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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures

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To: Chip McVickar who wrote (22778)	5/11/1999 8:21:00 AM
From: Chip McVickar	Read Replies (2) of 44573

Jerry, Reasons why I belive bond prices will fall and stocks will rise!!!! Inflation, PPI, CPI.... Estimates are for PPI to be about = 5/10ths and CPI to be 4/10th's of a percent. Analysts are saying that CCI will rise almost completely on the 17 month high in oil prices. If the core rate for the 1st quarter is modest the bonds will look over sold and correct back closer to 5.5-6 percent. Another factor to consider is that the government changed the method of calculating the CPI and this accounts for the recent image that inflation is way down. Actually according to an article in todays WSJ, the inflation rate would be still down...but not as far as stated today. In the last 12 months CPI is up 1.6% by todays calculation....the old figure would read 2.0%. This perception is great for inflation figures! Most of us have forgotten about this adjustment. Another factor is that OPEC has cut oil production, but not as much as announced....so the perception is for weakening oil prices....not significantly higher prices in the weeks ahead. Even at $20.00 a barrel and falling modestly our economy can absorb that price and world economies who depend on $20.00 a barrel will actually improve as well as the overall world economic condition. Combine this with cheap imports, docile workers and the plunging price of computer power are only a few of the reasons inflation will remain flat.(We just bought high end computers at 50% the cost of just a year ago.) Core Rate- 1st Quarter....Tues PPI...Thur CPI...Fri I'm looking for equities to rally and bonds to retrace...I believe the bond selling area is 5.7-8 not 6%. Todays core rate figure will probably tell us something. My Best Chip

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