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

To: MARK C. who wrote (25546)	4/22/1999 12:19:00 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

The movement of big caps sometime is a mistakenly identitfied as rising inflationary expectations, when TECHS started correcting we saw rotation into big caps, however the market assumed this as signal that cyclicals are coming back in favor and as such treated this move as a internmediate step leading to higher intrerest rates, as you know we got this rally in DOW going as strong economy resulted in strong corporate profits, but it is also considered as down the road a recipe for higher Fed rats, but underlying yawning gap between capacity and out put indicates ( the most important yardstick one should have in face of breadown of Phillip curve) that we may have this non-inflationary new paradigm economy going until the output growth exceeds capacity growth, we have this 6 months margin, in them. Meanwhile, Fed worrried about 'asset inflation' in internets must have seen that 'asset bubble' (where gallons of ink has been spilled on out come for US economy if internets corrects) had a shrp haircut without any impact on the market, we still stayed above 10250 on DOW abd above 1300 on SPM. The bond yields will soon head south as techs and broad market makes a lethal move in a forward direction..