- I don't put too much faith in Alcoa and DuPont as being harbingers for a bad quarter. Alcoa is a perpetual disappointer and the DuPont story focused on a specific event that will not impact the entire economy.
- The market gets right into it on Tuesday with Intel and Yahoo (client holding). I think Intel will be the more important of the two as there is now real visibility for AMD to start taking market share for PCs. Another change on the landscape now is that microprocessors are no longer the most important type of semi-conductor. That is giving way to flash and other types of chips for hand held devices. Intel will need to convince the market it can make headway with things like MP3 players and cellphones.
- While Yahoo might lag Google in terms of growth rate I think both companies can co-exist and deliver great results.
- Wednesday Apple Computer and eBay both report. There has been so much great news priced in to Apple that I would be surprised if the news from here could get better. I am not expecting bad news per se, but it would take a lot for a dramatic upside reaction to this report.
- I would not be surprised if whatever lift might come from Yahoo gets taken back by eBay. The business is great and there will be more solid growth but I don't think it has a bullish surprise in store.
- One concern making its way around the bearish camp is that a disproportionate amount of the earnings growth is coming from the energy sector. If oil stays around its current levels for 2006 there will be a lot less earnings growth coming from energy stocks in the back half of the year. If growth from energy does disappear then some of the current full-year estimates for the market will prove to be far too optimistic.
Sunday, January 15, 2006
I will be appearing on Asian Squawk Box tonight at around 8:10 pm EST. I believe the focus will be about the earnings season that is about to get underway in earnest this week.
Posted by Roger Nusbaum at 11:25 AM