Overheard On The Street
Here’s what they’re saying at mid-day:
Charles Payne, President and Head
Analyst, Wall Street Strategies: “It looks obviously like the Fed will stay
in pact. It’s interesting because they don’t have an official bias, but they do
have a sort of outlook on market conditions, and right now, that look
inflationary. It will be intriguing as to whether or not they will change that
view. If you look at the action, I would call it cautious optimism, and it’s
reflected by how the Dow is out-performing the Nasdaq. I’m not sure what it’s
going to take to get the institutional money back in the market, because, as I
said, today’s decision is sort of a foregone conclusion.”
“The hope for today is that at least maybe comments will be made that
will suggest that the Fed is done with rates for the rest of the year. I’m not
quite sure that’s going to happen, but obviously I hope it does. But, you know,
outside of actually raising rates, the greatest weapon has been the intimidation
factor, and if they can sort of scare the Street into believing that they’re not
totally out of the woods, then that may be a way to keep investor enthusiasm in
check, which has been a big deal for Greenspan for a very long time.”
Greg Parise, General Partner, Dorado
Capital Management: “I’m kind of neutral on the market right here. I think
we’re pretty much at a lose-lose situation as far as the Fed. I think Greenspan
will stand pat, but I think that his stance will remain cautious going forward.
If he raises rates, then I think it would surprise the heck out of the market,
and we’d have a pretty sharp knee-jerk reaction lower. I just feel that with the
rally the market’s had here in the last two weeks, what is going to be the next
catalyst? I’d rather just keep my powder dry until we get through Labor Day
weekend until most of the money managers are back and we see a more definitive
sign in the market. As far as making a move on the day the Fed makes a decision,
I would shy away from that.”
John Roque, Vice President, Arnhold and
S. Bleichroeder: “On the positive side, the dollar is strong, the 10-year
T-note is at its highest levels since April, 1999, and market bellwether GE is
at all-time highs. In addition, the NYSE Composite is at an all-time high, the
NYSE Financial Index moved to an all-time high in early August, the S&P
MidCap Index is at an all-time high, and the Dow Jones Utilities moved to a new
high in early August.
“On the negative side, broad stock market leadership is absent, base
patterns are not that plentiful, and stocks have generally been able to respond
favorably to strong earnings news. Also, volume is light, the VIX is low, oil
and gas continue to work higher, and the 3-month rate of change in M2 is at its
lowest levels since spring, 1995, suggesting liquidity has dried up. For us, the
near symmetry in these lists says that big moves in the major indexes, either up
or down, are unlikely.”
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