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.

Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: robert duke who wrote (25469)	7/11/1999 11:54:00 PM
From: puborectalis	Read Replies (1) \| Respond to of 41369

Record highs don't diminish sector selectivity By Elaine Garzarelli, CBS MarketWatch Last Update: 5:42 PM ET Jul 11, 1999 Also: columns & opinion NEW YORK (CBS.MW) -- Stock markets hit new highs this week as investors do not expect to see more rate hikes by the Fed in the near future. The S&P 500, Dow, Nasdaq, Nasdaq industrials, NYSE composite, and AMEX all reached record levels. Investors will focus next on the upcoming earnings reports which we believe will be positive. The improvement of the global economy without much fear of inflation is also helping. Consumers continue to spend freely and the Internet boom is helping to make it even easier to spend. As we mentioned last week, we expect the rally to extend to a Dow level of 12,000 and 1,600 for the S&P 500 over the next six to 12 months. However, we are being very selective in the sectors we invest in (see our newsletter for our full listing of sectors we recommend). Any corrections should not exceed 10 to 20 percent. Bond basics Bond yields were mostly unchanged this week. Bond market participants are not fully convinced that the Fed is finished raising rates. The stronger than expected tankan report on Japanese business confidence strengthened the view that the global economy is accelerating. We believe, however, international strength will have a limited affect on the U.S. economy given the domestic influence of higher bond yields. Also see Bond Report. In fact, mortgage refinancing, which has allowed the consumer to spend the extra money they saved on their mortgages, has dropped off. Given the above, we continue to track the outcome of our favorite leading inflation indicator by Columbia University. It accurately forecasted the last Fed tightening and continue to monitor the indicator for further warning. In the meantime, we continue to be bullish on bonds and expect the yield on the 10-year bond to drop to 4.5 percent over the next six to 12 months. We would recommend taking advantage of any uptick in yields currently. Elaine Garzarelli is a columnist for CBS MarketWatch. You can get more information at her Web site.