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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: StanX Long who wrote (56744)	12/1/2001 8:15:13 PM
From: StanX Long	Read Replies (1) \| Respond to of 70976

Not good news. 12/01 10:56 Treasuries May Rise on Rate-Cut Expectations: Bonds Outlook By Walden Siew New York, Dec. 1 (Bloomberg) -- U.S. Treasuries may rise for a second week as Enron Corp.'s likely bankruptcy and signs the economy won't soon recover from recession push investors into the safety of government debt. An expected rise in the unemployment rate, slated for release in a report Friday, may add to evidence that the economy remains sluggish, heightening speculation the Federal Reserve will cut interest rates for an 11th time this year in December. Enron's collapse could saddle banks and companies with bad loans and bonds. ``Fed staffers are keeping an eye on the Enron situation,'' said George Adell, head of research at Philadelphia-based Starboard Capital Markets. ``It can tilt the Fed'' toward cutting rates again. The yield on the 5 percent note maturing in 2011 fell 24 basis points this week to 4.75 percent as its price surged to over 101. That's the biggest weekly gain since investors flocked to the safest securities after the Sept. 11 terrorist attacks. ``The key questions are have we bottomed economically and how we turn the ship around. The unemployment data may indicate things have not yet turned around,'' said James Rice, a government bond strategist at Stone & Youngberg LLC in San Francisco. The unemployment rate is expected to climb to 5.6 percent in November from 5.4 percent in October, according to a median forecast of economists polled by Bloomberg News, which would be the highest since May 1996, when it was also 5.6 percent. The increase in trading volatility in November will extend into December, investors said. Daily price swings in November were more volatile than in any other month this year as Treasuries tumbled for two weeks before rebounding.