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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Red Scouser who wrote (47374)	2/8/1999 3:21:00 PM
From: rupert1	Read Replies (2) \| Respond to of 97611

Looks to me like the market sentiment is undergoing a fundamental - if temporary - change. The bias is cautionary and tending towards bearish. There is going to be a battle of the gurus. The bulls will point to the fundamentals and argue that even if interests rates rise in the market, as opposed to the Fed, the economy will be able sustain the increase, and the strength of the economy will continue to generate profits for corporations. But even the bulls will have to concede that the shares of many companies are fully valued if not overvalued, for the time being. The bulls will argue that year over year improvements in Asian and other economies and one-of business having to do with YK2 will make up for any structural demand weakness. The bears will argue that there is little room for error in current valuations, that there is no room for error in the economy, that interest rates will not only move up in the market but they will be raised by the Fed sometime later this year. They will say that recovery in Asia and Europe has been exaggerated and, in fact, there will be year over year decrease in some economies. The YK2 problem may create demand in the first half but will dampen it in the second half. Both bulls and bears can agree that if the stockmarket could be 10-15% lower for most of the first half then the market could look forward to incremental gains in the second. From time to time - a tech conference, a new product, an AV type announcement - will cause stock prices to pop up, but it will be against a more sombre background so that the effect will be subdued and transitory. It seems that techs have to cool off and maybe pull-back. But after that, techs will offer the best prospects of double digit growth in earnings and in their share price.