John J. Edwards III Chats on AOL, July 10

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John J. Edwards III chatted on AOL MarketTalk on Monday, July 10. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live).

Comment:

Live from New York, N.Y., please welcome John Edwards, assistant managing editor,

TheStreet.com

. John can answer questions about the latest market-moving news.

Comment:

John does

not

offer individual stock commentaries or recommendations.

Jedwards:

Thanks for having me. As always, great to be here!

Question:

What are gap ups and gap downs?

Jedwards:

A gap up or gap down is when a stock trades up or down by more than 1/16 on a single trade. It can also refer more broadly to a stock moving strongly in one direction or another.

Question:

What are you thoughts on Friday's employment report and what effect will it have on the market going into earnings season?

Jedwards:

Friday's report was an interesting one. The headline figure, 11,000 new jobs, was definitely misleading, as the public-sector workforce suffered a large one-time decline as census workers were dismissed.

Jedwards:

Private-sector payrolls grew by 206,000, which is much closer to the recent range but does evince some slowing. I think the report overall was moderate enough that it won't be a big factor by itself as we head into earnings season.

Jedwards:

Second-quarter earnings should be quite strong, which will give the market a solid backdrop this month. Wall Street will watch economic data closely, but I expect we'll see further signs of moderating growth, and the Fed will stay on hold at the Aug. 22 meeting.

Question:

I would like to invest, but it would be my first time. I have a little money and I just don't understand how and where to begin. Someone suggested that I start with commodities. Is there a Web site that can help me to understand how I should begin?

Jedwards:

Well, I'm not an expert on commodities specifically, but I can humbly suggest

TheStreet.com

as a fine Web site for a beginning investor. A true novice like yourself would probably want to begin with our Investing Basics section, which has lots of tutorials and background materials to help you make some initial investing choices.

Jedwards:

In general, you'd probably want to start off in stock investing by investing in mutual funds. You can do research on funds that are right for you in our Personal Finance section, as well as at other sites, such as

Morningstar.com

and

SmartMoney.com

. Good luck!

Question:

How do you expect the e-tailing sector to fare?

Jedwards:

It's a very tough sector. E-tail stocks have already suffered heavy losses as the initial wild expectations have come down to reality, and while many of the stocks may be bottoming, you can't count on the kind of skyrocket action that made 1998 and 1999 so exciting and misleading.

Jedwards:

As with all Internet stocks, we're moving closer to the day when the distinction between "online retailers" and "offline retailers" will blur to the point that they're all just in retail. As that happens, e-tailers may have some modest cost advantages, but they'll be in the same inherently low-margin business as the rest of retail. There may be opportunities in the sector, but be realistic in your expectations.

Question:

Do you expect any more major earnings disappointments in tech sector in this earnings cycle?

Jedwards:

I think most of the major disappointments are behind us, for the simple reason that the warning season is over and earnings reporting season has begun. Woe unto the stock of a major company that misses expectations without warning Wall Street.

Jedwards:

CFOs know that, so I think most of the downside stunners are known already. According to the folks at

I/B/E/S

, this preannouncement season has actually been less negative than usual, with about 66% negative preannouncements compared with the usual 80%. So we're probably looking at a pretty solid season here.

Comment:

Thank you for joining us today John!

SageCrystl:

We appreciate your insights today John.

Jedwards:

Thanks very much. Great chatting with you, and I'll see you at

TheStreet.com

!