Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Richard Mazzarella who wrote (35443)	6/16/1999 10:49:00 AM
From: Alex	Respond to of 116764

As Rates Climb, Business Worldwide Gets Softer By James J. Cramer How did things get so tough? How did they go from where everything's working to where only a handful of small-caps and semiconductor companies are working? When we did our morning meeting at Cramer Berkowitz, we were struck by the paucity of sectors that are working. We know the Net's gotten tough. And drugs and banks will remain tough as long as rates are going in the wrong direction. But what happened to the cyclicals? Frankly, they did what they have done so often: They fell hostage to the softening world economy. It is hard to believe, in a world where "synchronized global resurgence" has become the conventional wisdom, that the world's economy has actually gotten softer this quarter, but it has happened. We are blinded by our own aggressive spending in this country. We look at our retail sales and we know they are smoking. But as Jeff and I check in with our companies as the quarter wraps up, we discover the following: A.Latin America is no closer to a turnaround than it was six months ago. It is not going to have a depression or a Weimar-like inflationary period, but business isn't any good. B.Asia has come back a bit but not enough to matter, except for telco tech, where these economies are spending again. C.Europe is the new problem area. Europe has gotten weaker this quarter. As Europe was not robust to begin with, this is especially bad news for the U.S. cyclical stocks, which were banking on Europe to get stronger, not weaker. This change will cause many cyclicals to miss newly revised up numbers despite the strong U.S. market. Why does this matter so much? Because we have a vicious double whammy. We have rates going up at a time when business worldwide is getting softer. That means nothing really works. Either business has to turn up or rates have to come down. Frankly, I would prefer the latter, as there are many more stocks that would go up if rates went down than if business got stronger. Right now we have neither. fnews.yahoo.com