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

To: AugustWest who wrote (42029)	6/12/2003 9:17:35 AM
From: Peach	Read Replies (1) \| Respond to of 57110

The insane fit well in an insane world.

To: AugustWest who wrote (42029)	6/12/2003 9:56:55 AM
From: stevenallen	Read Replies (2) \| Respond to of 57110

Whaddaya think about this AW? Fundamentalists AHEAD OF THE TAPE By JESSE EISINGER In a liquidity-driven rally, fundamentals matter less and less. Back in May, when April economic data were coming in and there was no sign of a strong postwar rebound, we were told you might as well write off the entire month and wait until June. June has arrived. While the data seem to be improving, they are far from robust. Fortunately, the bulls have an answer: Wait until the second half. "This is round No. 3 of the Bush tax cuts, we're heading into round 13 of Fed rate cuts, and we're in wave six of the mortgage-refinancing boom," points out skeptical Merrill Lynch economist David Rosenberg. "It's now a real show-me situation. I'm once bitten, twice shy." Mr. Rosenberg is getting lonely. There are fewer and fewer doubters out there. The most recent Investor Intelligence poll found 58.7% of financial advisors were bullish, while 16.3% were bearish. That's the lowest bearish number since April 1987 and the widest difference between the optimists and the pessimists since August of that year. The conventional wisdom among sentiment watchers is that the more bulls there are, the more bearish a signal it is. There's no one left to buy. In fact, the II poll isn't much of a predictor, but it's a decent barometer of where investors' minds are. The reason to buy is that cash isn't doing anything for investors. The median stock in the S&P 500 has a dividend yield higher than what a money-market fund and short-term Treasuries throw off. But that doesn't mean this is a rally based on fundamentals. The economic underpinnings may catch up, given all the levers helping out. But in May, retail sales were lackluster, economists expect. The figure comes out Thursday and economists expect a rise of 0.2% in sales, excluding auto sales. At least they are likely to be up. In April, sales swooned, but much of that was thanks to falling gas prices. Excluding gas pump prices and autos, sales were OK: up 0.4%. Given that chain-store sales seemed to strengthen toward the end of the month, some economists foresee an upside surprise. That, combined with an ebbing in the weekly jobless-claims figures, will further embolden the bulls. Updated June 12, 2003