Big Market Sell-Off Coming? You Bet!
NEW YORK (Reuters) - The market is incredibly
overpriced and Federal Reserve Chairman Alan Greenspan stands ready to knock the legs out from under the longest-running bull market.
But Wall Street bulls say stocks are not in a crash mode.
''Stay bullish, if you can take the risk,'' the experts say.
The economy is still in great shape and with corporate profits expected to be up more than 20 percent in the second half of this year, the stock market should be able to extend its winning streak -- even if the Fed raises interest rates a notch or two, the bulls say.
And, they view the guesswork on when the ''Big One'' will finally send the market crashing in
flames as just a crazy exercise that's failed to hit the bull's eye for nearly five years.
Only recessions and financial crisis have been known to cause tremendous stock market upheaval. So far, there is no evidence that either will slam stocks.
Greenspan, who has been trying to talk down the market since December 1996, when the Dow Jones industrial average was nearly half today's level, sees stocks as one of the greatest manias ever.
The Federal Reserve's own market valuation model says stocks are overvalued by an eye-popping 40 percent.
The model, which compares corporate earnings with the 10-year note yield, reached a record 48 percent in July, when the Dow and other indexes zoomed to new record ground. The model has come down from its peak due to the market's recent pullback and a jump in bond interest rates to almost two-year highs.
dailynews.yahoo.com
|
