Overheard On The Street
Here’s what they’re saying at mid-day:
Phil Roth, Chief Technical Market
Strategist, Morgan Stanley Dean Witter: “I think we had a mediocre Summer
rally after a low was established in May. That rally appears to have ended, and
now we’re moving into some Fall correction. The market suffers from a lack of
leadership. We had a big rebound in technology stocks, and when that ended it
left the rest of the market foundering.
“Other areas of the market that did reasonably well in the last couple
of months, some of which were the beneficiaries of lower interest rates, like
electric utilities and financials, are now extended and due to consolidate. So
about the only sector I see that is in a strong technical position that can
continue to move up is energy, and energy is just not enough to carry the
averages.
“In the background for stocks, I think we have a bond market that’s torn
between the positive of the perception of an economic slowdown and the negative
of the perception of increasing inflation. Despite the seemingly tame inflation
look from this week’s CPI and PPI reports which are lagging measures of
inflation, the markets are beginning to believe that higher energy prices are
impactful.”
John Roque, Vice President, Arnhold and
S. Bleichroeder, Inc.: “On Thursday, the PPI came in less than expected,
and that should be good news for both bonds and stocks. To that statement we
would reply with the old ‘yeah, but’ thing by saying yeah, but the bond market
was unable to embrace the favorable PPI numbers and that’s negative. The
inability to embrace positive newsshould always be viewed cautiously. We know
nobody can game the PPI, but it is curious why the bond market couldn’t do
better on the news.”
Brian Belski, Chief Fundamental Market
Analyst, U.S. Bancorp/Piper Jaffray: “For the week ending September 13,
money and equity fund flows reported another week of mixed data. Net outflows
for equities were $527 million, compared with inflows of $619 million for the
prior week. Large Cap Equity index funds showed outflows for the seventh time in
10 weeks. What does this mean? Clearly indexing has not worked this year as it
has the past three to five years, and investors are apparently reallocating positions
to more specific instruments like Aggressive Growth Funds.”