(October 25 – 12:00 ET) – Slower
growth will occur in the U.S.,
through 2000, predicts Marshall
Acuff, an analyst at
Salomon Smith Barney.
Equity investors will have to chose
their spots carefully to prosper
in these conditions, he suggests.

Higher interest rates look
likely, he says, which will dim
the economic growth and corporate
profit picture in 2000.

As a result Salomon says that
it is broadening its equity
strategy beyond its focus so far
this year on mid-cap growth and
cyclicals .

Instead Salomon says large caps
may see better valuations,
thanks to investor demand for
earnings consistency and
liquidity. The firms notes that
big caps tend to outperform when
profits dip.

Despite the risk of higher
interest rates, Acuff still
contends there will be value in
selected U.S. financials. He likes
American International Group,
AXA Financial, Bank of New York,
Chase Manhattan, Fannie Mae,
and Wells Fargo. Although
these stocks may well get slugged
when rates go up, he argues
they’ll be poised to run when
rates start trending down again.