When we get beyond the Fed's decision in August, it then opens up the opportunity for technology to assert itself because of its strong earnings growth and take the market to higher highs and higher lows.
If the Fed is just neutral, what's really going to move the market higher is more progress on the earnings front. You're going to want to be overweight in those companies that have the greatest underlying earnings growth, and that's technology,
I think we go nowhere for the next three weeks in terms of a real move in the markets. What's going to carry us is reduced uncertainty relative to the Fed, very good numbers on the economy and very good earnings as we wind up the year.
What's going to drive stock gains going forward is the earnings, and the current crop of earnings may have already been accounted for. I'm looking for the earnings in the second quarter and particularly the second half of the year to drive stocks higher.
There's a growing realization that technology is where earnings growth is going to show up. Investment spending drives earnings, and it's going to technology,
A P/E is meaningless by itself. A P/E has to look at the price you're paying for earnings but you have to compare it relative to something, ... Companies with low P/E's also tend to be the companies that have the lowest prospects for growth.
It has nothing to do with an election year. We believe the underlying earnings are what really count.