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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Link Lady who wrote (16773)	10/15/1998 9:48:00 PM
From: Link Lady	Read Replies (1) \| Respond to of 18056

Nomura's Farnon on Fed Rate Cuts, Japan Stocks: Market Comment news.com

To: Link Lady who wrote (16773)	10/15/1998 11:43:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 18056

Wendy, I think that the point AG is trying to bring home is that he will not let a recession take hold in the US if he can avoid it. That means that this cut is probably one in a series of cut. AG will not want the markets to get too frothy either, so from time to time he'll try and talk them down, but the leading driver is avoidance of a recession and redirecting liquidity into the economy (but he'll try to prevent that liquidity from getting funneled into the financial markets, how, I know not). In any event, absence a recession next year, forget about further major declines, IMHO. If history is any guide, AG will try and engineer a "soft landing", trying to get earnings to catch up with overpriced equities (the nifty 500 or so). Two Fed easing in a row are typically signaling the bottom of "bear markets" (you can count this bear either from July 17 of this year or from last October, the small caps bear certainly is about a year old). Will it be the same right now, the odds (and a bunch of turnips, with the exception of the A/D lines and new high new lows ratio which are still bearish, but could turn with just another day like today) favor an end of the bear move here, IMHO. Will the dow make new highs before the end of the year? My current model does not show new highs for the year, nor new lows below 7400 (quite a change from last week). Stocks which I think are going to lead this rally are MRK and few other drugs, IBM, Dell, CPQ GTW in the computers, INTC, RMBS and possibly some other chips like MU (to 40 or a little more?) AMD, selected chip equipment like NVLS, AMAT, VECO. Brokers like MER and financials like STT, FNM maybe even CCI and few other money center banks like CCI (but this group may still have some "air pockets") and other financials like GE. I still like the networkers including CCRD, CSCO, ASND and few odd ones like HAUP, THQI, IFCI. Zeev Zeev