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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Bill Shepherd who wrote (8795)	11/30/1998 11:52:00 AM
From: Jeffrey D	Read Replies (1) \| Respond to of 42834

I hope all of you had a great Thanksgiving! Now back to work: The following is a market strategy analysis by Credit Suisse today. I agree with their assessment that the technology sector provides the greatest potential. Any comments or ideas from others? Jeff CREDIT SUISSE FIRST BOSTON CORPORATION Equity Research November 30, 1998 MARKET STRATEGY Economic Comment - Mutual Funds Monthly - October Data Net inflows (seasonally adjusted) into equity funds in October backslid a bit from September's beginning of a recovery, suggesting that the support to the stock market rebound from mutual fund investors still lies ahead. Gross outflows continued to decline but gross inflows fell off. This combination indicates waning panic but no strong attraction back into the market. Record-setting November could have changed that. Net inflows into aggressive growth funds picked up smartly but attraction to world equity funds slipped. Net inflows into bond funds also ticked down in October. They have been bouncing on a plateau since mid-year, having risen along an irregular trend since the end of 1996. Junk bond net inflows were modestly positive in September and October after a large outflow in August. However, activity in junk bond funds is still below the $11/2 billion monthly inflow earlier in 1998 and in 1997. Cash was still king in October. The net inflows into money market funds edged down in October but the August-October cash pileup has been the largest in history by a large margin. Investment Strategy - The Fire Walls Around Corporate ProfitsRemain In Place Sector selection continues to be the main message embedded in the corporate profit picture. Third quarter operating profits were poor in the aggregate, but were weighed down by commodity-related businesses (basic materials, energy) and those portions of manufacturing with greater reliance on export activity (capital goods). The ratio of positive to negative surprises contracted slightly for the S&P 500 while the negative bias in the Russell 2000 persisted. In addition, the proportion of overachievers in all sectors deteriorated while comparative sector standings fluctuated. Sectors with the largest proportions of positive surprises were communications services, utilities and financial services, but technology possesses the greatest appreciation potential. Above-consensus GDP growth, 6% profit gains and enormous reserves in money funds should promote a buy-the-dipmentality in 1999