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Leading American Stock Analyst Predicts Rebound in US Equities


One of America's leading stock market analysts, Abby Joseph Cohen, is forecasting a rebound in U.S. equities in the later half of 2002. Ms. Cohen spoke in London.

Abby Joseph Cohen has become one of the most influential analysts of U.S. stocks through her position as chief global strategist for the New York-based investment bank, Goldman Sachs.

She is predicting that a year from now, the benchmark Standard and Poor's index of America's 500 biggest companies will be 15 to 25 percent higher.

Ms. Cohen said the September 11 terrorist attacks dealt what she called "a very significant blow" to the U.S. economy. But she said those who bought stocks right afterward have made money.

Ms. Cohen said in the short term, U.S. companies have more bad news to report, but things should improve next year. "Most investors in the United States believe, as we do, that this recession is already showing some signs of stabilization," she said. "And that we do think that the economic data will start turning positive in the spring and by the second half of 2002, we should have some very good news from U.S. corporate America."

Ms. Cohen says in her forecast that the U.S. economic rebound will be led by technology companies, manufacturers, financial services, and energy firms.

The chief of global economic research at Goldman Sachs, Jim O'Neil, said he expects another half-point decline in interest rates both in the United States and Europe between now and February.

He said lower rates already are helping to improve next year's economic outlook. "Luckily, as a result of monetary and fiscal policy, primarily in the U.S., but also the same aggressive response elsewhere, we think by the second quarter we will be out of it, and things will be looking healthier, considerably healthier, in the United States and in Europe," he said.

Mr. O'Neil remains pessimistic about Japan, however, saying it is almost a "hopeless case." He said there is considerable talk about devaluing the Japanese yen to help increase exports and stimulate the long-stagnant Japanese economy.

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