The markets popped a bit after this morning’s U.S. retail numbers. But they pulled back once oil inventories showed a much sharper drop than expected. Dan Genter of RNC Genter Capital Management says traders are going to be preoccupied with these reports until the end of the year. The problem, he told Becky Quick on “Morning Call,” is that any movements won’t be sustainable until we get an idea of next year’s earnings.
According to Genter, this year has averaged about 14% to 15% – but 2007 will be closer to 8% to 10%. “I think it’d be a little naïve to think we’re going to have the type of really turbo-charged market we’ve had coming into the third quarter and fourth quarter of this year,” he says.
There is a different opinion. Rob Sellar is the head of North American equities at Aberdeen Asset Management--he was on "Morning Call" with Genter. Sellar's got a brighter outlook going into 2007. Much like some analysts these days, he’s predicting a transfer of money from the declining housing market into stocks. GDP may be slowing and earnings could be lower than this year, but that doesn’t exempt the market from more growth, he says.