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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Kelvin Taylor who wrote (50011)	12/11/2003 7:04:57 PM
From: E.J. Neitz Jr	Read Replies (2) \| Respond to of 53068

Goldman Sachs Strategic Market Comment--Just Released (I have no faith in the analytical abilities of company analysts except for Goldman Sachs, Argus and maybe S&P....in that order. Goldman is anticipatory in their research and sharp enough to no longer provide stock price projections...just my thoughts. I have discarded Merrill Lynch and CSFB.) US Strategy Issues and Outlook 2004: The Next Phase of the Equity Bull Market 12/11/03 0:35pm ET The next phase of the economic cycle is forecast to bring a shift from rapid-fire recovery to a more sustainable pace of expansion. We expect economic and profit growth to decelerate in 2004. The critical factor for investors would be the expected durability, not the absolute pace, of the expansion. Mild inflation and currently benign Federal Reserve policy argue for an extended period of growth. Fair value for the S&P 500 is estimated at 1250 for year-end 2004. If correct, the next phase of the equity bull market will be less intense than the last few months. Our model portfolios remain overweight in equities at 75% and underweight in fixed income at 20%. We find better value in corporate bonds rather than Treasury securities. We also advise a 3% exposure to commodities, which would benefit from the expected improvement in the global economy. Cash in the model portfolios is a modest 2%. S&P 500 EPS, DPS Estimates for 2003 and 2004 Raised--Again 12/11/03 0:35pm ET We raised our 2003 and 2004 S&P 500 operating estimates to $53.50 per share from $49.00 and to $58.00 per share from $53.00, respectively. Our new estimates represent annual operating EPS growth rates of approximately 27% for 2003 and 8% for 2004. We also raised our dividend per share forecasts for 2003 and 2004 to $17.00 from $16.50 and to $17.75 from $17.00, respectively. Preliminary third-quarter 2003 S&P 500 operating EPS grew by 34% to $14.06. On a year-to-date basis, writeoffs represent about 10% of reported earnings, down from the unprecedented level of 140% in 2002; we expect writeoffs to remain at low levels in 2004. Potential impediments to profit growth include (1) rising compensation expense, (2) rising cost-of-debt capital, and (3) tougher comparisons and less benefit from restructuring. Positive surprises may come from (1) still-powerful operating leverage, (2) improved global economic conditions, and (3) enhanced US competitiveness through rising productivity and a declining currency.