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Michael Ferguson wrote:
> Good topic. My question concerns the disconnect between the nasdaq and the
> dow/sp. It appears that the techs are flying because they do not use debt to
> finance their growth and acquisitions. I can see how inflation and the
> pressure on debt rates will hurt home buyers, credit card addicts, suv gas
> bills, etc., but how or when will this apply to jdsu or nt or intc or msft?
> These companies do not borrow to do business. So how can the fed reach them?
> Caterpillar gets killed, but who wants to own cat with their growth
> potential instead of the independently wealthy growth stocks?
>
> Hopefully someone will address this.
>
> Regards,
>
> Michael
>
> ----- Original Message -----
> From: "Earl Adamy" <eadamy@xxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Thursday, March 02, 2000 06:45
> Subject: [RT] Re: OIL has almost reached our upside target of 32.35--35.85
>
> | I'm expecting to see an uptick in inflation in the next couple of months
> | which scares heck out of the markets. High energy costs will percolate
a few thoughts: Tech might be affected:
- by a series of business disappointments: occurrence unlikely
- by a reduction of business investment: allthemore unlikely that cost reduction
efforts will be even more important.
- by lower consumption, due to people getting laid of by old economy firms: ???
- by lower stock buying power, due to people being squeezed on their debt side
through higher rates: possible
- by extreme valuations justifying some degree of stock rotation: several
attempts so far, but all failed, people went back into the "new new thing"...
I guess it will come out differently anyway:
- for example because a new "new new thing" emerges and wins the fund inflow
sweepsstakes, like everybody buying china or whatever..., dumping current
highfliers. That is the "hot money leaving one sector for an even better one"
theory
- Nasdaq breaks down through current rising wedge and we see followthrough
"profit taking" down to about 3500.
- Nasdaq breaks out of current rising wedge and we see an explosive rise to way
over 5000, with people trampling each other to get on the bandwagon.
I am sure there are several others...
Gwenn
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