Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 177.78

-2.2%

Jan 9 9:30 AM EST

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To: Jon Koplik who wrote (65035)	1/28/2000 5:38:00 PM
From: Jeffry K. Smith	Read Replies (2) of 152472

What does the thread think of the possibilities described in the following article from MoneyNews? ----> "Friday January 28, 2000; 10:52 AM EST Inverted Yield Curve - First Time in 10 Years Two year notes now have higher yields than the 30 year bond for the first time in ten years. We are clearly at an inflection point in the economic cycle. Bond traders are predicting that the Fed will be raising rates significantly this year in order to stamp out any long term inflation. Inflation lowers the real return on debt securities. The longer the maturity, the more of an effect inflation has. Another factor to keep in mind is that the Treasury will be reducing supply of long term debt through announced buybacks. This is helping to keep long term yields lower than they might otherwise be. Rising short term rates will have a significant effect on corporate borrowing this year as most of this is done in maturities less than ten years. This means that corporations will be more likely to just issue more stock to fund operations. Unless demand significantly increases, the increase in the supply of stock will lead prices to fall. And the chances for demand to significantly increase are slim, given that margin debt has already exploded. As reported by Bloomberg News, the last time the yield curve inverted we were in a recession a year later."

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