I happen to disagree with that. It's all about having doubts about the recovery. We are getting close enough now, heck with-in weeks, to being in the second half. Like I said last week, we are entering the put up or shut up time, and leaving the benefit of the doubt rally.
The recovery starts 3rd quarter but the profit warning from SUNW is for the 2nd quarter. IMHO, SUNW is no longer the kind of the company that is indicative of business conditions. It is a company facing some serious competition. To me, companies like SUNW and Oracle will almost turn into future Lucents in the coming year or so. They just don't have the big debt on the balance sheet to get all the way there.
What I am watching for is the outlook from Cisco, MSFT, Intel, IBM, HWP, EMC types.
They will indicate whether we are at a bottom as these companies are in good competitive situations (maybe with the exception of EMC---Intel could also warn but with positive outlook for the next quarter).
As CNBC pointed out this morning, many are now talking about "L", instead of a "U".
Bearish sentiment on the prospects for a recovery may be good for the market.
Also have to remember that the tax rebates will be in the 3rd quarter...that should be enough to give that quarter a bounce.
Still think we are going to get aggressive rate cuts. There are people talking about another 25bp and then they stop. With the prospects for an "L" shape recovery especially in technology, Greenspan is not going to stop cutting yet. He is going to be surprising the "experts" again.
Agree that it will be time for the companies to put up or shut up...but that happens in July when these companies report. Now are just going to get comments from the weaker companies.
I think we will get the benefit of the doubt rally as long as the economic data is good. Spending has not come to any abrupt halt; consumer sentiment is improving. |
