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Strategies & Market Trends : Coming Financial Collapse Moderated -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (153)	6/18/2001 4:07:40 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 974

Hi Joel, Long time, no say hi... <g> Even at $51 (down from $53 which itself was down from $58 earlier this year), the S&P future earnings estimate seems a tad on the high side IMO. My math (perhaps flawed?) puts the earnings estimate somewhere between $43 and $48 with a caveat. Should consumer discretionary spending remain "flat" for the rest of 2001, then we'll likely come in closer to the upper limit of $48. But should consumer spending decline, then we're likely looking at the lower figure of $43. Right now, it's much too early to attempt to "predict" consumer spending trends 3 to 6 months out. But there are indications that consumers may not be "binging" as the year progresses. Plastic credit stands at or near all-time highs, meaning there's not a lot of room left to extend additional credit to many spenders. (Defaults on plastic credit is increasing dramatically, so...) Early indications are that, savvy consumers are paying down debt (mortgages, plastic, personal loans) and as long as these people are in debt reduction mode, they're not likely to mindlessly take on new debts. New housing purchases may have peaked, and sales of new cars seems a bit restrained at the moment. Other big ticket items (furniture, appliances) also seem to not be selling well (with or without discounts) at the moment. We'll probably have two early indicators though. Back-to-school purchases at the end of summer should reveal some clues as to the consumer mind set. And then in September, we'll have another set of clues based upon what corporate buyers are stocking for Christmas sales (light or heavy stocking, etc.). I suspect the second half of 2001 will be quite restrained though. Just my (worthless?) opinions... KJC