Re.:"...projects no recovery before the end of next year, or possibly in 2003.."
Weak recovery may be expected in 2002 but projecting into 2003 is oversimplification of the problem. The fact that so many interest rate cuts have not had much effect on the stock market, is just one indicator for the Corporate sector's fear of new capital investments and Fed's fear of losing consumer confidence. Agree that certain sectors like the chips, telecom, etc. are at a low point now. Most mutual funds are down 40% or worse. We have passed the Personal Computer wave and the Internet craze. There are sectors that are likely to grow due to low energy prices and inflation, provided consumers do not lose confidence. Unemployment, the September 11 disaster, the Enron debacle, etc. are not helping the consumer confidence. However, companies are extremely lean now and they should show modest earnings improvement next year to justify their workforce reduction in 2001. Other companies will merge, when possible, to boost earnings. For example, AMGN and IMNX. China got admitted into WTO. China is a huge market. Japan is negotiating for closer trading relations with India to take advantage of markets in India and the surrounding countries, after lifting the nuclear embargo against India. Companies catering to the basic needs of people and product exchange on a global basis: basic materials, construction, financial and retail, pollution, health care, pharmaceuticals, energy, IT, e commerce, hotels, etc. will grow, I think. High tech may not be the place. jmo. Ram |
