Who Will Lead Earnings?
10/06/2014 12:01 am EST
In anticipation of earnings season, MoneyShow's Jm Jubak reviews the various sectors to see who may lead the market with their earnings.
As I look out across the start of earning season, earning season starts on October 8 with Alcoa, it's not so much that it makes me feel frightened because I think earnings are going to be so bad, but it makes me feel like meh, because I can't see any real leadership sector for the market. I look at this and go, “Okay, well, the likelihood that financers are going to provide leadership is pretty small.” They're probably not going to be terrible but we're not going to see a big pickup in lending or mortgage activity. Results may be better than expected but not enough to really provide leadership to the market.
Technology, well, Apple (AAPL) doesn't look like it's going to do it. Maybe we get something out of Google (GOOG) that would make us feel better, or Facebook (FB). That's the one sector where I might see as generating some excitement. I don't see it from autos. We had Ford (F) give guidance that basically said, “Hey, we're seeing sales slow in Latin America and Europe and they're not that great in the US.” I think GM (GM) might show a better picture, a different model mix, but still, not a whole lot to make you go, “Oh, okay, I got to put money in.” Energy, oil is down around $90 per barrel, $93 per barrel. Material, cooper, iron ore, none of that stuff does it.
The consumer is moving ahead but if you then turn that into consumer stocks, well, we're not going to see it out of the big retailers. I don't think we're going to see it out of food stocks, such as McDonalds (MCD). If you look at the usual suspects for providing leadership in this market, I don't see it. It doesn't mean there won't be good earning stories out there. They'll probably come in companies where we really aren't expecting it, where we don't really count on them to provide leadership, maybe because they're too small. I think we will see some good earning season stories. It's not going to be a terrible season but in terms of leadership for a market that right now needs some leadership, I just don't see where it might come from.