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After weighing the pluses and minuses, it still looks like big cap leadership to us...small caps lacking sponsorship and liquidity at this point.

On a year to date basis, the entire bounce universe is up almost 13%, outperforming the S&P 500 (+8.1%). Maybe there was a bounce this year, but it really seems that Tech stocks were the driver.

Steve’s thoughts on 1998 Stock Market Leadership, Volatility, Japan, Gold and Inflation.

Looking for a potential Double? Take a look at our Asia Pacific market opportunity index. High risk markets but risk is tempered by the beating these market have taken.

Equity managers increasingly fear the career danger of holding cash. Sagging stock prices have led a growing number high tech firms to reprice employee stock options. The importance of humor and laughter in life and in business.

Bullish conclusions using today’s low inflation levels and today’s “low” bond yields are derived from very short-term, historical time horizons. Longer term studies do not support these conclusions.

Asian crisis not yet applying brakes to strong U.S. economy...Asia should be bigger “drag” on U.S. in next six months. Near term, bond market still correcting from being somewhat extended.

Today's moderately positive sloping yield curve may evolve into a flat or mildly inverted yield curve later in 1998...

Wage pressure is only cloud on inflation horizon.

It was a shaky 1998 start, but the U.S. equity markets got it together after the big hit on January 9th (-3%).

In January, the S&P 500, on a close to close basis moved up 1% or more on four trading days and down 1% or more on two trading days and down 1% or more on two trading days (January 9 was down 2.97%).

Jim Floyd maintains a continuing earnings momentum monitor for a universe of 3000 stocks, breatking the universe down into tiers based on market capitalization.

Back in November 1997, the bottom fishing expedition began in the devastated Asian markets.

We did not employ nor endorse this tactical strategy in late 1997.

In last month's publication, it was noted that the Unconventional Asset Allocation Portfolio was establishing a 3% position in gold stocks.

Net inflows into equity funds lagged somewhat behind last January. We estimate U.S. focus equity funds experienced still strong net inflows of $17 billion, but foreign focus net inflows may have been less than $1 billion (net redemptions in the first few weeks).

The U.S. yield curve could mildly invert in 1998, even with a passive Fed.

Each February, this publication, sometimes with help from our readers, constructs a series of "Fearless Forecasts".

1987 closed with a pretty good rally, a rally extending into early January 1988.

1998...Will "New Era" deflate?  Thermal pollution time...Steve Leuthold offers his 1998 views on U.S. stock market, interest rates, economy, etc.  Also a review of 1997's prognostications.