When It Will End

I wish I could say there are compelling stocks,Dan Niles said,but there really isn't one.There's gonna be a lot of layoffs by the end of the year.Q1 of 2009 really scares me.That's the earliest I expect to see stocks bottom.Summer of 2009 is more likely.The layoffs will affect tech consumption.I expect 9-10% unemployment,Mr.Niles predicted.We are currently at 6.5%.These analysts' views are not optimistic for the medium term.Nonetheless,a number of advisers feel that long term investors should continue to dollar cost average into the stock market,taking advantage of the extremely low share prices-even if they may not be at absolute bottom.No one can call that.

How Tech Will Fare

Tech analyst Dan Niles of Neuberger Berman notes that the September-October sell-off caused some tech issues.There will be a lot of cutbacks.Numbers will have to be cut lower for 2009.A president can only do so much.We're in a down business cycle.You can't go out and buy every house on the market,Dan Niles remarked.

With Clear Eyes:Medium Term Outlook

Two leading business analysts,Meredith Whitney and Dan Niles,have been giving their medium term outlooks.Ms.Whitney specializes in financial services,while Mr.Niles covers technology.Meredith Whitney,Director of Equity Research at Oppenheimer,says that financials and the economy are so far off the tracks right now,it's hard to see how President-elect Obama could help.If banks modify loans,they will make less,not put capital back into the system.The securitization market isn't coming back.You're gonna actually see mortgage contraction.You're gonna see credit taken away from consumers by a large degree.We've never seen that before,Ms.Whitney observed.

Consumers May Hurt Tech

Cautious consumers may hinder technology firms in the second half of the year,Dan Niles of Neuberger Berman thinks.Mr.Niles pointed out that housing prices are down 14% year over year,and homeowners won't be able to refinance.As well,the biggest impact of high oil prices hasn't been felt yet.Drivers are taking an extra hit of 450 billion dollars U.S..We don't know how consumer demand for tech products will be,Mr.Niles added.By early July,their tax rebate checks will be spent,so back to school and Christmas sales could be tough.He's constantly talking to Chief Information Officers,and they're ratcheting back their tech purchase plans.It is not a good picture right now.Nonetheless,he sees promise in selected firms,such as MEMC Electronic(WFR),which makes solar wafers;eBay(EBAY),as people are looking for bargains;and Apple(AAPL),which is launching a new iPhone.It's the most defensive in the portfolio Neuberger Berman has been for several years,Mr.Niles noted.