Overheard On The Street
Here’s
what they’re saying at mid-day:
Paul
Rabbitt, President, RabbittAnalytics.com: “Value investing is
back. This
style had been deemed ‘too boring’ and had been blamed for having no ‘new-economy
vision’ in the past decade.
Still since WW2, the battle between growth and value investing has swung
like a pendulum lasting an average five years.
Growth led for 8 long years and value was long overdue.
Moreover, the extreme manner in which growth led, characterized by the
Internet bubble in its final year of leadership, suggests value will steal the
show for another year or two. After all,
the market always carries trends to an extreme. Expect it to carry the value
theme to an extreme too. This may take time.”Â
Frank
Gretz, Maybe it’s a bit of a stretch but the market seems on a
schedule that’s dictated largely by what the Fed does and, most importantly,
when the Fed does it. For example, the last little spate of weakness seemed
provoked by the Fed’s failure to act, as anticipated, between meetings. The
market became extended down again, ‘oversold,’ and began the recent rally in
anticipation of the next Fed event, the March 20 meeting. The real point,
perhaps, is that the market remains in its ‘hope’ mode, hoping Greenspan and
the Fed will save everyone. It’s not so different from the ‘peace rallies’
during the Vietnam war.Â
Peace eventually came, and nothing happened. Everyone likes to think
something, someone will save the day when, actually, it’s just all about the
market.Â
Lows aren’t made by events they’re made when stocks are sold
out.”
Brian
Belski, Fundamental Market Strategis, U.S. Bancorp/Piper Jaffray:
“Last week’s employment report was a mixed bag. Accordingly, the bond
market quickly priced in a less aggressive Fed in the coming months as the
report did not reinforce the notion that the economy was ‘falling off a cliff.’
While consensus is still calling for a 50 basis point cut at next week’s FOMC
meeting, there is more talk of only a 25 basis point cut. We remain in the 50
basis point camp, but continue to think that a 25 basis point cut is more likely
than a 75 basis point cut.”