FWIW, I have noticed in the past that when we hit a bottom in one of these FED cycles (which only happens when the FED steps in and lowers interest rates), several things happen:
1) Defensive stocks get hammered as all the fund managers sell them and buy recovery stocks. This is true today - look at the pill guys, energy, etc.
2) The fastest growing segment that makes money gets fed first - in this case fiber optic and the likes.
3) Then financials. I don't know why it is but the online brokers do much better than the banks. Look at AMTD, NITE, EGRP, etc versus C, JPM, etc. This trend continues (it is not a one day affair). I can only guess at this but I guess it is because online brokers have zero overhead compared to the big banks (and no business loans). It seems to be true with the brokers up today in the teens and banks single digit.
4) Soon after the IPO businesses get fired up (ICGE, CMGI, RRRR, etc). They will start putting on road shows for capital by the end of this month.
So far it seems like a classic, but abrupt and late, turn around. |
