Bernanke Trying to Calm Markets: Sethi

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

July 17 (Bloomberg) -- Sarat Sethi, principal at Douglas C. Lane & Associates, discusses the potential market impact of Federal Reserve Chairman Ben Bernanke's written testimony and the companies he is following in the technology sector. He speaks on Bloomberg Television's "In The Loop."

I think he is trying to calm the markets, not put a date on anything that would happen.

The problem is, the market is looking for certainty.

Today, when he goes in front of congress, it will be a question of what he says.

Maybe he brings up fiscal stimulus.

Sort of wedding the finger at congress.

That is right.

You own both google and yahoo!, but google is your big pick.

We like them.

We think they have long term secular growth, in terms of mobile.

Yahoo!

Is a new addition for us.

We are adding to it.

We think the new ceo is great, but there is a lot to be done.

The nice thing with yahoo!, you have some great cash in alibaba, and she is trying to turn around the web sites of yahoo!, which have had not much attention.

I want to get to qualcomm.

Adam johnson has more on that.

This year, up 13%, slowing next year, according to estimates comment to %. i know this is based on the guts of a mobile phone, but the question is, when the start to see saturation, and when does this change into a value play?

Right now they are trading at 12 times earnings and is projected to grow over the next couple of years.

We have two things with qualcomm.

They have a royalty on every third generation chips that made.

As you get the volume going up, they will get more money.

They are also one of the best chipset makers, going forward.

Anything with wireless or interconnectivity, and not just in the u.s., but globally.

The reason why the stock has not taken off is because they are looking at the proxy of apple and samsung, saying prices are coming down, but we are looking at volume increasing.

They are agnostic.

They will be making money no matter what.

Julie is looking at general motors, one of your picks.

Goldman sachs downgraded the auto maker group.

We saw declines in gm, ford, and tesla.

The thesis, from goldman is that this is a group that tends to suffer when rates go up, and we know that rates have been going up.

We know that analysts like both stocks, but they point out we could be entered into a rocky period because of what we have seen historically, and consumer discretionary stocks generally have had an amazing run.

Rates are rising for the right reason.

The economy is improving and consumers are spending more money.

I think it is a positive because consumers will have more money, their cars are still 11 years old, and you have refinancing rates that are much lower now.

These companies are not in a position where their balance sheets are bad.

Goldman is making a short-term call, but we are looking out three to five years.

These companies will be growing their bottom line.

Thank you for joining us.

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change