Updated: 07-Aug-01
General Commentary
For every two steps forward, sector takes one step back... While it can be frustrating to watch, the sector's "hesitation waltz" is very constructive... Sideways pattern allows fundamentals to catch up to stock price... And with the earnings part of the equation very soft at the moment, there are only two alternatives - holding pattern or price declines... After having experienced brutal price declines earlier in the year, not sure about you, but we'll take the boredom of going sideways.
With little in the way of fresh news on the horizon to (materially) alter either the economic or earnings pictures, investors should get used to price consolidation... Briefing.com continues to expect Nasdaq to spend better part of next couple of months confined to defined range (1900-2300).
Before you email me to say what about Cisco's earnings (CSCO) tomorrow night, I didn't forget - just don't think CSCO's report will alter the overall earnings picture very much... First of all, company no longer carries the same sector weight it once did... Secondly, tough to imagine CSCO painting a significantly brighter outlook than rest of industry, and even if they do many on street will be skeptical... Third, should company miss its numbers and guide lower impact will be muted by fact that stock and related companies are already down significantly... Fourth, first signs of earnings turnaround likely to come from other areas of tech sector, such as software, storage and chips. |
