Earnings have been very healthy on the back of cost-cutting,according to Steve Barry,co-chief investment officer at Goldman Sachs Asset Management.We see a market with stocks reacting individually.There's only so much you can do on the cost side.You've got to get some revenue growth.
I think you have to look beyond our borders.The U.S. is maybe half to a little more of our company's global results.The middle class of the emerging markets can help drive growth globally.
We see an improvement on the credit side of financials.We're in a world where investors want confirmation,rather than what may happen.Financials look to us to be very opportunistic here.That anticipatory dynamic is core to what we do.Financials are enterprises that behave and adapt,Mr.Barry believes.
Bob Albertson,a principal and chief strategist at Sandler O'Neill Partners,L.P., also likes the financials.He would go into banking.You're seeing accelerating signs of loan growth to businesses.It's a magnetic attraction to see that.The financial sector hasn't participated in the rally.
At the end of the day,credit demand is picking up.The excess capital is overflowing,and the banks don't know what to do with it,Mr.Albertson points out.
Goldman Sachs(GS),iShares Dow Jones U.S. Financial Sector Index Fund(IYF),iShares S&P Global Financials Sector Index Fund(IXG)
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