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As you can see, we are up in all the indecies today, especially the naz. While I am bullish, I do not expect this short term rally to last, per se - I think we are in a "1 up, 2 down" scenario for the next 2 weeks, until we hit the following targets:
DOW: 11,750
NAZ: 2,270
S&P: 1,350
At that point, you want to be in names that benefit from capital investment. At this stage of the cycle is where companies are looking to deploy the massive cash hoard they have built up and distinguish themselves. They are doing this through:
IT Investment (I see this personally - the demand for IT services is red hot - cant hire enough people right now)
Building new factories (though not in the US, for the most part)
Investing in "innovation" to stand out from competitors (following Apple and Google like sick lemmings).
Whether companies will actually innovate and get a return on these investments is immeterial. There will be winners and losers, as always. More importantly, you want to have exposure to companies that benefit from capital and IT investment.
Stocks that come to mind are ACN (Accenture - 34.81), INFY (Infosys - 52.92), ABB (the European engineering concern - 16.12), FLR (Fluor - a big US based Engineering company 87.91) and, of course, GE (General Electric - 34.67).
Capital investment is what happens when companies are trying to pull away from the pack. Companies have been on the sidelines, and are just starting to do things more interesting than stock buybacks and aquisitions. No time like a mid-cycle correction dip to start legging into these kind of stocks.
DOW: 11,750
NAZ: 2,270
S&P: 1,350
At that point, you want to be in names that benefit from capital investment. At this stage of the cycle is where companies are looking to deploy the massive cash hoard they have built up and distinguish themselves. They are doing this through:
IT Investment (I see this personally - the demand for IT services is red hot - cant hire enough people right now)
Building new factories (though not in the US, for the most part)
Investing in "innovation" to stand out from competitors (following Apple and Google like sick lemmings).
Whether companies will actually innovate and get a return on these investments is immeterial. There will be winners and losers, as always. More importantly, you want to have exposure to companies that benefit from capital and IT investment.
Stocks that come to mind are ACN (Accenture - 34.81), INFY (Infosys - 52.92), ABB (the European engineering concern - 16.12), FLR (Fluor - a big US based Engineering company 87.91) and, of course, GE (General Electric - 34.67).
Capital investment is what happens when companies are trying to pull away from the pack. Companies have been on the sidelines, and are just starting to do things more interesting than stock buybacks and aquisitions. No time like a mid-cycle correction dip to start legging into these kind of stocks.
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