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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Defrocked who wrote (1325)	4/26/2000 2:56:00 PM
From: John Pitera	Respond to of 33421

Hi Def, there are only 14 stocks that make up the DJUA. I'm sure you are right that the UTILS have been boosted by the telcom and deregulation kickers that are entering this formally staid market. The Durable goods numbers today, can only fan the Fed's flame to raise rates ------------------------- Highlights Durable goods orders rose 2.6% in March, Feb revised to -2.0% (from -2.7%) Key Factors The 2.6% March gain followed a two month combined decline of 3.9% after the 6.5% December surge. Volatility continues with an upward trend. A 31% drop in defense orders dragged overall orders, ex-defense showed a strong 3.7% gain. Transportation orders increase of 1.8% didn't reflect the strength of the Boeing orders as civilian aircraft orders jumped 10%, ex-transportion orders were up a strong 2.8%. A 9.7% surge in electronics provided the power following a similar sized 9.3% February jump. On the down side was the back to back decline in industrial machinery (10% Jan boom) and the three month decline in capital goods orders (after an 18% Dec surge). Shipments rose 1.5% in the month as unfilled orders rose 1.1% suggesting continued production strength in April. Volatility is the bottom line for durable goods orders given the lofty price tags on planes, trains and defense missiles. Big Picture Higher interest rates are supposed to hit the capital-intensive durables sector early, but there's not much evidence of that yet. In fact, the continued strength in business investment leaves little evidence that higher rates are having any impact at all. It may be that accelerating productivity growth is improving the rate of return even as rates rise. If so, it is possible that we will see continued strength in the manufacturing sector until and unless the Fed raises rates more aggressively. Increased foreign demand is at work as well.

To: Defrocked who wrote (1325)	4/26/2000 3:57:00 PM
From: Chip McVickar	Read Replies (1) \| Respond to of 33421

Defrocked and John, A closer look at this Utility rally suggests something a little different....., And I was wrong about the Tel and Optic fibers running these stocks up. It is much different. These major gains appear to be the straight forward energy producers. Take March 13th as the beginning for the move: AEP Amer Elect is up 45% PEG Publ Serv is up 43% ED Consol Ed is up 35% REI Reliant is up 33% PCG PG&E is up 31% Those with telecommunications components are weaker: ENE Enron is up 11% wmb Williams is dwn -16% TXU Texas is up 25% DUK Duke is up 28%