Here is what I am likely to talk about.
- Since my last appearance the S+P 500 has gone below its 200 day moving average (DMA). This signals a problem with demand for equities and is a catalyst for me to start getting defensive in client accounts. So far I have done a little selling in industrial, consumer, tech and convertible bonds. If things don't improve I will do some more selling and add a little more yield, a little more foreign and hold more cash than normal.
- The biggest issue, I think, continues to be the Fed. I am surprised at the FOMC's willingness to be the big story. The unknown is whether the yield curve will invert. There is a belief that the Fed wants the middle of the curve to go higher to slow down borrowing for real estate. I expressed concern months ago on the show about the Fed's history of going too far in both directions. I can't imagine that the Fed can engineer the exact result they are looking for.
- Earnings season is under way and I think the bigger stories will be the misses or perceived misses like Lexmark and Apple. Earnings overall could easily be pretty good compared to estimates but I think there are too many other things confronting the US market that are more important.
- The rate at which treasury yields have gone up looks like it has slowed down for now but if the Fed gets what it wants the ten year should go much higher. I have added two year treasuries for more conservative clients.
- On the plus side it seems like sentiment is just awful and the problems at Refco, depending on far it goes, could be significant as well, as big failures often occur closer to the bottom than the top.