Clearly there are signs that we are going to see a much less rosy picture in capital investment, and we're certainly in a bear market in technology. I would expect many investors still have not been able to pare back their exposure to technology to the degree that many would like to.
A lot of people have turned much more optimistic that once the blue chips get hit, that indicates the bear market is dead. Valuations are down, but they're still not cheap.
The market is always dealing with uncertainty, and this particular piece of uncertainty is not terribly complicated. There will be a President Bush or a President Gore, and neither will have a strong mandate from voters.
I think that's evidence that a good deal of any weak earnings is priced into the market because the expectations have been lowered by analysts and further lowered by realistic expectations of the Street.
In the past Greenspan has implied market valuations are OK. as long as earnings growth is sustained. But there's a lot of concern valuations are too high?and now we've had a couple of earnings warnings.
Contrary to logic, people were hoping the Fed would change their bias to a neutral stance. Part of the exuberance earlier was an increased appreciation of the likelihood that we would have a president-elect before the market opens on Monday.