To: LABMAN who wrote (25406 ) 4/19/1999 12:08:00 AM From: IQBAL LATIF Respond to
I think this is just a result of that long awaited buying in BKX stocks and DOW stocks, the investors have now realised that if money has to be made the right stocks are the ones where earning momentum is high, like chemicals, BKX and otehrs which were overlooked and the whole emphasis was on NDX or nifty fifty, if you remeber most of the time the worry of the bears was that NHNL and breath of the market, now look at that NHNL and other indicators related to breath of tyhe market, it looks like we are seeing a rotation, I have been highlighting DOW stocks like GE G KO, Banks like C AEP CMB JPM, RUT and indexes other than hi-techs, for me some of these sectors from here may outperform NDX, for a smart investor he should be able to know the shift and position one self in a way to benefit, as you have seen that C is the new stock by stansky we are in it since 28$, the lowest it made on 8th of Oct, now if the earnings beat street big time we may see some selling buy the rumor sell the news but stocks moves higher, I was looking at this report yesterday the manufacturing capacity is increasing and higher than current output, with break down of Phillip curve, it is establisehed fact beyond much of doubt that whenever we have this current out going above the capacity we have seen Fed rising rates in present circumstance I don't see that fed will play with interest rates, the bonds yields moved up on a very strange logic, that is money in 'cyclicals' is now indicative of inflation pressures, however I think it is the lower interest rates helping the cyclicals and threat of 'global deflation' and lifitng of ice age which is resulting in a re-ignition of interest in cyclicals, that should not lead to new fears of inflation but so far it is this lingering fear that all cyclicals move are proceeded by rising interest rates, for me that is a wrong deduction I will like to go long the bond at around 123-124 area expecting that macro economic releases will slowly and steadily erode this fear of rising inflation. Imagin the logic that with NHNL comes the fear of inflation, the moment breath of them arket improves the bears have a new case to worry about naturally the breath of the market will only improve if the profits are resuming in key sectors if that happens it is the 'death of deflation' and 'over- capacity theory' not a threat from rising inflation. The deductions and the reading have to beright for right conclusions. A smart investor likes to read all that
