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

To: Lee who wrote (16174)	1/7/1998 3:38:00 PM
From: J.T.	Read Replies (4) \| Respond to of 50167

Lee, Good analysis. I think the Big Six reporting within the next month will tell a lot about the health of the market (GE, INTC, MSFT, IBM, CPQ, DELL) Others could be added to the list. If three out of six don't make the #, or if they project lower forward earnings over the next two quarters this will be another albatross overhanging the market. Remember, earnings are a "lagging indicator" and the market is looking out six to nine months out. Therefore, we need to monitor very closely the comments Grove, Gates et all have to say and the tone of their message about the next two qtrs. I do agree with you that we will back up to 6.25% to 6.4% area but only after a test of the recent record low yields. We may in fact have to move down to 5.25% area before it is all over. Once confidence gets shaken, credit card delinquencies start to rise and loans start to default and assets retrace, then you will see the credit noose tighten up and hence yields back up to your levels. This may or may not happen until summer or into fall. Also, if the big six all come in and the inflation buzzword comes back, then we will see your yield targets much sooner. OMHO. JT