There are two key challenges to the U.S. market: one is Fed policy -- and it's still our concern that the Fed will be increasing rates this side of Christmas; secondly, it's the slowing corporate earnings outlook. Although corporate earnings are still probably going to rise, I think there's a concern that numbers may come in below consensus and drive the markets down. |
There's still a bit of a tech wreck going on in the wake of the Nasdaq weakness. The other problem is that we haven't had good sector rotation and we've seen a bit of a sell-off in the banks. The results for the banks have not been too good - they are facing margin pressures. |
These situations often provide buying opportunities, rather than reasons to sell stocks. We've seen all this before. They argue, and then they resolve things. |
This could finally lead to a sell-off in U.S. equities. And then European stocks would mirror falls on Wall Street. |
This thing has been bid down and down. But I think on fundamentals now, taking a two to three-year view, people have got more comfortable with the level that we're paying. |
This was not good-quality institutional buying. It was really a question of people playing the trading range. |
This won't prevent a mini-recession in mid-1999. |
Today I think there will be a set back (in the U.S. markets) following the lead of Europe. Investors are nervous ahead of Sept. 11 -- people just don't want to take positive positions. |
We felt that the momentum of growth through the fourth quarter was going to feed into the first, there's no change of view. |
We were saying that sectors matter now, not countries, but Germany's performance, with its preponderance of domestic issues, has shown that country factors still matter. |
We'll see an acceleration of M&A activity in 1999. |
We're looking at growth which is more balanced. We're looking for this economy to move on through domestic demand. |