How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 493.80

-2.7%

3:59 PM EST

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To: Ibexx who wrote (14790)	1/20/1999 2:20:00 AM
From: Ibexx	Read Replies (1) of 74651

Thread, From Option Investor Newsletter issued 1/20/99: ______ "Microsoft announced after the close and showed just how big the $5 bln gorilla really is. The $5 bln was sales for last quarter. MSFT announced $.73 vs estimates of $.59 and blew away the whisper number of $.62. Microsoft was trading up +5.00 after the close. There was no split announcement and this could be attributed to the trial publicity. They don't want to appear too prosperous for the penalty phase. The conference call was typically pessimistic as they tried to keep a lid on analyst's estimates for the future. I would expect MSFT to gap open on Wednesday. The futures are up +6.50 at 7:10 ET and we give the credit to MSFT and several other announcements after the bell. The fly in the ointment could be the Alan Greenspan testimony tomorrow in Washington. He is sure to be asked some "irrational exuberance" type questions and the answers could be earth shaking. Some analysts say Mr. G. has been criticized so severely by congress for his previous market moving performances that future comments will likely be constrained. Don't bet the farm on this. Alan is tasked with many insurmountable projects one of which is keeping the U.S. markets under control. The recent Internet "froth" is something that other Fed governors have pointed at in the past as a sign of a speculative bubble. So even though the futures are up now, we may see some weakness before the testimony. If we get by without any earthquake comments then the week could continue up strongly. The Brazil problem could even be a muzzle for Mr. G. Better to be quiet than roil the markets and have to lower rates again next month to rescue them again. Clinton gets a major play tonight with the televised State of the Union speech. He is under a strong spotlight as people look for signs of cracks in the presidential armor. What should he do? Pull out some heavy firepower! He is planning just that. Clinton will unveil his support for a plan to take some Social Security funds and put them into the market in a retirement savings account program. Estimates in the $500-700 bln range are being tossed about. This is not a new concept but his support for this popular plan is new and timely given the other problems he is facing. Maybe we should keep his feet to the fire longer if he is going to do us favors like this. Not only would I rather my Social Security was gaining ground in an account of this style but can you imagine the market impact of a $700 bln inflow of cash? Don't count your chickens yet but stay tuned for plan details if it is ever approved. Opponents claim losses could occur if a long term bear market were to appear. Ibexx

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