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Technology Stocks : Intel Corporation (INTC)
INTC 50.99+5.7%12:48 PM EST
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To: jmac who wrote (9483)1/28/1997 10:35:00 PM
From: P.Prazeres   of 186894
 
Here are a couple of thoughts on the market , in general....I hope to spur some replies with this.

Today, we heard on the old tv tube that since the dollar is strong it attracts foreign money into our market....that's good.
Today, we also hear that the cost of wages is increasing but only "as expected"....that's good.
Today, we also heard that companies are not passing on the cost of wages to the consumer, therefore inflation will be kept at bay....that's good.

Question. What is wrong with the 3 points made above.
1. A strong dollar eats away at the impact on earnings from foreign revenues.
2. Wage increases that are not passed on to the consumer are taken from the bottm line (earnings)...

Therefore, is it possible that unless the dollar weakens and companies start to pass the wage cost onto the consumer, then earnings may not be as strong as they have been.

When you hear all the "spin-doctors" on tv giving their "infinite insight" on the markets...we need to take it all in and read between the lines.

One more point...everyone in Washington today began talking about the balanced budget...again trying to do it by 2002. Unfortunately, unless they expect to put a serious dent in defense, medicare and social security...most of the rest of what Washington spends won't cut the mustard....and even though a balanced budget sound great...the real problem is that we need to have budget surpluses to ease our interest payments, which accounted for 23% =/- of the total budget last year. If you don't believe me then check out Kiplinger's news letter from January 96 or Feb 96.

Paulo
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