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Oct 23, 2012, 11.58 AM IST
In an interview to CNBC-TV18, Richard Ross, Global Technical Analyst at Auerbach Grayson spoke about the performance of the Wall Street, the effect on the market due to US Presidential elections and the struggles ahead
In an interview to CNBC-TV18, Richard Ross, Global Technical Analyst at Auerbach Grayson spoke about the performance of the Wall Street, US Presidential elections and the struggles ahead.
Below is an edited transcript of Richard Ross's interview on CNBC-TV18.
Q: What do you make of earning season?
A: So far it has been somewhat disappointing. We have seen some real weakness in technology sector. Bellwether stocks like Microsoft, Google, Intel and IBM are very weak. The real blue chip names here are underperforming and that is the reason why we see weakness in broader market. Just today we get General Electric, another blue chip company, one of our oldest industrial companies, down 3.5 percent. So again if blue chip companies are weak, technology becomes weak.
Q: Caterpillar is coming out with a weak outlook which is also hurting the stock and the street. What do you make of the political pressure? This market doesn’t seem to align with any one candidate or am I wrong?
A: Yes, you are right. One thing the markets do not like is uncertainty and that’s what we are dealing with right now. Depending on which poll you are using, it is a very tight race so it is uncertain in terms of the outlook. So, it will be full hearty for the market to put too much way behind one candidate or the others with the polls being as right as they are right now.
Q: What do you think the outcome will be depending on whether President Obama or Mitt Romney comes back to power? Have you worked on those scenarios? What are you expecting?
A: Depending upon whom you talk to you get different scenarios. I speak to a lot of different customers and research analysts throughout the day so I take a lot of data in and there is no single consensus which would be better for the market. Some people feel that if we bring Mitt Romney whether he is going to get Bernanke out and bring somebody hawkish, bearish for the market. So, the uncertainties are not just on who will be elected but what will be the reaction of the people.
Q: We have seen sustained pressure on stocks and the broader markets for the last couple of weeks. Are you putting all of this down to earnings disappointment? Is there more that we are not reading right?
A: Earning is certainly a key component here. We have come up a long way over the past few years and all along the way people say the economy is getting better, fundamentals are getting stronger; Europe is emerging from the sovereign debt crises. But, maybe the slowdown in China is starting to impact the US. Some of these companies are drawing numbers which are very disappointing and uninspiring, a little erosion of the fundamental backdrop.
On the technical side we now have a bull market which is over three and a half years old. We had a third round of quantitative easing which is now suppose to go through infinity so people are becoming skeptical. So there are concerns on the technical side and now on the fundamental side too.
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