Merrill sees 1H 2001 rally ($INDU, $SPX, $COMPQ) by Tomi Kilgore
Christine Callies, chief U.S. investment strategist at Merrill Lynch, notes that broad tax cuts have been associated with "significant" equity market gains, especially when coming in conjunction with money supply growth. She says the year-to-date rise in stocks is "typical of the 'stress release' phase of a new medium-term recovery." Since the end of 2000, the Dow Industrials ($INDU) is down 0.8 percent, but the S&P 500 ($SPX) is 3.3 percent better and the Nasdaq Composite ($COMPQ) is up 14 percent. Callies says the biggest threat to her outlook is that if the economy bounces
back to quickly in the second half. Either way, however, she sees a first half rally.
Christine Callies, chief U.S. investment strategist at Merrill Lynch, notes that broad tax cuts have been associated with "significant" equity market gains, especially when coming in conjunction with money supply growth. She says the year-to-date rise in stocks is "typical of the 'stress release' phase of a new medium-term recovery." Since the end of 2000, the Dow Industrials ($INDU) is down 0.8 percent, but the S&P 500 ($SPX) is 3.3 percent better and the Nasdaq Composite ($COMPQ) is up 14 percent. Callies says the biggest threat to her outlook is that if the economy bounces
back to quickly in the second half. Either way, however, she sees a first half rally.
