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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Rande Is who wrote (970)	12/21/1998 2:22:00 PM
From: Jim Spitz	Respond to of 57584

Rande, Thanks for the link! jimS <EOM>

To: Rande Is who wrote (970)	12/21/1998 3:53:00 PM
From: Bucky Katt	Read Replies (1) \| Respond to of 57584

CMED looks interesting....The FED is going into damage control RE the runup in the I-nut stocks, so look for the 2nd tier, like ones we have talked about before, the ones that have not run yet, to take on wings as the high-flyers get clipped.....these will be for the piss poor investors/speculators that watched the I-nuts, who never bought them, for fear, never understanding how things could get so high...well guess what, everything always overshoots the mean, up & down....so some are still cheap and due their turns at bat... >>Fed market concern seen shifting to stock "bubble" By Marjorie Olster NEW YORK, Dec 21 (Reuters) - When Federal Reserve policy makers meet Tuesday, they will probably fret less about risks of a credit crunch and more about the eyebrow-raising prices of stocks like online bookseller Amazon.com. The swift rebound of blue chip and technology stocks to record highs after the Fed's recent interest rate cuts has central bankers increasingly worried about an asset ''bubble'' in the stock market, economists and former Fed officials said. Those concerns have bolstered expectations for no change in rates at Tuesday's Federal Open Market Committee (FOMC) meeting. A Reuters poll of 20 economists last week showed a unanimous forecast for steady rates. ''Our equity market is beginning to show signs of becoming a speculative bubble,'' said David Jones, vice chairman and chief economist at Aubrey G. Lanston and Co. Inc. ''Irrational exuberance is a strong argument for leaving (monetary) policy unchanged and hopefully that will prevent the bubble from getting any bigger.'' ''Irrational exuberance'' was the term Fed chairman Alan Greenspan used in December 1996 to describe stock prices, raising the question of whether financial assets were out of line with underlying fundamentals. The remark triggered a broad but short-lived selloff in global equities. The recent resurgence of high-flying Internet shares like Amazon.com (Nasdaq:AMZN - news) is seen as one sign of a speculative frenzy in the stock market, which the Fed does not want to encourage by lowering rates further, analysts said. Amazon.com shares skyrocketed from about 25 in January to a record high of 317 on Monday. In mid-September, when the Fed began cutting interest rates, the shares were at 73. The company posted a loss in the third quarter. ''The Internet stocks are the leading edge of the speculative surge,'' said Jones. ''They are obviously overvalued.'' Just two months ago, the Fed was worrying about plummeting stock prices and the threat of a credit crunch from a sudden widening of spreads between U.S. Treasuries and riskier corporate and emerging market debt. The Dow Jones Industrial Average had tumbled nearly 2000 points from its July high above 9300 to an intra-day low of 7400 on September 1. Russia's debt default in mid-August and the near collapse of hedge fund Long Term Capital Management in September triggered an investor exodus out of stocks and virtually all types of debt except U.S. Treasuries. The Fed slashed its key fed funds rate by 75 basis points to 4.75 percent from 5.50 percent with three quarter-percent rate cuts between September and November aimed at stabilizing financial markets and averting a threat of recession from the global turmoil. Credit spreads have since narrowed somewhat, although they remain high compared to historical levels. But Fed policymakers are reassured because lesser rated borrowers, some of whom were shut out of the market at the height of the crisis, have been able to issue debt recently, economists said. While credit markets staged only a partial recovery, the Dow Jones Industrial Average raced to a record high on November 23 at 9374. On Monday, the Dow was up 160 points at 9064. Former Fed governor Lawrence Lindsey, speaking in New York earlier this month, said the Fed's more relaxed monetary policy in recent years has made it easier for investors to get their hands on cash to buy stocks. Easy money drove up prices, creating a ''financial asset bubble'' which now poses a dilemma for Greenspan, he said. ''The dilemma is not to let the bubble get out of hand and, at the same time, let the world go ahead,'' Lindsey said. Many experts say hefty stock gains in the past few years created a ''wealth effect'' which boosted consumer spending. Strong spending this year has been the major engine of U.S. growth, offsetting the harmful effects of the global economic crisis on U.S. exports and the manufacturing sector. ''If the bubble pops and stock prices fall, that could lead to a sharp drop in spending,'' said Jones. ''Of all the threats to the economy next year, that would be among the largest.'' Jack Beebe, director of research at the San Francisco Fed, said in a December note the price/earnings ratio for S&P 500 stocks remains well above historic ranges given the possibility earnings will decline next year. ''The strong resurgence of the stock market since October generally is at odds with the persistence of elevated risk premia in debt markets,'' Beebe said. Other analysts have noted that while a relatively small number of stocks are driving the major indices higher, many second-tier stocks are still well below their 52-week peaks and reflect the risks to the economy and to corporate profits which are priced into credit markets. --------------------------------------------------------------------------------

To: Rande Is who wrote (970)	12/21/1998 5:09:00 PM
From: Starduster	Read Replies (1) \| Respond to of 57584

Rande Could you tell me what you think this will do for SHRP tomorrow? Thanks, S Sharper Image in pact with Marketwatch.com December 21, 1998 08:01 AM SAN FRANCISCO, Dec 21 (Reuters) - Specialty retailer Sharper Image Corp. said Monday it has struck a deal to have its products featured on the the CBS Marketwatch.com Internet site. Sharper Image said the pact with Marketwatch.com, a site aimed at stock market investors formed in October by CBS Corp. CBS and Data Broadcasting Corp. DBCC , is intended to increase exposure of its own retailing Web site, www.sharperimage.com. "The Sharper Image Web site has been extraordinarily successful this season, with increases of over 400 percent from the same time last year," Sharper Image chairman and chief executive Richard Thalheimer said in a statement. "Now we are developing relationships with other Internet partners to further expand our reach," Thalheimer said.