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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Suresh who wrote (27127)	6/22/2000 7:59:00 AM
From: j g cordes	Respond to of 68187

Key phrase "unlikely to be the soft landing.." Thursday June 22, 7:31 am Eastern Time Markets too relaxed on U.S. slowdown -UBS economist By Nick Edwards HONG KONG, June 22 (Reuters) - Equity markets have not adequately priced in the sharp slowdown the U.S. economy faces next year, but the downside risk could be a boon for euro assets, a top economist said on Thursday. ``It is very unlikely to be the soft landing that everybody hopes for where nobody gets hurt,'' George Magnus, global chief economist at UBS Warburg, told reporters. ``It's a much harder landing that the markets are currently discounting,'' he said, adding that his global economic analysis team had overnight revised down its forecast for U.S. Gross Domestic Product (GDP) growth in 2001 to two percent from 3.2 percent previously. UBS Warburg says the U.S. Federal Reserve will hike interest rates by 100 basis points by April 2001 and sees the overnight Fed funds rate at seven percent by the end of this year. The Fed raised rates 50 basis points to 6.5 percent in May. ``What is the point at which financial markets begin to discount this more significantly? I don't know when that will be, but it isn't going to be this summer,'' Magnus said, in Hong Kong to visit clients in Asia. ``It is probably not a bad idea to take a little bit more of a defensive posture to own some reasonably high yielding, highly graded -- in other words triple-A or double-A -- public sector or corporate bonds,'' he added. Magnus said U.S. productivity growth had slowed sharply since the end of 1999 while capital expenditure had overtaken cash flows and internal funds, creating a $100 billion financing gap. That was diminishing investment returns, creating over capacity and risking unproductive investment which would be reined in eventually with painful consequences for Asian economies dependent on U.S. demand for electronics imports. ASIA TO FEEL PAIN ``This can't have a zero impact on Asia... there will be some pain,'' said Magnus, adding that a dramatic U.S. slowdown would drag on global growth. ``I don't think it's going to completely unhinge the global economy -- global growth still looks like it's going to come in at about three percent this year -- but it's significantly below trend,'' Magnus said. He forecasts global growth at 2.5 percent in 2001. High oil prices were also seen as a negative. "People have not taken into account properly that the rise in energy costs, as large as it has been, actually represents a tax on growth and is a charge on productivity. ``I'm guessing, but if global growth slows from 4.5 (percent) to three (percent) over the next year, I would probably say you could trace about a third of that decline to the impact of rising energy costs,'' Magnus said. That downward adjustment would spell a cyclical decline for the U.S. dollar which would see the Japanese yen strengthen to between 92-95 to the greenback over the next six to nine months from about 105 presently, he said. EURO SEEN REBOUNDING It would also trigger a reversal of fortunes for the sagging euro , boosting it past parity to the dollar -- not seen since February -- to 105 by the year end and higher still into 2001, Magnus said. That would open a cyclical window of opportunity for portfolio flows into euro-denominated assets. ``I'm not necessarily saying that European equities are going to go up if U.S. equities are going to go down... but I think the currency kicker is going to be quite an interesting angle for investors,'' Magnus said. And while the immediate outlook for the global economy was dominated by risks, there were encouraging future pointers. The structural backdrop to the global economy was strong, inflation was not a problem, the trade picture was good while globalisation and new technology were also positive. ``The negatives are all about a cyclical end game. From a secular point of view, I'm not very bearish at all,'' Magnus said.

To: Suresh who wrote (27127)	6/22/2000 10:51:00 AM
From: IA	Respond to of 68187

Thanks, closed RTT on the way up. IA

To: Suresh who wrote (27127)	6/22/2000 11:22:00 AM
From: Johnny Canuck	Respond to of 68187

Suresh, Thanks for the heads up. Out of RTT at $18.80. I wasn't quite as quick as Inder. At 334 million shares outstanding, it is going to be hard to get this price up above $29 dollars as this gives them the same market cap as ONIS ($10 billion). Given that RTT will hold 1.2 million shares of Corvis and they have 3.6 million shares outstanding, this give them about $14 CND extra per share from the Corvis position. So $18 CND is about fair value.

To: Suresh who wrote (27127)	7/6/2000 7:53:06 PM
From: Johnny Canuck	Read Replies (3) \| Respond to of 68187

Suresh, Out of AMCC at 117 and change. It was moving too fast to get the high price. AMCC has typically only beat by a penny in the last two Q's. The options table inidcates it needs to finish near $110 to cancel the most call/puts at par. Upper BB is at $114. The CSCO contract is good news for forward guidance, but the greater than expect decline in NT business is still an unknown from the prospective of whether this is due to greater revenue from SCMR, JNPR and CSCO or an absolute decline in NT revenues. Q over Q and Y over Y revenue growth will be what the company will be judged by this Q. The acquisitions of the last Q will distort income. Given the options table there should be time to re-entry if earnings and forward guidance are good.