Talk about mixed signals.
It's early in this investing year, but Wall Street's been greeted with so many conflicting signs about where the market and economy are headed that it'll probably take the rest of 2001 to figure it all out.
On one hand, we've had disappointing guidance this earnings season from tech stalwarts such as
Cisco(CSCO Quote - Cramer on CSCO - Stock Picks),
Dell(DELL Quote - Cramer on DELL - Stock Picks) and
Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks), which come after a preannouncement season that
IBES/Thomson Financial called "the most malevolent on record." On the other hand, the
Nasdaq Composite Index -- buoyed in large part by the
Fed's rate cut earlier this month and the promise of more easing to come -- shrugged off such concerns and has risen 12.14% so far this year.
Meanwhile, confidence among consumers and business leaders has suffered some hits: The
survey of consumer confidence from the
University of Michigan showed the index dropped to its
lowest level since 1996. And the January
Business Outlook Survey from the
Philadelphia Reserve Bank showed
a sharp decline in manufacturing activity in the Northeast, which could foretell continued bad news in capital spending.
Despite an economy lacking in self-confidence, several of the top equity strategists at the big securities firms
boldly predict stock-market returns north of 20% for 2001, pointing to a period of easing interest as a gimme for investors.
We haven't even mentioned other wild cards on the radar screen: the potential of a weak euro and capital flight by European investors, a possible edging down of lofty oil and gas prices on the upside, rising unemployment and so on.
So, where's the market heading?
TSC went straight to the bull's and bear's mouths, facing off two opposing viewpoints in an effort to get a closer read on the market. There is no shortage of bulls -- in fact, we had a harder time finding a bear who'd commit his opinions for the record. Then we turned up Howard Rosencrans, the unapologetic pessimist who directs research at trading firm
HD Brous. He and
J.P. Morgan Chase economist Jim Glassman -- a bull, but a cautious one -- help us sort through the good and bad news of the past few weeks.
The Case for the Bull: Jim Glassman
The Case for the Bear: Howard Rosencrans
K.C. Swanson
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