I tried to examine all the sectors over the weekend, looking for clues. Online stock trading and the various programs make this easier, as I said, under normal circumstances, but harder when there are no sectors that can be consistently positive.
Earnings reports have been coming out for most companies. The majority have not been good, and those that have been good have been eventually hammered by the projections going forward of slower sales.
Health care is normally a sector I like. Traditionally it’s been a reces-sion resident sector, because people still need treatments for what ails them. This time, however, you have the potential for a dislocation of that opinion due to the Presidential election. If Obama is elected, he clearly has health care in the sights of government reform. This will probably mean lower profits for the health care industry and more regulation. Not good factors to consider in making a long purchase.
Communications are interesting within the technical sector. Verizon reported good addition of wireless subscribers, and ATT, too, continues to add subscribers. Still, they must both rapidly add wireless subscribers in order to offset the loss of land lines. Many consumers are giving up their land lines and going wireless or to cable.
Elsewhere in technology, things are not so bright. Yahoo is doing some big layoffs, Amazon is fac-ing a bleaker future these next 12 months, and even Google shares are way down.
It’s interesting to note, that in spite of the current financial mess and the expected fall out from a slow down in the real economy, at least one company — Apple Computers– is taking a bold step or two, by intro-ducing some really fancy notebook computers. They have been criticized for not lowering the prices on some prod-ucts to be more in line with what the expectations of the economy are, but maybe they are taking the view that people will always find some money to buy the hottest or most modern product.
Intel, on the other hand, doesn’t see the same bright picture that Steve Jobs and his Apple devotees see. They see much slower growth, and considering that their chips make up the brains of even the Apple computers now, you do have to pay attention.
It might be a very real case of an accelerating market for low price units (of anything) and accelerating demand for the ultra latest and hip of anything.
Internet stock trading and trading options online make looking for good sectors to invest in fairly easy under normal circumstances. With the market flip flops in the last several weeks, everyone, including the seasoned online stock broker, is finding it nearly impossible to find a sector that is consistently performing well.
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