Hi Nuc,
I guess that mostly its MY perception and gut feeling. I'm not sure I can exactly quantify why I feel this way but I'll try. First off, we have what I believe is an attack on the market's leading sector, the semis. In the face of bullish comments from just about all the major chip companies, we have the bulk of the analyst community downgrading companies and posting bearish comments on the industry as a whole. Similarly, we've seen some pretty cautious commentary on the oil patch, another of the sectors that's been leading the market this year.
Let me say that I don't believe the market is as over priced as many seem to think. Sure there are plenty of stocks that need to be cut down to size but as a whole, I think that earnings growth and future potential justify much of the run we've had over the past few years. Did the market get ahead of itself, yes, no doubt. We've seen the DOW flat for over a year now and we've seen a pretty healthy correction in the NASDAQ.
That said, the market will continue to have a tough time digesting the 6 straight rate hikes forced on it by the FED and if AG and company raise rates again in the near future, it looks as though we could be forced into a recession. This would be tragic, IMO, because I don't believe this is necessary given the current economic climate.
As to the major brokerages, their aim is to make money. They need and want the churn. They are happy to watch stocks go soaring way past reality and they are just as happy to watch stocks go heading into the dumps. The more action they can get the better they can scalp portions of people's money into their coffers. I don't know for sure and again maybe it's just my perception.
What are your thoughts on the subject? |
