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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (15407)	12/16/1997 6:09:00 PM
From: current trend	Read Replies (1) \| Respond to of 50167

by Joe Battipaglia, Chairman of Investment Policy 12/15/97 As the fourth quarter of 1997 comes to a close and we look ahead to 1998, we see that the size and soundness of the U.S. economy will lead economic activity on a global basis. The competitive nature of American industry, the vibrancy of the service sector, and the continued high level of consumer confidence and consumption will lead the way for 1998. U.S. trade, particularly exports, is predominantly value-added, or proprietary goods and services, rather than commodities. As a result, Asia is less important to us on the export side than some might think. My view is that Asia is more of a source of production rather than an end-market for U.S. goods. In that event, the fact that producer prices are falling speaks to the positive aspects of the turmoil coming out of Asia. As a result, we are maintaining our S&P operating earnings estimates of $46 for 1997, and $52 for 1998. With the market currently trading at 18 times that number, and the fact that the long-bond is at 6%, I foresee continued upward movement of the markets. Our target for the S&P 500 is 1000 and 9000 for the Dow by mid-1998. The fourth quarter is usually the worst time for write-offs and write-downs and this year is no different. However, even with the pre-announcement season we have just come through, we are not dissuaded from our bullish viewpoint. The recent Technology sell-off is also a regular occurrence for this time of year. We believe the industry still has dynamic growth characteristics and will go on unabated in 1998. The U.S. financial institutions have also been challenged of late but they too will mirror the size and soundness of the U.S. economy. These institutions will continue to prosper in 1998 due to the quality of their loan portfolios, the quality of their sources of income, and the kind of earnings possibilities that exist for them. The Healthcare industry has a mind of its own. The rebound in the big-cap names is only the beginning and we would be concentrated in this arena. We like the transportation sector also due in part to the vibrancy of the U.S. economy and the fact that we believe management has the ability to straighten out their cost structures and get pricing right. In my opinion, there will be a few positive surprises for 1998. The first will be a rate cut from the Fed in the first quarter. Also, there will be a second half major rebound in Asia in terms of economic activity. Finally, Europe will emerge as a vibrant economy in 1998. ------------------------------------------------------------------------------------------ This bullish opinion from Gruntal & Co. posted to even out some of the short to long term bearishness on this thread! CT