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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Techplayer who wrote (37989)	4/28/2003 12:44:18 AM
From: Techplayer	Respond to of 57110

"Real demand growth in the U.S. is growing at a 4% annual rate," he says. "That's better than in the first five quarters [of the recovery] after the 1990 recession." Trouble is, much of that demand has been met with surging imports and has not been feeding into domestic production. If the dollar's decline can stem that pattern by stanching the trade-gap losses, then he figures GDP growth can rise toward that 4% rate of domestic-demand growth" With risks present in all the most popular industry vehicles being used to follow the recovery route, investors looking for less conventional approaches might do well to look toward the older economy. Heavy industrials, which are up about 3% on the year, and even basic-materials producers have a few things going for them. For one thing, big American manufacturers have become lean. Wells Capital's Paulsen dates their struggles not to the start of the bear market in 2000, but to 1997, when the first Asian financial crisis hit and began a long-lasting surge in the dollar. This hurt U.S. manufacturing competitiveness and crimped pricing. Now, the dollar's decline is a tailwind, industrial commodity pricing is stronger -- indicating firmer demand -- and the larger industrial companies have good operating leverage after years of restructuring. Caldwell of McDonald Financial prefers to stay "close to the factory floor," with names such as Illinois Tool Works and Caterpillar, which may see the unleashing of some pent-up global demand for their products. Belski, whose firm ran a screen of industrial players that could gain pace in the budding upswing, highlights Cooper Industries and Pall Corp. online.wsj.com A reason for letting the dollar do its thing. ..so cut rates to inspire a move towards stocks and let the buck tank in order to increase domestic production. What will happen to inflation?