Chevron is a very cheap stock. You have a 3 percent yield, it has the potential to grow 10 percent a year, in terms of earnings. It sells at a discount to the market.
Bank One is selling at a discount to the market and provides a modest current yield. And frankly, it's got the capacity to grow, with earnings growth of 13 percent a year over the next number of years. So it's one that we think, certainly for value-conscious investors, makes a lot of sense.
What we're seeing happening is the best of all worlds. The economy is strong yet inflation remains quiescent. The earnings outlook remains reasonably good. Given those things, the money continues to flow into the market from both domestic and foreign sources.
The reality is that if the Fed raises interest rates by a quarter of a point all that's doing is serving to keep inflationary pressures under control.
I'm looking for a minor correction. It looks like we're going to have one.
Look back in the last 30 years, the Federal Reserve has caused every major market pullback because of tightening the monetary policy, ... I believe the odds are that they will be raising rates by 25 basis points on Nov. 16. But beyond that, that will be it, well into the year 2000 before any further rate increases take place.
The market's responding positively to the fact that earnings were not as bad as expected.
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