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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Stephen M. DeMoss who wrote (65585)	1/2/2001 2:32:15 PM
From: Les H	Read Replies (1) \| Respond to of 99985

MARKET EARNINGS - First Call The first few weeks of January are likely to bring forth a lot of disappointing earnings news. However, the issue no longer is whether or not we are going to have something worse than a soft landing. It is apparent we are in for at least a rough landing, and possibly a hard landing. The issue now is when will the market be ready to look over the valley. The earliest earnings growth is likely to bottom is 2Q01. The earliest the market might begin to look over the valley is probably late January. But both the bottom in earnings growth and the market could be later. We could have a profits recession next year. Earnings are likely to be down in 2Q01, and might be in 1Q01 and/or 3Q01. Because of the very sharp drop in GDP in 4Q00 from the three earlier quarters of 2000, the impact on earnings could be similar to a recession even if GDP growth stays above zero. It would probably take a major event to trigger an economic recession. OPEC may get nasty again and cut production, but even that might not be enough. What may be a bigger worry is the Japanese economy and the country's banking system, but at this point a US recession seems less likely than something between a soft and hard landing. The pace of negative pre-announcements continues unabated. Three weeks ago, there were 85 warnings. In the week before Christmas, warnings rose to 96, well above the 28 in the same week last year. We expected a respite in the week between Christmas and New Year's, but we didn't get much of one. There 47 warnings were only half those of the week before, but were well above the 21 warnings in the same week last year.