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Technology Stocks : PC Sector Round Table -- Ignore unavailable to you. Want to Upgrade?

To: LK2 who wrote (1319)	12/16/1998 8:47:00 AM
From: LK2	Read Replies (1) \| Respond to of 2025

RE-->Because in the end, valuations matter. Business is pain.<< Below is a Merrill Lynch analyst who agrees with Lawrence Kam that further pain in the market is needed. Unfortunately, analysts opinions have questionable value. Everybody's got an opinion on everything (including me). For Personal Use Only ----------- >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> biz.yahoo.com Tuesday December 15, 5:55 pm Eastern Time Merrill's McCabe sees pain for stocks in early 99 NEW YORK, Dec 15 (Reuters) - Merrill Lynch and Co. Inc.'s (NYSE:MER - news) chief market analyst said Tuesday the U.S. stock market may see a year-end rally, but equities are at the tail end of a bull market and due for some serious losses in early 1999. ''This recovery, back to the highs ... could be over, but I think we could have a bit of icing on the cake,'' Richard McCabe said. ''We could get one more step of the rally now or in January.'' He spoke at an annual presentation by Merrill on the firm's economic and investment outlook for 1999. Three major U.S. stock indices -- the Dow Industrials, the Standard & Poor's 500 Index and the Nasdaq Composite -- set new highs in July before sliding about 19 percent on fears the Asian crisis was bulldozing Russia and heading to Latin America, and could eventually hit the U.S. economy. A massive series of rate cuts by central banks and international intervention allayed the fears, allowing the indices to quickly regain their old records. McCabe is at odds with some analysts, who hold that the correction is over and stocks are ready for a higher phase. McCabe expects the recent recovery to dry up despite any year-end poofs to the upside. He exacts weakness early in 1999 to force blue blue chips to retest their summer lows. ''We have unfinished business,'' he said. Such a downward move would correct many of the largest stocks that were unmarked by the summer's bruising. It would also give small caps a chance to catch up to blue chips, correct sentiment measures and erode some heady speculation, namely in rocketing Internet stocks. ''(That) is not characteristic of the early stages of a new bull market,'' he said. The Dow struck its recent low in late August, touching an intraday bottom of 7400. McCabe declined to say how far he thought his predicted 1999 downdraft would go. The softness would set the stage for a new bull market in 2000, he said. Stocks could move higher, finishing out the year with slim gains and a ''V''- or ''U''-shaped graph. McCabe also said that foreign investment on Wall Street could go much higher in the next bull market. ''There is room for foreign investment to become much more aggressive in the next bull market cycle,'' McCabe said in remarks to Reuters after the presentation. McCabe said that while many on Wall Street assume that non-U.S. investors buy only big blue chip stocks, he has found in the past that such investors ask questions about smaller cap stocks, ''a much more aggressive play.'' McCabe reconciled his view of a rebounding market with Merrill's overall view that the U.S. economy would be weak in 1999 and not make a comeback until the year 2000, saying that the stock market often leads the economy by six to nine months. Copyright © 1998 Reuters Limited <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<