We're in this transition period right now, getting ready for interest rates to start rising, which will happen June 30, and for second-quarter profit reporting season to start, which will be early July, ... Those things could get the market going again.
As long as the fundamental conditions continue to come on the way they have been ... the profits roll on. And if profits roll on, investors will have to pay more for those earnings, because their alternative investments are limited.
When you look at how the market is trading, the big cap names in the right sectors are leading the market,
The PeopleSoft news could make it more likely that the Oracle deal will go through. And after all the recent downgrades, people are probably relieved to see a brokerage lifting its view on the chip sector.
Oil prices at these levels are providing all kinds of dislocation issues for stocks. Earnings and the economic data are O.K., but with oil where it is, the market is unable to make a decision, long or short, and there's certainly no real catalyst for buying.
The government contributed to that strength by spending more. Retail stocks had a good first quarter because with the strong economy, consumers had flexible spending power. The retail sector still has the power to outperform for the rest of the year.
The Nasdaq clearly has a positive tone. It's got momentum players back in a big way, going in and out of these stocks at regularly rising prices,
I think there's a real lack of commitment in the market right now from both institutional and individual investors,
We sold off pretty heavily in January coming off last year's rally, and I don't think we'll see as much of that in 2006. This year's start could be a little more bullish, and you still have lots of companies sitting on a lot of cash that can be put to use in 2006.
If you are the leading low-cost producer in a segment, as that segment performs and you pick up share from other competitors, you're only going to be stronger when things normalize, and Dell certainly typifies that at this point.
