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To: Joe NYC who wrote (123413)	12/20/2000 7:11:21 AM
From: William Hunt	Respond to of 186894

Thread ---from briefing.com-- Fed dropped the ball today when all it did was adjust its so-called bias from tightening to easing... While such a move was probably all market should have expected, reality is that decision leaves Fed behind the curve... By postponing the inevitable (cutting rates), Fed took the risk of watching a potential soft landing turn into a hard landing... Make no mistake about it, the economy is slowing down hard and fast... Credit is very tight, consumer confidence/spending is down big, corporate America is beginning to downsize aggressively due to decelerating earnings growth and worldwide equity markets are in the tank creating a negative wealth effect which is currently being underestimated by many economists. Traders needed to see a rate cut from the Fed to stay in the market. When they didn't get it, they bailed. And we don't blame them much. Nasdaq, which was up nearly 70 points when the Fed laid its egg, ended off 113 points -- closing at a new yearly low of 2511. Without a bold move from the Fed, traders have no reason to step into the market in front of the Q4 earnings - especially given the daily drumbeat of profit warnings... Consequently, we no longer expect Nasdaq to make a year-end run to the 3000 level. To the contrary, additional damage in tech leaders suggesting that we could see another nasty dip... Briefing.com didn't expect things to unravel so fast, but that's clearly the message of the tape... Among the big names setting new 52-wk lows in Tuesday's session: Cisco (CSCO 41 3/4 -1 3/16), Yahoo! (YHOO 28 -4), Amazon.com (AMZN 18 1/4 -1 5/8), Sun Microsystems (SUNW 26 15/16 -1 5/8) and Microsoft (MSFT 44 3/4 -3 1/16)... Why is this significant? These stocks are widely owned, meaning when they drop to new lows the negative wealth effect is magnified. Being widely owned also means that they are found in lots of mutual funds... And as these funds send out their year-end statements, showing big, big losses, redemptions are likely to follow... Fears of such redemptions will keep managers from putting any sidelined money to work, and could lead to additional fund selling should redemptions accelerate quickly -- which sends share prices lower, which results in increased redemptions, etc., etc, etc. Meanwhile, the momentum favorites, many of which snapped back sharply over the past couple of weeks, are again on the decline... With stocks such as Cisco and Sun Micro setting new lows, little hope that the stocks listed in the table below will hold above their 11/30 lows. BEST WISHES BILL