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WESTFALIA
INVESTMENTSTECHNICAL COMMENTSEconomic
conditions remain healthy as the U.S. economy enjoys good growth
with little inflation. The Federal Reserve's latest survey of
regional economic conditions showed wages and prices were barely up
in the late summer. Because the U.S. economy is doing so well,
labor shortages are growing, but as we see it, the huge buildup in
stockpiles earlier this year should translate into slower growth.
Since inflation is under control we believe workers will continue
to accept modest wages increases. We continue to look for a steady
Fed policy for the balance of the year.
EQUITIES: Is the Dow
getting ready to move above 8000? As we said, in our comments of
September 10, the stock market would spend time trading between
7700 and 8000 before moving to new highs. We now think the market
is getting ready to move to it's old highs and here is why: We look
for third quarter earnings to prove pleasing to Wall Street,
stimulating investors appetite for stocks! We continue to look for
increasing volatility over the next two weeks as the market awaits
the next parade of earnings report.
GOLD: No change, trading
affair.
BONDS: Long-term yields moving towards the 6¼%.
But the next batch of economic data could stall the move!
DOLLAR:
No change, the U.S. Dollar has peaked and should continue to
correct against the German Mark.
September 25, 1997
Peter
Cardillo, Director of Research Westfalia Investments, Inc. 90
West Street, New York, New York
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