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To: Frederick Langford who wrote (2023)	2/19/2002 2:41:41 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95756

SSB's Levkovich says: "Go long" By Julie Rannazzisi, CBS.MarketWatch.com Last Update: 2:08 PM ET Feb. 19, 2002 marketwatch.com NEW YORK (CBS.MW) -- Salomon Smith Barney's chief U.S. equity institutional strategist Tobias Levkovich turned bullish Tuesday, ending a three-month period of neutrality. In a bold note entitled: "The stars are beginning to line up! Go long!" he asserted that business trends are about to improve and will support macroeconomic forecasts for recovery. Levkovich stressed that earnings predictability, -- not valuation - is critical for stocks to sustain a rise. He noted that analysts' earnings revisions have turned more positive. A lack of confirmation from companies that macroeconomic fundamentals have turned around has restrained equity market gains, Levkovich said. But he added that he expects improvements to emerge in March, April and May. While market watchers fret that high valuations will stall gains at this juncture of the cycle, Levkovich said current historically low interest rates support present share prices, and told listeners to a conference call Tuesday that stocks are probably a touch below "fairly valued". He expects earnings growth of 20 percent in the second half of the year. Accounting worries misplaced The Salomon strategist offered reassuring words for those worried about the aggressive accounting tactics employed during the heydays of the late 1990s. Levkovich believes accounting issues are not as large as investors make them out to be. He said market participants are being "distracted" by repercussions from Enron's fallout and are ignoring the fact that production trends are turning the corner. He expects the Enron scandal-related fears to taper off soon. As production levels begin to climb, manufacturing and employment gains will follow and work to keep consumers resilient while inciting earnings and stock price rebounds. Levkovich said a market retest of the September 2001 low isn't needed since that nadir was triggered by the aberrational nature of the terrorist attacks. Levkovich maintains a year-end S&P 500 ($SPX: news, chart, profile) target of 1,300 to 1,350, which corresponds to a 19 to 24 percent gain from current levels. The turnaround signs Levkovich doesn't buy the "double-dip" theory some economists are forecasting, which predicts a second recessionary slide just when it appears a recovery is taking hold. He gave investors eight signs pointing to a turnaround at the micro level that he claims will become evident in the next couple of months. The signs include General Electric's first positive North American short cycle order growth numbers in 13 months FedEx's assertion it's experiencing robust ground services business A preliminary rise in North American heavy-duty truck orders Apparent firming in radio, online media and television advertising. Applied Materials' showing of a slight increase in sequential orders with semiconductors; Easy year-over-year comparisons that will become evident in sectors such as industrials, airline and lodging; Strong retail sales and, A January survey from the National Federation of Independent Business revealing an increase in hiring and production expectations by small businesses. Sector shifts Levkovich made a number of sector shifts to reflect his more aggressive market stance. The strategist raised his weighting on the industrials sector to an "overweight" from a "market weight." He also upped his outlook on information technology to "market weight" from "slight underweight" on the wings of turning trends in the broad chip and chip equipment industries. But the strategist remained cautious on telecom equipment, integrated circuit and Internet infrastructure stocks. Finally, the defensive consumer staples group was lowered to a "slight underweight" from a "market weight" posture. Levkovich also added Analog Devices (ADI: news, chart, profile), Deere & Co. (DE: news, chart, profile), Continental Airlines (CAL: news, chart, profile), Canadian National Railway (CNI: news, chart, profile) and American Express (AXP: news, chart, profile) to the Salomon Smith Barney "Recommended List," while removing Colgate-Palmolive (CL: news, chart, profile). Among the mentioned stocks, ADI lost 3.2 percent, Colgate erased 0.6 percent and Continental fumbled 0.8 percent while AmEx climbed 1 percent, Canadian National jumped 1.5 percent and Deere edged up 0.4 percent. Potential risks Levkovich recognized that market risks could arise from the potential of an energy shock given current tensions in the Middle East. He added during the conference call that the backdrop of asbestos issues could also hang over stocks. But the strategist clearly advised investors to buy now. "We contend that if someone handed us the ball at the line of scrimmage, we could tell our receivers to go long," Levkovich concluded. When released the numbers always come out after the close of the stock market. Usually they get posted on the AMAT thread before they make it here. RtS

To: Frederick Langford who wrote (2023)	2/19/2002 2:52:31 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95756

