Money managers are desperate to put money to work at this moment, desperate for a new idea and for a reason that makes for a compelling buy. And they are finding them in spades.
Let's take them sector by sector starting with the largest one, technology. Here's a sector that's been stalled of late. We haven't had a lot of data points. The big cloud plays haven't been able to mount rallies. The stocks of the Internet businesses seem to be just plain tired.
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But if you are a desperate manager you look at the world quite differently. First, you see Apple (AAPL) going higher, and that means that the consumer is still spending on technology. If that's the case, then you can buy Skyworks Solutions (SWKS) , which just reported a great number but hasn't really moved. It means you are going to download a lot of pictures to your personal cloud: That's Western Digital (WDC) .
Research helps out on a day like today. Goldman Sachs bumps numbers for Micron Technology (MU) , saying that DRAMs, the lowest form of semiconductor plant life, are in short supply and pricing is good. That's not supposed to be happening this late in the cycle. If DRAMs are tight though, you are going to get some ordering in semiconductor equipment stocks, which allows you to buy Lam Research (LRCX) , a high-quality equipment play that we know from Mad Money is doing quite well. Applied Materials (AMAT) could also be doing better, and its stock looks to be breaking out.
If Micron's doing well, then I think the PC industry's probably doing well, which allows me to buy everything from Intel (INTC) and Microsoft (MSFT) to Hewlett-Packard (HPQ) , Seagate Technology (STX) and SanDisk (SNDK) , none of which is expensive based on next year's earnings.
Cisco (CSCO) just reported a widely panned quarter when it shouldn't have been panned at all. The quarter was a testament to how well Cisco can do in a tough environment. Great gross margins. Terrific execution. Can you imagine what this horse can do when things get better? Cisco has vanquished the competition. It's pretty much game over for everyone else. I like that.