The Two Faces of the Market THE MARKET COULD HIT 10,000 BY THE END OF THE YEAR BECAUSE... 1. Goods prices are falling, and overall inflation is under control 2. Second-half earnings growth is expected to be healthy 3. Despite Asia's continuing financial problems, the impact on the U.S. economy is minimal and will be confined to the first and second quarters 4. The Fed is unlikely to raise interest rates when economic data are inconclusive THE MARKET COULD EXPERIENCE AS MUCH AS A 15% CORRECTION BECAUSE... 1. Tight labor markets may spur inflation 2. Corporate profits are already losing momentum and will slow even more in the second quarter 3. Asia is still sinking, and the full impact on the U.S. economy has not been felt 4. Fearing that already rapid consumer spending--accelerated by a rising market--will ignite inflation, the Fed hikes rates Return to main story

Updated Apr. 30, 1998 by bwwebmaster
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