Bob Pisani's Trader Talk: Foreign Growth Still The Big Story

Bob Pisani

CNBC's Bob Pisani reports on what traders are telling him this afternoon.

Q2 results are confirming the foreign growth story. Look at Halliburton. Halliburton reported killer earnings today; 68% of their revenues occur outside the U.S.

Same with Merck: great earnings, has 40% of sales outside the U.S.

Most important thing to understand is that global growth is unaffected by the U.S. housing and auto slowdown, as well as subprime concerns. That's why the markets in the U.S. keep advancing.

Here're the key factors in the global growth scenario:

  • Commodity surge continues; elevated prices for metals, oil.
  • Export-led growth from many countries like Germany, which shows industrial expansion.
  • Upward revisions in GDP growth from countries like Germany and Japan.
  • Upward earnings revision, but not just for everyone. Companies with stronger international growth have stronger upward earnings revisions than those that do not.

The sectors that have the biggest component of growth outside the U.S. are tech, energy, and materials. These are the sectors that have been market leaders.

Here's some examples of companies that get a big part of their revenues outside the U.S. Figures are from Goldman Sachs.

Schlumberger      72%

ExxonMobil          69%

National Semi      80%

IBM                     61%

Dow Chemical     59%