GE Got Pick Up in Demand in U.S.: Knapp

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Jan. 17 (Bloomberg) --Barclays head of U.S. Equity Portfolio Strategy Barry Knapp previews today's markets and discusses his investment ideas with Betty Liu on Bloomberg Television's "In The Loop. (Source: Bloomberg)

His call thomas not much looks cheap to reject be selected.

Right, barry?

I think that is right.

We have seen it is pretty indicative of that.

General electric did get a increase in revenue.

It is not surprising considering gdp grew in the second half of 20 or team.

Earnings matched and the stocks were struggling because the market has been pricing in this pickup for quite some time.

It is a tricky spot for the markets.


There are some areas where you say there are spots to pick at.

Olivia, i know, is looking at some of the areas in tech.

The way i would think about it, we think there are three drivers to stronger growth that started and will carry into 14. that is largely priced into the market.

Even though the numbers are getting better, the stocks are expensive.

You have a pick up in housing.

There is a little bit of a mixed story but the trend will be the strongest through this is a cycle, an increase in capital investment.

It was delayed through much of the cycle due to public policy uncertainty and the european recession.

We also have a case for very strong capital spending because of the read industrial realization of u.s. manufacturing, a drop in the exchange rate.

Those things are matching up.

Even though the industrial sector and tech sector do not look particularly cheap, because we think this trend will be so prevalent through the cycle, it is worth sticking with those stocks.

Hang on.

I know we're having a little bit of problems, but you are trying to chime in.

I think he hit on it.

The stock slipped expensive.

The biggest issue is, what are these companies actually really are?

We have seen the run up in many companies that are not yet profitable and companies that are not yet making money.

Interest has a -- of a couple billion dollars.

Snap chet turned them down -- snap chat turned them down.

If you look at the earnings cap, earnings growth forecast for this sector are just 4.9% compared to 8.7% and 14.8% for the banks.

Who knows what these new companies are worth.

We heard it from intel after the bell yesterday.

It's good to a macro v where inflation is headed.

-- macro picture where the inflation is headed.

It is the word no one likes to talk about.

D for laois and.

If you take out food -- deflation.

If you take out food and energy, steep declines if you go back to 2012. the managing director was urging economies to fight trends of deflation.

What might this mean for stocks?

Investors have yet to react to the deeflationary threat.

Is there one?

I could not disagree more strongly with all of that.

What effectively happened is if you look at service-sector deflation, it is rock solid at the fed's target.

What happened in 2012 is the point that olivia mentioned.

You have deflation capital goods rices.

That was a function of europe being in recession and japan devaluing their current see -- currency.

Those pressures happy easter.

-- happy easter -- have eased.

Things like margins in the industrial sector, we think the worst of that story in the u.s. and particular is behind us and that inflation will pick up.

You made your point of their.

Thank you so much, barry knapp, head of u.s. securities at

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


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