This article from yesterday is good. As always, it's about the Fed tomorrow.

finance.yahoo.com/ne...6.html

So next few days, who the hell knows. I see we've had more bad news in the last 24 hours from HP (30K more layoffs) and Fedex (lower earnings and lower guidance), and the market breadth leadership is very narrow which IMO means new highs look unlikely. Even if the Fed doesn't hike rates, we'll just revisit this discussion next month and the month after, and the uncertainty will be an overhang. I think that plus the recent price action has given enough people the thought to be selling into rallies, which isn't the same as going short and looking for 20% declines.

Good article indeed.  I do plan to add (401K money which is still mostly in guaranteed fund) again when the market dips again.  I moved some money from guaranteed fund into equity funds when the market was down around 11%-12%.  I think a 18% correction would be healthy for the overall market but who knows if we get it or not.

Re HP and FedEx:  I would not pay too much attention to HP.  FedEx is of course very important, not just stateside, but globally, so that is a warning sign.  It would be interesting to see, if the slow down is due to all regions being soft or if it is mostly due to Asia slowdown. The state of its US operations could also tells us a lot about the health of our economy.

Not saying Asia does not matter, it certainly could dent our GDP.  I am just wondering about the details of the FedEx warning.

I will be reading the FedEx Seeking Alpha CC transcript, I think it is very important, thanks for posting the FedEx warning.  With Corporate profits near or at record highs there is no room to the upside given that Europe is still slow, Asia is headed down.  The US will feel the pressure of the global slow down, hence my expectation that the markets will drop to test recent lows.

Re Fedex, we've heard so much about "Everything is Awesome" everywhere, things couldn't get better in the US it seems, and China 7% growth, so how could Fedex both miss and guide lower? Does not compute. We could talk about CAT's what it is 30 straight months of YoY global sales declines? If "Everything is Awesome", these things wouldn't be happening.

Agree.  I do have a question re CAT: What % of sales originate in China (and the rest of Asia by extension) and Europe?  We know Europe has been in the dumps for quite many years, in fact I would argue that Europe has not really recovered from the financial crisis, there are a few Pockets of strength (Germany and Scandinavian countries, although that may no longer be), but most of the Eurozone is not in good shape.  So I would strongly agree that a lot of the old world infrastructure, materials and cyclical industries are not functioning well and will struggle to grow, given the mish mash of weak economies.  The dollar is now a tall obstacle which will dampen revenues and profit growth.

Major corporations statewide have remained lean, hesitant to hire and to spend (CapEx) to improve productivity, so profits are at records, but it is mostly because of the fact that they are running so lean.  That too will eventually have to change.  Not going to go on forever, eventually companies will need to invest or eventually die as competition could dent their ability to compete effectively in the global economy.  When that happens is anyone's guess.

Then we have the Feds around the world still pumping liquidity everywhere.  Which is the major reason stocks are now overvalued (IMO).  

Many tech companies are in sharp contrast growing extremly well, regardless.  They are hiring and have enourmous CapEx Budgets

Share buybacks have been a huge factor in the market. I agree HP is largely company specific, but again if "Everything is Awesome", a big company like that shouldn't really be in such trouble. It should be Easy Street for them. I exaggerate slightly, of course. I find it disgusting though how many billions they have been spending buying their own shares even as they lay off tens of thousands. The execs gotta make sure they're well set.

zerohedge.com/ne...-30000

My take on HP is that it is now truly a commodity product company, except for the Services division.  Even the Server market is IMO about to be in a tough fight given that ARM through companies like AMCC and others will help in driving down the gross margins on servers.  The printer division has not been a gross margin driver for years.  Now, I do not follow HP closely, but what innovation has come out of that company?

So, I tend to think it is mostly if not entirely company specific.  The sector has been tough given the state of commoditization. A similar company to HP is IBM, except IBM has had the ability to reinvent itself and has real R&D. IBM finds itself challenged once again, but I bet they will manage to reinvent themselves again, HP would do well in taking a page out of IBM’s book.

Jester,

I've followed CAT closely for the last several years, as I own a small chunk of it (very bad decision, must've been in a seconal stupor at the time). And you're exactly right - the business has been dismal and declining for years. I also take it as one indication of the underlying economic realities, since what they do is essential to the basic materials of economies, which, along with commodities, has been a terrible place to be for some time now. I have kept wondering whether the divergence beween indicators like CAT's sales and the ever-upward path of other sectors meant that there was a basic underlying reality being ignored, or whether there is some other way to explain that divergence that makes sense. I'd have to vote for the former, but I've been pessimistic about the market for years, and so far, have been wrong on that. 

Interesting to me also is, immediately after the article you cited on Business Insider, was an interview with Paul Krugman, not sure if you caught it. He's saying the market is wrong, Yellen is right, and don't pull the trigger on raising interest rates until you see real inflation starting to take hold. He's always been crowing that his call on printing money with no backing is the absolute best thing to do. I still wonder how, when, and if the consequences of QE infinite (or indefinite)  will be felt.