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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NickSE who wrote (10597)	4/11/1999 11:42:00 PM
From: Les H	Respond to of 99985

CPQ may hit 50 million shares on Monday thomsoninvest.net Select Top 10 in issues

To: NickSE who wrote (10597)	4/13/1999 12:33:00 PM
From: NickSE	Read Replies (2) \| Respond to of 99985

TALK FROM TRENCHES: MARKET ON DECAF: CORP HOUSE OF CARDS? economeister.com NEW YORK (MktNews) - The U.S. Treasury market is having another "decaffeinated" session, one source commented Tuesday morning. Lack of market direction is forcing players to focus on the growing supply in the corporate bond market while remaining on alert for flak bursts from Kosovo. One veteran U.S. Treasury player said the market is trading largely without direction with "more than slight confusion as to what the next move is". He thinks the market is looking for a reason to correct but when it does not find anything concrete "it will manufacture something to get prices down". Others agree there is much indifference out there but caution that it might be dangerous to be short. Large customer cash positions and more safe-haven buying on Kosovo bodes against such a move. These players are cautiously buying dips. Right now the main focus is the corporate bond market. Supply of $U.S. corporates and global is expected to be over $10 billion this week. Since the beginning of the year, there has been only very manageable supply because many international names opted to issue in the new euro instead. It will be key to watch how this supply is received, sources say. For now, the U.S. Treasury market is expected to benefit from hedge and rate lock unwinds related to the corporate deals. And any selling of U.S. Treasuries to make room for sister market paper may be welcome in the face of dwindling treasury supply and upcoming treasury paydowns. But there is still caution out there. Despite the worldwide interest in $U.S. spread product, some warn that one bad corporate deal could send the corporate bond market down like a house of cards and take the treasury market with it. One seasoned corporate trader said the corporate market is feeling a bit squishy. There is lots of paper already in the market and more is coming in via bid lists, he added. Terming the market "fragile" he warned that if one of these "high profile deals like Associates" goes bad, it could hurt the whole market. $1B European Investment Bank 5Y already sold this morning. On tap for the rest of the week are $1.5B Associates Corp 5Y, $1B Inter-American Development Bank 10Y, $3b Conoco 5Y + 10Y +30Y, $1B Korean Development 5Y, and $3B Freddie Mac 5Y re-opening. And there are persistent rumors that if these deals are successful, jumbo deals from Ford Motor Credit, Asian Development Bank, DuPont and others are not far behind. Here is a bit of warning for what is now being called the "teflon" U.S. stock market: Continental European fund managers' optimism about U.K. and Japanese equities improved in April, while enthusiasm for U.S. and continental European stocks slackened, according to a survey sponsored by Merrill Lynch. In fact, financial sultan Warren Buffett is reportedly buying U.K. equities.