My view: I can't make a good case here for a broad, sustained rally, so I'd say we're working our way through the cycle. It's a trader's market, not a buy-it-and-forget-it market.
Tighter lending, overcapacity, corporate default rates rising, etc. But we're in the middle of the recession now, not the beginning. That's a big change. Better days lie ahead, possibly late this year.
But consumer spending will NOT lead us out of this recession. It will HAVE to be cap-ex spending.
Market continued to be value-oriented until two weeks ago. Blowing smoke into some of these former mo-mo names does not impress me. But there are signs.
Remember last year, when CSCO said it already sold everything it can make in 2001? That was time to sell CSCO.
Now companies say their orders have fallen off a cliff. From the standpoint of an investor, I find that backdrop more inviting.
Irwin Kellner, who writes for CBS MarketWatch, penned a piece this week saying basically that the layoffs had Greenie moving faster than he otherwise would. Companies losing patience with the downturn, etc.
Now, what happens when Fed funds go to 3.5 and everybody says Greenie won't cut anymore?
If the economy isn't moving by then, look out below.
PB |
