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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gersh Avery who wrote (17508)	6/16/1999 8:56:00 AM
From: Dragon 1	Read Replies (1) \| Respond to of 99985

Where is that freaking bobby bearer? I am waiting for him to sell me AOL at 22. What a freaking idiot!!!

To: Gersh Avery who wrote (17508)	6/16/1999 9:11:00 AM
From: Les H	Respond to of 99985

US FUND MANAGERS SEE FED HIKE BUT ONLY BY 25BP IN YEAR'S TIME LONDON (MktNews) - The next move in U.S. interest rates is up, say 94% of U.S. fund managers surveyed by Gallup for Merrill Lynch, who see a rate hike as "fine tuning' rather than the start of an aggressive phase of tightening. The average 12-month forecast for the Fed Funds rate, the benchmark U.S. interest rate, is 25 basis points higher than the current 4.75% rate, according to the June Gallup survey of U.S. fund managers collectively responsible for managing funds totalling $2,949 billion. Only 37% expect the inflation rate to rise on a year's view, down from 51% in May when strong U.S. business confidence and a rise in headline consumer price inflation led the Fed to move to a "tightening bias" at their May 19 policy meeting. A rate hike is bearish for U.S. stocks, with fund managers shifting out of U.S. equities and into Treasuries and cash, the survey said. Emerging markets and commodities will also bear the brunt of a rate hike, the fund managers' said. "A major change in economic leadership could be about to take place with the U.S. economy slowing into 2000 while Asia and Europe recover," said Trevor Greetham, global strategist at Merrill Lynch. "We are overweight Asian and European equities but underweight U.S. equities." Although U.S. GDP forecasts are unchanged since the May survey, managers have downgraded their 2000 earnings growth forecast to 5.8% from 6.6%. According to the June survey, U.S. fund managers have turned bears on domestic financials for the first time since first asked about sector preferences in June 1996, the biggest drop in support since the credit crunch of Q3 1998. Since the May survey, oil prices have increased over the month, fuelling fears of a further upturn in U.S. inflation. The Bank of England also cut U.K. interest rates a quarter percent to 5% and Japan and Germany posted surprisingly strong Q1 GDP. "A tap on the brakes might be all that is needed to cool an internally generated upturn in inflation," commented Greetham, "But if Japan continues to grow in the second half of the year as the European economic cycle turns up, a rising oil price could put upward pressure on U.S. inflation as it did in 1987." For the June 1999 survey, conducted between June 4 - 9, 274 leading institutions took part in the global survey with funds under management totalling $8,696 billion.