As we get further into earnings season, MoneyShow's JimJubak senses a lack of enthusiasm for stocks. He explains what this may mean for investors in coming months.
For the week ahead, I think we should look for some kind of leadership. In earnings season in the market as a whole, I don’t think we’re going to see it, which I think is sort of the problem right here.
You talk about stock markets as if they’re sort of people. You talk about...well, they get tired, they have enthusiasm and whatever. Right now this market feels tired. There seems to be a real absence of enthusiasm or excitement.
It’s not so much that earnings so far this season have been terrible; it’s just that they haven’t provided any reason to really put money into the market, with the market already at an all-time high. What we’re getting is sort of OK earnings. We’re getting a penny, four cents. But we’re not getting anybody out there whose going to say next quarter is going to be great or we’re introducing new products.
And there’s really no leadership in the market. You’ve basically had materials and commodities stocks like oil companies do nothing. Banks, which were one of the financials, one of the key sectors for a move up, are producing nothing in the way of earnings excitement.
Technology—certainly after Intel’s (INTC) report of a bigger drop than expected in revenue—you’re not seeing anything from that sector either. Apple (AAPL) looks like they’re another quarter away before they start to produce anything. Yahoo! (YHOO) was better than expected, but still the metrics of advertising were not good.
So you look at all that and you go OK, who’s leading this market upward? Who’s providing a reason to invest? And right now I’d say there’s really nobody.
What typically happens in a situation like this is you get through a quarter or two quarters where nobody feels very much enthusiasm, and you sort of reset things. That’s the hope, that somewhere down the road we’ll get a reset, prices will be low enough, commodity prices will have dropped.
You may bet on a return to growth story, but right now there’s really no story, no enthusiasm, no leadership to suggest this market should move up very strongly from here.
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