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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: KevinThompson who wrote (13531)	10/16/1999 9:14:00 AM
From: Rock_nj	Read Replies (2) \| Respond to of 57584

In my opinion, the market is down because of three free market forces, not because of Greenspan or any other bureaucrat. First, profit warnings have been hitting the market during the past few weeks, so investors are nervous about this quarters profits and selling. Second, inflation appears to be making a slight comeback. Higher inflation means higher interest rates, and less money in equities. I say "appears" because one month with a 1.1% increase in PPI (more than double the expected number) does not make a trend. In fact the 1.1% figure was probably skewed by tobacco price increases that were implemented to recover costs from the recent settlement (why the hell is tabacco even tracked as part of the inflation index, not exactly a necessary item?) and car price increases due to the new model year. Third, interest rates have gone up over a point in the past year. While this is not a huge move by historical measures, it's enough to convince fat cats to put their money into bonds rather than stocks. Thus, draining money from the market. Also, it appears that Y2K concerns are keeping a lot of money on the sidelines this fall.