What: Taking a closer look at market reaction
Where: CNBC's Morning Call
When: November, 2006
Who: CNBC Host Mark Heins, Darin Richards (AKT Wealth Advisors), Sean Clark (Clark Capital Management)

Mark Heins: Let’s take a closer look now at market reaction. Due to this morning’s consumer sentiment figure, joining me are Darin Richards with Wealth Advisors and Sean Clark with Clark Capital Management. Gentlemen, thanks very much for being with us. I’ll start with Darin. Is that consumer number significant?

Darin Richards: I don’t really think so. We actually expected it to maybe be a little bit below expectations. You know the unemployment level right now is at 4.4%. I still think there’s some nervousness about the job market and I think that’s being reflected in consumers’ opinions.

Mark Heins: So you expect consumers to be pulling back?

Darin Richards: I think you’re going to see them pull back a little bit. The 4.4(%) is deceiving because the housing market has created so many jobs over the last several years and as we’re seeing a slowdown, I think you’re going to see that number start to tick up and you look at the number of people that are actually leaving their jobs and it continues to drop. That tells me that they’re a little bit nervous.

Mark Heins: Sean, you share that opinion?

Sean Clark: Yes and no. I don’t think the market is going to react too significantly based on just this one number. I would not count out the American consumer. A lot of people have tried to do that in the past and been proven wrong. I think what it does show is that more of the status quo is what we should expect, and the holiday sales should be reasonably strong, given this number. It would have been really concerning to me if this number dropped significantly considering the fact that consumer spending does represent about 70% of all economic activity.

Mark Heins: Ok, so this is not--I mean, I can see some people saying, “This is not a good number,”--by the way the market’s been moving lower ever since you came out--“this is not a good number, especially because of the time of year…but Sean you don’t think so.

Sean Clark: No. I don’t think so.

Mark Heins: Darin, you seem to think that a little. Fair?

Darin Richards: Yeah but there’s so much positive momentum in the market too, I think even if we see maybe the DOW drop today, I think it could easily come back later so I don’t think this is going to be a big enough of a bump in the road to slow down the markets.

Mark Heins: Alright well let’s if we can’t have you guys down to some embarrassing--potentially embarrassing--prognostications that you will later regret. I’ll start with Darin. What sort of growth in the holiday shopping are you hoping for?

Darin Richards: I don’t have a particular number--

Mark Heins: Awww come on!

Darin Richards: --but I think its going to make--potentially--disappoint a little bit. I’ll go that far.

Mark Heins: How can we know if it’s going to be disappointing if you don’t give us a number?

Darin Richards: Well from an expectations standpoint. I think at the end of Christmas we’re going to say gas prices came down, there were a lot of positive things--unemployment was low--and we were a little bit let down by consumer spending.

Mark Heins: Sean, what about you? What kind of growth should we expect?

Sean Clark: I think holiday sales will be up maybe 4-5% this year--

Mark Heins: Ooh, that’s pretty good.

Sean Clark: --Yeah you know, there’s a lot of positives right now. As Darin mentioned, gas prices and oil prices are down significantly. Interest rates are low. The unemployment rate is very low. There’s a lot of positives that consumers right now can currently hang their hat on.

Mark Heins: Ok Darin got away, but we got Sean on the hook. Thank you gentlemen, appreciate it very much.

Darin Richards: Thank you.

Sean Clark: Have a good holiday.

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