At about this time last quarter, folks were completely obsessed with what the Fed's next move would be. While folks certainly care this time around, the issue just doesn't seem to engender the same sense of urgency or degree of attention. I'm not sure if this is because most feel that the first cut or change in policy is always the most important one, but it sure seems that way.
We're in the thick of earnings season. And so far, things have been okay, particularly for growth investors. At the margin, the greatest disappointments have come from the financial sector, where complex lending practices and exposure to the housing markets have done the most damage. There have also been pockets of weakness within the consumer discretionary sector. Whether or not this is related to $94 oil, slightly higher unemployment levels, or aftershocks from this summer's credit meltdown is difficult to say. But retail traffic does seem to be a tad lower in most malls around the nation.
There are, of course, always exceptions. Exceptions born of innovation. Consumers still can't seem to get their fill of IPhones and Mac's, Blackberries and GPS devices, or over sized burritos the size of one's head. Understanding macroeconomic trends is useful, but it may not always be the best resting place for investors.
We think the Fed will cut rates tomorrow. But whether or not it's a trick or treat, there is still good news!
Thanksgiving and Christmas are just around the corner!
All kidding aside, this is an environment in which growth prevails. Our job is to find it.