The market has done poorly over the recent couple of days and weeks. Three weeks ago, the fundamentals were improving and all was well with the world. Now there's depression back on Wall Street and it looks like the 'Santa Claus' rally is not going to happen. Having said that, this market is also driven by emotion.
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If someone is planning to get long today, God bless. People are trapped long and they're hoping to get out and they're hoping it recovers. Hope is not a good investment thesis.Tony Dwyer
That fact alone could act as a stabilizing force for the market this week. The U.S. consumer has been the linchpin of this economy. So this number doesn't bode well, especially as we enter the Christmas shopping season and retailers are already suffering because of the West Coast ports dispute .
Tony Dwyer
We've gone from a psychology a month and a half ago that the economy is growing too quickly, and the Fed is going to have to raise rates, to we're going to go towards a recession because the economy's slowing too quickly. That's like turning around the JFK on the Hudson it doesn't work that quickly, ... So you get fear coming into the market -- it just changes its nature. The fear was inflation. Now the fear is earnings. And it's going to end up somewhere in the middle. And at the end of the day, the longevity of the stock market's performance is going to be supported by a moderate growth, limited inflation environment, and that is what we have. It's not going to be robust growth -- 5.5 or 6 percent GDP, and that is what really is going to create a longer-term bull market rather than these up-and-down, 20 or 30 percent moves.
Tony Dwyer
There's a bias, because of the bubble-popping, to be negative no matter what after we've had a good rally, because you don't want to be accused of being too optimistic.
Tony Dwyer
That's a likely outcome. For the time being, as long as earnings are so strong, I think the worst of the market's worry about a Fed rate hike has probably already happened.
Tony Dwyer
Technology should fare real well, given all the business being done on the Internet right now. Those subject to the Internet, like a Sun Microsystems, those type of companies should have excellent earnings,
Tony Dwyer
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