Is leadership finally starting to lead? CEOs and corporate executives, who lead our business climate, have been victim of the same cautious and negative thinking as consumers and investors for a long time. But they may finally be emerging from the psychological funk.

The last few quarters have shown a capital-spending led recovery. Companies are sitting on record piles of cash and free-cash flow, and they are finally starting to invest. This is an important trend that show business leaders are finally finding the will to invest.

This would be a huge trend reversal, if it holds. What's interesting about cash and capital spending, as you can see in the chart below, is that it is not a recent trend established in the last recession. Companies have actually been decreasing their capital spending for the last ten years.

Let's face it, the economic engines won't get humming along until executives start getting a little more confident and start building new things, buying equipment, and hiring people. The equipment buying is starting to happen, which hopefully means the jobs are next. Jobs will be where its at. In fact, there is evidence that business leaders are starting to come out of the long slumber.

Bloomberg has a nice article pointing to this topic today.

The stock market is into a pretty good-sized correction. It’s not clear to me where exactly the correction will stop, but one thing is clear: The earnings of large blue-chip technology companies have been improving, while their stocks are going down. That's an opportunity. The stock market is a funny thing, it's the only "market" where people get disappointed when prices go down. As a shopper, that's a good thing, especially if you are using good valuation metrics when you do your shopping. Large companies have pared back technology spending for years, but there are signs that it's starting to bounce back, with capital spending budgets. Given that 2010 is off to a good earnings start  for technology companies, I think there's a high probability that companies continue increasing tech spending. I have been combing through the stock screens looking for “dream stocks” – large-cap tech with good track records, improving earnings, and cheap valuations. I found lots of candidates. In fact, other than March of 2009, it was hard to find a time when you could buy high-quality tech stocks at such cheap valuations. Many of them are at P/Es under 20, including Apple, which has a 5-year growth rate of more than 40%! I cannot remember the last time a stock with this kind of growth was available at a forward P/E of 19.