Fed Chairman Ben Bernanke dealt with many questions from Congress Wednesday about the ways risky mortgages will impact the overall economy, but the debate goes on: Will the housing slowdown stunt stocks' earnings growth? Craig Hester, chief executive officer of Hester Capital Management, and Todd Salamone, director of research at Schaeffer’s Investment Research, joined Bill Griffeth on "Power Lunch" to debate the impact housing will have on stocks in the future.
Hester pointed out that subprime lenders and homebuilders have already felt the housing impact. He urged investors to pick stocks selectively. “This is an earnings-driven, stock pickers’ market,” Hester said. “A broad economic slowdown would be an earnings risk.”