The worst of the earnings news is probably out of the way and expectations are probably back in line.
It was too much for the market to overcome. Otherwise, it could have been an even better year profit-wise if so much of (companies') earnings weren't deflected into energy costs.
The alternatives to equity investment today, when money market rates are as high as they are, are much different than they were a year ago. It gives people more of a choice when there is some bad news.
I think we're coming to the end of it. The rise of energy prices and the general impact of the hurricane would make it dangerous for the Fed to push rates higher and higher.
There isn't enough good news right now to really get people involved. Most professionals and individuals are just holding, looking for some clarity on the transition in Iraq, looking for some clarity on the presidential election, and, perhaps more importantly, looking for some clarity from the Fed on rate rises.
The year is starting off with strong M&A activity, and part of what's driving the economic cycle is consolidation. It does provide some support for the market.
People will be focusing on the 10 o'clock number. The market has shifted to a fear of recession, as implied by inversion of the yield curve, and consumer confidence could go a long way to restoring a more positive view.
I think that the idea of never-ending, short-term-rate increases no longer seems as likely to people. But I would not be surprised if the Fed still increases, but signals to the market that they are prepared to stop increasing if the economy slows due to the hurricane.
The market has been poised to break out on the upside but there seems to be a lot of resistance to every rally.
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