China is one of the biggest areas right now.
Steve, great to see you again.
Earnings are going to be not so good this time around.
I think it will be challenging.
We have a first-quarter which in the best case scenario is very contaminated by the weather affect, and that will create a work through through second quarter, sluggish right now, we think it will be more of a revenue gain in this challenging environment company, and the name by name basis that can demonstrate pricing power will be smiled on more favorably by the markets, so it becomes more of an active management security.
Grinding through the hard work of analyst.
Steve, it has been a revenue game on earnings over the last few orders.
What is different this times around?
When you look at the markets last year, up over 32%, smaller caps face up almost 39%, so there is a lot of movements.
In this more challenging earnings environment, more challenging revenue environment, it is more of a name by name basis, so maybe not a specific and that it would have been 2013. you underweight one sector, utilities, and i know olivia has been looking further into utilities.
I know, betty, utilities do not get a lot of love, but we have a few graphs that hopefully will disburse that sentiment.
At the v up less than one main percent, utilities up nearly 30% year to date as a sector.
Compare that to the s&p overall, as i said, less than one bank percent.
Data stocks are doing the words, down about 5%. this is forecast first-quarter sales.
Look at what is happening to utilities.
Utilities are expecting to see growth in first-quarter sales of more than five percent.
Banks -5.3% in the red.
You will see forecast earnings per shares growth, excited to have growth in this quarter of more than 4%. compare that to the s&p overall.
What is wrong with utilities?
It is one that will be on a lot of people screamed, and they have been under waiting our portfolio for a large portion as well.
I think coming into 2012, 2013 and into 2014 is the costliness, the price lateness of that segment.
A lot of investors when they became disenchanted with a low income environments, they moved out of fixed-income entities bond analogues and equity markets.
From a valuation perspective, what are you paying for what you are getting, so the costliness became -- to you, that rally has peaked.
I would think so.
You have been talking about how investors should take a multi-asset approach in order to gets, in order to find that yield.
Julie, you have been looking into that strategy as well.
This is something that is not really gone away.
To steve's point, we have seen people continue to buy utilities because rates are remaining low and they still want that yield.
Coincidently, i spoke to our resident etf guru yesterday, and he was talking about this very thing you pointed out there are some multi-asset etf's that people can buy to sort of capture that yield and get that multi-asset strategy.
We are seeing here listed a number of them.
They combined stocks, in some cases mlp's, high yield bonds, for example, try to achieve that yield, but to trying to use risk by having a multi-asset strategy.
One example is the first one, the ishares multi-asset income.
As you can see, it has out reforms stocks this year.
You are getting that yield as well on this.
This does not include mlp's, so that is the difference here between it and others.
It is one suggestion eric had for folks looking at the multi-asset high yield of strategy.
Is that a good way to get in?
That if the name of the game from our perspective.
Looking at not one specific, but looking globally as well, looking at real assets listed in structure commodities, emerging markets, but also from a perspective of global credit, looking at ways you use currency strategies, looking at ways of using security within a global credit portfolio for a total return strategy not just a yield strategy.
I was at the yellen luncheon yesterday, and i think the federal reserve as well as the central banks globally will be in coordination to bush on that yield.
They are giving investors no alternative.
You need to look at that multi-asset strategy to get the number that you need.
Widest china keep you up at night?
I sleep pretty well, but i would look at what is moving the global economy.
I think the u.s. is doing well, but i figured china right now we are seeing a global deceleration from a 12%, 13%, into what the government wants, probably a 7.5%. they will hit that number.
They are decelerating, transitioning that economy, and that will create some lump in the global glow.
In emerging markets, those that are disproportionately exposed to chinese demand have been hit really hard, but also commodity-based economies like the australian economy, the aussie dollar, the kiwi, credit and chinese financial system i think is unfolding and that will be very important.
Something to keep an eye on.
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