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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (7988)	2/9/2000 8:03:00 AM
From: clochard	Read Replies (1) \| Respond to of 42523

Nightly Business Report, Feb 8, 2000 16:02 hrs Analysis Of The Cash Flow Through The Market PAUL KANGAS: And speaking of trading, there are signs pointing to a possible slowdown on Wall Street in the coming months. New figures show more money may be going out of the market in the future than will be coming into it. Joining me now to discuss this rather ominous trend for the bulls is Tom Wolf, BridgeNews fund flow analyst. And welcome, Tom. TOM WOLF, FUND FLOW ANALYST, BRIDGENEWS: Good to be back, Paul. KANGAS: Tell us about this potentially bearish trend. WOLF: Well, Paul, the stock market goes up and down based on supply and demand and for the past five years the demand has exceeded the supply so the market has gone up. But the research firm Trim Tab sees that changing this year. What they're seeing is more insider selling and new supply coming on the market from public offerings. At the same time we're seeing cash takeovers go down and also stock buy backs are flat. KANGAS: Well, this is not a very nice trend here. How serious could it be? What kind of an impact could this have, let's say, percentage wise, on where the market is now? WOLF: Well, I know one thing, Paul, is that it creates about a $37 billion outflow from the market each month and this is only being partially offset by new money coming in from individual investors. Another problem is that much of the new money coming into the market is being borrowed. Now, in January, margin debt was up 5.3 percent after climbing 62 percent last year. Now, the last time margin debt rose so much faster than the overall market was in 1993, and after that period of time, stocks went down for a while. KANGAS: I know, but this market has defied practically all traditional trends. WOLF: Right. Well, most of the money is still going into the bigger technology stocks and the NASDAQ 100. So even though outflows might be increasing somewhat, you're still going to see concentrations in specific sectors of the market and the hot places right now are still in technology, biotechnology and telecommunications included. KANGAS: And you think that trend will stay alive for a while? WOLF: Well, I think as long as margin debt keeps increasing that's making up the difference between the out flows and the in flows, Paul. KANGAS: That's a rather bearish picture. You're talking basically about the fact that the math is simply not with the market anymore? WOLF: Well, right. The math for the little guy is changing and it's not in his favor anymore. KANGAS: All right. This is not nice to hear about. But maybe something will come along to change it the other way. Do you think so, Tom? WOLF: Well, anything could change at any time in this market and people might just shift more assets and buy more stocks. KANGAS: OK, very good. Thanks so much, Tom. WOLF: OK, thank you, Paul. KANGAS: My guest, Tom Wolf, correspondent for BridgeNews. Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c)2000 Community Television Foundation of South Florida, Inc. quote.com