Sunday, May 17, 2009
There's nothing more attractive than a nice bottom, so everybody is looking for one. From a report I got on Friday from a leading investment bank:
The software end markets we serve have ceased freefall, but are also not improving and only moving sideways. Small orders are coming in, but that's really all the new orders we are seeing. The banks we serve have recently commenced a round of big layoffs, so they aren't seeing improvement at all, and in fact seem to be girding for another leg down in their businesses. Outside of banks we're seeing only spotty progress in recovery, mostly in government business (which surprises no one at all I suppose). There may be a bottom, but the consumer confidence is the only real evidence I see and there might just as easily be another big leg down coming. It's just not yet clear, at least to me, and I think our economy will be in trouble well into 2011 if not beyond.
Beware of truth-claims from people who are trying to sell you something. Investors I've talked to -- who weren't trying to sell me anything -- say they don't expect the DJIA to bottom out above 4,000. Two words: "Sucker's rally."