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

To: Stoctrash who wrote (19247)	8/11/1998 12:46:00 PM
From: IQBAL LATIF	Read Replies (3) \| Respond to of 50167

US bonds and equities have a direct relationship as shown below= I doubt market will ignore it for too long. I am looking at earnings and revenues picture without the loss of MOT and CPQ for special DEC write off we had profits increase of 7% in second quarter this is not a bear market and soon you will see that. Return to main story Is the Market Overvalued? It depends on what you think about earnings and interest rates. Suppose you think the S&P 500 companies will earn $50 a share in the next 12 months. If the 30-year U.S. Treasury yielded 5.5%, the fair value for the S&P would be 1037, about 4.5% below the current level, according to Morgan Stanley Dean Witter. That indicates that even well into a correction, the S&P 500 is overvalued. But if you assume higher earnings growth or lower interest rates, stocks could be cheap. OPERATING EARNINGS FOR THE S&P 500 OVER NEXT 12 MONTHS YIELD ON 30-YEAR U.S. TREASURY BOND 5% 5.5% 6% $47 1087 986 898 48 1106 1003 914 49 1126 1020 929 50 1145 1037 945 51 1164 1055 960 52 1183 1072 975 53 1202 1089 991 DATA: MORGAN STANLEY DEAN WITTER, BUSINESS WEEK Return to main story Updated Aug. 6, 1998 by bwwebmaster Copyright 1998, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use