To: mattie who wrote (4326 ) 4/21/2001 9:04:28 AM From: SusieQ1065 Respond to Updated: 23-Apr-01 The message we take from Friday's session is not that the recovery has run out of gas, but that investors didn't sell the rally. institutional investors can no longer afford to fight the Fed... They will chase this rally because they have the cash and the motivation (underperformance means no big bonus) to do so... Are prices too high? Definitely - if the economy doesn't rebound and earnings continue to spiral lower into Q4... But the street now putting a lower probability on such an outcome... Consequently, investors will pay up for growth... Values will look a little skewed given the still depressed earnings, but market now anticipating a rise in the "e" part of the p/e equation by late this year. And at inflection points the street is almost always either too optimistic (as it was last year) or too conservative (as it will be late this year). In other words, we ain't seen nothing yet. So don't get fooled by a modest two or three day correction. The big, momentum favorites will continue to provide leadership early, with smaller second and third tier stocks gaining steam once traders become more convinced of the rally's sustainability. Might take another week or so. Notable reports include: CPQ, NVLS, T, LU, Q, VZ, AMZN, QCOM, GLW, JDSU, NUFO and CORV... For full list, see Briefing.com's Earnings Calendar.
