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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: jjetstream who wrote (77248)	2/19/2000 12:48:00 PM
From: baddtiming	Respond to of 108040

Thank You.

To: jjetstream who wrote (77248)	2/19/2000 5:53:00 PM
From: puborectalis	Respond to of 108040

This correction is buying opportunity But Greenspan will hike rates again By Elaine Garzarelli, CBS MarketWatch Last Update: 4:02 PM ET Feb 18, 2000 Commentary Listen to recent interview NEW YORK (CBS.MW) -- Reports released this week showed both producer and consumer prices remain tame. Producer prices were unchanged last month and the core index (excluding food and energy) fell 0.2 percent. Consumer prices rose a mere 0.2 percent last month as a big drop in clothing costs offset higher prices for gasoline, oil and tobacco. See full story. Even with these lower inflation reports and based on Greenspan's recent Humphrey Hawkins testimony, we continue to expect further rate hikes at the next Federal Open Markets Committee meeting on March 21. The FIBER index, which we believe is one of Greenspan's favorite leading inflation indexes, showed a continued rise in its latest reading. Until this index starts to decline or the economy slows, we expect to see continued Fed tightenings. Greenspan repeated his preference for a steady, gradual approach to monetary policy -- giving no indication that the Fed is about to embark on a more aggressive approach. We remain invested and recommend using this correction as a buying opportunity. The Dow has corrected about 11 percent and the S&P 500, 6 percent at this writing. The Nasdaq continues to be near its record high. We will use this opportunity to position our portfolios further in financials, some technology, and healthcare groups. Interest rate analysis The yield curve continues to be inverted with the 30-year bond yielding 6.22 percent and the 10-year yielding 6.56 percent. The short end of the curve, however, will remain tied to Fed policy. The U.K. yield curve has been in a similar inversion for a few years now and if the U.K. is any guide, the U.S. curve could curl significantly lower. Nonetheless, we remain bullish on bonds and continue to include them in our asset allocation. Our bond model uses the consumer price index inflation rate and the budget surplus to predict the 10-year bond yield. We forecast that the CPI falls from 2.6 percent to 2 percent by year-end; therefore, we expect a downturn in long rates (10-year bond) to 5.6 percent by the end of this year. Elaine Garzarelli is a columnist for CBS MarketWatch. You can get more information at her Web site.