To: OX who wrote (3954 ) 5/31/2001 2:50:05 PM From: John Pitera Respond to good point, this is also very interesting from Briefing....reflation rally has already compromised equity valuations. One dynamic that has particularly caught our attention has been a rehashing of the concerns that initially sent the markets into a tailspin. A recent Morgan Stanley Dean Witter survey of chief investment officers (CIOs) revealed that more CIOs plan to spend less or more slowly this year. Of interest, the number of CIOs highlighting requests from senior management to either reduce the size of deals or cut back and in some cases actually lower spending, surged to 50% in May from 40% in April and 33% in March. DRAM makers and distributors in Taiwan have risen to 4-6 week from 3-4 weeks. Of course capacity is by no means exclusive to the chip sector, as MSDW's expectations for a deterioration in the optical components industry are somewhat a function of the massive overhang at Nortel, not surprising when considering that inventories actually rose in Q1.exacerbate vendor pricing pressures going forward, supporting our longstanding concerns surrounding the disinflationary implications of the slowdown . While the Fed has been fairly direct in its efforts to protect corporate profits, these dynamics provide more credibility for a pushing on a string mentality that could force Greenspan and company to the sidelines. Of course, this is where we would come back to our expectations for a more bullish flattening of the yield curve
