The Trend Looks Bullish for at Least The Next Several Months.

[Research]

Title: Newsletter

NEWSLETTER Tuesday, December 11, 2001 Global Quantitative Strategy Make-Cents Friday's disquieting jobs report continued to reverberate in the market Monday. With the economy sending mixed signals and generally failing to herald a recovery with any real conviction, investors regarded the payrolls number (down 331,000) as more than sufficient reason to collect profits. Those twin barometers of the new bullishness - Dow 10,000 and Nasdaq 2,000 - once again fell victim to investors' skittishness about near-term earnings and economic prospects. A few company-specific releases also tugged on specific sectors of the market, such as technology and finance. The outlook for the economy is spurring a wide range of arguments, with some holding that the worst is past and others suggesting it yet lies ahead. The consumer's willingness to spend is threatened by job cuts, and so far the industrial sector has not stirred sufficiently to rescue the economy (as the consumer did when manufacturing was moribund). A resurgence in capital spending would signal a resurgence in the industrial economy. But so far, companies are unwilling to spend because they are uncertain about final demand and, just as important, because wide credit spreads makes borrowed funds too expensive. So many economists believe the Federal Reserve, which can't really do anything about the spread itself, will do the next best thing: effectively lower corporate debt rates by pulling lower the bottom end of the spread. for more Subscribe here Technical Market Update Bob Dickey MANAGING DIRECTOR RESEARCH for RBC Dain Rauscher Wessels The early strength last week was met with some normal profit taking late in the week, which is normal action in a bullish trend, in our opinion. The markets are into areas in which they spent several months and traded much volume at midyear, which makes it more likely that the advance will slow from the strong pace of the past two months, in our opinion. There is still quite a bit of doubt about the prospect of further upside gains for the market, as evidenced by the high put/call numbers and the heavy amount of cash on the sidelines. The argument that stocks are overvalued on a historical basis is also true, but we believe this has turned into more of a reason not to do anything, rather than a reason to sell, as it was one year ago. The lack of selling pressure and the slow improvement of the sentiment from some deeply bearish levels is providing the market with some consistent fuel for further gains, in our opinion. Dips are buying opportunities in our opinion, and although there will be consolidation periods along the way, we believe the trend looks bullish for at least the next several months. for more Subscribe here Research News CSFB • Portfolio Strategy INVESTOR SURVEY: Our key conclusion form our Semi-Annual Investor Survey is that investor expectations for 2002 are conservative if not low. Nearly 75% of the sample anticipate less than 10% earnings growth for the S&P 500 in 2002 and 2003. Also, the plurality of respondents expects 10-year Treasury bond yields to hover close to or above current levels of 5.0% to 5.5%. Share prices should remain in a narrow trading range over the next three months and provide 10% to 20% gains by year-end 2002. Stocks could have considerable upside potential if the sell-side numbers are anything close to being attained. US Economics Now Expect GDP to Grow in Q1'02; Recession, Which Began in March, is Likely to be All But Over by Early Months of 2002 Three key points: First, we have revised up our US real GDP forecasts for 2002 slightly, and now expect positive GDP growth as early as Q1. We think the recession is going to be all but over by the early months of next year; the economy is likely to start expanding again in Q1. Second, we think inflation is taking another step down; over the year CPI inflation could fall as low as 0.5% in the first half of next year. Strategy - Global Equity Excess Liquidity has been at Record Highs, But There are Now Signs of Some Slowdown Excess liquidity is a major driver behind the current equities rally. OECD excess liquidity is now the highest for over 20 years (measured by money supply growth minus industrial production growth and inflation). Traditionally this has been positive for equities. The three previous periods of high liquidity- October 1982, January 1986 and December 1998 - saw equities outperform bonds by 18.7% 5.6% and 31.4% over the following year. for more subscribe here Argus Market Report • MARKET REVIEW • Value Stock: KMG reports EPS of $1.08; reiterating BUY and price target of $78. • Value Stock: HAL's management reassures investment community that it will appeal the recent asbestos verdict for more subscribe here RBC Dain Rauscher Wessels • (SEBL) Siebel Systems, Inc. 12/10/2001 Buy-Aggressive ; Price Target: $30.00 (Prev:$25.00) E-BUSINESS APPLICATIONS BUSINESS UPDATE: THE STABILIZATION THEME CONTINUES *We believe Siebel is on target to meet expectations for the current quarter, although we do not expect upside. The company has set aggressive goals for upgrade activity within its install base. We believe that upgrade activity has been limited to date, although it still very early in the process. We maintain our Buy-Aggressive rating on SEBL shares but are increasing our price target to $30. for more subscribe here EMAIL TO A FRIEND               PRINTER FRIENDLY FORMAT Make-Cents.com E-Mail Center: subscribe or unsubscribe to Newsletter at Make-Cents ________________________________________ Copyright © 2001 Make-Cents. All rights reserved. -- �Desea desuscribirse? Escriba a [EMAIL PROTECTED] con el tema "unsubscribe".