It’s Not Going to Be a Straight Run Higher: Gibbs

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Sept. 18 (Bloomberg) –- Raymond James Equity Advisory Group Co-Head Michael Gibbs discusses how he thinks the market will react to the Fed’s decision not to taper. He speaks with Julie Hyman on Bloomberg Television's "Street Smart.” (Source: Bloomberg)

Equity advisory group is joining me from memphis.

I think this took a lot of folks by surprise, as evidenced either pretty sharp reaction we saw in the market -- as evidenced by the pretty sharp reaction we saw in the market.

What happens now?

I think that you probably carry this rally forward a little bit more.

They obviously can't everybody on one side of the trade.

-- they obviously caught everybody on one side of the trade.

We have earnings coming out in october.

Once we get our feet under it, we will go back to guessing when they are going to taper, how much it will be.

I think that the market will be choppy.

It is not going to be a straight run higher.

You are the first person i have heard mention earnings in a while.

We have heard a lot of other things -- have had a lot of other things to distract us from that.

If this is any indication, and the numbers might not look that strong.

What are you expecting?

Consensus is looking for earnings to be about about -- to be up about 5% year-over-year per quarter.

Once the dust settles and the quarter is over, the bottom-line number will probably beat.

We have slow economic growth.

We have challenges at top lines.

You're going to have negative or -- negative surprises, and you will have the market react to that.

The budget debate, the seasonal period we are in, the debate about when they will taper and how much, this is not going to be a marketer the upside.

The choppiness does provide opportunities.

Where do you see the opportunity?

The you get defensive?

-- do you get defensive?

Do you -- the cyclical stocks still make sense.

We like the tech space, the industrial space, the financial space, would be our top three areas to focus on.

The economic growth in the u.s. is sustainable.

We have seen europe emerging from a recession.

China, the last economic data points we have have been good.

You need to be procyclical.

That's where we continue to look for our opportunity.

The risks could affect the cyclicals more than the rest of the market.

I don't know.

If the economic data continues to be ok, i think the cyclicals will be fine.

My worry and angst would be what happens in the market, the reaction on the budget debate?. if you notice what happened, it was the cyclical and tech money rotating in that direction.

I still think that trade is on.

Mike gibbs from raymond james.

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

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