Tags: Carr | double | digit | earnings

Moneynews Insider Carr Expects Double-Digit Earnings Growth

Monday, 14 Oct 2013 05:32 PM

By Dan Weil and John Bachmann

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Corporate profits should show double-digit earnings growth this quarter, according to Michael Carr, editor of Street Authority's "Maximum Profit" newsletter and a Moneynews Insider.

"I don't think the shutdown is going to have a major impact" on earnings, he told Newsmax TV in an exclusive interview. "Analysts are expecting about 11 percent year-over-year growth for the full year. In 2014, they're looking ahead already at 13 percent growth."

Editor's Note ‘I Wish I Were Wrong’ — Economist Laments Prediction. See Interview.

And that should be good news for stocks, Carr says.

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He was impressed with the fact that Alcoa beat expectations for its third-quarter earnings.

"That means consumers are buying a lot of stuff in cans, and that's a good sign for the economy," Carr said.

On the downside of earnings reports, Yum! Brands, which owns Taco Bell and other fast-food chains, "was probably the biggest dud, and that one's not really surprising," Carr said. "It shouldn't have too big an impact on the U.S. stock market."

Yum! suffered from a big push into China, he says. "Their U.S. business looks fine. Taco Bell, KFC in the US and Pizza Hut are going to do well, but in China it's going to be very volatile," Carr said.

"So what we're seeing here is confirmation that the U.S. is still the market leader in the current global environment, and investors should stay focused on the U.S."

As for JPMorgan Chase, it's ailing due to its legal woes, Carr says. "So the company's doing well, but they're having huge problems with regulators," he said.

"Hopefully, that will be overcome because, in the long term, this regulatory push is going to hurt the next time we need a bailout." Wells Fargo and Bank of America are being beat up for acquisitions they made at the government's request during the financial crisis, Carr says.

Editor's Note ‘I Wish I Were Wrong’ — Economist Laments Prediction. See Interview.

Meanwhile, he says the Standard & Poor's 500 Index gives a more accurate read on the stock market than the Dow Jones Industrial Average, because the S&P includes more companies.

"The S&P 500, with 500 different companies, 500 different sets of estimates, gives a good gauge of where the market and economy are," Carr said.

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