Overheard On The Street
Roy Blumberg,
chief equity strategist, Sterne, Agee Leach, Inc.: “This is very much of a
trading range market with an upside bias. And I don’t think that’s going away
here for a while. There’s still a lot of money coming out of tech. People have
distinguished in a big way between what they believe are the real companies that
are really going to succeed and the rest of tech. And since everybody was so
overweighted there, money is trickling out as opposed to running out. But it is
going away. Since the weightings are so high in tech and the averages, it’s
holding the averages down. Meanwhile, if you go under the surface and you look
at what’s going on in a lot of other groups, you have a very positive tone. And
you actually have better breadth in this market, a flat market, than you had in
an up market in the spring, because financials are acting better, drugs are
acting better, energy is acting better. And I think that trend goes on. So the
subsurface market definitely has an upside bias to it. The major averages’ bias
may not look as apparent. Meanwhile, in the very short term, we had enough days
up in the Dow and S&P that another day or so of rest would make sense, but I
don’t think it’s going to be anything too extreme. Nasdaq will underperform a
little bit, but I actually think it will have somewhat similar performance.
There are two groups that look good. Energy services is getting ready to break
out and continue to work higher. And in the financials, the combined companies,
those that combine banking, insurance, and brokerage, are ready to go. The plain
vanilla banks aren’t ready to go yet.”
Lou Parks, senior
managing director and director of listed and OTC trading at Raymond James:
“I’m waiting to see what the Dell earnings are like at the end of the day
and I think that will give you a better idea as to whether there is a trend here
in the Nasdaq. I think the market is trying to establish a base here. If it’s
able to establish a base through these earnings reports, then I think we’ll see
a nice move upward. The economic news over the past couple of weeks has been
very encouraging. I think that also we’re seeing some interest in the old
economy stocks, the value stocks. Overall, most earnings appear to be in-line to
slightly improved. Once again, they’re going to take apart the stocks that miss
the numbers. But I think overall we’ll probably see some more favorable results,
especially in the areas out of tech.”