Slower growth – a commonly used word so far this Q4 in the market
It seems many companies for their Q4 earnings keep saying slower growth, less sales, or falling short of revenue. What this 4th quarter has shown us is that corporate companies are profiting more then last years sales and trying to create a new plan for a more profitable future with more growth. The whole slow growth thing is turning off investors so corporate CEO’s are working on changing that attitude. Many optimistic CEO’s trying to get rebust growth from a slowing economy doesnt’ equal up. Inflation didn’t go up much and yes our economy is softly landing positive news to investors ears, but sooner or later inflation is going to catch up big time. Oil prices are going to rise to ultimate high levels and our dollar will fall.
Recently AMAT had its earnings and had a very profitable Q4, but said new orders would be slow disappointing investors. The stock price has traded between $17.20 – $18.90 sideways. Since after earnings it dipped and has started to step back up. Maybe all investors needed to hear was that it is still profiting and that was enough to keep buying into the company. Many companies that uses its products it creates are receiving rebust growth like AAPL and SDSK. I believe we are always going to have computers around, but they are just going to get lighter and smaller and maybe even one day put into a contact lense.
I see the market moving upwards into January 2007. There has been lots of profit taking and the buying is ready to begin. I see stocks like SHLD going to $180, AAPL moving to $95, and GRMN continueing up to $55 even after a profitable disappointing earnings. Investors keep talking about bubble bursting stocks and it will happen. If you look at the market in a whole many stocks priced over $60 could move to $100. Google hitting $499 today almost at the $500 mark. Do you remember in 2000 when stocks were $500? I see Google as the first to maybe get to $600-700 and be the first the bust really hard down to $100-200 when the market finally dips and crashes really low. In the meantime prepare to sell before it’s too late. Be ready to take the handsome profits off the table and save it.
The time maybe isn’t near just yet, but as soon as stocks start getting to extreme high prices again the burst will happen.