Writes Richard Salsman, CFA in the February 28th, 2003 edition of the InterMarket Forecaster:

Until war is waged, bonds in the U.S. especially corporate bonds will be the best financial asset worth owning. What would be bullish for stocks? We saw a spectacular, but brief (two-month) rally in U.S. stocks starting in early October the same week the U.S. Congress passed a resolution granting President Bush full authority to wage war against Iraq. But Bush has failed (so far) to exercise that authority. He may do so next month. If not or if he acts against Iraq but not against Iran and North Korea investors in U.S. stocks could see a sad repeat of the long, bearish spring-summer of 2002.


Here’s a simple guide for investors in the coming weeks: If the headlines are filled with reports of actual U.S. bombings, battles won and Don Rumsfeld, that’ll be bullish for U.S. equities and bearish for commodities; but if the headlines are filled (as they have been for so long) with reports of still-more U.N. resolutions, ‘inspectors’ reports’ and Colin Powell, that’ll be bearish for U.S. stocks and bullish for commodities.

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