What: Discussion of current market moves.
Where: Bloomberg Live
When: January, 2007
Who: Bllomberg Live host Luke Napoli, Darin Richards (AKT Wealth Advisors)

Luke Napoli: Joining us now to talk more about the market moves: Darin Richards, Chief Investment Officer at AKT Wealth Advisors in Portland, Oregon. Darin, what do you make of this close for stocks here?

Darin Richards: Well you know, it was kind of an uneventful day. It ended up basically flat. I think alot of people are waiting for earnings to come out this week. There’s some other data coming out. And I think Intel reporting after hours, I think really put a lot of people on hold to wait and see. I think what Intel provides today may provide some good insight into whether the technology sector may be poised for a rebound, not only the quarter but maybe the whole year.

Luke Napoli:Now, the analysts’ estimates that we’ve surveyed showed that Intel’s profits were down in the latest quarter. Is that what you’re hearing from other investors, other traders?

Darin Richards: You know I haven’t heard a lot on the downside. I think what you’re seeing is when AMD came out, and they reported earnings were down, the question is how much did Intel have to lower prices and profitability to kind of take some of the market share back. And I think that’s kind of a great unknown. Earlier in the day there was some thought that maybe Intel might beat estimates and kind of close the day with more of a kind of moderate, maybe inline type expectations.

Luke Napoli:Now the DOW average, as we mentioned, closing at a record, in fact the third straight record close. Now with the pullback today and the NASDAQ composite--the tech-heavy composite. How do you gauge earnings prospects now for technology versus the broader market?

Darin Richards: The outlook right now is for technology to be one of the stronger areas. It was certainly one of the laggers in 2006 and most of the projections I’ve seen from ROITER??, Thomson and some of those companies is we’re seeing double digit growth in technology companies where a lot of the other sectors, like the energy for instance, and utilities, coming down to low single digit. So really kind of a reversal of which sectors dominated performance last year going into this year.

Luke Napoli:What’s it look like in between the tech sector and the energy companies. Who’s up and who’s down?

Darin Richards: A lot of the financials and some of the other sectors are kind of looking kind of low dougle digit to high single digits so kind of inline with my expectations for the overall market. But there are some anomalies where there are some higher expectations on tech as I said, and much lower on energy companies.

Luke Napoli:We’ve already talked about how Intel might influence the market in the next session. Also get some data tomorrow on producer prices, industrial production, the Beige book, how is all that data going to play into where stocks move?

Darin Richards: It’s interesting, you’re hearing less and less talk about the Fed of late. I think some of the scaredness is kind of taken out of the market with respect to “Yeah the Fed’s going to have to start lowering rates…curb the economy” and some of these inflationary concerns that we had, seem to be kind of be put on the back burner. Now we’re really focused on earnings, which I think’s going to be a good thing going forward so I’m hearing much less about he Fed than I have you know the last quarter, and the first few weeks of this year by far, so I don’t expect it to have a  huge impact. I think a lot of people have kind of decided that the Fed’s on hold for a while and we’re just going to live with it now lets focus on what’s important, and that’s earnings.

Luke Napoli:Would that also suggest a discount of the possibility of further rate increases as the year goes along?

Darin Richards: Right now, from what I’ve heard from talking to other people, you know most people kind of view an increase or a decrease equally likely, but not likely--if you will. So that “on hold” outlook certainly is the dominant one that I’m hearing in the market right now.

Luke Napoli:Ok, Darin Richards, Chief Investment Officer at AKT Wealth Advisors in Portland, Oregon.

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