Profitability in the first-quarter and beyond is going to continue to be strong and the broader economy is clearly in a recovery phase, |
The biggest concern is how high the Fed will go with rates. That's clearly destabilizing the markets and causing choppiness. |
The earnings reports are going to be the big driver in the next few weeks. What companies say they earned in the fourth quarter is going to be less important than what they say about the rest of the year. |
The stock market is hoping that the Katrina effect will cause the Fed to stop its campaign, or at least pause, until it becomes clear just how big the impact of Katrina is on the economy. |
This trend of the stabilization of the broad stock market we've been seeing lately will continue through the year. We saw a sharp recovery in stock prices last year, but right now stocks are fairly valued versus the underlying fundamentals. |
We'd concur that '06 is not going to be a gangbuster year for increases in tech spending. Everybody's still waiting for a strong recovery after the 2000 bust. |