DJ US Bancorp's Nicoski Sees Signs Of Market Bottom
18 Apr 12:50
By James Covert
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The Federal Reserve's surprise rate cut on Wednesday
was an encouraging sign for the markets, but lately there have been plenty of
other reasons for optimism, said Edward Nicoski, chief market strategist at
U.S. Bancorp Piper Jaffray.
The market has weathered bad news from major technology companies, including
a profit warning from Cisco Systems Inc. (CSCO) and lowered earnings
expectations from Yahoo! Inc. (YHOO). Hosts of other computer companies have
also lowered their net estimates for the year over the past few weeks.
"I think the market has been acting pretty decently in recent weeks," said
Nicoski. "The news at this juncture is that investors are willing to look
beyond the bad news. That is what you want to see in a bottom."
Nicoski sees reason for optimism across most major sectors of the U.S.
markets, including energy, financials, industrials and consumer cyclicals.
The Fed's intermeeting, 50-basis-point cut to its federal funds rate shows a
recognition that for manufacturers "earnings are soft and visibility is almost
negligible," Nicoski said. "And the Fed doesn't really need to worry about
inflation."
Nicoski is also optimistic that the big, surprise move isn't necessarily the
Fed's last.
"I'm not concerned that the Fed is finished now," he said. "We have to see
that things have picked up. The U.S. could still repeat some of the problems
Japan had when their bubble burst in 1989-1900."
The Nikkei Index was down more than 60% when the Asian financial crisis
began, he notes, and major U.S. stock indexes still haven't recovered from
their dramatic losses.
"The Fed is going to do everything it can to help the situation," Nicoski
said.
-By James Covert, Dow Jones Newswires; 201-938-5360;
james.covert@dowjones.com
(END) DOW JONES NEWS 04-18-01
12:50 PM |
