A key ingredient, consumer spending, is already starting out weaker this quarter. Higher electric bills, higher gasoline and weaker spending can't be good for businesses. Second and Third quarter earnings may still be hazardous to our health as companies fight to raise prices during a slowdown. Lower interest rates help all businesses. If we are lucky, we may just stay rangebound through the summer.
Traders can trade that.
Good visibility reports by CEOs warning of an upside surprise by July earnings would also strengthen support. Falling interest rates directly affect businesses that revolve around the lending and borrowing of money. Some stocks in these sectors have already had huge run-ups since last spring in anticipation of rate cuts. Some have pulled back nicely since January, ripe now for re-entry attempts. Instead of partying with bears and waiting for the hang-over in tech, I will be looking into these sectors which have reason to grow in this economy at this time.