Rev Shark: "Morning Outlook"
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Obrigado Zaratustra
'Quando fores falar com uma mulher leva sempre o teu chicote'
in 'Assim falava Zaratustra'
Abraços,
in 'Assim falava Zaratustra'
Abraços,
Abraço,
Dwer
There is a difference between knowing the path and walking the path
Dwer
There is a difference between knowing the path and walking the path
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Rev Shark: "Morning Outlook"
Rev Shark
"Morning Outlook"
5/29/03 09:00 AM ET
"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man."
-- George Bernard Shaw
Is the progress that the indices have been making over the past couple of months unreasonable? Are there any solid fundamental reasons for a basic change in the character of the market? That is the essence of the debate we now confront.
The bears insist that valuations still border on the absurd and that there are few if any signs that the economy is improving. Throw in things like high levels of debt, deflation and the unsustainability of consumer purchasing power through mortgage refinancing and the arguments against this market are apparent.
The bulls' case is also easily understood: The market is looking ahead and sees economic improvement in the not-too-distant future. There is plenty of buying power stashed away in low-interest-paying bank and money market accounts. The potential impact of allocations out of bonds and into stocks is huge when it starts in earnest.
Longer term I tend to lean toward the bullish camp. I find the macro valuation argument unpersuasive. We will always have stocks that seem unreasonably expensive but I also see plenty of issues that are not trading at outrageous multiples.
However, the single most important thing I see is a lot of cash on the sidelines looking for a place to go. Bond yields of 3.5% are going to force investors to look very hard at stocks. The essence of the stock market always comes down to supply and demand and I see a number of reasons why demand for stocks should grow in the future.
That's my long-term view but in the shorter term I definitely would like to see this market cool off a bit. The speculative ardor in a number of groups, particular biotechnology, looks unhealthy. Traders have had very good success with the momentum game lately and, as always happens when something is working well, they are starting to push it too far and too fast.
We need stocks to digest the gains over the last few months. Basing action and pullbacks will set up another leg but we need to undercut the confidence of the bulls before we can look forward to a healthy advance.
This morning the Nikkei continues to act well as exporters benefit from the weak dollar. European stocks are holding on and futures are slightly positive at the moment. We have the weekly unemployment data coming up at 8:30 a.m. EDT and GDP data. The market has been rather unconcerned about mediocre economic data lately and we'll see if that attitude continues.
The end of the month is approaching and we'll have to keep our eyes open for window dressing. There are gains to preserve and the big funds won't want them to slip away in the next couple of days.
I see a number of downgrades on the screens and a mixed open shaping up. We'll have to continue to monitor the small-cap stocks for signs of momentum trading. When that dries up, and it will at some point, I'm looking for a very healthy pullback in the market. Watch the bios and chips for signs of what the hot money is doing. "
(in www.realmoney.com)
"Morning Outlook"
5/29/03 09:00 AM ET
"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man."
-- George Bernard Shaw
Is the progress that the indices have been making over the past couple of months unreasonable? Are there any solid fundamental reasons for a basic change in the character of the market? That is the essence of the debate we now confront.
The bears insist that valuations still border on the absurd and that there are few if any signs that the economy is improving. Throw in things like high levels of debt, deflation and the unsustainability of consumer purchasing power through mortgage refinancing and the arguments against this market are apparent.
The bulls' case is also easily understood: The market is looking ahead and sees economic improvement in the not-too-distant future. There is plenty of buying power stashed away in low-interest-paying bank and money market accounts. The potential impact of allocations out of bonds and into stocks is huge when it starts in earnest.
Longer term I tend to lean toward the bullish camp. I find the macro valuation argument unpersuasive. We will always have stocks that seem unreasonably expensive but I also see plenty of issues that are not trading at outrageous multiples.
However, the single most important thing I see is a lot of cash on the sidelines looking for a place to go. Bond yields of 3.5% are going to force investors to look very hard at stocks. The essence of the stock market always comes down to supply and demand and I see a number of reasons why demand for stocks should grow in the future.
That's my long-term view but in the shorter term I definitely would like to see this market cool off a bit. The speculative ardor in a number of groups, particular biotechnology, looks unhealthy. Traders have had very good success with the momentum game lately and, as always happens when something is working well, they are starting to push it too far and too fast.
We need stocks to digest the gains over the last few months. Basing action and pullbacks will set up another leg but we need to undercut the confidence of the bulls before we can look forward to a healthy advance.
This morning the Nikkei continues to act well as exporters benefit from the weak dollar. European stocks are holding on and futures are slightly positive at the moment. We have the weekly unemployment data coming up at 8:30 a.m. EDT and GDP data. The market has been rather unconcerned about mediocre economic data lately and we'll see if that attitude continues.
The end of the month is approaching and we'll have to keep our eyes open for window dressing. There are gains to preserve and the big funds won't want them to slip away in the next couple of days.
I see a number of downgrades on the screens and a mixed open shaping up. We'll have to continue to monitor the small-cap stocks for signs of momentum trading. When that dries up, and it will at some point, I'm looking for a very healthy pullback in the market. Watch the bios and chips for signs of what the hot money is doing. "
(in www.realmoney.com)
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