Overheard On The Street
Here’s what they’re saying at mid-day:
Steve Shobin, Technical Analyst, Lehman
Brothers: "I think that the low that we reached in May was an important
low. Often after you reach an important low and have a rally, the market has to
go through a testing phase. So I wouldn’t be surprised if later in the year,
let’s say during the seasonally weak September-October period, the market was
prone and vulnerable to a period of testing. I think that the low we made in the
S&P in May at around 1360 and the low that we made in the Nasdaq Composite
at around 3000 are formidable lows that will stick for some time.
"The characteristics of an important bottom or the marquis of an
important bottom is a combination of panic and an improving bond market, both of
which occurred at that time, and both of which suggest that the initial part of
the basing process has begun. I don’t think the market is ready to rally back up
to its highs, at least in terms of the Nasdaq Composite, because usually when
you have a bad accident you have to convalesce for a while, and we haven’t gone
through that recuperation period. But the worst is over, and investors and
traders should look to buy on dips."
Bob Zuccaro, Portfolio Manager, Grand
Prix Fund: "For the first time in four months, all major market indices
that we look at, which are the S&P 500, the Nasdaq, the S&P Mid-cap, and
the S&P Small-cap, were all trading above their one-month, three-month, and
six-month moving averages, and we viewed that as being constructive for the
stock market. The stock market has given a very good account of itself in the
past year despite six rises in interest rates by the Federal Reserve.
"In fact, the market is actually higher than last June before the Fed
started to aggressively raise interest rates. Second quarter earnings will make
for very good reading, with a high content of positive earnings surprises. We
estimate corporate profits will be up approximately 20% this year. It’s a
Presidential election year, which is characteristically good for the stock
market going all the way back to when John F. Kennedy was elected in 1960. We’ve
had all Presidential election years turn in positive rates of return since 1960.
For year 2000 as a whole, we are looking for double-digit gains by the major
market indexes, and we think the Nasdaq will once again be the leading index by
year-end for the eighth time in eleven years."