Is this an opportunity for the contrarian investor?

Article Abstract:

Industrial stocks could drop further in price, judging by signals from the bond market, and flatter yield curves could be a sign that economic activity is near a peak. This could mean that industrial cyclicals are unattractive. A drop in the supply of bonds may also have caused flatter yield curves, according to ABVN Amro's George Hodgson. There may be opportunities for contrarian investors, argues Hodgson, who does not doubt recovery, and who sees indicators for industrial activity as buoyant.

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The corporate line

Article Abstract:

Corporate bonds are issued by local government, quasi governmental organizations, and companies, and offer fixed yields which are above those for government bonds. Higher yields tend to represent higher risks. Some corporate bonds offer lower yields and trade at less than their issue values, rising in value until they are redeemed. World financial instability has affected the corporate bond market, but there is hope that some of the economic problems that led to the instability are being solved.

Corporate Bonds

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They're paid to look perceptive, but indecision rules

Article Abstract:

Fund managers are moving into cyclical stocks and they foresee a rise in commodity prices and world economic growth in the later part of 1999. There is concern that US interest rates could rise leading to sales of equities and weak bonds, due to increased US inflation, though there has not been evidence of US inflation. Meanwhile, United Kingdom interest rates have been too high, and this has helped push up the value of pound sterling at a time when the euro is weak.

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