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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: dennis michael patterson who wrote (10397)	6/27/2001 3:42:35 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 52237

Postings I made on our board..... By Lee_Lichterman on Wednesday, June 27, 2001 - 03:37 pm: Edit From: longdong_63 Wednesday, Jun 27, 2001 3:35 PM 2:33 PM FED TALK: The Fed omitted any language that would suggest the possibility of an intermeeting rate cut prior to the August 21 meeting, and the Fed Fund futures market is accordingly pricing in very little chance of such a move. The July Fed Fund futures contract has jumped to 3.735%, just 1.5 basis points below the new target rate. But the market still sees a solid chance the Fed cuts rates another 25 basis points at the August meeting. The September contract is trading at 3.59%, a level that suggests about a 64% chance of a 25 basis point move in August. By Lee_Lichterman on Wednesday, June 27, 2001 - 03:27 pm: Edit 15:24 ET Nasdaq Composite : -- Technical -- For all the "post-rate-cut" volatility, both near-term support and near-term resistance have held. To the upside, continue to watch resistance at 2085. On the downside, look for near-term support at 2042. Nasdaq internals have retained their bullish bias and to this point intraday buy waves have been stronger than intraday sell waves. Overall picture favors a close in positive ground. 14:49 ET Merrill On Fed : Merrill Lynch had been expecting a 50 bp cut by the Fed; finds it interesting that the Fed cited all of the weakness we have been observing for awhile without any mitigating sources of strength, yet only cut rates by 25 bp... Merrill sees another easing at the Aug. 21 meeting; while does not see a high probability of an inter-meeting move, thinks it is a possibility. 14:35 ET Fed Interpretation : Little to be positive about regarding Fed announcement; at least, as it relates to equities. Market had priced in 50 basis points; instead got 25 bp. Would have been more palatable had The Committee indicated in its statement that signs of recovery and eventual inflation risks warranted the less aggressive easing. Didn't get that either. If the Fed is to continue along an easing path, investors would like to think that it is injecting as much juice into the system as possible, preferring over-stimulation to an extension of policy action... Important to note that the Fed is beginning to fade to the background, as investors realize that an end to the easing cycle is near. Focus now is on when companies will finally see a reacceleration in earnings. By Lee_Lichterman on Wednesday, June 27, 2001 - 02:34 pm: Edit Release Date: June 27, 2001 For immediate release The Federal Open Market Committee at its meeting today decided to lower its target for the federal funds rate by 25 basis points to 3-3/4 percent. In a related action, the Board of Governors approved a 25 basis point reduction in the discount rate to 3-1/4 percent. Today's action by the FOMC brings the decline in the target federal funds rate since the beginning of the year to 275 basis points. The patterns evident in recent months--declining profitability and business capital spending, weak expansion of consumption, and slowing growth abroad--continue to weigh on the economy. The associated easing of pressures on labor and product markets are expected to keep inflation contained. Although continuing favorable trends bolster long-term prospects for productivity growth and the economy, the Committee continues to believe that against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future. In taking the discount rate action, the Federal Reserve Board approved requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Atlanta, Chicago, Dallas and San Francisco. federalreserve.gov