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Critical as companies report first quarter results our first guest says.
Right now there simply is cheap in comparison to other investments Jack -- went.
Is that the -- private bank's chief investment officer Jack so much thank you so much for joining us.
Is it the earnings season that's going to be the catalyst to keep this rally going and if that is true what are you expecting to see in the earnings and how the market's gonna react.
Yeah I did you know just -- way backward I think the markets cheap relative to bonds which means that.
Most of the -- move we're gonna continue to see from that now to the end of the year we'll likely be fueled by liquidity.
And momentum that said.
At least for this quarter have been pushed down pretty dramatically now so that.
I think most companies will be able to beat these.
Beaten down forecasts -- and that will likely you know create a little bit Intel win.
But that is slowly slowly.
We've -- S&P 500 is is is gonna be pried away from its fundamentals and moved higher.
On a Connie tidal wave of liquidity.
You know coming from the -- different areas of the market most notably -- -- In the first go to health care.
Utilities were pretty much leading the S&P but they're not really affected by short term slowdown in consumer spending.
What sectors are you looking toward in the second quarter which ones feel like.
Sure so are our four favorite sectors of the moment.
Our financials health care consumer staples consumer discretionary.
Here actually we look at a combination of cheap valuation plus momentum.
The financials and -- health care are cheap.
And -- moving in the right direction consumer staples consumer discretionary are relatively expensive.
But they still have some positive momentum so we're gonna continue to -- -- You mentioned financials we -- JPMorgan this week Wells Fargo reporting Friday it in and in particular respect to Wells Fargo that's so heavy into mortgages what are you looking for from -- earnings and if it's healthy that is speaks to a healthy -- housing market I would I would assume.
Yeah I would I would think so you know I've been pretty impressed with the gains -- made in housing Balkan prices and and amount of sales that have been able to now carry on Wells Fargo as you mention is kind of an anchor player and mortgages.
And you know the more mortgages they do -- the more refi stay right.
The better it is for their bottom line so.
I do think that wells will likely is if if they don't surprises to the upside that we got to rethink the housing recovery.
Business confidence -- a critical ingredient to getting this economy rolling.
Spending and hiring so important.
But the latest small business survey shows that confidence is dropping -- going to be a significant headwind -- thing because in the second quarter.
Well it you know actually it is been a headwind for a while it's remarkable to me that you know here most of them -- Barometers that we track.
Have already pretty much covered up close that this.
That gap that we had from 2007.
Right if you look at the economy you look at the stock market.
Other things business confidence is barely a quarter away off the bottom and this is not just small business but CEO seven that a large companies to -- The a -- big business leaders I talked to just don't have the confidence that.
The way this economy is being put together right now with.
Monetary stimulus and massive.
Fiscal deficits you know it seems rather than a foundation in this economy it seems like for putting together -- putting -- -- And I think you have to weigh in on their confidence of course -- is that's why we just can't get this economy rolling Jack Kaplan -- BMO.
Private bank Jack as always thank you so much.
Very guilt and not put together with hungry and that feels down so much more ahead.
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