H.S. Dent Publishing: U.S. Economy in Good Shape for 2004 and Dow Poised for
Short-term Summer Rally But Expected Fall Market Correction Could Hinder Presid
nt Bush's Re-election Bid
DALLAS, Jun 1, 2004 (BUSINESS WIRE) -- The strengthening U.S. economy should
hold steady for the remainder of 2004 and the financial markets are poised for a
short-term summer rally that could drive the Dow toward the 11,300 mark by early
July, according to the June issue of the H.S. Dent Forecast newsletter.
Moreover, a major market advance driven by productivity enhancements, high
corporate profits and increases in capital spending by businesses should begin
in 2005 and extend into 2006.
This is good news for investors and it should be good news for an incumbent
president during a typical election year. The problem for President George W.
Bush is that 2004 is shaping up to be anything but typical, said Harry S. Dent,
Jr., president and founder of the H.S. Dent Foundation.
"As we have been forecasting for several months, our key technical economic
indicators continue to suggest the U.S. markets will experience a summer rally
extending into July that should push the Dow to at least 10,800, and possibly as
high as the 11,300 mark," Dent said.
"The problem facing the president is the same economic indicators that are
forecasting a summer market rally also are pointing to a market contraction that
could pull the Dow back down to the 9,600 to 9,800 level just in time for the
November election," said Dent.
Making matters worse for President Bush is the cumulative effect of sobering
news reports about modest job growth, soaring crude oil prices and a cooling
housing market. While these reports are accurate, Dent believes many financial
and economic experts tend to overstate their impact on the health of the economy
as a whole.
"On the jobs front, it is important to remember that our economy is creating new
jobs, just not as many as we would like. But from a historical perspective,
significant job growth has always lagged behind the emergence of economic
recoveries by several months or more, particularly when the nation is coming out
of a period of extreme overexpansion like we saw in the late 1990s," Dent said.
"Crude oil prices are high and they may rise even more, but adjusted for
inflation they are still much lower than their peak in 1981, and they amount to
only three percent of personal consumption expenditures. And while we agree that
new home sales appear to be slowing in 2004 -- a slowdown we first forecasted in
June 2003 -- we expect a modest decline, not a crash," said Dent.
Dent cautions that regardless of how the presidential election turns out, the
remainder of 2004 will continue to present investors with significant buying
opportunities in advance of the major upward market move that he has been
forecasting to begin in 2005.
"Investors interested in the long term need to remain focused on significant
economic trends, not election-year media stories driven by partisan politics.
And these trends continue to indicate 2005 should be the beginning of
significant market upturn that will last into 2006 and beyond," Dent said.
About H.S. Dent Publishing
H.S. Dent Publishing (www.hsdent.com) of Allen, Texas helps people understand
change and prepare for its arrival through a variety of Dent publications,
including the monthly H.S. Dent Forecast. The Dent methodology, which is based
on the study of demographics, or the study of whole populations and their
spending habits, takes financial forecasting out of the world of theory and into
the realm of real-world consumer behavior allowing investors to make intelligent
and informed economic decisions about their future.
SOURCE: H.S. Dent Publishing
CONTACT: Michael A. Burns & Associates, Inc.
Michael Burns, 214-521-8596
mburns@mbapr.com
or
Virginia Stuart, 214-521-8596
vstuart@mbapr.com
Customize your Business Wire news & multimedia to match your needs.
Get breaking news from companies and organizations worldwide.
Logon for FREE today at www.BusinessWire.com.
Copyright (C) 2004 Business Wire. All rights reserved.
-0-
KEYWORD: TEXAS
INDUSTRY KEYWORD: PUBLISHING
BANKING
GOVERNMENT
*** end of story *** |
