Wall Street might be pleasantly surprised during the quarterly earnings season, which could lead to gains for the stock market according to one expert.
"I think we're going to see companies beat expectations going forward," said Brad McMillan, chief investment officer for Commonwealth Financial Network. McMillan expects companies will begin reporting better sales and revenue growth as the economy picks up, and sees opportunities in both the consumer and energy sectors.
"I think the infrastructure area, the [master limited partnerships], have been hit unduly hard," said McMillan. "The oil market is not going to go away. We're going to continue to see demand for oil, we're going to continue to see the need to transport that oil."
McMillian also likes large-cap energy players with access to capital. "A lot of these companies are waiting to pick up assets on the cheap, from bankruptcy," he said. McMillan thinks the stronger oil companies will be outperformers.
In the consumer sector, McMillan favors shares in both consumer discretionary and staples. "Right now you hear a lot about how consumers are not growing their spending. That's actually not true, they're just not growing it very quickly," explained McMillan. "But you have to draw the distinction, are they not spending because they can't or because they don't chose to at the moment?"
McMillan believes it is the latter, and says increasing consumer confidence and rising wages will eventually lead to more spending.
While McMillan is generally bullish heading into the earnings season, he's not expecting much from banking stocks. "I think financials continue to be an area of concern," he said. "They rallied on the prospects of faster rate increases and then of course that didn't happen."