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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: tradermike_1999 who started this subject6/3/2003 1:05:17 AM
From: energyplay   of 74559
 
Positve Feedback / Virtuous Circle in US market -

There's a 'virtous circle' effect of the for S&P 500 companies with under funded pension liabilites -

Those pension funds are heavily invested in the stock market. With the market down, those companies will have to take more out of profits to fund their pension obligation.
This is why we have seen the article about the enormous pension costs.

With the market up, they don't need to take as much out, maybe even zero. So their profits and ability to pay dividends are higher. Higher profits push up stock prices....S&P earnings get revised up later this year.

Looks like the US learned something from Japan ;-)
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