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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: mike who wrote (6897)	10/28/1997 6:35:00 AM
From: D.J.Smyth	Read Replies (1) \| Respond to of 25960

mike you don't know me from a hill a beans, nor do you know how i operate my accounts. "someone to sell my stocks too". we were actually in 50% cash last week for most accounts. i'll be buying alright when the indicators show to do so. anyone can predict fear, even the longshoremen who sit around at lunch time deciding the fate of the world. the more difficult task is moving with optimisim when others are full of it. they did a University study mike wherein they asked 20 farmers a series of questions about solving world problems. they then gave the same questions to a group of well-know University professors of economics. the study revealed that both the farmers and the economists gave approximately the same answers - each clothed in different language. which are you the farmer or the economist?

To: mike who wrote (6897)	10/28/1997 9:00:00 AM
From: D.J.Smyth	Respond to of 25960

mike: today's DJ article regarding US Treasuries and Japanese Investors: 06:42 DJS Japanese Investors Faithful To U.S. Treasurys In Market Turmoil 6:42 DJS Japanese Investors Faithful To U.S. Treasurys In Market Turmoil By Chikako Mogi Staff Reporter TOKYO -(Dow Jones)- Japanese institutional investors are viewing this week's financial turmoil as a further stimulus for investing in U.S. Treasury issues, and their appetite has also been whetted for assets denominated in German marks. "Financial crisis by definition is favorable for any government bond market," Koshi Watanabe, manager in the foreign bond investment section at Chiyoda Mutual Life Insurance Co., said. Investors expect safe-haven buying to support the U.S. Treasury market as equities markets around the world, including the U.S., undergo major adjustments in the wake of a steep tumble in Hong Kong's Hang Seng Index. But they see little imminent risk of U.S. financial markets collapsing. U.S. markets are volatile now not because of internal problems such as huge budget imbalances but due to external factors, which sets the current market environment apart from that of the financial crash in October 1987. "It is a fact that U.S. financial markets were overbought in light of economic fundamentals, so it's natural that they should undergo a correction," a dealer at a large Japanese bank said. "This time, (U.S.) investors aren't selling out of dire need. They are selling on sentiment, and those are people who can still buy back." Watanabe said that before the Hong Kong meltdown, he expected the Federal Reserve to raise interest rates to cool the rally in the U.S. stock market amid high M3 money supply growth in the U.S. of an annualized 8.0%. Now, the U.S. Treasury market looks in a stronger position, he said. "The Hong Kong crisis has done the job. If the crisis spills over to other emerging markets, it could trigger world-wide deflationary pressure and further hurt equities markets. Money would then naturally find its way to the high-quality U.S. government bond market," Watanabe said. But he cautioned that the long end of the yield curve doesn't offer fair value in terms of interest-rate levels. Traders in the Treasurys market in Tokyo said the yield curve is steepening as money flocks into the short end of the curve, with the yield on two-year notes falling below 5.50% - the Fed funds target rate - earlier Tuesday. "It's basic instinct to put your money in the shorter maturities when you are unsure where all the other markets are heading," the bank dealer said. "The long bond yield could fall below 6.0% for the first time, and it's not surprising if people begin to sell to avoid that." "There is no merit in investing in the long bonds now," Watanabe added. The dealer said the two-year notes are a good buy as Japanese investors can pocket almost 5.0 percentage points from interest-rate differentials - enough to offset the risk of the yen appreciating at least 10 yen from current levels. Japanese government bonds maturing in September 1999 yield around 0.50% to 0.53% compared to around 5.50% for two-year Treasurys. Investors say they are also unconcerned about the dollar continuing its slide in the aftermath of the downturn in global stock markets. The dollar plunged almost 2 yen to an intraday low of 120.00 yen in Asia on Tuesday. Japanese institutional investors say the dollar is now at a very attractive level, and this bodes well for Treasurys buying. Furthermore, in terms of the dollar-yen rates, Japanese institutional investors say they don't expect the dollar's weakness to last for very long. "It's in the U.S. that global investments are made," Ryutaro Kono, senior economist at Dai-Ichi Life Research Institute, said. "It's not problems originating in the U.S. that are unsettling financial markets. Funds will eventually flow back to the U.S. and support the dollar higher." When faced with a financial crisis, Kono says, global investors look for the least risky market, not the most profitable one. Mitsuhiro Nakashizu, manager in the international department at Asahi Mutual Life Insurance Co., said that Europe, and particularly Germany, seems to be gaining more popularity as a safe-haven. "It's physically the most remote of all markets from Asia, currently the center of the turmoil. We've been boosting our portfolio allocations in German assets over the past month," Nakashizu said, noting that the price of mark assets is relatively attractive. Kono said the attraction of German assets depends on expectations for German short-term interest rates to rise in the future. "It's clear that Germany has stopped endorsing a cheap-mark policy. If you take the scenario that Germany will raise interest rates and cause the Deutsche mark to strengthen, then the mark at current levels is a bargain," Kono said. Copyright (c) 1997 Dow Jones & Company, Inc. All Rights Reserved.