Saturday, September 28, 2002

9/28/02 2.2 Ratio Of Negative 3rd Quarter Earnings Pre-Announcements To The Positive

Thru September the bear market is 40 months in duration.

September consumer sentiment still dropping.

Wyeth warns. Barrick Gold warns. Delta Airlines warns and announces job cuts.

Merrill Lynch lowers 4th quarter earnings projections for the S&P and cuts 2003 too.

GE's CFO: "2003 is looking more challenging than it was when we talked in May." He is saying that GE's growth rate in 2003 will be down about 50% in 2003 to about 8%.

Monday is the last day of the quarter. How many mutual funds will want to eliminate stocks from their portfolio and raise cash?

Friday, September 27, 2002

9/27/02 More Layoffs And Earnings Disappointments

SBC Communications slashes 11,000 workers and its capital expenditures. Aetna to layoff 2750.

Philip Morris misses earnings projections by wide margin. Callaway Golf warns. Solectron has quarterly loss. Nortel warns-again.

Japan has its 3rd consecutive year of deflation. Our 30 year mortgage rates fall below 6%, the lowest ever. Is this a sign of deflation?

Unfortunately more Americans owned stocks at the beginning of 2002 than in 1999. Poor timing I'd say.

Underfunded pension funds a growing problem. The stock market is the culprit. The latter certainly has created havoc for 401K plans.

The question for the day: can mortgage refinancing save the Christmas season? If we have 0 percent auto financing, why can't we do the same for the homebuyer? How about 0 monthly payments on credit cards? Can life be a free lunch or is there a payment at some point?

Thursday, September 26, 2002

9/26/02 Greenspan: "Our Ability To Forecast Is Limited"

Glenn Hubbard, Chairman of the White House Council of Economic Advisors: "On balance the economy's recovery looks pretty typical." Tell that to HP who are laying off another 1800 or Handspring who are laying off 20% of the workforce or Gucci that warned about results or....

If Knight Greenspan is having forecasting difficulty, then how would an investor expect individual companies to assess with accuracy expected results for the 4th quarter and 2003? With limited visibility p/e ratios should be reduced and with them stock prices. A smaller and smaller percentage of companies are making their earnings forecasts, and those forecasts in most cases have been reduced at least once.

Wednesday, September 25, 2002

9/25/02 Posting #2 "I Don't See A Spark"

As I write this blog, the Dow is up 200 points and the Nasdaq abouy 40. One of the reasons cited is GE reaffirming their third quarter numbers. Investors might have been better served to focus on Jeff Immelt's comments made in Boston today. He said that he doesn't see a spark generating a macroeconomic recovery and that CEO's should not expect a strong recovery for the 4th quarter or early 2003. I noticed that Immelt did not provide guidance going forward for GE.

Interestingly, the IMF lowered their estimates for growth going into the 4th quarter and for next year.

As I have often remarked, there are sharp rallies in bear markets; however, they occur at lower and lower levels, and this has been true for the last 2+ years. The idea is to lighten up on the losers during those rallies. I last made these comments when the Dow rallied to 9000 and the Nasdaq to 1400. Of course, this is my opinion and I am prone to making mistakes- just not the same one twice I hope.
9/25/02 Dow Had Its Lowest Close IN 4 Years

US consumer confidence declines for 4th consecutive month.

Fed says growing risk of war creates more economic uncertainty. Two Fed members vote to lower interest rates.

US oil supplies continue to shrink, and crude rises to 19 month high.

Several European Union states are experiencing trouble meeting budget goals- Germany may exceed deficit limits and may not balance its budget in 2003.

Japan's trade surplus continues to expand. Unfortunately, they are paying a big price for deflation.

Tuesday, September 24, 2002

9/24/02 Cisco's Chambers: Customer Visibility Lessening

Earning warnings issued by Maytag, Target, Steelcase, Temple Inland, and Weyerhaeuser

Traditionally, customer visibility should increase as we move towards the holiday season. For Wall Street November, December, and January most often mean good times. With consumer confidence on the downslope, this holiday season maybe a different one, and things could get worse before they level off. It may be wise to play it close to the vest, and hopefully you will feel cozy in that vest. Don't be ashamed to consider shopping at a thrift store. The savings are real, and the money goes to a good cause.

Monday, September 23, 2002

9/23/02 Patients To Have Less Access To Healthcare

The government is proposing sharp cuts in Medicare payments for many drugs, medical devices, and high-tech procedures. At the same time the government expressed "concern to us because of the potential impact on access to care."

According to a survey by AT Kearney, for the first time China is attracting more foreign direct investments than the US.

WalMart expects September sales growth at the low end of their forecast or about 4%. August was a similar experience.

JDS Uniphase lowered its quarterly sales forecast.

David Murdock, CEO of Dole, to take Dole private.

The airlines are considering asking for more government funds.

Sunday, September 22, 2002

9/22/02 Half Empty

Robert McTeer, President of the Dallas Fed: "for a while now, when it comes to the economy, the glass has either been half full or half empty..I must say,however, that half full has become a bit of a stretch lately."

Of the earnings pre-announcements for the third quarter, 52% have been negative outlooks.

Japan's cabinet office: "the growth target for 2003-2004 will be extremely difficult to achieve- deflation to continue thru fiscal 2003-2004."

The Mexican peso at a 3 year low vs the dollar. The yen at a 3 year low vs the Euro.

If Japan continues in a deflationary cycle, then why is the 10 year yield spread between Japan and the US narrowing? Maybe because the US is entering a deflationary period. If the latter occurs, stock prices will erode further and house prices will be on a similar path.

NEC lowered its forecasts.