Fed Meeting & Dell’s Numbers

The recent rally has been long overdue. Going into tomorrow’s FOMC meeting, I would not be surprised to see a small rally into the decision, followed by a sell-off after the language of the statement shows no slowing of interest rate hikes on the horizon. So, if the Dow is up 30 or 40 in the morning, it might be a good idea to take some chips off the table for the afternoon.

That said, after seeing Dell’s surprise earnings warning tonight, a small rally tomorrow might be overly optimistic. Dell stock has been very weak lately, so a shortfall isn’t totally shocking, but disappointing for tech investors nonetheless. Although Peridot does not have a position in Dell right now, a move down to, or even below, $30 per share could be an attractive entry point based on the notion that a corporate upgrade cycle will start taking shape next year.

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One Thought on “Fed Meeting & Dell’s Numbers

  1. Jack Miller on November 7, 2005 at 9:42 PM said:

    It seems that the rally does not need the “old technology” stocks such as Dell. Wonder if Dell will get into the cell phone business?

    I believe billions of computers will be purchased in the next 10 years but a growing number are going to be not much more than “dumb terminals” or sophisticated PDAs.

    As far as the rally goes, I don’t think this is the “big breakout” but I’m willing to bet big that the market will be up a lot 18 months from now.

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