SSB's Levkovich says: "Go long" By Julie Rannazzisi, CBS.MarketWatch.com Last Update: 2:08 PM ET Feb. 19, 2002 marketwatch.com NEW YORK (CBS.MW) -- Salomon Smith Barney's chief U.S. equity institutional strategist Tobias Levkovich turned bullish Tuesday, ending a three-month period of neutrality. In a bold note entitled: "The stars are beginning to line up! Go long!" he asserted that business trends are about to improve and will support macroeconomic forecasts for recovery. Levkovich stressed that earnings predictability, -- not valuation - is critical for stocks to sustain a rise. He noted that analysts' earnings revisions have turned more positive. A lack of confirmation from companies that macroeconomic fundamentals have turned around has restrained equity market gains, Levkovich said. But he added that he expects improvements to emerge in March, April and May. While market watchers fret that high valuations will stall gains at this juncture of the cycle, Levkovich said current historically low interest rates support present share prices, and told listeners to a conference call Tuesday that stocks are probably a touch below "fairly valued". He expects earnings growth of 20 percent in the second half of the year. Accounting worries misplaced The Salomon strategist offered reassuring words for those worried about the aggressive accounting tactics employed during the heydays of the late 1990s. Levkovich believes accounting issues are not as large as investors make them out to be. He said market participants are being "distracted" by repercussions from Enron's fallout and are ignoring the fact that production trends are turning the corner. He expects the Enron scandal-related fears to taper off soon. As production levels begin to climb, manufacturing and employment gains will follow and work to keep consumers resilient while inciting earnings and stock price rebounds. Levkovich said a market retest of the September 2001 low isn't needed since that nadir was triggered by the aberrational nature of the terrorist attacks. Levkovich maintains a year-end S&P 500 ($SPX: news, chart, profile) target of 1,300 to 1,350, which corresponds to a 19 to 24 percent gain from current levels. The turnaround signs Levkovich doesn't buy the "double-dip" theory some economists are forecasting, which predicts a second recessionary slide just when it appears a recovery is taking hold. He gave investors eight signs pointing to a turnaround at the micro level that he claims will become evident in the next couple of months. The signs include General Electric's first positive North American short cycle order growth numbers in 13 months FedEx's assertion it's experiencing robust ground services business A preliminary rise in North American heavy-duty truck orders Apparent firming in radio, online media and television advertising. Applied Materials' showing of a slight increase in sequential orders with semiconductors; Easy year-over-year comparisons that will become evident in sectors such as industrials, airline and lodging; Strong retail sales and, A January survey from the National Federation of Independent Business revealing an increase in hiring and production expectations by small businesses. Sector shifts Levkovich made a number of sector shifts to reflect his more aggressive market stance. The strategist raised his weighting on the industrials sector to an "overweight" from a "market weight." He also upped his outlook on information technology to "market weight" from "slight underweight" on the wings of turning trends in the broad chip and chip equipment industries. But the strategist remained cautious on telecom equipment, integrated circuit and Internet infrastructure stocks. Finally, the defensive consumer staples group was lowered to a "slight underweight" from a "market weight" posture. Levkovich also added Analog Devices (ADI: news, chart, profile), Deere & Co. (DE: news, chart, profile), Continental Airlines (CAL: news, chart, profile), Canadian National Railway (CNI: news, chart, profile) and American Express (AXP: news, chart, profile) to the Salomon Smith Barney "Recommended List," while removing Colgate-Palmolive (CL: news, chart, profile). Among the mentioned stocks, ADI lost 3.2 percent, Colgate erased 0.6 percent and Continental fumbled 0.8 percent while AmEx climbed 1 percent, Canadian National jumped 1.5 percent and Deere edged up 0.4 percent. Potential risks Levkovich recognized that market risks could arise from the potential of an energy shock given current tensions in the Middle East. He added during the conference call that the backdrop of asbestos issues could also hang over stocks. But the strategist clearly advised investors to buy now. "We contend that if someone handed us the ball at the line of scrimmage, we could tell our receivers to go long," Levkovich concluded. When released the numbers always come out after the close of the stock market. Usually they get posted on the AMAT thread before they make it here. 2:30PM : The path of least resistance remains to the downside as the market continues to weaken....Semi equipment stocks remain weak, although they are outperforming many other tech sectors. Industry book-to-bill data comes out after the close tonight....Gold prices are weak today in the wake of comments from Bundesbank President Welteke, who said that Germany wants to "slowly" sell some of its gold to move into assets that offer a return beyond potential capital appreciation. The Gold and Silver Sector Index (XAU) has traded off 3.9% on the session.... RtS