Overheard On The Street
Here’s what they’re saying at mid-day:
Frank Gretz,
Market Analyst, Shields & Co.: “Sun
Microsystems…auto maker. A few days ago
Sun, the Silicon Valley-based network computer maker, announced it would shut
down for a week in July in an effort to cut costs.
The company’s 38,000 American employees will be asked to take vacations
or unpaid leave. Funny, that sounds a
little ‘Old Economy’ to us. Unpaid leaves, layoffs, where’s the growth in
these high-tech growth stocks? It seems
pretty clear that the growth is in the past. It’s enough to make you wonder if
there may not be another shoe to drop, namely the multiples.”
Paul Rabbitt,
President, RabbittAnalytics: “Markets were mixed last week as the reality
began to sink in that the economy is going to recover.Â
GDP growth was surprisingly strong in the first quarter.Â
However, inflation seems to be still a factor.Â
Energy prices are annoyingly strong and the all-important GDP price
deflator surprised everyone as it came in above consensus at 3.3 percent in the
quarter.
“As contrarians, we find bonds
very attractive here. Everybody
hates the bond. Bullish sentiment
has plunged from 80 to 30%. We are
intrigued by rising bond yields. Why
take the risk of an overbought/ over valued stock market when you can get 5.8%
on long bonds, up from 5.25% in March.”
Brian Belski,
Fundamental Market Strategist, U.S. Bancorp/Piper Jaffray: “Let’s get to
the bullet points…the downward EPS estimates for S&P 600 Small-Cap Index
have not solidified…the S&P 500 and S&P 400 Mid-Cap estimates are
showing signs of bottoming…the S&P 600 Small-Cap is most highly correlated
S&P Index in terms of valuations and performance within sectors… the
digestion process of the market remains intact…and investors are gravitating
toward both higher quality and liquidity ideas…(large cap).”