John J. Edwards III Chats on AOL, Nov. 29

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John J. Edwards III chatted on AOL MarketTalk Monday, Nov. 29. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live). As with all chats, this transcript is unedited.

Comment:

Live from New York, N.Y., please welcome

John Edwards

, markets editor at

TheStreet.com

. John can answer your questions about the markets and investing. John does

not

offer individual stock commentaries or recommendations.

Jedwards:

Thanks, great to be here.

Question:

Do you see the merger between

Exxon

(XON) - Get Report

and

Mobil

(MOB)

preventing lower fuel prices in the near term?

Jedwards:

I think the issues of supply and demand will remain more important to oil prices than the continued consolidation of the industry. So, the real thing that will prevent lower oil prices in the near term is the continued strength of the

OPEC

production cuts.

Question:

Will the market have its traditional end of year rally this year, or will Year 2000 fears prevent this from happening?

Jedwards:

I still expect to see some upside around the end of the year. As traders try to get ahead of an expected rally, early in the first quarter, on Y2K relief.

Question:

Do you see the strength of the Japanese market continuing?

Jedwards:

The signs we're seeing from the Japanese economy do seem to be generally positive. The success of Japan's stimulus activities remains uncertain, but the economy does seem to have turned a corner and that should support stock prices there in the intermediate term.

Question:

What areas of the technology sector do you feel hold the most promise?

Jedwards:

The business-to-business e-commerce sector looks very promising as both a short-term momentum play and a longer-term bet on the future of the economy. Similarly, there is probably more upside in the computer networking and telecommunications equipment area.

Question:

Will the growth of e-commerce hurt bricks and mortar retailers this holiday shopping season?

Jedwards:

I don't expect bricks and mortar retailers to be very directly damaged by online retailers, at least not this season. Online retailing, while fast growing, remains very small, relative to the standard retailers. However, it should be a strong retailing season both online and offline. Some of the retailers best poised to take advantage of that are what's being called the Clicks and Mortar retailers, which have both physical locations and a strong online presence.

Question:

Well....will the Dow reach 12000 by year-end?

Jedwards:

No.

Question:

What has been the biggest story for 1999?

Jedwards:

I would say the biggest market story we've been watching at

TheStreet.com

, is the remarkable growth of the kind of business to business e-commerce stocks and networking stocks that I mentioned earlier. It's been, what looks like it could develop into a lasting shift in investment focus in the technology arena.

Question:

Can we continue to avoid inflation with oil at these levels?

Jedwards:

I think that if we see productivity continue at the levels we've seen in the last couple of years, the economy can stave off serious inflation, even with oil prices at current levels.

Jedwards:

However, there is little room for extreme further gains in oil prices before we start to see that translate into inflation in other economic sectors.

Question:

What is your opinion on bank stocks?

Jedwards:

I think bank stocks could be in for some difficulty in the current interest rate environment. But, overall, there are many financial institutions that will benefit from the recent reform of U.S. banking laws. And, from the continued trend toward consolidation in the industry.

Question:

What do you believe to be the best play on the growth in the Internet?

Jedwards:

Again, I would have to go back to the networking sector and companies that are involved in the business to business e-commerce area, which looks even more promising than the business to consumer area.

Question:

Do you think that we are going to see a year-end rally, the mother of all rallies?

Jedwards:

While I am not sure what position in the family of rallies this rally will hold, I do expect that we'll see a pretty strong finish to a very strong year.

Comment:

Thank you for joining us today John!

Jedwards:

Thanks very much for having me, I'll see you at

TheStreet.com

.