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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 232.88-0.8%Nov 17 3:59 PM EST
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To: GST who wrote (115227)1/12/2001 10:51:15 PM
From: schrodingers_cat  Read Replies (2) of 164684
 
Here's a scenario that I've been wondering about lately :

What if we aren't quite in recession yet, and if the Fed really tries to step on the gas with interest rate cuts and pumping up the money supply, is it possible that the economy could bounce right back? The economy certainly slowed fast last autumn, so maybe the rebound could be just as fast ( and unexpected). What if the Fed can get things going again before rising unemployment and bad debt problems really start to bite? Perhaps they might even over do it like in '87.

Now what if companies take the opportunity next week to really guide down future earnings expectations, setting up for big upside earnings surprises come next April as the economy bounces back. Could there be the makings of a really big spring rally here?

I agree that the above scenario isn't all that likely. The country would have to be lucky to escape any really serious energy crisis, bankruptcies etc., and interest rate cuts usually take time to work. Not to mention that a return to economic growth would make the energy shortages worse, although high prices and more drilling may start to cure those. What started me thinking about this is that recent economic data like unemployment and retail sales seem to be coming in a little better than expected, and the Fed seems to be moving quickly to head off a recession, which makes me wonder if the economy (and market) still has a chance.
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