>>Very unlikely
Actually, it has been happening for some time.
Dow Jones Newswires -- September 9, 1999
DJ PNC Investment Managers Give Rosy Market, Economy View
By Dinah Wisenberg Brin
PHILADELPHIA (Dow Jones)--PNC Bank Corp. (PNC) officials offered a bullish outlook Thursday for the U.S. economy and the stock market.
"I think the expansion remains firmly rooted in the fertile soil of low inflation and that we should continue to see the economy expand even past some of the troubles early next year as we turn to 2000," the bank's chief economist, Stuart Hoffman, said during a teleconference for clients of the PNC Advisors wealth management unit.
He cited low inflation, government budget surpluses, consumer confidence, the higher stock market and rising home prices.
The tight job market and upward wage pressure present negative risks, he said, but productivity growth is keeping up "fairly well." Rising crude oil prices also present a risk, but year 2000 computer problems should be "more like gnats than black widow spiders," Hoffman said.
"I still think that the positive factors will continue to carry the day," he said. Hoffman expects the economy to finish strong this year, a possible slowdown early next year, and regained momentum in mid-2000 and a strong second half.
"At least through the end of next year our view is no recession and continued economic growth carrying the day," Hoffman said. He said it's a "close call" whether the Federal Reserve will raise interest rates another quarter of a percent next month, but said the odds are it won't.
PNC Advisors Chief Investment Officer Don Berdine, citing many of the same factors, predicted the bull market "isn't going to end any time soon." Investors shouldn't expect continued 20% returns going forward, but the market will keep rising as earnings accelerate.
Earnings were up 15% in the second quarter and many on Wall Street believe they will be in the 15% to 20% range in the second half, Berdine said.
With budget surpluses, growing productivity, competitiveness and good demographic trends still in place, he said, earnings should increase an average of 10% in the next 18 to 24 months, and the market should move higher "in that vicinity."
R. Andrew Damm, portfolio manager for PNC's Blackrock large cap growth fund, said large cap growth stocks should continue to do well put probably won't outperform the rest of the market as much as they have.
Technology and telecommunications companies provide the best opportunities, especially "infrastructure plays in the backbone of the telecommunications network," he said.
Among those he mentioned were MCI Worldcom Inc. (WCOM), Cisco Systems Inc. (CSCO), Oracle Corp. (ORCL), Dell Computer Corp. (DELL), Gateway Inc. (GTW), Sun Microsystems Inc. (SUNW), EMC Corp. (EMC), JDS Uniphase Corp. (JDSU) and cable system operators.
The technology sector can be volatile and investors should focus on the long-term, Damm said.
Other sectors he favors are health care, financial services, and media and entertainment.
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