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

To: Kirk © who wrote (9001)	2/9/1999 11:42:00 AM
From: Jeffrey D	Read Replies (1) \| Respond to of 42834

From Credit Suisse yesterday. Analysis of mutual funds, European investors sentiment and their analysis of the U.S. economy in 1999. Like Bob, they feel there will be stock consolidation here after 4 months of increases. Jeff Mutual Fund Monthly-December Data Mutual funds investors were not behind the stock market rebound, since the net inflows into equity funds from September-December did not recover to 1997 and 1998 highs. Aggressive growth and world equity funds lost market share last year. Restarting contributions to 401(k)s, that maxed out before the end of the prior year, seasonally boosts equity fund inflows in the first four months. It will be more interesting to see how strong underlying net inflows will be. European Investors' Sentiment-Beginning of 1999 The results of our survey of investors we met in Europe showed a bias toward confidence in the United States in all indicators. Only 1/5th of those expect the dollar to weaken against the euro in the first half of 1999, whereas 2/5th think it will strengthen. Only 1/5th expected U.S. interest rates to fall, as opposed to 2/3rd thinking that euro rates would drop. 3/5th of those surveyed thought both U.S. and their own country's stock prices would rise this year. Outlook for the US Economy The current spate of strong economic data is consistent with our view that the economy would remain on a robust growth track. The fourth quarter's 5.6% growth includes a rebound from the General Motors (GM, $85.94, Buy) strike and extra construction activity due to mild weather; underlying real GDP rose around 4%. We have made no changes in our forecast of 3.4% growth during 1999 and 2.1% growth during 2000. We expect the drag from foreign trade to gradually diminish during 1999. Two domestic fundamentals keep the economy chugging along-(1) real wage growth greater than 3%, and (2) productivity-enhancing capital investment. We view the January National Association of Purchasing Management report as an initial sign of a rebound in manufacturing as forces that weakened it last year are diminished. Inflation will remain quiescent because of excess global investment, domestic deregulation and U.S. wages that are more determined by employers than employees. We expect the Fed to stay on hold for the rest of the year because strong growth does not ignite inflation in a disspansionary economy. Fiscal policy remains uncertain given partisan political environment in Washington. In the financial market, bond yield is expected remain around 51/4 % for most of the year because of low inflationary economy. Stock prices are expected to consolidate after four months of gains. The dollar's 3% gain against the euro in the first weeks after its introduction flew in the face of widely held expectations. CREDIT SUISSE FIRST BOSTON CORPORATION FIRST EDITION