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I wasn't Hamburg -- just against starter but our first guest is already planning for the new year on his target for the S&P.
In -- -- -- fourteen Scott -- is senior equity strategist at Wells Fargo.
Joins us now -- -- -- we like to hear good news but is any of the stuff going on right now bothering you are -- and.
Good end to terror your your little goal.
It's bothering me a little bit Tracy but I had the way that I'm looking at this.
Are these selloffs are volatile this volatility is is an opportunity and we have a lot going on in September that you guys have been talking about between.
Debt ceiling debate Syria.
Fed meeting you all those things are likely continue to cause some uncertainty in the market some some you know.
Probably we'll have a lot of days like today where we open up one where the other pretty good -- -- and and then drop off and go the opposite way so.
I I'm looking at this is an opportunity but certainly.
You know Syria.
You know that's an issue there that's been at the top of my mind as as as the most potential to really disrupt things in the -- -- is if this gets into more of a regional conflict.
We see oil go to 1203040.
Dollars a barrel.
Gas Skoda you know six plus dollars here that's going to be a problem that's going do not help our slow growth of the economy.
And it's certainly not going to help the global recovery there.
But -- your point then in your notes you said that earnings are not going to be much of the driver this coming quarters you know our companies I guess.
Again are on hold based on all these macro issues.
Yeah I think earnings over the next couple of quarters remainder are really going to be a real snooze or not much to drive the market I think.
You know this year will be up 56% next year 56% were just at that point of the cycle the thing we have really on our side is valuations.
And of course the Fed's going to continue to help us even if they -- a little bit but valuations -- of our big thing to think about.
You know right now on our target for this year at fifteen you know fifteen and a half times.
Approximately so that's below the long term average if if valuations were stretched right now I think I think -- have a pretty different view.
But that's the one thing we have on our side and just.
The thought that were in this modest growth modest inflation environment we have been for a few years we'll probably continue to be really for at least a couple years.
Let's talk about the consumer -- as you said stretched and the consumer is pretty -- in your point about higher taxes.
No talking about this anymore feeling the pain of entitlements and that there were paying for this and that taxes are higher.
Less money is being taken home.
-- how does that play into all this.
Well I think that the the unemployment situation is going to continue to get a little bit better.
As we know I mean we have the labor participation rate is is very low you guys talk about that.
All the time that's been a big factor in bringing unemployment down but.
The fact of the matter is is companies are adding jobs.
Now wages are going up very slowly but I think his confidence continues here on a consumer to business basis.
You'll see a little bit of pressure up on wages that gives people more money to spend.
And I think right now people are more than willing to spend money if they have the income coming in and if jobs are are more easily found and I think that's going to be the case as we move into 2000.
Fourteen that's a big get right and they don't like the defense that is actors of all.
Back to your big if you do like the consumer discretionary and that is really relying on the consumer having -- To cash.
You know it's been it's been funny because really Tracy if you look at it over the last five years to consumer discretionary has been really in the top or the second best sector performance.
In this whole -- rally that we've had.
And and some groups alike homebuilders may not look very good in our work but a home improvement retail does so there's there's and off groups in the consumer discretionary.
Sector that I think it's going to still be an outperformer.
At least through the end of this year and probably into the middle of next year.
It's got your point really -- to be a stock picker in this market Scott -- thank you as always -- taking the time --
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