Take on the ticker

Alexander Paris Sr. of Barrington Hills is president of Barrington Asset Management, ChicagoWhat moved markets last week?"Generally, it started slowly (last) week; a couple days were down but it rallied strongly two days in a row. Generally speaking, the market has really been driven by improved sentiment regarding the credit crunch."What changed market sentiment about credit?"The market responded favorably to Bush's plan to help subprime mortgage borrowers. There were a lot of bailouts from Saudi Arabia and other places #8230; and (investors were) betting more heavily that the Fed will cut rates when they meet on Dec. 11."Has the market adjusted to lower economic growth projections?"There's a question of whether the market has really discounted the fact that the economy is likely to grow at about 1 percent in the fourth quarter and the first quarter #8230; A month ago at most, analysts were looking for double-digit earnings increases for the fourth quarter and the first quarter. Now they are down to just a 2 percent increase and 8 percent in the first quarter."Is there a flight to safety going on among investors?"There is a huge flight to safety still going on, even when the market is rallying. Most of the flight to safety usually ends up going into U.S. Treasury securities. The 10-year Treasury rate #8230; got down to 3.81 percent -- I think it's up to 4 percent now -- that has no business being down at that level. #8230; I don't want to buy bonds when the yield is down by 4 percent because there's not going to be much profit in it."Are you still bullish on gold and bearish on the dollar?"I think it is always good, particularly in this kind of environment, where there is still a risk of the dollar coming lower -- I don't think the dollar will come down as much because other countries are lowering their interest rates. Still, I think it will drift lower. So it's a good policy to have some small part of your portfolio in gold."What will move the market this week?"It will be dominated by the Fed news. This coming week the Fed is meeting on Tuesday. The only question, in investors' minds, is whether they cut a quarter or a half percent. But I would say, certainly, a quarter point is already in the market. #8230; But the important thing is, probably, either one is probably discounted."