Steven DeSanctis

Steven DeSanctis has been quoted 15 times. The one recent article where Steven DeSanctis has been quoted is RPT-Wall St Week Ahead-Post-Fed boost for small-cap stocks may be limited. Most recently, Steven DeSanctis was quoted as having said, “We're in a show-me state for small caps. We've gotten (price-to-earnings) multiple expansion, so you need earnings growth.”.

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Market valuations are still too expensive. When the Fed hikes a third, fourth and even fifth time, performance starts to slip for the overall market.

We're in a show-me state for small caps. We've gotten (price-to-earnings) multiple expansion, so you need earnings growth.

We think that the growthier growth stocks will outperform the weaker value names.

Though retail sales numbers have been good, profitability for a lot of the retailers has not been good. That's going to be a big telltale sign for us. We're overweight discretionary, thinking that was the cheapest group out there, and it still is the cheapest but... if the E drops out the PE, you run into a problem there.

We think that the Trump bump has run its course and now investors should tack back to 'growthier' growth companies that may not need a better economy to post strong earnings growth.

Tech is quickly becoming our favorite group as it has been left behind in the Trump bump. The sector is cyclical and so a faster economy in which rates rise helps this sector.

We are moving to an overweight from a market weight on financials and realize that we are certainly not early to the party. However, the sector has cooled a bit year to date from its tremendous run after the election, and the reporting season has gone really well. We have liked the banks for some time, but we think there are other groups such as capital markets, consumer finance, and insurance industries that look positive.

Now that the calendar has turned to 2017, investors could unwind their big winners, as they are not comfortable with their valuations and want to take profits in these stocks.

We contend that investors were in the midst of a selling strike late in 2016, as capital gains tax is thought to be lower in '17 than in '16. The winners from last year could be under pressure, and although five days does not make a trend, the gainers in 2016 are lagging YTD.

Since election, it has been risk on with cyclical sectors leading the way and defensive areas lagging. Our sector allocation is more domestically focused, and given the dollar's strength, we think it makes sense. We are overweight discretionary and industrials. We are overweight tech, which has been a source of funds and lagging behind since the election.

If tax rates are reduced to 22 percent, we see a significant boost to earnings (that lowers) the P/E to 16.2X, which is still above the average. However, using a 15 percent tax rate, we see that earnings jump to $88.71 and the P/E falls below 15X.

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