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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (24316)	3/15/1999 6:05:00 AM
From: IQBAL LATIF	Respond to of 50167

New and Stronger Outlook for 1999 —March, 1999 Mer report Last year ended strongly for the American economy and the positive momentum continues. We now expect gross domestic product (GDP) to increase about 3% this year. We are also raising our estimate for Standard & Poor's 500 operating earnings-per-share to $46 for 1999, up 3.5% over 1998. The U.S. is expected to be the world's strongest major economy in 1999, with growth negligible or negative in most of the rest of the world. The key issue: Will the rest of the world pick up before the U.S. slows down or will the U.S. slow before the rest of the world starts to recover? Latin America is expected to have a regional recession in 1999. Japan remains in trouble, and China looks shakier. We don't foresee sustainable recoveries in emerging Asia. European growth is slowing. Our trade balance continues to deteriorate, but the key factors driving the economic outlook-consumer and capital spending-should moderate in 1999. The deflationary pressures that squeezed profit margins in 1998 are not expected to relent in 1999. A lack of pricing power and declines in overseas sales should continue to adversely affect corporate earnings. Barring a market disaster, we think that the Federal Reserve won't ease monetary policy again until the U.S. economy slows.