Costs cuts and a modest sales gain helped home-improvement chain Lowe's fourth-quarter profit rise 27 percent. Does the company’s strong earnings signal a recovery? Bob Doll, chief equity strategist at BlackRock shared his insights.
“We’ve got a lot of things moving in the right direction for the economy—industrial production, business capital spending, profits, comments like Lowe's has made and many others,” Doll told CNBC. “This will lead us to some job and income growth in the months to come and gives us some self-sustaining mechanism to economic recovery.”
Doll described the Federal Reserve’s decision last week to hike the discount rate as appropriate and said the move will eventually lead to a rise in interest rates.
“We have to remember that we’re starting at zero, not one or two,” he said, referring to the interest rates. “Zero connotes an emergency and the emergency has passed, so I would guess that by year’s end, the Fed would have raised rates by then.”
Doll said investors should look into some of the global cyclical areas such as energy, metals, industrials and technologysectors.
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Doll does not own shares of Loews.