SEANA SMITH: Well, financials obviously a weak spot in today’s market action after we just– after what we just heard from Brian Cheung. It’s one of the things weighing on the broader market today, with all three of the major averages closing in the red. So for more on this, we want to bring in Jeff Powell. He is managing partner at Polaris Greystone Financial Group.

And Jeff, great to have you on the show. We’ve been waiting for this rotation, I think, into some of these cyclical sectors. We’ve been getting a few signs of it, but investors are still hesitant to go all in, especially when it comes to financials.

And I think it’s clear just in terms of what we heard from a lot of these big banks over the last two days as to why that is. But what do you think it’s going to take in order to see a bigger bet on some of these names?

Well, on the banking side of things, I mean, obviously with having such a flat yield curve right now, it’s really having a major impact on how banks make money. They’re making money off of savings accounts, checking accounts, those types of things, and obviously, on the spread between long term and short term fixed income. And when you have the 10-year sitting at 7/10 of 1%, so you got the 30 out not much better, they’re really not making much money for them within that space.

SEANA SMITH: So Jeff, just zooming out a little bit then and just talking about earnings season overall, because it’s not just the big banks that we’ve seen reporting. And I think when you take a look at what’s been happening, it’s been a pretty mixed start because at the stock reaction, at least, investors seem to be punishing companies that missed more severely than buying or rewarding those that are beating it.

And you can see that reflected in the banks today with Wells Fargo and Bank of America under a significant amount of pressure. And Goldman Sachs up just around 2/10 of a percent. Why do you think this has been the case so far this earnings season? And do you think that this is a trend that’s going to continue?

JEFF POWELL: Well, this entire year has been purely driven on sentiment. I mean, if you look at a lot of the fundamentals of what’s going on within the markets, with earnings and earnings revisions down, and then getting a downward earnings revision, the stock market, as an overall, it’s very surprising that it is where it is.

You’ve really had this market really being driven by technology stocks, by consumer discretionary stocks, and the consumer services arena, where you’ve had financials, energy, obviously, severely down, and a lot of areas you’ve mentioned, industrials, which is projected to have fantastic future earnings, really not having had a better day in the sun yet.

So really, I mean, what you’ve got is the large, big growth names that are really driving the market. Right now, it really comes down to valuation. If you look at the top five companies, you had mentioned Netflix, and you had mentioned Microsoft and Amazon all having a little bit of a downturn on the day. They’re very overvalued compared to the historical norm.

So I think that you’ve got a game of musical chairs going on right now. You will eventually see a leadership change, as you see value, which has severely underperformed growth, revert back to the mean at some point in time.

ANDY SERWER: Hey, Jeff. I know that you wrote that we’re still in a secular bull market, even though the US is in a recession. I mean, how can that be the case? How unusual is that? Does that mean we already had the bear market or a little downturn, and we’re done here and we’re off to the races for the next several years?

JEFF POWELL: Well, when you talk about secular bear markets and secular bull markets, the average secular bull is 14 years. The last one we had was from 1982 through 2000. In the midst of that, you have the ’87 stock market crash. You have the 1990 recession. You also have ’94, but it wasn’t exactly the most amount of fun to work our way through it during that time period.

So it doesn’t mean that you can’t have shorter time periods in which the markets are correcting or pulling back. Obviously, we had a 30% pullback in the market earlier this year. That means that the longer term overall general trends are still in an upward movement, which they are still happening right now.

RICK NEWMAN: Seana, unmute.

SEANA SMITH: It happens to the best of us. It happens every so often. So you just kind of– But Jeff Powell, as I was saying, thanks so much for taking the time to join us. Great to have you. We’ll talk to you soon.

JEFF POWELL: Truly my pleasure. Have a nice afternoon.