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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (8027)	7/27/2001 6:24:13 PM
From: Mark Fowler	Respond to of 57684

Bill it's looking good here Damn i think it's happening finally! And it looks like the Semi activity is picking up from serval reports over the last few days. That was good to see on Onis, i think that has seen its first higher low bottom. You have Vrsn leaps great! I don't think you'll be disappoint. Vrsn top line stuff guy what a relief!

To: Bill Harmond who wrote (8027)	7/27/2001 8:37:00 PM
From: Mark Fowler	Read Replies (2) \| Respond to of 57684

Bill, Second quarter GDP growth was 0.7%, slightly above expectations. Consumer spending rose 2.1%, primarily boosted by spending on home furnishings and equipment. Purchases of gasoline and other energy products were lower, as high prices drove cutbacks. Business spending fell 13.6%. Both construction expenditures and equipment sales were sharply downward. Inflation fell one full percentage point, to 2.3%, according to the implicit GDP price deflator. Inventory stockpiles were cut, but by a smaller amount than the previous quarter. The trade balance deteriorated, as exports fell more strongly than imports. Behind the Numbers The economy weakened during the second quarter, expanding at a miserly 0.7% annual rate. Still the pace of growth beat expectations by a modest amount, due to the strength of government spending and solidity of consumer buying patterns. The major constraints on the economy were business spending, continued cutbacks in inventory stockpiles, and further deterioration in the trade balance. Consumer purchases of furniture and household equipment was the strongest component of private growth. Residential construction also expanded, further emphasizing the importance of the strong housing market in preventing recession thus far. Spending growth for nondurable goods and services was much weaker. Spending on gasoline, electricity and other energy goods fell, as high prices drove reduced usage. Business spending was weaker across the board, with no major component advancing. The slump in IT equipment buying intensified sharply, with 8% declines for both computer and communications equipment categories. With cash flow still constrained, there is no sign of turnaround in the current quarter. Completed nonresidential construction projects dropped, as a slowdown in office and warehouse absorption is leading to construction delays and cancellations. Inventory stockpiles were cut again in the second quarter, although not quite as much as in the previous period. If stockpiles would have remained unchanged, GDP growth would have been higher by 1.2 percentage points. Apart from IT equipment, most industries have returned their stockpiles to a desirable level. The sharp pullback in business demand continues to lower the target level for IT manufacturers. Exports also continue to flag, as the overseas economy grows increasingly weak. With recessions developing in many countries, the odds that the U.S. economy will be able to avoid a downturn are not improving. The hope is that the monetary easing to date and that which is to come, along with the tax rebates that will be mailed beginning in late July, will jump-start the economy by year’s end. This GDP report does little to raise those hopes.