The market is taking a breath this morning, which is fine. Some heavy breathing days are just around the corner. This fall will be big for the market. We will have a better idea about the status of the US and Chinese economies, the November elections will bring a level of certainty about the fiscal cliff, the Fed will speak to QE 3, and the latest plan to put the Eurozone on a path to correction will go into effect or it will fade away as another broken promise.
The chancellor’s [Merkel] remarks in Ottawa on Thursday – she said Draghi’s strategy was “completely in line” with that of Europe’s leaders – should dash once and for all the notion that she opposes the ECB president’s flexible stance. That is significant. Without tacit approval from Berlin, the ECB president would find it virtually impossible to explore the limits of his powers in order to keep the euro show on the road.
Merkel and Germany need to keep the “euro show on the road” and I believe the other power players, like it or not, understand that as well. Thus, if the German Constitutional Court rules in favor of the latest plan on September 12, the plan move forward, which will give the market an adrenaline shot in the arm …
If all moves forward in the European realm and certainty about the other issue arrives, where will opportunity pop up? Well, just about everywhere, but I still like technology as a play. In fact, I think the sector will outperform all other sectors handily. True, many components comprise the sector, but one I find most interesting because of the changes going on is the mobile-phone/internet market. The battle between AT&T and Verizon is compelling because it looks now as if Verizon has the former undisputed leader on the ropes.
As data usage on mobile networks explodes with more people using smartphone and tablet devices, wireless carriers are fiercely competing to relieve congestion while at the same time trying to deliver (and advertise) ever-faster service. “It is a precious commodity,” Bill Moore, CEO of Root Metrics, a company that measures the performance of carrier networks, says. Verizon announced that its 4G LTE network will cover more than 75 percent of the U.S. population as it expands in dozens of markets this week.
Verizon’s potential purchase of a huge amount of wireless capacity from the land-based, broadband deliverers, and AT&T’s loss of both wireless subscribers and land-based broadband subscribers does not look good for the former titan. Verizon is poised to ramp up its already consuming appetite for wireless market share.
On another front, keep an eye on the US wind-power industry this fall. Politics is coming to a town near you and it might spell the death for the industry in the US. Either more air will be pumped into the tires or a big pop is coming.
The fast-growing but still relatively tiny U.S. wind industry is in danger of suddenly spinning to a halt. Its fate will largely depend on whether or not a large federal subsidy for wind power producers, set to expire this year, is renewed.4
The market chaos of the last three years or so is coming to a head this fall. The European debt issue, the US November elections, the US fiscal cliff, QE 3, and the status of the US and Chinese economies all will play out this fall. For good or for ill, we will see, but be assured, some certainty will come roaring back to the market.
Trade in the day; Invest in your life …
