Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Diamond Jim who wrote (9030)	2/26/1999 1:17:00 PM
From: Jeffrey D	Read Replies (1) \| Respond to of 42834

Jim, bonds go higher and yield goes lower today as inflation is still nonexistant. Hope this helps INTC and AMAT a little. Jeff << Top Financial News Fri, 26 Feb 1999, 1:11pm EST Treasury Bonds Climb as High Yields, Slow Inflation Lure Investors U.S. Bonds Rise; Yields at 6-Month Highs Lure Buyers (Update3) (Updates prices. Adds comment from economist in 5th paragraph.) New York, Feb. 26 (Bloomberg) -- U.S. bonds rose, snapping a three-day slide, as the highest yields since August and a report showing scant inflation lured buyers. ''We expect inflation to stay very benign,'' said David Berry, who oversees $35 billion of bonds at Lincoln Investment Management Inc. in Fort Wayne, Indiana. He's been buying and said these yields are ''attractive.'' The 30-year Treasury bond rose 26/32 points, or $8.13 per $1,000 bond, to 95 1/32. Its yield fell 6 basis points to 5.59 percent. Even after today's gains, Treasuries in February suffered their biggest monthly losses since 1980, according to Ryan Labs Inc., a research firm. Bonds rallied today as the government said a key inflation gauge rose 1 percent last year, the smallest increase since 1949. Slow inflation allows bonds to hold more value. Yet the report also showed the economy hummed along at a 6.1 percent annual rate in the fourth quarter, faster than first estimated. That follows reports this month on jobs, housing and manufacturing that indicate growth isn't letting up in 1999. Analysts said the market's swoon may not be over, especially because a report next week is expected to show healthy job gains in February. ''It's way too soon to say that because of today's rebound we're out of the woods,'' said Anthony Karydakis, an economist at First Chicago Capital Markets. Fed Watching Evidence of a strong economy sparked concern that the Federal Reserve might raise interest rates later in the year to keep the economy from overheating. Fed Chairman Alan Greenspan added to that concern when he said the central bank has to evaluate whether its three interest-rate cuts last year remain ''appropriate.'' Greenspan's remarks came during his semiannual testimony to Congress Tuesday. Fed Governor Laurence Meyer spurred losses yesterday suggested the Fed's 4.75 percent target for overnight bank lending - the federal funds rate -- may be too low. Bond investors reacted to such remarks by selling, sending the 30-year Treasury yield as high as 5.65 percent yesterday, a rise of 57 basis points since the start of the month. That lured some buyers today. ''At some point you find a level where you attract some interest,'' said Dave Connors, head of government bond trading at Credit Suisse First Boston Corp. in New York. Edgar Peters, who oversees $16 billion of stocks and bonds at PanAgora Asset Management in Boston, said he's been buying. ''As bond yields come up like this, they become attractive,'' he said. >>

To: Diamond Jim who wrote (9030)	2/26/1999 1:28:00 PM
From: Jeffrey D	Respond to of 42834

Jim/all, Argus research economist analyzes the economy and interest rates. He sees slowing European growth causing no Fed. rate increase and lowering long term rates back to 5.25%. Jeff << U.S. Economy Fri, 26 Feb 1999, 1:21pm EST Economist Yamarone on Federal Reserve: U.S. Economy Comment Washington, Feb. 26 (Bloomberg) -- Comment from Richard Yamarone, an economist at Argus Research Corp. in New York, on the outlook for the U.S. economy and the Federal Reserve after a government report showed gross domestic product grew at a 6.1 percent rate in the fourth quarter: ''With economic growth accelerating at robust 6.1 percent pace during the fourth quarter, many market pundits are claiming the Fed will retract the November rate cut -- we say no way!,'' Yamarone said. ''The Fed cannot raise rates with inflation nowhere to be found. ''That isn't to say that there won't be an adoption of an asymmetric bias towards tightening at the March 30 meeting,'' Yamarone said. ''But a tighter bias does not a rate hike make. There have been numerous occasions where the Fed has instituted an asymmetric bias and not acted. ''What's more, there are currently two concerns on the Fed's radar screens -- Europe and the U.S. agricultural picture,'' Yamarone said. ''Even the Fed chairman recognized that the European economy is weakening. And we believe that it will be the determining factor in the direction of the U.S. economy. ''We feel that Europe will slow and subsequently shed some U.S. exports. This slowdown will bode well for the Fed as the landing strip will be primed for a smooth landing. Weak economic growth in Europe will have investors flock to the safe haven status of U.S. Treasuries and push yields back down to the 5.25 percent to 5.35 percent range.'' >.