Morning Call Host: A strong start to earning season helped push the DOW past the 11900 mark. What will it take to send the bluechips to some more record highs. Here with their thoughts on that is Darin Richards. He’s Chief Investment Officer at Wealth Advisors, and Charles Raughtblod is Senior Market Analyst over at ZAX.com. Good morning to you both.

Richards & Raughtblod: Good morning.

Morning Call Host: Darin, let me begin with you. The early take this morning is that the GE news was good but more concerns about a tight labor market, a pressure on the margins…are we going to begin to see some higher standards being applied to some of these bluechips especially after the run they’ve had over the past few weeks.

Darin Richards: I don’t think necessarily. I think we saw one example of GE coming in line, and for the most part I think the market is almost predicting and expecting companies to beat estimates. So when you have a situation where you meet them, you actually have a situation where the stock price declined a little bit. Going forward, I think people are going to get kind of use to “in line” as being “ok” and I still think we’re going to see a lot of companies on the positive side of the surprises.

Morning Call Host: Charles, we’ve had some people this morning suggest that we were oversold for awhile, now we’re beginning to get to a level--conveniently or not, since we’re near that 12000 level--that we’re overbought. What’s your view on that?

Charles: One of the things we’re saying is that people are shifting allocation towards more aggressive funds. We haven’t really heard people actually putting new money into the market. It’s really money coming off the sidelines. And certainly, I think to a little bit, the markets are still somewhat that dependent which is why today you’re seeing a little bit of a negative reaction to the retail sales number. Although, overall, its been good. And also you might have a little bit--just because the weekend’s coming up--sometimes traders are a little bit cautious holding anything over the weekend.

Morning Call Host: That’s a good point, and Darin, on that note, what is a weekend risk? Is it geopolitics? We’ve seen the market look past things like Korea and headlines out of Iran. It’s like a plane crash in Manhattan that gives you that midday scare.

Darin Richards: Yeah. I don’t think there’s really going to be any weekend risk. I think you’re going to see people digest the retail sales, the consumer sentiment. And we’ve had a really nice run this week and for it to close Friday flat to slightly down, its not necessarily a bad thing.

Morning Call Host: Charles, the bluechip run itself; what does it say about America as a global economic engine. There’s been so much talk--you pick up the FT any day of the week and you see headlines about how all the new issuers are going to the London Stock Exchange, how money flows are going overseas and not staying at home. Does this change that view?

Charles: I think a little bit. One of the things about the American economy is that it continues to grow. We do hear all of these reports about the economy slowing, but a slowing economy is still a growing economy. What we’re not seeing is the economy pull back into a recession and I think one of those stories that may be finally getting out is that earnings are good. We did not have any reaction to second quarter earnings, especially to the upside. People were really concerned about geopolitics, they were concerned about the Fed, and now that we kind of have the geopolitical picture fade to the background--although its still important--we’re seeing people now focus more on earnings and I think that’s driving some money back into the markets.

Morning Call Host: Yeah. Darin, you make the point that the bluechip run--to a large degree--is built on oil prices coming down. If, for whatever reason, they spike back up, is there still enough of an argument that bluechips have easy access to capital--that they’re well known names, that they’re easy to run to in a time of panic. Does that still hold up even if crude oil goes back up higher?

Darin Richards: I think it definitely holds up because it was higher in the second quarter and the large cap value of the bluechip stocks held up very well. So tend to be viewed both as defensive, but then they also benefit when the price of oil goes down. So really its a nice hedge either way.

Morning Call Host: Darin, are you still looking for 12000 at this point.

Darin Richards: Oh I definitely think we’ll go through 12000.

Morning Call Host: And you Charles?

Charles: Absolutely.

Morning Call Host: Alright. It may not happen today, although its still early in the session, but a lot of people are calling for it, some people are saying that we may never get there, but we’ll find out eventually. Darin, Charles, thanks a lot.

Richards & Raughtblod: Thank you.