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Christine Short of S&P Capital IQ Global Markets Intelligence on companies' negative 2013 guidance.
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Investors have been pushing the markets to new highs this year US companies have a different outlook almost 70% of the companies that have issued guidance for the first quarter of this new year.
Are anticipating negative earnings so what are they saying that investors perhaps are not.
Joining me now Christine short senior manager of global markets intelligent -- S&P capital IQ before we get to the earnings news I hear you guys are getting back into your office is which were so badly damaged after hurricane sandy how is that working -- that's spray beginning next week we're gonna start filtering in and so we're all very excited spent four months were excited to get back to the home base we haven't stopped for a second.
Analyzing all of these companies and -- earnings coming out so why so many companies now.
Warning us here in the first quarter.
Well which he said there is again names seem distant past -- a disparity between what investors are seeing what they're choosing to see.
What the companies themselves are saying and how analysts are -- it.
So right now we're seeing investors paying more attention to economic indicators you know PMI was up a couple weeks ago -- -- strong retail sales.
And you its overall -- pretty decent fourth quarter earnings season however when you look at the guidance going forward specifically for the first half the year.
About 58 companies have provided negative guidance in comparison only -- and two with positive.
Negative -- average is about two point 60 very like I'm going to change what you companies as far as what they're seeing what's gonna change it we're seeing a little more of the same many companies have said.
We do see a strengthening US economy economy but still very weak we're seeing in Europe that continues to be weak we're seeing China although it's improving modestly.
We're somewhat gonna see the same going up profits out of China that we -- in 2010 and 2011 so.
Really just more of the same continued weakness.
And really we also have to consider the -- difficult -- -- comparisons that their point in 2011 beginning in 2012.
-- -- wanna talk to you about your February 1 report -- S&P capital IQ entitled.
Stay -- In the US economy poised to deliver on expectations for record corporate earnings for the balance of 2013.
For so even know we're looking at perhaps a -- first quarter company should make up ground through the duration of the year is fact that these.
Currently analysts expects forced -- 2013 to post almost thirty dollars per share.
So I think that's a little lofty at this point but even in the fourth quarter right now we're seeing record earnings per share 26 dollars and four cents.
That's on par with last quarter but it would be your record if we if we get up to 26 dollars and five cents up.
In another growth is sort of on the average side we are continuing posting record earnings per share -- -- quarter.
Investment managers been telling us for weeks and weeks how fairly valued eating -- the overall market isn't out now surpassing 141000 you agree generally with that assessment.
Right now we're looking forward for -- PE of about fourteen are little -- fourteen and so the average is fifteen to -- and that's.
A bit undervalued and that's using of course yes some 15100 right now so if earnings do come in slightly disappointing here in the first quarter then would you change your outlook on the valuation of the broader market do you think that the markets will.
Be leading or lagging on that reaction to what ever happens in the first quarter by way of earnings well despite the fact that first quarter and second -- 2013 and -- estimates follow that.
We're still looking at 2627.
Dollars per share so that's still quite high historically.
And our global markets intelligence.
Is expecting S&P to rise to about 16100 by the end of the year so.
That would give us a -- much closer to the fifteen historical level that we've seen so our conversation is focused on earnings in the impact on the market here but the Federal Reserve you can't leave that out of the equation does the Fed have to hold the course for these market gains to continue.
-- looks like the Fed is continuing on with -- stimulus efforts they haven't wavered -- that -- that's we're seeing investors reacts to -- -- the Fed has held steady it's giving investors the confidence they need to bring the markets higher.
-- so yes they do need to continue of that to throughout 22013.
If we continued to see.
To levels but the Dow and S&P has reached Christine charts so nice to chat with you thanks so much Christine is -- S&P capital like you look at after the institute.
