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Strategies & Market Trends : Tech Stock Options
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To: ViperChick Secret Agent 006.9 who wrote (47272)7/5/1998 1:21:00 AM
From: WBendus   of 58727
 
It appears that Hasimoto wants to clarify his ignorance about how to revive the Japanese economy.

biz.yahoo.com

"TOKYO, July 5 (Reuters) - Japanese Prime Minister Ryutaro Hashimoto on Sunday said permanent income tax cuts were still just a debate, dashing world financial market hopes of swift extra measures to revive the nation's economy."

I suspect that this will take about 1/2 of the recent gains away from the Nikkie in the early part of the week. The recent rally was in anticipation of there being a permanent tax cut after the July elections. These comments by Hashimoto will sound to the world financial markets that Japan still does not wish to recognize the seriousness of its economic problems. Up until now, there had been hope that they were finally beginning to realize what steps were necessary to turn their slumping economy around.

I suspect that this means that the bonds will continue to rally, the dollar soar, and the market remain in a trading range with some slight down ward pressure. I expect that we will trade in a 900 point range on the DOW between 9200 and 8300 for the remainder of the summer. The S&Ps will likely continue to slightly out perform the DOW which has larger, more multinational companies in it's index. Domestic & financial companies should continue to outperform in this market, along with those that import from the east.

I am targeting the yen for 148 and US long bond yields at 5 3/8% by the end of July. Fears will likely crop up again about Chinese devaluations. Oil prices will likely be capped at $15.50 a barrel by continued concerns over Asian demand, but need to be watched closely for the affects of the announced OPEC and non-OPEC cut backs.

Wayde.
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