Bellwether Report Large-Cap Newsletter:
December 18th 2006
Will Oracle Be Great?
The market came out of the gate nicely this morning, only to falter, with investor angst once again being reflected in the migration to blue chips. Part of the problem for the NASDAQ today is Oracle’s earnings announcement, which has a lot of investors sitting on pins and needles. Larry Ellison has mounted an impressive charge (just goes to show what could happen if you stop digging in your rivals’ garbage and simply go to work), but after $20.0 billion in acquisitions the bear argument is back in play, that the company is still too tied to a database market that simply isn’t growing the way it once did.
I’m not so sure I buy that assertion but the anxiety is real. The good news for investors is this is the kind of doubt that builds long-term rallies; in fact, the current leg of the 2006 rally came from surprisingly strong earnings results over the last few weeks.
Current Account Deficit:
Third quarter 2006 current account deficit came in slightly higher than expected but at a new high mark. One compelling and not so exciting trend is the income payment made to foreign holders of US assets, the figure has trailed the US income on its assets abroad, until the second quarter of this year and is now beginning to stretch ahead.
The market is fighting back but is very indecisive at this point. We aren’t going to force the issue with any new ideas this afternoon.
Market Commentary By Charles Payne, CEO & Principal Analyst of Wall Street Strategies.
