Market Pundits Talkative on Dow 10K day
FROM THE BULLS:
"I think we have a pretty good shot at a little over 11,000 by the end of the year and I think maybe at that point we'll have too much optimism," says RALPH ACAMPORA of PRUDENTIAL SECURITIES. (CNBC "Market Wrap", 3/29)
"We're in a very good environment economically [and] we think a year from now stocks will be higher," says STUART FREEMAN of A.G. EDWARDS. (CNBC "Market Wrap", 3/29)
"The market is acting very well and although the advance- decline [line] is not very impressive, if you look at the advance-decline volume it's up more than three-to-one on the upside and I think that might be a little more important than looking at the actual issues," says PETER HENDERSON of HENDERSON BROTHERS. "I see the market continuing to go higher -- a big difference from a week or so ago when the Dow approach and exceed 10,000 intraday. Last week it was a big media event; people weren't sure if the Dow would ever get there. It gave the media a chance to ask a lot of seasoned veterans what they thought about the Dow hitting 10,000 and they heard from a lot of value type investors and portfolio managers that the Dow is really trading at lofty levels. I think that gave investors to make a few sales, and they did. Now the momentum is back. I see no stopping the Dow right now." (CNBC "Street Signs", 3/29)
How bullish is DAVID ALGER of FRED ALGER MANAGEMENT?
"Extremely," he says. "After our little profit-taking episode [last] week, I believe the market will regain its momentum and close at 11,000 by the end of the year. I think it will go up to 20,000 by 2004." ("Barron's", 3/29)
"I'm very comfortable with in the market," says LASZLO BIRINYI of BIRINYI ASSOCIATES. "Looking out three to six months, I'm thinking a lot of these stocks are going to be higher and whether they're 12 percent [higher] or 15 percent doesn't terribly concern me." ("Wall Street Week", 3/26)
"The fear of the economic black hole has disappeared," says ABBY JOSEPH COHEN of GOLDMAN SACHS. "A second phase, but one that is just beginning and is sporadic, is to see industries with actual improvements. What we have built into our forecast for 1999 is that in the second half of the year we will see some notable improvement [in earnings from abroad.]" (WSJ, 3/29)
"I actually think we're on the cusp of seeing better market breadth overall and I think that's going to happen as we get into the earnings season," says THOMAS GALVIN of DONALDSON, LUFKIN & JENRETTE. ("Wall Street Week", 3/26)
FROM THE BEARS:
"I think this more through 10,000 is a cause for caution, not enthusiasm," says KEN HEEBNER of CAPITAL GROWTH MANAGEMENT in Boston. He thinks inflation will pick up this year. "It's going to be gradual, it won't happen all at once, I don't think the Fed is going to tighten anytime soon. But if you take a two or three-year view, I think the next news is that we see more inflation and higher [interest] rates. This market at 26 times earnings cannot stand higher rates and more inflation.' (CNBC "Market Wrap", 3/29)
"If anything, I am more cautious today than ever," says RANDALL ELEY, president of EDGAR LOMAX CO. "The S&P's P/E ratio is something over 34. I mean it's never been there in history and sooner or later, the market's going to go back to normal, which is somewhere around a 14 or 15 P/E ratio. ... We would say generally a 50 percent invested position is much better than our normal 60 to 65 percent. ... I do expect by the end of this year, to see downside action. I think we're looking at a minimum 20 percent down period." (PBS "Nightly Business Report", 3/26)
"You've got no inflation, you've got no deficit, you've got solid, modest earnings growth but Dow 10,000 is just a little ahead of itself," says EDWARD KERSCHNER of PAINEWEBBER. "Our models ... say we're 5 to 15 percent too expensive ... so maybe we'll see a 9,500 Dow, maybe a 9,000 Dow. I think more importantly, we're just not going to real quickly see that 11,000 mark that so many people thought was the inevitable next marker for this bull market." (CNBC "Street Signs", 3/26)
"We have actually gotten pretty cautious over the last two months by various degrees -- pretty cautious meaning expecting a pullback of 10 or maybe 12 percent from the peak," says CHARLES BLOOD of BROWN BROTHERS HARRIMAN.
"We started off looking for 5 to 8 percent and as these problems have continued to evolve, I've gotten a little more worried. So I'm keeping my powder dry right at the moment, waiting for a buying opportunity and to move back to new highs later in the year." (CNBC "Market Wrap", 3/26)
"This market has broken all the rules, both the fundamental valuation rules and, in the last couple of weeks, all the technical rules," says BARTON BIGGS of MORGAN STANLEY DEAN WITTER. "So I have no idea what it's going to do, but I think it's crazy." (CNBC "Market Wrap", 3/26)
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