Markets remained lower on Wednesday after sales of newly built U.S. homes fell for a fourth straight month to a record low in February. What should investors expect going forward? Michael Jones, chief investment officer at Riverfront Investment Group, and Andrew Kanaly, chairman of Kanaly Trust Company, shared their insights.
“The decline in home sales puts us right back where we were a year ago and that’s probably where we’re going to stay for some time, until employment turns around,” Kanaly told CNBC.
“It was all related to the stimulus and everything else the government’s doing.”
Kanaly said although the housing recovery is precarious and expects foreclosure rates to continue climbing, it will be a good year for stocks.
“We’re going to pull a lot of activity from 2011 into 2012, so corporate earnings are going to continue to be very robust this year," he explained. "So stocks in terms of earnings are going to look good through the first half of the year this year, but beyond that into 2011 and 2012, we’ve got to be pretty cautious."
Jones' Take:
In the meantime, Jones attributed the weak housing numbers to weather-related issues.
He said he is bullish because of the positive corporate earnings.
“We have a great earnings story right now going on in the market,” Joneds said. “That growth is coming from overseas—nearly 50 percent of the earnings from the S&P are coming from overseas sales—so the domestic story isn’t quite as powerful on the domestic stock market as it might have once been.”
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Top Dow Gainers (As of Early Afternoon):
Bank of America
General Electric
Boeing
DuPont
Walt Disney
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Disclosures:
No immediate information was available for Jones or Kanaly.
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