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To: Johnny Canuck who wrote (25644)	3/17/2000 2:43:00 PM
From: Johnny Canuck	Read Replies (2) \| Respond to of 68399

My broker said $1 billion dollars of bonds were redeemed by the Federal yesterday, so the rally in the DJ30 may have been that money moving into the oversold Dow component, old economy stocks. JBL and SLR not seeing a lot of follow through. They just met estimates this time as opposed to beat. I missed the SLR call and have not heard the JBL call yet. I wonder if demand is not as strong as thought for certain segments of the tech sector. ECM stocks are usually a pretty good indicator of demand. ***************************************** *************************************** 11:46 ET Telecom Equipment/Networkers : Group extends its gains: NT +8 1/4, CIEN +9 29/64, CSCO +3 21/64, SCMR +4 15/16, JNPR +19 1/2, COMS +5. Laggards: LU +1, FDRY -3, RBAK -1 1/8. 11:19 ET Intel (INTC) 128 15/16 +3 7/8: It's that time of the quarter -- time for Intel preannouncement rumors. For the last few days we have been hearing vague trading desk talk of an upside preannouncement. Most of these rumors don't play out, but it does appear to be supporting the stock. 11:07 ET Kulicke & Soffa (KLIC) 65 5/8, -1 9/16: Announced 10-year technology transfer agreement between Amkor (AMKR 48 11/16 + 1 5/8) and Flip Chip Technologies, LLC; AMKR will use FCT's proprietary Flex-on-Cap (FOC) wafer bumping and redistribution (RDL) technologies to manufacture advanced flip chip IC packages for both performance and form factor driven applications. 11:13 ET **** Inflation/Fed/Rates/Banks : Inflation is rising and the Fed will most likely raise rates again next week, but market interest rates are falling and bank stocks are rallying. What gives? We don't have all the answers, but we can shed a little light on the market's recent apparent snubbing of the fundamentals. First, let's clarify the inflation outlook. While the spike in oil prices has pushed up the headline CPI and PPI figures, the core rate of inflation remains benign. Whenever we write that, we get plenty of feedback indicating that higher oil prices cannot be excluded by the average joe who has to fill up the car and heat the house. We know that. But at the risk of sounding unsympathetic, that's not our concern. We are interested in the Fed and bond market view of inflation, and for that we must look at the core. Why? Because oil prices rise sharply and then plunge from one year to the next, but tend not to trend higher or lower for multi-year periods. In other words, oil price swings tell us nothing about the inflation rate for the next 2, 3, 5, or 10 years. For indications of longer term inflation trends, we look at core PPI and core CPI. And the message from those indexes is that inflation remains benign. Core CPI remains near a 34-year low, and has shown no signs of turning higher. So the inflation picture looks relatively friendly, but the Fed nevertheless is likely to raise rates again next Tuesday. Here's where this story gets more complicated. With the Fed continuing to raise rates due to its fear that good inflation news now will not translate into good news in the future, it is surprising to see both the stock and bond markets place bets in the other direction. Interest rates have been falling at the long end of the curve (10-30 years) due to Treasury buybacks, but even the shorter maturities have seen falling rates, which suggests a more optimistic view of inflation and the Fed. And the stock market, by driving up bank stocks, also appears to be more optimistic. There are two explanations for this optimism. First, the markets could just be in a brief correction in what remains a longer term bearish trend for Treasuries and bank stocks. Or second, the markets could be looking beyond the bad headline inflation news and expected Fed tightening, and focussing instead on the benign core inflation numbers and the possibility that a steady inflation trend will limit the magnitude of future Fed tightenings. The markets are forward-looking and often see the end of a rate cycle before the Fed. The optimistic view is that the markets' forward-looking powers are coming into play again now. - GJ 10:27 ET Jabil Circuit (JBL) 83 7/16 -2 9/16: Wit SoundView raises revenue and EPS estimates for the balance of F00 (August) to $3.52 bln and $1.59 from $3.47 billion and $1.58, respectively. Reiterate STRONG BUY rating and $95 price target. Jabil is one of a select group of companies well positioned to be a leader in the EMS industry, and is well positioned to benefit from strong sequential growth in the communications segment.