about all these billions of dollars flowing back into the market a lot of it has to do with changes in terms of guarantee for money market funds etc.
But there is a lot of optimism about the equity market maybe it's simply because as -- was saying before there's no place else to go.
No place did you get a return on except equities.
Some people are concerned about this though they they're kind of spooked by all the bullish if this is are they just too pessimistic or what.
While -- momentum based trading shop so we're happy to have more money coming into the markets increasingly enough we've been following an uptrend in US European and Asian equities.
For the last few months and certainly it was nice.
When everybody else was panic in about the fiscal -- and getting out of the market said.
It gave us more opportunity add to our long position.
And certainly with more investors are coming into the market here in January it's only gonna continue to drive momentum higher push markets up to that -- your high.
Okay eight you know what everybody wants to know what ever your perspective where do you put the money -- -- I wanna start with you mean.
Where you find the most compelling investments for the retail investor out there.
I think when you're looking at the sector that the economy as a whole this sectors that stand out -- going to be housing sector and consumer discretionary.
It's sort of falls into the same thing we look at the broad market these sectors have performed quite well despite that the short sellers continue to target them.
We see a lot of bearish bets from option speculators and analysts just haven't really bought into this so.
We don't always wanna focus on low prices but low expectations are for those reasons we think there's a two sectors when I have some money for a classically you believe that housing still less gas because they've had a beautiful run up here for many of the names and the these sort of derivative -- on this.
Yet they definitely have but I think when on the shorter term of the past 52 weeks there.
Potentially look a little over -- you take a step back and let -- look at a longer term chart most of those are still -- -- half of their all time high.
You couple that the fact like I said there's just a lot of skepticism towards housing a lot of people like you said mention too far too fast.
We just think whenever there's that doubt on the sidelines it represents a lot of money that has yet to be put to work.
You talked about DI inflows and equity funds this week we think perhaps that could just be the start of a little bit of the acceptance phase where some of that money starts to come into this market -- fist as prices higher.
I wanna stick with -- for second Michael I haven't forgotten about -- believe him but I I think what I mentioned Netflix earlier on with Lawrence cement that he.
I know Joseph -- a big fan of Netflix but it's now and a triple digits is over a hundred bucks a share.
People are worried that with all the competition out there it's it's on a sugar high right now what do you think.
Yeah that's absolutely right it has had a pretty good run but that's another when you take a look at the longer term chart it's nowhere near its all time highs -- you might see some of the other consumer discretionary names but that's -- we just look at.
A lot of sorts targeting that name a lot of analysts just a lot of doubt toward Netflix and general we think that -- been set so low for Netflix that it doesn't take much for it to be Dennis Michael back to the general picture some folks are saying what we're heading towards.
Is one of these big -- of stock stumps of equities in the springtime you'll see economic.
Well we've we have followed trends we don't predict them so I can't say that I see it coming but instantly enough.
-- -- one of the benefits of systematic managed futures is that we don't have a bias to be long or short so.
If we see the -- happen in the spring our models will shift from being long and start to follow that downtrend and in many ways provide some of the portfolio protection and investors need.
Because we we are seeing investors moved back in equities in 2013.
But you don't like precious metals Mike.
We just saw that that platinum made a very nice move today is there is there -- base metal you prefer.
Certainly on the base metal side we see more of a downward trend recently and we've had short positions in those markets.
In precious metals it's not that we don't like them.
There's been a nice trend the upside from a long term basis but certainly seen a pullback in recent weeks source shorter term models have covered a lot of long -- -- in and say that that copper -- work on a recovering economy might do better.
-- I mean right now we're following a downtrend but it's actually a possible that we -- -- the emerging markets.
It that -- slow lending story is it's still out there and whether or not we see a pick up there base metals may come back guy.
Into fruition for -- Joseph would you go to ETFs if you hear -- again if you're generally bullish about what's happening in equities.
But you don't wanna focus on on individual stocks -- even know what you're you're big on Netflix Expedia lululemon what about going for the UTFs and which ones would you prefer.
Sure I think pretty common investor ETFs -- -- -- especially as we head into the earnings season there's a lot of event risk when it comes to individual earnings plays.
For homeowners you can look at -- -- feel homeowners spider.
And then even acts -- -- and we've heard a lot about the consumer but the retail names have been doing incredibly well also -- searching for retail would be good play as well.
Joseph -- Mike Harris gentlemen great stuff thanks very much have a good weekend.
Thank goodness thank you.
