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To: Jim Willie CB who wrote (35927)	4/18/2001 11:06:14 AM
From: Ritch	Read Replies (1) \| Respond to of 65232

those expecting interim rate cut have rocks in their head Must be some of those Smart Rocks I've been hearing about. <vbg> btw - Congrats on the new job Jim! Ritch

To: Jim Willie CB who wrote (35927)	4/18/2001 11:09:25 AM
From: stockman_scott	Respond to of 65232

Goldman's Cohen Cuts Targets on S&P, Dow Wednesday April 18, 10:18 am Eastern Time <<NEW YORK (Reuters) - Goldman Sach's chief investment strategist, Abby Joseph Cohen, cut her year-end price targets for two major U.S. indices on Wednesday as she reduced corporate profit expectations, but is still bullish on stocks. Cohen dropped her profit forecast because of ``muted economic expectations'' for 2001. In her annual spring note to clients, Cohen cut the Standard & Poor's 500 Index (.SPX) year-end target to 1,550 from 1,650, and reduced the Dow Jones industrial average (.DJI) target to 12,500 from 13,000. Still that would be a 30 percent jump for the S&P 500 from where it closed at 1,191.81 on Tuesday, and a 22 percent gain for the Dow average. Cohen's rolling 12-month S&P 500 year-end price target is 1600. ``Even with moderately reduced profit forecasts, stocks are notably undervalued and offer sizeable potential returns in the coming months,'' Cohen said in a note to clients. ``We do not expect an intractable recession, and expect profit growth to reaccelerate in the second half of 2001.'' Cohen left her asset allocation unchanged at stocks 70 percent, bonds 27 percent and commodities 3 percent. Cohen also cut her 2001 earnings per share outlook for companies in the Standard & Poor's 500 index to $56.50 from $60. She introduced her 2002 S&P 500 operating profit forecast of $61.50, a projected gain of 9 percent above the revised expectation for 2001. ``A key point is that profit deceleration began six quarters ago, and much investor disappointment is already reflected in stock prices,'' Cohen said. ``Our main assumption is that the current economic malaise will be resolved, and that economic and profit growth will be closer to trend rates.'' Cohen noted the earnings slowdown was pronounced in sectors most sensitive to the economy, as well as in computer and telecommunications equipment. With Wednesday's note, Cohen was only the latest Wall Street strategist to cut her year-end targets. Jeffrey Applegate of Lehman Brothers cut his year-end S&P 500 index target twice this year, the last time to 1400 in March, after saying it was ``silly'' to maintain a year-end price target of 1,600. Salomon Smith Barney's Tobias Levkovich, cut his S&P 500 year-end target to 1,400 from 1,450 earlier this month, and for the blue-chip Dow Jones industrial average (.DJI) to 11,400 from 11,750, even as he urged investors to buy more stocks. One of the few holdouts is Ed Kerschner of UBS Warburg who has retained the bullish target he began the year with -- 1,715.>>

To: Jim Willie CB who wrote (35927)	4/18/2001 12:12:20 PM
From: stockman_scott	Respond to of 65232

Cisco thought they were Immune... msnbc.com They learned the hard way and now they're starting a long road to recovery. I don't like investing in companies as large as CSCO. It's VERY difficult for them to exceed expectations after a while. Best Regards, Scott

To: Jim Willie CB who wrote (35927)	4/18/2001 12:41:28 PM
From: stockman_scott	Respond to of 65232

Briefing.com on the FED rate cut... <<Fed Rate Cut : On this page on Monday, we argued that it was too early to rule out an intermeeting rate cut, but that it had to come soon or else we would be waiting until the May 15 meeting. Just when we were about to give up (and poor Wayne Angell already had given up!), the Fed finally came through. As we argued on Monday, the case for a rate cut was compelling. Nonfarm payrolls fell in March, jobless claims have been on the rise, ex-auto retail sales fell for a second straight month, and consumer confidence is still falling. All of these indicators fit in with our view that business investment is leading this downturn, and that the consumer comes next. After excessive investment during the bubble, investment is now falling dramatically. Since businesses cannot simply unload excess capital equipment, they cut costs by unloading workers. That in turn reduces income, confidence, and finally consumer spending. The Fed has finally recognized the nature of this downturn. In past announcements, they have focussed primarily on the inventory correction, and suggested that it would probably not last long. But today, they acknowledged the importance of investment, noting that "capital investment has continued to soften and the persistent erosion in current and expected profitability, in combination with rising uncertainty about the business outlook, seems poised to dampen capital spending going forward." Precisely. Everyone today seems to be wondering what the Fed is seeing that they aren't. We would argue that the Fed is seeing three primary factors. 1) They are understanding that this is not just an inventory correction; it is an investment-led downturn, and it will take time and lower rates to bring to a close. 2) Weakness is now spreading to Europe and Asia, which will further undermine corporate profits and thus investment. 3) The level of real interest rates was still restrictive. The market has placed far too much weight on recent Fed official comments. Fed officials always talk an optimistic game in public and voice their true fears behind closed doors. Those three points are what is being talked about by the Fed in private, and they drove today's decision. More is on the way -- look for another 50 bp cut on May 15, and expect this cycle to take rates below 4% this summer as the economy will continue to struggle. Business investment was the first economic shoe to drop; consumer spending is next. - Greg Jones, Briefing.com>>