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THE CLEAREST CRYSTAL BALL OF ALLSeveral market strategists came close to pegging the Dow Jones industrial average's 1998 rise. A few were in the ballpark on the Standard & Poor's 500-stock index. But only one guru, Allan Roness of JW Genesis Securities, a brokerage in Boca Raton, Fla., correctly divined where all three major stock indexes would finish. When BUSINESS WEEK stopped the clock on its market forecast survey for 1998 on Dec. 15, Roness had overshot the Dow by only 0.9% and the NASDAQ by a tiny 0.13%. He missed the S&P by 3 percentage points. Roness' closest rival, Eugenia Simpson of Kirkpatrick Pettis, was even more prescient on the Dow but trailed badly on the S&P. RAGING BULL. The key to his crystal ball? Technology. ''The technology industry keeps the U.S. on the leading edge,'' he says. That bullishness helped Roness come within a hair of the NASDAQ's 27% rise--a gain that caught all but Simpson by surprise. As for the Dow, Roness reasoned that progress would be restrained by slowing improvements in corporate profits and high valuations. For 1999, Roness is even more ebullient, forecasting 30%-plus increases for all but the Dow, which he expects to rise 19%. The NASDAQ will still be powered by fast-growing earnings--a precious commodity as overall profit gains slow, he says. But the leadership mantle will pass to the S&P 500, whose less lofty values will attract bargain hunters. Cheapness will also help beleaguered small-company stocks, he says. Roness expects the Dow to continue to underperform, ending 1999 at 10,500. ''The Dow Jones is way ahead of the fundamentals,'' he acknowledges. Still, with interest rates low and foreign economies in disarray, money will also be flowing into Dow stocks.
What's Roness' favorite sector for 1999? Technology--of course. RELATED ITEMS
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Updated Dec. 17, 1998 by bwwebmaster
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