Newspaper article Sarasota Herald Tribune

An Apple Today Might Keep Many Investment Woes Away

Newspaper article Sarasota Herald Tribune

An Apple Today Might Keep Many Investment Woes Away

Article excerpt

The din of the naysayers and prognosticators on Wall Street is deafening, resulting in a flourishing contagion of economic and financial hysteria. Unfortunately, this state of affairs is likely to continue until the presidential election and maybe well after.

In over four decades of working with the Street, I cannot recall such a girth and number of scandals that run the gamut from the Libor abomination to the latest problems at Knight Capital and London's Standard Chartered bank. Stir in the difficulties facing the European Union, combined with our own little "fiscal cliff" debacle and you have quite the soup.

The economic precipice we have faced for the past several years and continue to face is indisputable. Yet without the unprecedented actions orchestrated by the Federal Reserve, the Great Depression of 1929 would seem like a tea party, no pun intended.

The unresolved European debt saga, the so-called "fiscal cliff" and the tension surrounding the presidential election are wild cards and could push the markets in either direction. Deteriorating corporate earnings and the sluggish economic growth, here and abroad, are all valid concerns.

Yes, fundamentally oriented market strategists have been worrying about the slowdown in earnings and the fiscal cliff -- the dual expiration of tax cuts at year end and the imposition of automatic spending cuts. Some say it will hit the stock market much like last summer's deeply partisan congressional feud over the debt ceiling.

Yet stock prices are riding a wave of momentum to a near-four- year high, with the S&P 500 index above 1,400 for the first time since early May. While the markets are being supported by the prospect of more easing by the Fed, both semiconductor stocks and small caps seem to have found a floor. Small caps are economically sensitive, meaning that the bearish, apocalyptic mood is being priced out of the market as we evolve toward a more bullish environment.

And stocks could continue to move higher as the market looks past current problems. …

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