I agree. This rally from the 4/4 lows has been based on "HOPES" that the economy will stabilize and rebound due to Fed rate cuts.
But, since 4/4--how many big caps have we seen raising forward guidance for rest of 2001 versus how many are warning AND saying that they have no visibility for rest of 2001. Same question for the mid- and small- caps.
Answer---very few companies are going out and saying things are improving; only that they THINK things have stabilized.
Sooner or later, the market will be out of denial and look on earnings. The Fed can only cut so many more basis points before they get to ZERO (a la Japan govt)
Back in 2000, when we had the bubble; at least the bubble was due to increased earnings, sales, revenues, etc etc. Now, markets are surging despite the above stats declining, and declining markedly so.
Sooner or later, companies have to show EARNINGS / SALES/ REVENUES, ETC. If not, we are going lower than 4/4 lows.
Sorry to sound so gloomy, only trying to be realistic |
