Overheard On The Street
Here’s what they’re saying at mid-day:
Paul Desmond, President, Lowry’s Reports:
“What a difference a week makes. The stalemate of weak demand and weak
supply that has plagued the broader market for the past several months appears
to have been decisively broken last week. And, several key indicators, including
a new intermediate-term buy signal, suggest this new burst of strength is more
than just a Summer rally.
“Our Underweighted Index, based on all NYSE-listed stocks, rose to a new
all-time high this week. This record strength tends to belie the bearish
argument that the current uptrend is nothing more than a recovery rally in a
basic bear market. It should also be noted that much of this recent strength has
been concentrated in mid-cap stocks. In addition, as of Friday’s close, the
daily NYSE advance/decline line has risen above its 150-day moving average,
reflecting a significant change in the trend of market breadth.”
John Roque, Vice President, Arnhold and
S. Bleichroeder, Inc.: “Since breadth had fallen steadily since April, 1998
we should consider the following: perhaps the improvement in breadth is telling
us, in the market’s inimitable way, that investors are already discounting
better times going forward; perhaps the improvement in breadth is telling us the
Fed is done playing defense; perhaps the improvement in breadth is telling us
the yield on the 10-year T-note will move above resistance at 99 16/32 and the
corresponding yield will work below 5.8%, or perhaps this sort of mild
conceptualization is just a bunch of words because when it all comes right down
to it, no one really has a good enough handle on everything to look that far
ahead.”
Paul Rabbitt, President,
RabbittAnalytics.com: “I think the Fed is probably done tightening. You
should expect the market to roar ahead, driven by surprisingly strong second
quarter earnings. A month ago, First Call expected S&P second quarter
earnings to be a respectable 19%, down from 23% in the first quarter. Now, it
looks like the second quarter will stay at the torrid 23% level.”
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