Forecast '99
Forecast '99
Very Positive Outlook
"The
market outlook is very positive," says Art Bonnel, Portfolio Manager,
U.S. Global Investors. "Last year there were $1.4 trillion in mergers
and acquisitions. This is creating a shortage of shares. On top of this,
investors are continuing to fund their retirement accounts which adds to
the demand for stocks. So we have an increasing demand for an ever shirking
supply of equities. This year the trend is continuing, and as long as IPOs
do not outnumber acquisitions, our market should do quite well. Then the
"Euro" is creating stability in Europe, which will help all financial
markets in Europe and the rest of the world. The key to strong markets is
a strong and stable currency. The Euro is doing just that. (What we need
is one for Latin America). Corporate profits should be "north"
of five percent this year, with a low inflation rate. This continues to
be extremely positive for the market.
So,
look for the market to show great alacrity as it moves to the 10,000 level
on the Dow quite possibly in the first quarter. Then some adjustments, which
will be on a base for a strong year-end close to perhaps 11,000. Industries
which will outperform the averages could be computers, chip makers, brokerage
firms, software and biotech. Look for strong performances from Dell, Apple,
IBM, Intel, AG Edwards Merrill Lynch, Schwab, Microsoft, Uniphase, SunMicro
Systems, Veritas Software, Amgen, Biogen and Genzyme."
South African Gold Shares
Bill
Kaeli of Noyes Partners, 50 Broad St., New York, NY 10004 says the South
African gold shares tops his list. Top Picks are: AngloGold (AU), Dreifontein
(DRFNY), and Harmony (HGMCY).
Top Stock Picks
Kenneth
A. Shea, Vice President, Director of Equity Research for Standard &
Poors offers the following Top Stock Picks for 1999: Univision Communications
(UVN), Tyco International (TYC), America Online (AOL), and Zebra Technoogies
(ZBRA).
ALK Top Stock Pick
Robert
H. Stovall, President, Stovall/Twenty-First Advisers, Inc., New York selects
Alaska Air Line (ALK) as his Top Stock for 1999.
A Good Year For Investors
Bin
Shi, Portfolio Manager, U.S. Global Investors (1-800-US-FUNDS): "1999
should be a good year for investors simply because the driving forces for
the equity market remain intact. First, you have a very strong U.S. economy.
Second, interest rates are low and liquidity continues to flow into the
market. We believe the U.S. and European economy will lead the global economy.
Asia probably has hit the bottom but it will take a while to sort through
all the structural problems they had, which will not be achieved overnight.
Latin America might be the hot spot in 1999.
"Based
on our outlook, our strategy is to focus on companies without a lot of exposure
to Asia and Latin America and to focus on companies that will thrive under
the low inflation environment. Many of the last years winners will continue
to do well. Technology companies, such as Microsoft and Oracle, will continue
to shine in 1999. Housing-related sectors, such as Fannie Mae, Home Depot
and Lowes are expected to deliver good performance as well. One undervalued
sector that is very attractive now is the investment management companies.
Our picks are Pilgrim America Capital and Federated Investors. Both have
reported good money inflow and both are trading well below the market multiple."
Visit the Web site at www.us-global.com.
Maintaining An Overweight Exposure to Equities
Joe
Rooney, Chief Global Strategist, Lehman Brothers: "We enter 1999 holding
an overweight exposure to both equities and bonds, but with a preference
for equities over debt. Relative to our asset allocation benchmark, we are
7% overweight in equities and 3% overweight in bonds, with these positions
offset by carrying a zero exposure to cash. Our positive outlook for equities
is based on the view that the policy environment will remain favorable,
as interest rates move lower together with initiatives to improve the structure
of the global financial system. At the same time, equity valuations imply
that markets are priced for a contraction in output and earnings, a more
pessimistic scenario than we envisage.
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