Finger to the wind: Brian Belski

Brian Belski

Fundamental Market Analyst

U.S. Bancorp Piper Jaffray

in Minneapolis

Assets under advisement:

$56.1 billion

Forecast:

Looking into Mr. Belski’s crystal ball, domestic production will continue to show signs of slowing over the next three to six months, which will also help drive the Federal Reserve to provide more liquidity in the marketplace.

Mr. Belski, 34, says the main factor the Fed continues to watch is employment wage control.

“We are starting to see subtle signs that wage increments are beginning to slow. We look for the Fed to lower the 6.5% federal funds rate one-quarter percentage point in March and another quarter percentage point in May, to 6%.”

Mr. Belski says that while the stock market is acting like the economy is going into a recession, a recession is unlikely provided productivity remains high or at least stable. Wage rates and energy will drive inflation, energy prices will fall a little, and inflation will be held in check, he says.

Mr. Belski predicts that corporate earnings as measured by the Standard & Poor’s 500 stock index will grow 8% to 9% next year versus this year’s 19% consensus estimate.

“Higher interest costs have taken a bite out of corporate profits,” he says. “Lower interest rates will lend some support to stock prices, but current earnings forecasts don’t factor in interest rate sensitivity analysis.”

Earnings for technology stocks will grow 15% to 18% 3/4 that’s revised down from 25%, he says.

The finish line, 2001:

* The Dow: 12,500

* The Nasdaq: 4,200

* The S&P 500: 1,675

Tip sheet:

* Hot stock: Intel Corp.

* Hot sector: technology software and services

* Next big thing: a return to a conservative and disciplined longer-term investing approach. Investors have been burned focusing on the next best thing. The bubble has burst.