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To: Lizzie Tudor who wrote (18627)	10/25/2003 6:48:58 PM
From: stockman_scott	Respond to of 57684

The "Feature Story" in today's IBD has some interesting comments... investors.com Some excerpts: <<So far, third-quarter corporate earnings among large firms are on pace to show the best growth in years. The financial, tech and energy sectors are leading the upside. So why did the market end last week with sharp losses? Analysts and fund managers think investors were looking for an excuse to sell hot shares and book profits. >> <<As of Friday morning, 323 companies in the S&P 500, or 65%, had reported third-quarter results. Of those, 210, or 65%, exceeded the consensus forecast tallied by Boston-based First Call. That's better than the historical pattern of 58%.>> <<The results aren't too surprising. Corporations have cut costs. Interest rates are still low. Analysts have kept estimates conservative after the 2000-02 bear market.>> <<Blending already-reported data with estimates of companies that have yet to announce, First Call research chief Chuck Hill has raised his forecast of total third-quarter S&P 500 profit growth to roughly 21%. In early October, analysts had seen earnings rising 15.9%.>> Those are all "good" things - now we come to some of the "drags". <<But sales remain a concern. Hill noted that we still aren't seeing "great" top-line growth, particularly among the tech companies.>> <<"The key to keeping this economic recovery going is further increases in consumer spending so we can get some of that excess capacity soaked up. Then some of these industries will get to the point where businesses will open the capital-spending spigot," Hill said. "I don't think that's going to happen in the fourth quarter. It may not happen in the first or even the second.">> <<"We're not seeing a sustained push in spending of technology and capital goods. It's recovering, but not aggressively so," said Peter Jankovskis, director of research at Oakbrook Investments who co-manages the $70 Million AmSouth Select Equity fund. He noted that capital goods spending has improved at a modest 5%-6% rate. He'd be far more excited about techs if capex were rising at a rate of 20% or more...>>

To: Lizzie Tudor who wrote (18627)	10/25/2003 7:18:11 PM
From: stockman_scott	Read Replies (1) \| Respond to of 57684

Another good article from IBD that highlights the lack of job growth in this recovery. investors.com Some excerpts from the article follow: <<In September, average hourly earnings of rank-and-file employees dipped 0.1% from August, the first decline since May 1989. As a result, the annual gain in average hourly earnings fell to 2.7%, down from 2.9% the prior month and the lowest since May 2002.>> <<"The combination of rising productivity and falling hourly earnings is great for earnings," wrote global investment manager Bridgewater Associates. "It essentially means that the benefits of productivity are accruing to the bottom line of companies instead of to fatter worker paychecks" as they did in the late 1990s.>> <<As payrolls grew by 57,000 in September, retailers and temp agencies added a combined 43,000 workers. But factories cut another 29,000.>> <<"Many workers are being forced to take lower-skilled, lower-paying jobs," Challenger said.>> <<The data, which can be volatile from month to month, showed unemployment among those with less than a high school degree fell from 9.4% in August to 8.6% in September. But the jobless rate among those with a bachelor's degree or higher rose to 3.2% from 3.1%.>> <<Stephen Roach, chief economist at Morgan Stanley, sees a link between higher productivity, weak wage growth and the shift of factory and white-collar services jobs offshore. The shift of labor-intensive work offshore "has the effect of biasing domestic productivity growth to the upside," Roach wrote. And while outsourcing overseas has boosted efficiency, it's given rise "to a significant income leakage that already has had a material impact on household purchasing power.">> <<Commerce Department data show wage and salary income in August was up just 1.8% from a year before, barely keeping ahead of inflation. But tax cuts pushed disposable income up 5.7% from a year ago and kept the consumer charging ahead.>>