Overheard On The Street

Here’s what they’re saying at mid-day:

Paul Rabbitt,
President, RabittAnalytics.com: “Stocks look a little tired after the
rally resulting from two Fed easings in 30 days.
The long-term picture is bright and is driven by the Fed rate cuts but a
short-term consolidation has already begun. For
long-term investors we would accumulate right through the expected
consolidation.  For traders we might
take profits and would wait for prices to decline 3-5% before venturing back
into the long side.

All
indexes are near the tops of their trading ranges with a fair amount of
optimistic psychology (the masses are usually wrong) and technology earnings are
continuing to be weaker than the consensus estimates foretold. 
The Fed will likely succeed in manifesting another soft landing but we
are already in an earnings growth recession. 
Based on narrow yield spreads in the corporate debt market there are no
signs of a credit crunch meaning companies will easily be able to borrow money
and the economy should rebound.”

Frank
Gretz
, Market Analyst, Shields & Co.: “The Fed cut rates..blah
blah blah, blah blah blah.
So now what?
The market seems to think its problems are over, mainly because it thinks
the economy’s problems are over.
Sure we all know that things are bad now and that the economy won’t
turn on a dime.
But the idea is that Greenspan will keep cutting rates and six or eight
months from now things will be just fine.
That also seems the message of the Semiconductor Index (SOX).

That
index proved the best economist around when it peaked back in March.
Is the November — December bottom in that index foretelling a bottom in
the economy six or eight months from now?
Makes sense, provided that the bottom in the Semiconductor Index remains
a bottom, and not just a resting spot after a 50% decline.”

Robin
Griffiths
, Chief Technical Analyst, HSBC: “Theory states that as
the four-year cycle is synchronized with the presidential cycle, the bear phase
normally falls within the first two years of the new term in office, while the
bull phase occurs in the last two years. The current trend of the market is
still proving this theory to be correct.”