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

To: American Spirit who wrote (75072)	4/16/2001 9:57:08 PM
From: t2	Read Replies (5) \| Respond to of 99985

American Spirit, I think the odds of an intermeeting rate cut will have gone up after this Cisco blowup that almost everyone was expecting. The language used by Chambers also sends a clear signal to Greenspan. Now the FED futures have given up on any intermeeting rate cut....that means the cut will have a SURPRISE element if it comes tomorrow or Wednesday. I don't believe Greenspan will wait til next month as the risk of a more serious downturn increases the longer he waits. That possibility in a rate cut very soon (this week) will cause short covering tomorrow, IMHO. It also made no sense in cutting last week--might as well do it at midpoints of the meetings-which is now. I had said to you that the telcos were not as good as the Nasdaq stocks. Now I believe they are just as good and probably even better as a rate cut now or just aggressive easing down the road will be good news for the carriers (since they carry a lot of debt). At the same time competition for them is decreasing. This warning surprises no one since all saw it coming--maybe the magnitude is a bit surprising. That was the dark cloud that was holding up buying up of the tech stocks, IMHO. With this HUGE hurdle out of the way, mutual funds will probably get more aggressive. In addition, I bet the level of shorting in the past few days and especially today has really been increasing. Looking for major short covering rallies as holders just stop selling. ------ Intel is not going to be good but IBM and MSFT should be fine. Don't believe Intel will surprise anyone even as they guide lower. Actually IBM and MSFT may rally off of the Computer Associates' (CA) positive pre-announcement this evening.

To: American Spirit who wrote (75072)	4/16/2001 10:05:48 PM
From: Dave Kiernan	Read Replies (1) \| Respond to of 99985

All this paints a very different picture of the global economy than dip-hungry investors want to see. At best, I see the world now entering the flattish portion of the U. It’s the beginning, not the end of an extended period of sluggishness for the US-led global business cycle. To the extent financial markets now rally in hope that the worst is over, more disappointment is likely in the months ahead. This looks like a false dawn. morganstanley.com