Think sentiment is bearish enough yet? Read these "advisors"
A Sampling of Advisory Opinion
By EDITED BY KATHRYN M. WELLING
HSBC Economics & Investment Strategy
Thames Exchange, 10 Queen St. Pl., London EC4R 1BQ
JULY 20 ~ The world economy is in an intensely dangerous phase.
Deflationary trends are evident in both Japan and China, while the recovery of
the smaller Asian countries after last year's crisis will be heavily dependent
upon the growth of net exports to the West. This is bound to put intense
pressure on Western prices.
If price deflation were to appear in the West, and especially in the U.S., the
consequences for financial markets would be momentous, with interest rates
and bond yields moving lower but equities under severe threat.
-ROGER BOOTLE
The Mercer Report
75 W. Front St., Red Bank, N.J. 07701
JULY 23 ~ Seven mega stocks, Cisco, Coke, Dell, Lucent, Microsoft,
Pfizer, and Warner-Lambert are responsible for one-third of the S&P 500's
advance year-to-date. All of them possess P/E ratios greater than 50. This
focus on so few has all the trademarks of a speculative bubble. Does anyone
remember what happened to the Nifty 50 of the early 1970s?
-HENRY D. MERCER III
Carolan's Spiral Calendar
P.O. Box 41, Gainesville, Ga. 30503
JULY 22 ~ It's over, finished, kaput. For nearly six years, Calendar Research
has maintained that late July 1998 is the most important time period of the
decade for the U.S. stock market. For two years, we have argued that this
time period may mark the end of the great bull market. Now we believe that
the DJII and S&P 500 Index tops of July 20 and the Nasdaq Composite top
of July 21 are that important turn forecast so long ago.
-CHRISTOPHER CAROLAN
Mogambo Guru
9241 54th St. N., Pinellas Park, Fla. 33782
JULY 21 ~ ''Investors'' pushed the P/E multiple for the S&P 500 over the 30
mark for the first time in history. No wonder the Wall Street flacks are busily
pushing the New Era myth that ''valuations don't matter anymore.'' This
preposterous valuation is so far into the Twilight Zone that I expect to see
Rod Sterling standing in the corner of the NYSE, intoning something sinister
and mysterious into a camera.
-RICHARD DAUGHTY
The Lancz Letter
2400 N. Reynolds Rd., Toledo, Ohio 43615
JULY 21 ~ We feel the prudent thing to do is to start taking profits in the
highflyers (old favorites that have done so well) while nibbling on the unloved
energy sector.
-ALAN B. LANCZ
Prudential Securities' Portfolio Comments
1 Seaport Plaza, New York, N.Y. 10292
JULY 22 ~ It's very unlikely we're going to get many more good earnings
stories to broaden the stock market's leadership. I see much volatility in the
second half as optimism on Asia, prompted by policy moves, wars with
economic reality for investor sentiment. I doubt that investors will begin
discounting cyclical earnings recoveries in 2000 any time soon.
-GREG A. SMITH
Investors' Intelligence
30 Church St., New Rochelle, N.Y. 10801
JULY 24 ~ With more than half the NYSE stocks below their own 10- and
30-week moving averages, this recovery has been weaker than any of the
previous ones following market setbacks. We think we will see a setback to
8000-8400. The last two weeks saw a big jump in optimism with Bulls close
to a yearly high and Bears close to a six-year low. Readings are bearish.
Market vulnerable.
-MICHAEL L. BURKE
The Presley Advisory
726 1st Ave. N., Naples, Fla. 34102
JULY 27 ~ [Barton] Biggs is wrong-buy the dip! No inflation plus Asia/GM
lever on Fed equals no increase in rates. What else do you need to know
now? Don't confuse profit-taking with a bear market.
-BRIAN PRESLEY
Primark Decision Economics
1 World Trade Center, New York, N.Y. 10048
JULY 28 ~ The very factors that can hurt the U.S. equity market this time are
positive for fixed-income markets.
-ALLEN SINAI
Quantum Research
1274 West Pender St., Vancouver, B.C., Canada VGE2S8
JULY 28 ~ If the next rally rolls over at about a 50% retracement, the top is
in. |
