Here’s my take
No, I’m not going to predict a crash. That’s a pointless endeavor. I do, however, caution investors not to expect the kinds of easy gains we’ve seen this year to continue. The simple fact is those higher bond yields I talked about are more attractive to investors, and that’s stiffer competition for stocks; that’s what’s driving the “good news is bad news” dynamic.
And yes, there’s still the issue of the Fed’s endlessly-discussed taper, but that’s probably a few months off at the earliest. I think that explains the recent downturn in gold. The yellow metal is closing in on a three-year low, and this will be its first yearly loss since 2000.
For now, a lot of healthcare names look very good here, and much of the tech sector has been left out of the rally. I continue to like Oracle (ORCL). The company has another earnings report later this month. Ford (F) is also cheap here. The automaker had another strong month for sales. Truck sales are at a nine-year high.
Both Cognizant Technology (CTSH) and DirecTV (DTV) are good buys. Cognizant said this week it plans to hire 10,000 workers in the U.S. over the next three years. Weak companies don’t say things like that. (By the way, here’s a good profile of Cognizant’s CEO Frank D’Souza.)