Michael Gasior takes a bearish* look at the market

Economic Outlook:

- US economy slowing

- Japanese economy recovering

- China growth still impressive

Fixed Income Outlook:

- No fed funds rate increase in 2004

- Long rates increase

- Speculators get flushed out

Commodity Outlook:

- Some raw materials prices spike

- Oil prices edge higher and higher

- Gold continues to make gains

Equity Market Outlook:

- Overvalued US equities correct

- Japanese market recovery continues

- Emerging markets charge ahead

Currency Outlook:

- US dollar continues to weaken

- Yen appreciates aggressively

- Euro also strengthens

Biggest Surprises:

- Upside Asian Reflation

- Downside US Economy Stagnates

- (with a smile) Tiger Woods Two More Majors

@EDITRULE:

Michael Burpee takes a bullish** look at the market

Economic Outlook:

- predicted 3.50 to 3.75 percent growth in US economy's gross domestic product (GDP)/1.3 percent growth in consumer price index (CPI)

- predicted 1.10 to 1.40 percent growth in Europe's GDP/1.5 percent growth in CPI

- predicted 1.50 to 2.0 percent growth in Japan's GDP/one percent growth in CPI

- predicted 8 to 8.5 percent growth in China's GDP/two percent growth in CPI

- predicted 2.25 to 2.75 percent growth in Canada's GDP/2.5 percent growth in CPI

Fed Funds at the end of 2004:

Mr. Burpee predicted that fed funds (benchmarked at 1.00 percent currently) could decrease to 0.75 percent or increase to 1.25 percent

Timing for a change, if there is one, he said would likely come in the second half of the year

US monetary policy: A 'patient' emphasis on stability

US fiscal policy: Emphasis on job creation

Fixed Income Outlook:

- Credit spreads will widen in anticipation of slowing economic growth in 2005

- Yield curve for treasures will remain positive

Commodity Outlook:

- Best may be platinum

- Worst may be palladium

Equity Market Outlook:

- Dow Jones Industrial Index gains over year to 10,250 at 3 months, 11,150 at 6 months and 11,350 by the end of the year

- S&P 500 gains over year with predictions of going from current level of 1,125 down to 1,105 at 3 months, 1,225 at 6 months and 1,260 by the end of the year

- Russell 2000 gains over year from current standing at 580 down to 530 at 3 months, back to 580 at 6 months and 620 by the end of the year

- The Nikkei 225 is predicted to move up to 11,500 by 3 months, 12,500 by 6 months and 14,500 by the end of the year

- Euro Stoxx 50 will increase to 2,730 by 3 months, 3,050 by 6 months and 3,200 by the end of the year

- FTSE 100 will gain in 2004 from its current level at 4,400 down to 4,300 at 3 months, then up to 4,550 at 6 months and 4,775 by the end of the year

Currency Outlook:

Forecast of parity for US dollar by year end

Against the dollar Mr. Burpee predicted by year end that the following currencies would be valued as follows:

Euro at 1.15 to $1.20

Yen at 105 to 110

Pounds stirling at 1.75 to 1.90

Renmimbi at 8 to 8.28

Canadian dollar at 65 to 75 cents

Mr. Burpee also predicted that the drivers and laggards of the US economy would be as follows:

Drivers:

Apparel, broadcasting, capital goods, defence, computers, communication, lodging, housing, natural gas, restaurants, semi-conductors and software

Laggards:

Automobiles, entertainment, retail food, health care, integrated oil, metal mining, tobacco and utilities

Exports:

Predicted annual growth over 15 percent in 2004

Biggest surprises:

- Republicans lose US presidential election in November

- Federal Reserve Board fearful of global deflation, lowers the Fed Funds rate to 0.75 percent

- Terrorism succeeds in a major catastrophe

- Domestic economy in Japan begins to grow

- We are totally wrong, and there is a deflationary depression that lasts for decades, and in that case, sell your property and old masters!