The U.S. and Europe are likely to be in a bear market for stocks next year, said Barton Biggs, Morgan Stanley, Dean Witter, Discover & Co.’s global strategist.
Investors are “grossly underestimating” the recessionary effects of the Asian currency and financial crises, Biggs said in a report to clients.
Economic growth and corporate profits will disappoint investors, Biggs said. The companies in the Standard & Poor’s 500 Index could report 1998 earnings at the same levels as this year, he said. At worst, profits could drop 5 to 10 percent, he said.
“The brutal hug of a bear market will squeeze some, maybe a lot, of the ebullience out of American equities - and European stocks as well, because the U.S. equity market rules the world,” Biggs wrote.
He said government bonds in the “hard-currency” countries, such as Western Europe and North America, should deliver returns of more than 10 percent next year. The yield on the U.S. 30-year Treasury bond could be at 5 percent by this time next year, wrote Biggs, who also chairs the firm’s money management business.
The long bond yield now yields about 5.92 percent.
Best stocks for ‘98 listed
Every year, Eugene Peroni lists his top 10 stock picks for the year ahead. Peroni, research director of Janney Montgomery Scott Inc. in Philadelphia, has an uncanny ability to find winners. The 1997 list is up 55 percent, vs. 27 percent for the Dow.
Since 1988, gains are 632 percent vs. the Dow’s 279 percent.
The 10 for 1998: AT&T; Corp.; Clear Channel Communications Inc., radio and TV; Coltec Industries Inc., aerospace; Walt Disney Co.; Home Depot Inc., retail chain; and Mail-Well Inc., specialty printer.
Also, Pfizer Inc., drugs; Procter & Gamble Co.; Sybron International Corp., dental products; Wm. Wrigley Jr. Co., gum.
DRIP list available
The company that publishes the “No-Load Stock Insider” and “DRIP Investor” newsletters now has a toll-free number you may call to get a copy of the latest master list of all no-load stocks. It’s 1-800-233-5922.
With no-load stock plans, you may buy your initial and subsequent shares directly from a company, allowing you to bypass stock brokerages or other middlemen.
Below are some of the companies that have recently unveiled no-load stock plans, according to “DRIP Investor.”
Each listing includes the company name, the minimum initial required investment, and a phone number to call for a prospectus and enrollment information:
Walt Disney Co., $1,000, 1-800-948-2222.
Aetna, $500, 1-800-955-4741.
Walgreen, $50, 1-800-286-9178.
Week will highlight saving, investing
Federal and state securities regulators in the United States and their counterparts throughout the Americas are creating the first international “Saving and Investing Education Week” early next year.
The week, from March 30 through April 3, is designed to promote the importance for consumers of saving, investing and avoiding securities fraud, the U.S. Securities and Exchange Commission said.
In this country, the educational campaign will include a series of investors’ town meetings, investment seminars, workshops and school programs. The SEC will work on the programs with the North American Securities Administrators Association, which represents state regulators in the United States, Canada and Mexico, and other government agencies, consumer and financial industry groups and the news media.
The campaign was created by the Council of Securities Regulators of the Americas, which is comprised of regulators from 26 nations in North, Central and South America and the Caribbean.