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Strategies & Market Trends : Waiting for the big Kahuna
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To: yard_man who wrote (34739)12/1/1998 4:46:00 PM
From: gregor  Read Replies (1) of 94695
 
>>>Very strange with Europe down so much, too. Usually they will cut losses a little when our market stays "strong."

I expected today to be slightly down after yesterday. Doesn't mean we aren't going up before we go back down, but something looks funny.

<<<

What is strange about this is that Europe is expected to have stronger growth than the USA next year. We have estimates on growth next year all over the place with S&P earnings from around +18% to negative 6%. In latest issue of BW one analyst compares this period to mid 60's when the expansion was winding down and profit gains became harder to maintain. The latest plunge in oil prices will ring out another 1% or so in world growth. IMO. With a service based economy the loss of revenue to oil exporting economies will not offset the gains oil users will experience from lower costs. Plug these factors into the equation of higher labor and benefit costs. i. e. 1999 health care expenses for example are going to 'soar like an eagle' and profitability is what will be squeezed-----not necessarily growth. We may still grow the GDP 2% to 4% but profits are going to have a very hard time growing. I think this is what I feel is going to happen. All in all , you are right, something is not quite right.

We are getting all the statistics of what happens in a fed easing environment. This is what is the most confusing to me. Another prediction that this time this factor will not be the same. We have a negative savings rate. For pete sakes, what will happen if the savings rate turns positive. Another something not right....gregor
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