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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (9666)	11/4/1999 6:55:00 PM
From: Wally Mastroly	Respond to of 15132

A summary article of Abby's comments: biz.yahoo.com Goldman analyst Cohen says rate hike won't shake bonds By Jennifer Westhoven BOCA RATON, Fla., Nov 4 (Reuters) - Goldman, Sachs & Co. stock strategist Abby Joseph Cohen predicted on Thursday that bond markets have anticipated a Federal Reserve Board rate hike this month and Standard & Poor's 500 stocks are five percent undervalued. ''I would suggest that should the Federal Reserve decide to raise rates at the FOMC meeting, that increase is already discounted into the fixed income markets,'' she said at the annual meeting of the Securities Industry Association. The Fed's Open Market Committee meets to decide monetary policy on November 16. ''We have already seen a noteworthy rise in Treasury yields and a more dramatic rise in corporate bond yields, which is not warranted, in our opinion,'' she said. ''Corporate bonds are a good value because they are pricing in a situation far uglier than is likely to develop.'' Cohen is known for her forecasting paired with her bullishness in the face of market downdrafts. She said she expects the Standard & Poor's 500 Index to close out the year ''easily beating'' her 1999 target of 1385. The broad market measure is at 1357. She earlier she set a rolling 12-month price target of 1450. ''Let's think back to a year ago. This conference was at a time of grave concern. Many investors were convinced economic armageddon was just around the corner and there were worries about the global economy and deflation,'' she said. Cohen said the securities industry and the market have come a long way in the 1990s, starting from a time when the industry was plagued by concerns over the savings and loan crisis and Japan seemed to be leading the world economy. Two broad categories have been behind the improvement, economic policy and the improvement in corporate performance, she said. On economic policy, she cited the huge shrinking of the federal budget deficit under the Clinton Administration, well implemented monetary policy by the Federal Reserve, tough accounting standards, and movements to lower global trade barriers. She does not expect inflation or interest rates to move significantly higher in the short-term, she said. Longer-term, she said the country should want to ensure that American children are well-educated enough to fill the highly intellectual jobs being created by the new U.S. economy.