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Investors are holding their breath for first quarter earnings and if you remember -- when you were kidding you would hold your breath too long and you get a bit dizzy well that might be happening to investors anyway.
Earning season we're gonna kick off next week but.
The -- been said Lou really low by Wall Street the consensus estimate for first quarter earnings growth is a dreary half of a percent don't worry just yet.
Our next guest says these predictions are artificially low incredibly low -- Wall Street trying to underperform and then over perform and they actually report.
Joining us now to discuss this is Christine short senior manager for S&P capital IQ and we see this game played every quarter down.
Every quarter so we finally when we looked back over the last several quarters and we said.
Really what's the difference three to four weeks before earning season we do see an artificially low estimate given by analysts.
And by the -- of earnings season we've noticed that on average that number actually takes up about 4% by the time things are often done.
Some investors right now are looking up point 5% they're getting little spooked but ultimately historical trends are upheld we'll see probably about four -- 5% growth by the end of the -- Which would be Canada and some of the things we're hearing from analysts who are saying we're expecting a pullback in stocks earnings are not going to be there the way we've expected are those and are those people who is telling us that.
Buying into this you know underperforming attitude which proves me wrong it seems all the time -- doesn't.
And both of which sector you look at -- certainly factors that are expected to Wes -- and others but I think like that if you look at the historical trend especially over the last three or so years.
Analysts really set that the bar pretty allow.
And that everything is or not we see companies and updating you know right now we've got 60% of companies.
-- first quarter estimates that only nineteen companies have reported but.
That's quite higher than the overall historical tenure -- 62%.
So we're seeing her favorite -- higher and higher why don't -- -- also that.
That 68% beating estimates but well I think it's just that you know sort of -- you know we have to pay attention to -- estimates right that's as -- as well that's what we've got it right the data we -- our venues that we happen I think if you keep in mind that typically.
It does by the end of the season and -- getting much better analysts that are companies.
-- which sectors do you think would be most accurate as far as -- whether we're going to be going forward for strong earnings growth is going to be tech.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- This -- really looking at consumer discretionary for a lot of different reasons even paying attention in the retail sales numbers through 2000 and quite strong.
Consumer confidence the last -- with the highest throughout the entire recovery step.
We're seeing some very healthy consumer out there and again it's driven by a couple of the same industries that it wasn't a -- quarter and that is household durables were still seeing the home builders Lennar.
Knocking out a park a few weeks ago when they reported.
We're expecting DR Horton halting home to also do very -- And then the textiles and apparel retailers are just killing me you know they're expecting to be out double digits in the in the first quarter so.
We're gonna look at those two industries to really be driving overall.
I just -- I guess you know do going forward tax returns are coming in refunds for Cummins if you -- it was -- -- many real quick what sectors do you think.
Are going to live up to the underperformance is going to be a dog well right now.
We're looking at energy -- down about two point 7% although energy costs are very high right now it's really your -- comparison.
It's difficult comparisons from last year so for instance the barrel of oil on averages about 95 dollars in the first quarter of this year.
-- is a 103 last year so that's why the decline all right Christine should thank you very much for joining us John FBM will be Watson thank you had much for having me.
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