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Let's bring in somebody that can absolutely talk about the recipes and so -- S&P capital I cute cheap equity strategist is here.
And -- and -- just raising their S&P eleven -- target for the next twelve months and you went from 1550.
Up to 1670.
That was a big boost 7% boost what's the thinking here.
Our feeling is -- first off we established that earlier target back in on November.
Passage of time but also I think that the trajectory of this low flying recovery has been improving.
And at the same time the market has been willing to pay a little bit higher for.
Future earnings right now we are at a multiple of fifteen FPE ratio of fifteen.
Which is interestingly enough still trading at a discount of 15%.
On a trailing basis over the past quarter century.
And is also trading at a discount to the average -- secular bear market started so really it's just looking toward earnings over the coming twelve month period.
Applying what we feel to be a fair.
Multiple to it and we come up with 1670.
All right so that's what you've got in the next twelve months obviously there's going to be some ball -- live at an S&P is predicting that according to your research but I know you and I always look at the history.
The -- history tells you a lot.
From a technical perspective about what this market is -- -- and you're comparing GDP.
-- -- that we've got a look at GDP growth in this country.
And compare that's S&P that's where you get the real story talk about it.
Well -- was not traveling talking to clients last week and a lot of times they were asking Sam.
How can we end up wins rising earnings and an expanding PE multiple.
If we're looking at below average growth in the US economy.
First off I reminded investors that investors are anticipated.
They're not looking to current growth but looking to -- growth will be.
A year from now and Standard and Poor's economics believes will be looking at a much stronger earnings and growth environment with our US economy.
Next year that it will be this year.
Also we realize that because about 50% of revenues for the S&P come from overseas operations and even though we're only expecting a -- 3% growth.
In -- GDP this year I HS global insight is expecting -- more than 5% growth in emerging markets for 2013.
-- That's what I'm Fredricka but that's a divergence that -- I think what you're saying here we were looking at some specific charge ten years.
The S&P verses GDP in this country -- what you're saying really is is that that story overseas.
-- what's gonna give the S&P the growth perspective not so much US GDP growth which would be nice.
But you're saying it's about emerging markets I mean you're saying what for the 46%.
-- the essence he's gains are going to be from emerging markets and it used to be what thirty something percent 32% heavily.
International revenues for the S&P 501.
-- they're very hard to quantify because.
Companies don't like to give out their favorite fishing holes so because that's -- does not require them to do that.
They sort of hinted where they're getting most of their revenues and earnings.
And four up till 50% 46 to 50% are coming from overseas.
And obviously the greatest growth expectations in GDP.
Are expected to come from the emerging markets so a lot of US companies are going to be focusing on those higher growth areas so while the US.
Is likely to keep us down in terms of what they earnings could have been they're still a lot better because of the international exposure.
Sam I wanna look at a couple sectors here -- let them out of -- closing out the first quarter of 2013 the training is coming UN and let's look at some of the sectors.
But have actually been the best performers and as -- as -- and I talked about consumer staples more than 13% gain -- today.
You look at health care again more than 13% year to date gain -- -- financials are those the sectors in your mind.
But it can continue to perform any S and -- Well I think good good defensive leaning is really because.
Retail investors are only reluctantly getting back -- And what they're saying is okay we'll -- get back again because the Fed is not paying me anything I wanna make sure get a nice dividend yield.
I don't wanna be the last one to buy in and then fall over the cliff so I would rather be gravitating toward the defensive areas that have less volatility.
I still think that -- that we do have some cyclical growth.
In the months ahead because the US and international economies will be seeing an improvement in their economic growth trajectories.
-- sit so well it certainly it is good to talk to you especially in a day like today when he gets in case of course breaking and hopefully closing above the October 2007.
Record levels Sam thank yeah.
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