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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: BubbaFred who wrote (28459)	9/20/1998 8:05:00 PM
From: robnhood	Read Replies (1) \| Respond to of 94695

Bad News for all stocks--- S&poooos down 10.70

To: BubbaFred who wrote (28459)	9/20/1998 8:46:00 PM
From: Lucretius	Read Replies (1) \| Respond to of 94695

G has lead the mkt by a week or more since early July both on rallies and slides. G broke its '97 low on HUGE vol thus completeing its L-T top and closing below the neckline of a H&S pattern spanning more than a year. Just a leading indicator that I have been watching. It has been VERY accurate. IMO, it is just a matter of when.... ie- GAME OVER. -Lucretius

To: BubbaFred who wrote (28459)	9/26/1998 12:05:00 PM
From: BubbaFred	Read Replies (1) \| Respond to of 94695

Economy performing well despite volatility stocksite.com 9/21/98 U.S. Economy Weekly: The Asian crisis is moderating U.S. economic growth. But don't expect the slowdown to deteriorate into a recession in 1999. Financial market highlights - Atlanta FRB Production Index for August slips to 15.3 from marginally upwardly revised 22.1 for July - August retail sales up +.2%. Ex autos +.3%, a solid gain - Business inventories for July unchanged - dampens volatility - Federal Reserve Board (FRB) Beige Book released - see below - August industrial production jumps +1.7%. GM strike bounce - Ex auto production +.1% - capacity utilization = 81.7%. - Weekly jobless claims drop to 299,000; four-week moving average edges down to 304,000. - Trade deficit for July inches up to $13.9 billion. - August Consumer Price Index up +.2% - same core rate. - Core rate year-over-year +2.5%, certainly not deflation. - Philadelphia FRB index drops sharply to -13.2 from +13.3. - University of Michigan Consumer Sentiment Index for early September drops to 100.4 from final August level of 104.4 - quite a big one-month change if final index confirms early data. - Housing starts for August declined to 1.61 million annual rate, a -5.5% decline from July's record rate, but still very strong. Permits confirm strength at 1.66 million rate. As you can see from the above listing, a lot of economic data was released last week and among the noise there was some interesting information. The bottom line, at least in our opinion, is that economic growth clearly is moderating, largely because of the Asian crisis. But while moderating growth is a necessary precursor of a recession, it does not necessarily predict one. In short, our view remains that the growth slowdown will not deteriorate into a recession in 1999. In fact, there is evidence that the magnitude of the impact already is stabilizing. For instance, the trade deficit officially widened in July, but only by $.3 billion dollars, and only after June's deficit was revised down from an originally reported $14.2 billion to $13.6 billion. Obviously without the revision, the trade deficit would have narrowed. And while exports to Asia are declining sharply, year-over-year exports to Europe were up 3.5 percent in July, and to Mexico were up 16.6 percent. Even our exports to Canada were up 4.7 percent. So clearly there are some offsets to the Asian crisis. But as Chairman Greenspan noted, we cannot remain an "oasis of prosperity," and many have read more into this remark than seems justified. For instance, there was some speculation that central banks worldwide were planning a coordinated rate cut. Greenspan flatly denied it, implying that it is far too early for the central bankers to act. And Treasury Secretary Rubin did not mention any new plans to help build a "safety net" in Latin America, even while he acknowledged that Brazil is "enormously important" to United States interests. In short, they recognize the problem, and the potential for it to get worse, but it is not yet serious enough for preemptive action. The Beige Book also supports this conclusion. From the summary, "... most Districts see at least modest growth in business activity from generally high levels." And, "Domestic orders growth appears to be holding nearly steady or rising slightly in many regions." But, "... the San Francisco region notes that prices for services such as airline travel, health care, and cable TV have started to rise significantly." Obviously these all are signs of strong economic activity, and somewhat disturbingly, signal rising price pressures in the service sector, which is insulated from the Asian crisis. However, the Beige Book Summary also noted a surprising concern about future economic conditions. Whether the concern relates to the Asian crisis or the domestic political crisis is unclear, but apparently it is real, and in a sense was confirmed by the University of Michigan early September Sentiment Index. The bad news is that if expectations deteriorate significantly for whatever reason, they can become self-fulfilling. The good news, though, is that an interest-rate reduction would probably brighten the economic outlook fairly quickly. And, in fact, the financial markets are predicting interest rate reductions, noting that the plural is appropriate if one views reductions in 25 basis-point (.01%) increments. Look at the table above. A proxy for the short end is approximately one full percentage point below Federal Funds and the blended rate on the 30-year bond is approximately 35 basis points below Fed funds. Yikes! The markets expect the