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To: techanalyst1 who wrote (13926)	9/20/2002 1:21:56 PM
From: fedhead	Read Replies (3) \| Respond to of 57684

In an extended bear market public participation in the markets will drop and volume will be a fraction of what you see now. And yes we could trade sideways at these levels for years on low volume. But I think that would be a best case scenario. Worst case is we get a monster selloff from these leves to really put the buy and hold thesis to the test and then start a decent rally. Anindo

To: techanalyst1 who wrote (13926)	9/20/2002 4:22:50 PM
From: stockman_scott	Respond to of 57684

Eurostocks Week Ahead - Gloom and more gloom By Marie Maitre PARIS, Sept 20 (Reuters) - European equity markets are set for further bruising next week as investors brace for fresh profit warnings from what is expected to be an appalling set of quarterly earnings and amid gnawing fears of a new Gulf War. Leading European stock indices may plumb new five-year lows as the rising likelihood of U.S. strikes in Iraq adds more uncertainty to markets already wrestling with poor corporate earnings and signs that an economic rebound is faltering. "Everyone is worrying about a second recession, and in the climate of reeling stock markets, uncertainty over Iraq and less-than-encouraging data, the outlook is looking more and more negative," said CIC economist Chloe Magnier in Paris. Investors remain concerned that more companies will lower their guidance ahead of third-quarter earnings, due to unroll early in October and already feared as likely to be the worst reports in over a year. "For the short term it's very dark," said Thomson Financial Global Equity Strategist Ozan Akcin. "I don't think this third quarter reporting season is going be the one that gives a spark for anything." BRACING FOR GLUM Q3 Among the few European names due to update the market next week are Anglo-Dutch consumer products giant Unilever Plc/NV <UNc.AS> on Monday, fashion house Gucci <GCCI.AS> on Thursday and French retailer Galeries Lafayette <GALP.PA. on Friday. Beleaguered telecom equipment maker Alcatel <CGEP.PA> will come under renewed scrutiny at an analysts meeting on Wednesday after it lowered its sales targets and announced 20,000 job cuts and a charge of 500 million euros over the next three quarters. "Alcatel shows that a bottom has not yet been reached in the technology sector," said Aurel Leven strategist Jean-Noel Vieille. "And a sector rebound will not be possible until telecom gear makers start investing again." Analysts slashed their earnings forecasts on European technology companies by 16.5 percent this month, according to JCF Group Chairman Jacques Chahine, who estimated that two out of three analysts were now less optimistic about technology company prospects than they were at the start of the year. "The missing part of the equation is that we are still waiting for business expenditure to pick up but it is hard to see that happening when sentiment has been so negative, it is hard to see companies justifying investment when the figures are so bad," Thomson Financial's Akcin said. Investors will hence pay very close attention to Germany's IFO business sentiment survey on Wednesday and business and industrial sentiment reports in France on Thursday, for any signs of a pick-up on that front. Air France <AIRF.PA> will be another stock grabbing market attention after trade unions at France's flag carrier called a new strike for October 3 to protest against the government's plan to privatise the company. In Italy, markets will be bracing for an expected showdown next Wednesday at Mediobanca <MDBI.MI>, the Milan bank which traditionally dominated the domestic corporate scene, over the future of its controversial chief excutive Vincenzo Maranghi. WAITING FOR INVESTMENT TO PICK UP Reports of falling profits and bleak outlook from companies across nearly all sectors are likely to keep sentiment in the doldrums, all the more so that soft economic data give no signs of a pick up in corporate profits in the short-term. The ratio of U.S. firms that lowered their guidance for the third quarter against those who maintained or increased them is, at over 50 percent, at its highest since the start of the year, a sign of further deterioration in corporate fundamentals. "The one sector standing out almost globally is the consumer sector due to agressive monetary easing that has put in place the financing incentives that fuelled consumption," Akcin said. NO FED CUT SEEN Markets will be closely watching the outcome of the September 24 rate-setting meeting of the U.S. Federal Reserve Open Markets Committee (FOMC), but the majority of economists expect rates to be kept put at current levels. Not one of the 22 primary dealers who trade directly with the Fed think the U.S. central bank will alter interest rates at next week's meeting, according to a Reuters poll. Economists agree that an unexpected rate cut by the Fed would send a deeply worrying signal to the market that fundamentals are actually worse than investors currently perceive. Yet analysts also assume the Fed will keep its risk assessment weighted toward economic weakness. IRAQ AND GERMANY Among other concerns besetting markets are geopolitical factors and their economic impact, as U.S. President George W. Bush appears increasingly willing to launch military action against Iraq, with or without international support. "Fears revolve around the U.S.'s capacity to topple Saddam Hussein as many people remember that the Gulf War did not manage to do that in 1991," Aurel Leven's Vieille said. "We could thus be in for a prolonged war, which would fuel the markets' downward cycle because it would hurt sectors like luxury retail, which had held up rather well so far, and trigger sharp rises in oil prices that would hit the industrial sector." Markets will also keep an eye on Germany's general elections this weekend, which some feared could pummel the Frankfurt bourse to fresh lows if they produce a hung parliament. Although most equity analysts polled by Reuters expected Chancellor Gerhard Schroeder's governmment to be re-elected, almost 75 percent said they would welcome a new government led by conservative challenger Edmund Stoiber. But many warned that any benefit from a change would be rapidly erased as Germany, Europe's leading economy, remains dogged by weak growth, a flood of insolvencies and the technology sector slump. * end of story *