Overheard On The Street
Paul
Rabbitt, President, RabbittAnalytics.com: “Fear is the
prevalent sentiment and we buy mass fear. Our
sentiment model says this is the highest fear in more than two years.Â
Three of four polls are bearish. The
put/call volume ratio reflects the same high fear. Our
bet is the plunging stock market will re-energize the Fed to cut more
vigorously than we thought last week. The plunging NASDAQ has sucked wealth
away from consumers. We will get very
important consumer and manufacturing sentiment figures this week.
In fact, a poll of Wall Street bond dealers last week showed a
consensus that the Fed would cut rates 50 basis points at the March 20
meeting.”
Frank Gretz,
Market Analyst, Shields & Co.: “One stock that could be pivotal in all
of this is GE (47), another stock that everyone loves to love.
It’s not so much that fame corrupts, it’s more like by the time
“they†figure out you’re famous it’s the top of the curve.Â
In any event, add to that the fact that, while no Cisco (26), GE sells
for a not so moderate P/E of 37. And, 40%
of GE is GE Capital which is, basically, a bank, a good one but a bank.
The real growth in GE comes from GE Capital but the point is, is a bank
worth 37 times earnings? On top of that,
this clearly is a company, how should we put it, sensitive to the economy, as a
bank and otherwise. And, finally,
the chart like the Dow itself, keeps hanging on, has a chance, but looks
increasingly risky. A move above 49
would, at least temporarily, dispel that risk. A
break below 44, probably even 45, would pretty much spell bye-bye.”
Robin
Griffiths, Global Technical Strategist, HSBC: “The latest
economic numbers indicate that the economy is not as bad as it seems, suggesting
that the Fed might not rush to cut rates as aggressively as previously thought.
The Nasdaq has reached a two-year low and is still trending downwards. The index
will likely bounce along these levels with support at 1945. The Dow Jones has
also broken down through major support at 10,330. The long-term secular trend is
still in place as we expect the index to reach a new high of 12,000.”