CNN interview of Tom Galvin of DLJ (on my Genius List)
his main points:
- stocks hit a speedbump this month, techs were up 50% in last 90 days of 1999, and with the Fed about to meet, we had excuse for stocks to correct somewhat
- expects by end of 2000, Dow at 13,000 and NazComp at 5000
- TBond yield was up by 30% in 1999, while mainstream NYSE stocks were down 30%, just about right compensating reaction
- only 3 times in the last 30 years has TBond yield risen by 30% on relative basis in a single year, quite a rare event, followed each time by relaxation in interest rates... look for financial stocks to rise by 40-50% this year
- still an earnings driven stock market, earnings will continue to drive valuation multiples, and techs will continue to show solid growth
- the breadth of stocks showing earnings growth is improving, thus Russell2000 smallcap index is rising
*** end of Galvin ***
Qualcomm has been splattered on the financial news in wrapups... on CNBC, on CNN... good exposure and publicity for China tease news
gotta hand it to CNBC (Bill Griffith) who challenged an old school economist being interviewed... Griff challenged the main premise that growth in the economy is to be accompanied by inflation, saying that point has been proved wrong for three years now... the arrogant economist did not back down... the amusing and empty comeback by economists is to claim that it hasnt yet, but it will soon and loudly... so arrogant, so wrong, so outoftouch with changes brought about in the New Economy
my opinion: sure, wages are up, growth is up, and unemployment is down, but even these three factors cannot unto themselves explain the inflation future... must incorporate the trackable capital investments, untrackable productivity rates, and the totally nebulous but very real internet phenomenon
US economy is at great risk in the next three months from the shortend of Bond Market and the Federal Reserve cutting off the flow of capital in the form of higher interest rates, higher cost of capital from corporate bonds... and why?.. to interrupt inflation which does not exist
more on CNN (good stuff): inflation has yet to appear because of some strong factors
- globalization with new sources of supply (materials, labor)
- weak European and Asian economies (how long?)
- technology explosion leading to increased worker productivity and improved efficiency of companies (e.g. internet)
just wait until unemployment gets UNDER 4% !!!
coming soon this summer
DID ANYONE NOTICE THE INCREDIBLE ONSLAUGHT OF INTERNET ADVERSTISEMENTS ON THE SUPER BOWL???
/ Jim Willie |
