There is a change in sentiment as traders are trying to get their hands around the extent of the slowdown in global growth.
New issues for the market:
--global growth slowing
--poor guidance from Oracle,RIMM
--sector weakness spreads beyond financials & autos
At the same time, some old issues won't go away:
--housing bottom uncertain, as indicated by Lennar'sresults;
--oil & dollar not moving in right direction.
--endless cutting of estimates for financials
Of the issues the market has addressed today, slower global growth is a particular concern. Oshkosh, which makes heavy-duty vehicles for many commercial industries, is getting a lot of trader attention because they talked about weak business here and overseas, with specific reference to softer conditions in western Europe, so companies that make any kind of heavy equipment are weak today, including Terex,Caterpillar, Federal Signal , or heavy duty truck companies like Navistar and Paccar .
On top of the slowing growth issue, we have central banks raising rates in all the markets where growth is occurring, particularly emerging markets, which is adding fuel to the fire.
Bottom line is traders are confused. The market is messing with their heads:
1) blue chips dropping 3-5% a day? What's cheap anymore? They don't know.
2) traders complain stocks are oversold, but they are not Oversold, they're Underowned. No one wants them right now, which makes cash attractive.
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