Alan Kral
Alan Kral
ability awful both buyers hard insurance markets money risks soft terms themselves
They're heavily into the insurance business, but in a very interesting way, in terms of an arbitrage between the buyers and sellers. They don't take an awful lot of insurance risks for themselves and they've been able to demonstrate the ability to make money in both soft markets and hard markets for insurance premiums.
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Everyone is waiting to see if the Fed does anything, and if it doesn't, what it says about the economy over the rest of the year.
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The Fed made it reasonably clear they will raise rates again. The Fed is impacting the Dow stocks and not impacting the Nasdaq stocks.
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The defense sector has had quite a run over the past 18 months. As people start to anticipate a war scenario, we're seeing a little froth in these stocks.
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The whole last couple of weeks with the economic information that has come out has totally changed people's expectations with regard to the economy going forward.
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The big risk with the stocks that have done well recently is that the economy is so strong that it can't continue, and when it slows down, that will hurt earnings. Secondly, when the Fed finally acts to slow the economy and bring down inflation, it will be a double-whammy to earnings - and it will be an extra big whammy to those stocks that have been in the situation where they really need strong earnings growth going forward.
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Once we get past the CPI, we'll be right into Fed watch. Just because the numbers report a slower economy doesn't' mean that we're looking at anything more than the natural seasonal response.
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Probably there won't be any peace until after the Fed has spoken. This is a very sensitive time in the market and you'd better be comfortable with the stocks you own.
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But the real risk that we have to see with the economy is -- does it take another leg down based upon consumer spending?
demand environment prices returned
Now that the baseline of demand has returned and (oil) prices returned to around $20 to $21 a barrel, the environment is such that there will be a return to exploration, and Schlumberger will be a big beneficiary.
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Absent bad news, the market wants to go up. There's a lot of money around and a lot of hope around.
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Cisco reports tomorrow (Tuesday) and Cisco is the 800-pound gorilla of technology nowadays. People are reasonably confident that it ought to be a pretty good number and that has set the tone for the tech group as a whole. More than half of the Dow's gains are in technology stocks.
confident gains good gorilla group half number ought people reasonably technology tone
Cisco is the 800-pound gorilla of technology nowadays. People are reasonably confident that it ought to be a pretty good number and that has set the tone for the tech group as a whole. More than half of the Dow's gains are in technology stocks.
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We think the rally in Nasdaq over the past two weeks is really a relief rally. The relief is they don't think the Fed has to go any further.