Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 161.74

-1.7%

2:24 PM EST

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To: Craig Schilling who started this subject	8/18/2001 4:15:32 PM
From: marginnayan	Read Replies (3) of 152472

For information: By Bill Gross of PIMCO funds 08.16.01 Market Outlook: 3rd Quarter 2001 We believe that recent hints of resurgent growth in the U.S. provide false hope of a robust recovery over the longer term. The global economy will remain sluggish over the next several years as U.S. growth sputters at less than half its pace of the late 1990s. U.S. growth will not rise above 2 percent annually compared to more than 4 percent since 1997. Productivity gains that helped fuel this growth have peaked and will revert closer to historical averages amid the current investment bust. The result will be lower corporate profits, more layoffs and pressure on equity valuations. Consumers will respond to reduced job security and eroding wealth by reversing their negative savings, creating more of a drag on the economy. The Euro-zone will at least match slower U.S. growth. Europe is not as burdened with investment and consumption bubbles as the U.S. and will benefit from increased IT spending as the region catches up to the U.S. Still, European growth will not replace stimulus lost from the U.S. Japan will contribute little to global growth despite potential long-term gains from efforts to reform the banking system and limit government spending. Japan will be restrained by a huge public debt, low consumer confidence and weak demand for its exports. PIMCO will retain a bias toward higher quality investments and focus on the front end of yield curves in the U.S., Europe and the U.K. Mortgages offer superior risk-adjusted returns given their yield advantage overTreasuriesand minimal credit risk. Prepayment risk will be muted over a secular time frame as rates remain within our forecasted range. Corporate bonds will face downside price risk amid continued erosion of corporate profits. Short maturity issues in the U.S., Euro-zone and U.K. offer compelling relative value as the protracted global slowdown will prompt the Federal Reserve and the European Central Bank to ease more and for longer than markets expect. This forecast suggests that yields on the front end of these curves will not reach levels implied by current futures prices. ------------ Just my opinion: Looks likes a long wait for equity markets. With the productivity miracle about to have peaked, I don't know what arsenal Greenspan has left to make changes for the so called new economy. Since Bill Gross manages only bond funds, his opinion may be a little bit biased. But I think his view seems to make sense.

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