U.S. Bank Wealth Management's Eric Wiegand has a ''constructive'' outlook for equities but expects volatility to keep dogging the markets.
Another choppy trading session with US and 500 are able to maintain its positive start. Witnessed it dig deeper and marked as Eric weekend he is senior portfolio manager US bank while. While America. What's talking the US markets today is an oil as its what does it. You know yes toe to all of the above. Continued uncertainty is really confront investors. The answer your round global growth the uncertainty around the divergence of monetary policy between US and other major central banks around the world. And where she passed on the you know the eve of earning seasons so there's been a lot of anxiety. Around what's likely to be reported and corporate results for the fourth quarter. Not to get earnings in the second but yes and 500 shed more than a 160 points and six of the last trading sessions. Erica we overdue for a bounce. We very well maybe. But I think from that theme if we're trying to pull something from that lessons of 2015 and 2016. Is likely that we're going to continue to see volatility. Be being here. I have for investors were not likely to have you know resolution and number that concerns that are that are confronting investors. Will get intermediate data points that may be supportive of one side or the other of them will keep them. Keep us bouncing back and forth between strength and weakness or time possibly a bear market and this seven year bull run. We're still constructive on equity prices as we move through the year we think that inflation is relatively benign. We will see periods where where does rise. But low rates low inflation we think can be supportive of of valuations. There are continuing to be concerns though that that really need to be addressed. So while we are constructive we still think that volatility will be that the name of the game what are the concerns of saint. Some people there earnings earnings annals of saying possibly earnings recession. Well what are you expecting earnings season starts today with Alcoa after the yeah you know for the fourth quarter we're likely to seek continued contraction which will be the third consecutive quarter. Earnings contraction we haven't seen that since 2009 so it really just. Does demonstrate the level of concern and anxiety among investors. We do think though that will likely he would follow some much. Historical patterns and that while we had seen estimates reduced through the duration of the quarter. We're now looking at a contraction of nearly four and a half percent for the for the fourth quarter. That perhaps there was a little bit of overshoot on that. So expectations have been muted. Creating an easy hurdle rate. But we're still very likely not to see any relief on the revenue line which. Will be four consecutive quarters of disappointment on the top line DC earnings and being accountable lift stocks back or. You know if concern lately if we were to see it in east that stabilization. At least ours. Currencies or commodities are concerned. That would certainly give greater confidence. Equity investors as we move through the court lastly. Well what areas. What various sectors are buying right now possibly short. That would you know where we continued continue to find value. Things like health care which we view it's a sector for all seasons. Technology continuing to find attractive opportunities there. Can selectivity. I think it's key but and consumer discretionary we still think the consumers and in a position to. Continue with its consumption. And select financials as well as industrials are creating opportunities within tech or a particular sectors well in fact true that. With the volatility that we've seen more recently we're seeing now opportunities being a little bit more broad based. But we do like things that are geared towards. Clout e-commerce certainly. All right thanks for joining thank you so much. Our thanks to Eric weekend of US bank while men are Brett got this is.