Jan. 3 Hotline (Jan. 3, 2000)

This is the weekly market commentary that is a part of the service you receive when you subscribe to Wall Street Winners, Courtney Smith's stock letter. For more information click here: www.kci-com.com.

Market Commentary:

The market should continue higher in a choppy manner over the coming several weeks. The lack of any Y2K problems should give a boost to values as it reduces one of the main uncertainties for the market. The underlying fundamentals are very bullish and will lead to new highs throughout the year. Inflation is low, the economy is strong, earnings will grow.

However, the longer we go into the quarter, the greater the risk will be. My concerns are the current sharp rise in interest rates and the upcoming rise in Fed Funds. In addition, I look for Wall Street to realize that earnings will not grow so fast this year.

My scenario is to look for this to lead to a 10-20% correction in the market. That will be a very good buying opportunity because I think that the rest of the year will be excellent for equities.

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