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Strategies & Market Trends : Bear!

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To: Les H who wrote (126)7/10/1998 1:42:00 PM
From: Ming  Read Replies (1) of 271
 
Effect on overall market to date: next to nil. European recovery will make up for Asian shortfall in terms of earnings. Besides, many blue-chips(like GE)are benefitting from the low-rate environment. They have huge financing units(In GE's case, it's more than half their business), which are raking in record profits, while the company's debt servicing fees have drastically dropped. Its appliance and Aircraft engines units are suffering, but that's only 20% of their business.(During the 80s, corporate bonds yielded consistently more than 10%). Service sector making up for manufacturing sector. Manufacturing stocks already have gone down, and now already are an increasingly insignificant part of the market. If they go down further(and they most likely will), then that won't jeopardize the big picture.
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