Tech is suffering from one big inventory overhang. It's going to take a long time to work through that.
More Quotes from Larry Wachtel:
When we arrive on Monday, we may or may not know the full extent of Hurricane Rita. The stock market can attempt to discount what is discernible, but when it comes to acts of nature, it can only make assumptions.Larry Wachtel
There's a cautious backdrop (on Wall Street). We're heading to that glide path toward the Fed meeting. I think there has been a gravitation toward the cyclical stocks and away from the blue chips. And I think we'll continue to see movements into the papers and the metals.
Larry Wachtel
The differentiation is where the recession is coming from. When you're in a consumer-housing situation, the rate cuts have a very dramatic effect and hit much sooner. But when you're in a manufacturing recession involving overcapacity and inventory overhang, it's not going to make people borrow.
Larry Wachtel
It doesn't tell you anything in terms of the fundamentals. I think there will be a bet made tomorrow (Tuesday) and early Wednesday that the Fed goes 50 basis points (a half-percentage point). If it pays off, I think there will be a trading flurry.
Larry Wachtel
Getting back to inflation, it is important to note that the producer price Index does not reflect wage pressures -- and that is where the inflation threat really lies.
Larry Wachtel
The popular indexes have managed to reach 4 12-year highs, while small and midsize indexes flirt with all-time highs. The lack of sustainability is likely due to the senior citizen status of the bull market, now in its 41st month. The restless rotation is keeping hope alive with money shifting from energy stocks to home building to technology to financials.
Larry Wachtel
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