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MPSIF Market Strategy Value Fund October 20, 2003.

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Presentation on theme: "MPSIF Market Strategy Value Fund October 20, 2003."— Presentation transcript:

1 MPSIF Market Strategy Value Fund October 20, 2003

2 Objectives Market catalysts Sector recommendations

3 Bull Run YTD, Dow Jones Industrial Average ↑ 17% YTD, S&P 500 ↑ 18% YTD, S&P 500 ↑ 18% YTD, NASDAQ Composite ↑ 43% YTD, NASDAQ Composite ↑ 43% Earnings expectation 3Q03 : 18% ↑ over 3Q02 Earnings expectation 3Q03 : 18% ↑ over 3Q02 Earnings expectation 4Q03 : 22% ↑ over 4Q02 Earnings expectation 4Q03 : 22% ↑ over 4Q02

4 Interest Rates Fed Triggers : Core Inflation & Unemployment rate Fed Triggers : Core Inflation & Unemployment rate Core inflation (1.5%) at lowest level in 40 years Core inflation (1.5%) at lowest level in 40 years GDP growth (6% 3Q03, 3.3% 4Q03) > Productivity growth (3.5%) = Improvement in labor market GDP growth (6% 3Q03, 3.3% 4Q03) > Productivity growth (3.5%) = Improvement in labor market Sept.03 non-farm payrolls up by 57,000 Sept.03 non-farm payrolls up by 57,000 Fed funds futures price in 25 bp increase only in 2H04 Fed funds futures price in 25 bp increase only in 2H04

5 Growth Business investments Business investments ISM Survey ISM Survey Consumer Consumer Confidence, Retail Sales, Fading fiscal stimulus Confidence, Retail Sales, Fading fiscal stimulus

6 Earnings Dollar Dollar ST & LT direction ST & LT direction Consumer product, raw material producers Consumer product, raw material producers Other – Corporate default spread, pricing power Other – Corporate default spread, pricing power Upward earnings revisions > downward earnings revisions in 3Q03 Upward earnings revisions > downward earnings revisions in 3Q03 Guidance for 4Q03 more downbeat than expected Guidance for 4Q03 more downbeat than expected

7 Recommendations Upward revisions : Consumer discretionary, financials, industrials, materials, telecom services Upward revisions : Consumer discretionary, financials, industrials, materials, telecom services Downward revisions : Consumer staples, health care, IT, utilities Downward revisions : Consumer staples, health care, IT, utilities


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