But it was not to be. There were some ominous signs amidst the euphoria. America's farmers are in deep trouble, unable to enjoy the prosperity because of falling agricultural commodity prices and weakened overseas economies. Even some big, blue-chip companies, like Boeing, were hit with tough times as foreign competition became more of a factor and foreign orders for U.S. products dried up because the strong dollar makes U.S. goods more expensive overseas. The steel companies are being strangled by Japanese and Brazilian competition as the Commerce Department rattles its saber, accusing these countries of dumping their steel on the market.
Exports can no longer drive GDP growth and earnings.
Our trade deficit has swollen. The world's second largest economy remains mired in recession. Japan is expected to endure a deflationary spiral in the remainder of 1999. As 1998 came to a close, America's personal savings rate actually dipped into negative territory for the first time since World War II . Ultimately, earnings drive the stock market over the long-term.