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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Big Bucks who wrote (25415)	10/17/1998 7:36:00 AM
From: MrGreenJeans	Read Replies (1) \| Respond to of 70976

BB Low inflation + Low interest rates + Slow Growth + A Decrease in Rates + Decent profit growth in 1999 = A sustainable upside The analysts at Goldman Sachs, I know the posters on SI generally dismiss the analysts and AJC because that seems to be the hip thing to do, have a forecast of this economy which has been right on the mark for a long time now. They view profit growth for 1999 as growing at approximately 6% next year. This growth along with favorable inflation and lower rates will produce an equity market which will reach all new time highs within 6 to 12 months. I believe AJC has an S and P forecast of 1210 which she believes is easily attainable. Along with this an easing or series of easings by the Federal Reserve makes for a very explosive equity market going forward. 1. Production must be cut back which negatively impacts profitability, jobs and corporate growth until the demand increases The Gross Domestic Product while slowing does not indicate severe production cutbacks. Profitability is still positive. The job market while it may be easing is still very tight and consumer demand while slowing is still relatively strong. As a matter of course, if all the factors just mentioned were rising extremely fast the Federal Reserve may have had reasons to increase not decrease rates because of the threat of inflation which at the moment is very low levels. From my perspective, nothing was more bullish for the economy or equity markets than the recent rate cuts we have witnessed. If one goes long one will make major profits. It is a give me. It is a lay-up and let's face it there are not too many lay-ups one can make in a financial lifetime. This is one of them.