In the markets right now--stocks are modestly higher -- after a U.S. Labor Department report showed wages and benefits increasing at a much slower pace in the 3Q than previously expected. That eases inflation worries.
Maria Bartiromo talked about the economic outlook with James Paulsen who is Chief Investment Strategist at Wells Capital Management and Sam Stovall- Chief Investment Strategist at Standard & Poor's.
Paulsen says "I’m in the camp that see the slowdown in housing and auto as something temporary - bottoming soon - and I think in the Spring growth will be back around 3% and that will cause the Fed to tighten rates."
Paulson also says he still likes consumer cyclicals; the best things at the moment are the S&P industrials or the manufacturing stocks -- and he would emphasize the emerging markets and international markets.
Paulsen went on to say, those markets have greater growth rates than anywhere in the G7.
Stovall recommends seeking investment led growth in 2007.. as compared with consumer growth led growth in 2006. He expects the U.S. jobs report out later this week will show 100,000 to 110,000 new jobs and good growth over all.
He says the best way to get money on the sidelines back into the market is to work the market. He says the momentum is with the market. He likes what he sees; good earnings, a soft landing, contained inflation. Stovall’s expectation is for good earnings growth.. another 8% increase next year.