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Trader: First quarter to be flat
One trader predicts an unexceptional start to 2009, but that's actually a positive indicator for the future.
What’s the first full trading week in 2009 and as the Wall Street proverb goes “as goes January, so goes the year”. Is it true? Let’s bring in Bob Laccino. He is a senior market strategist in Regan global capital, joining us now from Chicago. Thanks for being with us CNNMoney. I appreciate it Bob.
Anytime.
What’s your overall sentiment? What are you hearing from the floor right now? But a nice rally at the end of last week? Is this a good indicator for the first quarter or at least this year?
I think it is a little presumptive to say that the entire first quarter will follow this few days or last few days of last year ,but it's definitely positive. I mean most of the traders I am talking to are coming in with sort of renewed sense giving distinct assault alongside, may be taking smaller positions that they wouldn’t be in previous January but you know after it is repeated over and over again, the worst year since 1931. I know a very few people that think this year is going to be as bad. I mean you are coming from a very very low bottom. so I think there is some positive outlooks and some positive sentiment that is going to the month and I think January could finish strong overall.
Give me your predictions for the first quarter of this year just how much of a boost we might see from the market at the first three months. What are they gonna look like?
I think we are gonna see a flat quarter. I don’t think we are gonna see a warner 2 percent gain or a warner 2 percent loss. I think the market is absorbing and digesting bad news. I think most market pro-testaments believe that the largest bad news is out of the way. We might have some small objects here and there. But I think we are going to see a flat first quarter. I think that gonna be positive once again given it is negative as we have been. Flat will be a really really small victory but a victory not the last.
President-elect Barack Obama is unveiling today the first part of his proposed stimulus plan on a docket of nearlly 300 billion dollars in tax cuts major investment in renewable energy , and ener nations , infrastructure, the early reaction to that. What are you hearing?
Oh, positive. It is a larger package that was once expected on the tax cut side. I think after the election, president-elect even bat off a little bit on potentially doing the tax cut. This is reinforcement that they are still committed to that. That’s… there are some people who don’t agree with those economic policies but this really a cater to those people who believe in the renewable energy so traders overall have very positive effect on that. And we are hoping that kind of things brings M&A activity back in the forefront starting with the small and medium sized companies. That’s really the big key for the first and second quarters getting that activity going again.
And of course, M&A activity is really important across the border especially for the financial big business. For them, of course. And then on Friday we get that unemployment December jobs reported. They are that we know the total job losses for 2008. Most people think that’s going to top 2 million. How much will this playing? Are traders already pressing major job losses into the market at this point? Well, they did, they are… If you gonna take a positive art of such a negative thing 2 million jobs lost last year the estimate. I think the positive is that people are expecting it to be bad whenever you have such a negative sentiment. The reason that those negative sentiment indicators work is because as negative it is very hard to surprise to the downside. Whenever one thinks the ultimate downside, the number that is going to come in. You generally get upside surprise .so believe it or not, i think Friday could provide a little bit of bullish blush to the equity markets.
Alright, we leave there. Thanks Bob for joining us. I appreciate it.
