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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Zeev Hed who wrote (2804)1/3/2001 9:35:05 AM
From: Robert Douglas  Read Replies (1) of 3536
 
I think that even if the fed's cut .25% this week, the down side movement of the market will resume shortly after such a cut, IMHO.

It's very much a Catch-22 for the investor. If the Fed begins easing and stocks rally, then the Fed will be less aggressive in further easings. If the Fed eases and stocks still flounder, then further easings will likely be swift and aggressive. Either way, the economic slowdown will likely be self-limiting.

Unless you believe this slowdown will be long-lasting, the bottom in stocks will likely be seen sometime during this year and probably within 6 months from the first easing. While it is quite possible that stocks will decline after the Fed begins cutting, I think the declines will be limited, probably not more than an additional 10%.
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