WEDNESDAY 22 September 1999
Morning Economic Comments:
The Dow is due to open up 35 points. Bonds and the dollar are unchanged. Will it be a ? dead cat bounce? or the beginning of a good rally?
Today, the Fed releases its monthly ?Beige Book? which will reflect on labor costs and productivity. Yesterday, the trade report showed that consumers are buying at a hectic pace, far outstripping exports. This caused the dollar to plummet to 104 yen, which has since stabilized. Most analysts are thinking that the fed will raise rates once again when they meet October 5th. Then the Fed will have taken back its third and final rate cut from last year. The weak dollar might be another reason why the Fed may opt to raise rates again.
Yesterday, the Dow was off 225.40; Nasdaq fell 65.05; the S&P 500 dropped 27.95
Even the Phila Semiconductor index fell 17.11, a rare occurrence.
Besides the horrible trade report, the market suffered through more earthquakes, this time in the chip production area of Taiwan.
For today: Watch the dollar for an indication of overall Market Direction
Stocks to Buy: Apple Computer ( AAPL ) and Atmel ( ATML )
We would use weakness to cover shorts, using 10,400 as a stop basis the Dow.
Internet related stocks did well yesterday. GOTO rose 8.44; RBAK gained 8.19, JNPR + 7.50; EBAY + 4.63; PCLN + 2.69, VRIO + 2.56 and YHOO + 1.38.
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