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To: Danny who wrote (113571)	12/28/2000 11:55:28 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Danny, I believe a lot of the institutional managers took a good part of this week off. They will be back on Tuesday and volume will pick up. Glenn

To: Danny who wrote (113571)	12/29/2000 2:18:36 AM
From: Victor Lazlo	Respond to of 164684

Danny, this is seasonal. Look it up. Markets always rally this week of the year. And last week- Thurs & Fri?? -- seasonal, buddy. Look it up. On Monday we get back into it- selling. Selling with volume. Victor

To: Danny who wrote (113571)	12/29/2000 3:40:00 AM
From: Victor Lazlo	Respond to of 164684

Conumer spending accounts for 2/3 of gdp...... Consumers Feeling Not So Confident As Sentiment Drops To 2-Year Low By Charles Oliver Investor's Business Daily It's no wonder consumers were scared off a bit. The holiday season was haunted by worries about a sagging stock market and a slowing economy. The Conference Board's Consumer Confidence Index fell to 128.3 in December – a bit lower than expected and its lowest level in two years. The sign of slower consumer spending hints at troubles for the economy. Separately, last week's claims for jobless benefits took an unexpected downturn. And the lower cost of financing lent surprising strength to home sales. The Conference Board index, based on a monthly survey of 5,000 households, is a key gauge because consumer spending accounts for two-thirds of gross domestic product. -------------------------------------------------------------------------------- Image: A Gloomy Outlook -------------------------------------------------------------------------------- The November reading was revised lower to 132.6, the industry group said. "This latest decline in consumer confidence suggests that consumer spending will cool further as we enter 2001," said Lynn Franco, director of the Conference Board's Consumer Research Center. "While the overall index continues to signal economic growth, albeit at a slower pace, the continued decline in expectations is somewhat disconcerting." A Bad Omen Franco added, "If expectations continue on this downward trend, a more severe slowdown may be on the horizon." Even more troubling, the expectations index – consumers' views of the short-term future – sank to 95.8 in December from a revised 101.2 in November. Some 10.2% of consumers expected business conditions to worsen compared with 8.3% last month. At the same time, though, 16.7% of consumers expected conditions to improve, up from 14.7%. Why is the outlook plunging? "The stock market is really beating down confidence," said Kelly Matthews, chief economist at First Security Corp. in Salt Lake City. Until a few months ago, huge stock-market gains made for big-spending consumers. That so-called wealth effect, which had been a concern of Federal Reserve policy-makers, seems to have turned negative; plunging stocks are making consumers more cautious. Still, some economists say the declining stock market isn't playing that big of a role. "If you look at it by region, the areas where confidence has declined the most haven't been the ones most affected by the stock market," said Don Hilber, an economist at Wells Fargo in Minneapolis. -------------------------------------------------------------------------------- Image: Moving Separately -------------------------------------------------------------------------------- He says the biggest drops in confidence have been in the industrial heartland. "This consumer confidence report is telling us more about the jobs market than the stock market," Hilber said. About 15.9% of consumers expect fewer jobs to become available, up from 13.6% in November. "For the first time in years, the number of people expecting fewer jobs outnumber the people expecting more jobs," Hilber said. Many hope the consumer confidence index and other economic data will persuade the Federal Reserve to cut interest rates soon. Even before these numbers were released, most economists predicted that the Federal Reserve will cut interest rates at its next meeting in late January. This latest report only makes a rate cut more likely. The fed funds futures market on the Chicago Board of Trade has already fully priced in a quarter-point rate cut at that meeting – and a 48% chance of a half-point cut. Will analysts be disappointed if the Fed cuts only 25 points? "No, a 25-point cut will be fine, so long as the Fed indicates that more cuts are coming. But if it sends a message that 25 points is all it's going to cut, then there could be problems," Matthews said. In a separate report, the Labor Department said new claims for state unemployment insurance fell sharply last week – but not enough to dispel the notion that employers' appetites for workers are easing. Home Sales Are Robust The National Association of Realtors reported that sales of existing homes rose 4.4% last month to an annual rate of 5.22 million units, spurred by cheaper mortgage rates. That was the highest level since August's 5.28 million-unit pace. The median existing home price fell 0.4% last month to $176,200. "Although the median price has been trending lower in recent months, it remains more than 4% above a year ago," said Dan Green, an analyst at Economy.com. Consumer confidence has fallen sharply since September's 142.5 reading. The last time the index fell below 128.3 was in December 1998, Franco says. The Fed last week shifted its focus away from inflation to watching for signs of economic weakness. The rate cut that so many expect in January may already have been priced into the market for long-term interest rates. That could explain plunging mortgage rates, even before the Fed pulled the trigger. "The market was probably never as concerned about inflation as the Fed was," Hilber said. "And now with the economy slowing, it's almost certain the Fed will cut rates next year, and that's getting priced into long-term interest rates." Mortgage rates have fallen since hitting a five-year high of 8.64% in May. The average rate on a 30-year fixed-rate mortgage in November was 7.73%, down from 7.8% in October. This week, rates fell to a 19-month low of 7.13%.