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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (11786)	1/15/1999 11:06:00 AM
From: David Petty	Read Replies (1) \| Respond to of 22640

Hey Steve/Guys read what some of the high paid experts said this morning... now they may be right at the end of things but they were sure wrong at the start of things today. That is what is so frustrating and they do this for a living... everybody is a weatherman and we all flip coins. We have done the research (mainly with Steve's prodigious help) and know that these are good buys... but a word of CAUTION, this is far from over. As many have said, these are stocks you can retire on as long as you are not retiring in the next 2 years. Oh, I almost forgot... here is the silly release from intermoney: US markets preview -- Brazil float to pour cold water on Wall Street January 15 1999 13:41 GMT Brazil's battered currency is floating freely on foreign exchanges on Friday. Watch it plummet, hitting the dollar and Wall Street. Brazil's central bank confirmed earlier today it would not intervene in the market today to keep the real within its trading limits. Those limits were revised as early as Wednesday, when the authorities sent shockwaves through world markets by an announcing an 8.2% devaluation of the unit. Dollar/real was at 1.53 at 13:05 GMT. In other words, the Brazilian unit was 16% weaker than its revised trading bands allowed. Currencies floated in panic conditions usually overshoot any estimates of their fair value, as speculators strive for ever greater profits. In coming weeks the real could lose anywhere between a quarter and a half of the value it had until Wednesday. It is bound to pare some of these losses in the long run, however. The central bank said it would announce new currency measures on Monday. It may resume intervening for its currency in coming days, forcing it to depreciate in an orderly manner. Brazil probably lacks the necessary foreign-exchange reserves to set up a currency board. A free-floating currency should ultimately help the Brazilian economy, making exports more competitively priced. But for now it will encourage local investors to send their money abroad. It's likely the Brazilian authorities have decided to cut their losses. They've seen precious dollar reserves evaporate in recent days as they battled to defend the real. Their cause can't have been helped by press reports suggesting US and IMF officials saw further devaluation as inevitable. Financial meltdown in the world's eighth-largest economy threatens the whole of Latin America, with serious consequences for the Wall Street. US companies and banks do billions of dollars of business in the region. The S&P futures contract on US stocks, seen as a good guide to where the Dow Jones industrial is heading, was down 7.7 points on the day. It was around 8 points up on the day before Brazilian markets opened. That suggests the Dow could tumble over 60 points at its start. Our technical desk think it could then fall to 9,000 from yesterday's close at 9,121. That would mark the fifth straight session of losses, and push the average firmly into negative territory for 1999. Trouble for US markets means trouble for the dollar, so investors are seeking safety in the euro and the Swiss franc. Look for euro/dollar to rise to 1.1810 in the coming session, from 1.1677. Dollar/Swiss targets 1.3400, from 1.3636. US Treasuries should continue to profit from worries about Brazil, although a falling dollar is likely to put off foreign players. Government debt is seen as lower risk when equity markets look fragile. Look for the yield on the benchmark 30-year Treasury to fall to 5.00% today, from 5.05%. Yields move in the opposite direction to prices. The Australian, New Zealand and Canadian dollars are in for yet more battering as commodity markets suffer alongside emerging markets. All three countries rely heavily on commodity exports. Falling commodity prices undermine their trade and budget accounts. The Aussie should slide to 0.6214 against the US unit; the kiwi should fall to 0.5295 and the Canadian dollar could weaken to 1.5450. The rates were 0.6325, 0.5395 and 1.5263 respectively.