In the short term, I think there are some good signs that the Fed will raise interest rates. |
It's just another number that the market will go through. |
Now we want to hear companies say they have light at the end of the tunnel. |
Obviously, the housing market has benefited them, but they're also doing other things. They're also selling some higher margin products, and you can go in and get the upscale products that you need. This company also has done some amazing changes in the last few years: getting their working capital down relative to sales, getting a better return on their investment. |
Right now, we're just digesting. The market is waiting for companies to start saying that future quarters are going to look better. |
The auto companies have done really well and I think it's hard to see a continuation of that for a long period of time. |
The prospects for tech did not suddenly deteriorate. In fact, tech earnings have been very good. |
There definitely seems to be some broadening out of the market. We're seeing earnings in other sectors that we haven't seen before. |
We have been waiting for European recovery, and it's been slow in coming. I think it is coming, and I think that the merger and acquisition activity in Europe is going to drive corporate profits higher. So I think there are some real opportunities in Europe. |
We may be setting ourselves up for a rally in the new year. We'll have a lot of announcements in the very early part of January from companies, which will point to some more disappointment in earnings, and that may be a catalyst for the Fed to lower rates by the end of January. |
We saw how fast those stocks could fall. |
We're in a zero-price environment. What really allows companies to earn is to cut costs and be in growth sectors of the marketplace. |
We're probably in a quiet period, maybe even a bit of a pullback. But I think if you're a long-term investor, the environment remains good and I would definitely remain in equities. |