Overheard On The Street
Here’s what they’re saying at mid-day:
Art Hogan, Chief Market Analyst,
Jefferies & Co.: “I’m thinking unfortunately that Alan Greenspan was
able to speak today in the House of Representatives, and the body language we
got was one of lacking panic, as far as the U.S. economy goes. What we’re
perceiving from that is that we’re not going to get a rate change this week. A
lot of folks in the marketplace had been betting that we would get a cut this
week, and a lot of that coming on the heels of former Fed governor Wayne Angell
making a better than 80% probability of a rate cut. He’s rescinded that now, and
the market’s selling off quite handily.”
Ricky Harrington, Technical Analyst,
Wachovia Securities: “You have to assume that we are very oversold here.
The Nasdaq has lost about 25% over the last four weeks, and the Nasdaq 100 is
down over 30%. That’s a significant selloff without much of an intervening
rally. So one thing we can assume is that we are in a very oversold condition,
and that doesn’t mean you have to rally but it does means that in normal markets
we have to be looking for a rally. I expect a Federal Reserve rate cut almost
any day now despite what Greenspan is saying today. I still think there’s a very
good chance of a rate cut shortly.
“The bigger picture, however, is a little more ominous. You’ve got two
markets. We continue to have the Nasdaq market which is down 55% while the Dow
is down about 8% from its high and the S&P is down about 19%. What is
happening is that the trading or more speculative interests are exiting the
Nasdaq and that money is migrating into the Dow and what is perceived as the
safe havens. It used to be the bond market or utilities, but right now these
money managers that comprise the Dow are their safe havens. I think that’s a big
mistake because as we progress through this year the big stocks will come under
some selling pressure. Going into the Dow is not going to save them, but it will
just complicate this problem later this year.”