I wish everyone a Very Merry Little and a Happy New Year. © Sandi Lynne, 2001                                      

Happy end of Chanukah to all!

© Sandi Lynne Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. Event-driven trading seeks to identify near-term catalysts that will move individual stocks or sectors. The discipline involves buying on a dip in advance of an event, and selling into the enthusiasm surrounding the event. In a steeply falling market, targets identified might still rise, or at least, fall far less than the averages, overall. Sandi or affiliates were long GE and INTC, though those positions do NOT represent a recommendation or bullish bent and may have been bought at far lower prices and carry covered calls against the longs                                       

Securicur was removed as Boston Logan's airport security firm in the last two weeks? Is it me, or does anyone else think there was just cause to remove this company months ago?

What's with all these mid-quarter updates suddenly making Maria Bartaboomboom so breathless? Mid-quarter updates have been going on for as long as I've followed events and, in the past, only the analysts paid heed. Now, suddenly, everyone's holding their breath. So I ask, when Nokia holds a mid-quarter this week, d'ya think they'll have much more to say than they did two weeks ago, when they held their analysts meeting? Can they surprise the markets with new product intros already announced two weeks ago, or disclosed in press releases that satisfied Reg FD.

And speaking of babes on Wall Street, anyone know of an office pool I can get in on predicting the day Carly Fiorina gets the boot from Hewlett-Packard? In case you haven't heard, the Packard Foundation has decided to vote its shares against the Compaq merger. Well, since I've been a bear on Carly for over a year, put $5 for me on her leaving before the end of the year. I won't be more specific until I learn on what dates the bets are clustered and the odds. I'd hate to win the bet for even money. It'd cost me money to send my bet with a stamp attached to an envelope.

Some really good news: Ralph I-Can-Make-You Poorer, also known as Mr. Dow 10,000, (according to guest host Mary Farrell) was a very subdued and reserved shadow of Ralph Acampora, on this past Friday's Wall Street Week with Louis Rukeyser, recommending cyclicals like IP & GP, as well as Intel, Cisco, Sun Micro and other recent NASDAQ tech-leaders that rocketed in the recent rally. However, Ralphie was NOT BULLISH, predicting range-bound markets, which probably means this week will be okay.

With the FOMC meeting on Tuesday widely expected to deliver another quarter point cut in rates, it pays to review the record of 10 prior rate cuts this year. The two unexpected (naturally) inter-meeting cuts sparked instant rallies that faded by the end of the week. So did a 50-pointer tha the market feared would only be a quarter. The other cuts brought sell-offs that reversed by the end of the week. And while we're talking about rallies, anyone else notice how little the DOW is off on the year? Less than 6%. Who woulda thunk, with non-performers like Merck, Gillette and Coke, as well as decliners of the NAZ variety, Intel and Microsoft, not to mention oil sector tankers? So what performed best? How 'bout IBM, given up for dead in the summer and fall lf 1993. How about how much the recent rally smacks of 1997 and 1998 redux? Word has it that the area around the WTC clean-up site is contaminated. Anyone know if the EPA is pumping Ozone or laughing gas into the air down there? That would explain the giddy markets, since not much else does. And the Street, itself, will need the canisters refilled this week: Wall Street bonuses start getting revealed, this week. Does that explain why Barr Labs, maker of generic Prozac, was such a winner recently?

Wednesday, the US Government will issue War Bonds--the headlines all say. Does that mean we'll all be watching the Lawrence Welk orchestra at midnight on New Year's Eve, because that's the last time the FEDs did such a thing? Someone riddle me this: Is a bond by any other name still a bond? Or is this the biggest dollop of doggy poop marketing in this, still young, century? Weren't they supposed to be called the much more palatable Patriot Bonds?

And speaking of the war effort, a video of bin Laden has been found on which the world's most wanted terrorist purpotedly talks about the September 11^th attacks. On the tape, bin Laden is said to express surprise at the destruction, which exceeded his expectations. No kidding, Sherlock!

Did ya hear that Boston police bought 5 IT's, former code name "Ginger," the long awaited technically revolutionary product from Kamen? At $8K each, anyone else find em a little pricey? Like, maybe the engine assisted bicycles so common in Asia and Europe that cost closer to a grand would be more prudent!

So I titled this week with a question mark because I'm as lost as anybody else, bearish on the economy for the next four months but cognizant of the power behind the recent rally, and convinced that any pullback that arrives between now and the end of the year will be mild, and trigger the formerly reliable "buying on dips." (I will grant, however, that investors with a 5 year outlook probably will prove smart if they're buying now.) The markets rally on bad news but pulled back on what appeared to be really good news out of Intel & AMD. On the other hand, can we please remember that the "good news" out of Intel, AMD and other tech stocks, in particular, might just represent the convergence of pent up demand after virtually no shipments from mid-September until mid-October, a switch from "just in time" supply chain management to inventory-building "just in case," increased government spending, as well as a typical 4^th quarter tick up in demand, as corporate IT managers spend the rest of this year's budgeted allowance. I don't happen to believe the increase in business is a trend likely to be sustained in the coming two quarters but  everyone else is free to believe differently, as long as stocks I own keep going up. Ya better watch out for good news, even the real kind, because the markets have recently more enthusiastically rewarded "less bad news" rather than even apparently good news.

On the economic calendar, this week, beyond the FOMC, Tuesday will deliver October Business Inventories which should have fallen because delivery systems virtually halted in the latter half of September, so production was drastically cut, a condition that persists, evidently, considering the still falling capacity utilization numbers. Likewise, Thursday's Producer Prices should have fallen, given the mess OPEC has made of energy prices--if you're an oil company, at least. Ditto Friday's CPI, where gas pump prices are still declining. November Retail Sales shoulda declined, thanks to auto sales that had their enormous spurt when zero financing was first announced, pulling higher sales into October. Furthermore, with retailers discounting like crazy, falling prices should translate into lower gross sales, even when the same SKU's (stock keeping units) are sold.

For unusual, watch Congress, Wednesday, when the Senate meets on the Microsoft settlement and a House panel reviews the Enron collapse. Since Wall Street hasn't even figured out the latter, it might be very funny to watch the House attempt to do so. Expect the same topic to dominate Power-Gen, in Las Vegas.

Now, rather than detail the week's Industry events which Premium Members can easily review on the newly designed subscription area, here are a few unusual ones. World Mail & Express meets in Orlando. Only 11 exhibitors but very much a hot topic, thanks to Anthrax, and recent word of PSAT's being held hostage at a Jersey mail facility. Since it took 29 days for my October bank statement to make it from New York to Florida, what's the odds all the gifts ordered online make it to recipients on time, this year?

Airport Economics and Retail, tandem events, meet in Phoenix. Well, if ya've been to an airport lately and tried to buy a magazine while waiting for a flight, ya know it ain't happenin' because the stores at most airports are behind security, where non-passengers ain't allowed. LVMH owns Duty Free Shops, which is the largest airport Retail operation. Enuf said. However, speaking of retail and the interent, BAI's Retail Delivery meets in Anaheim, with JPMorgan Chase analysts, Forrester researchers, Meg Whitman of eBay, and some of the infraastructure companies like Diebold, NCR, Unysis and credit card companies.

Aircraft Finance meets in NY, at a time when a coupla airlines still risk bankruptcy but personal aircraft are enjoying a surge in purchases. (General Dynamics bought Gulfstream, ya know.) D'ya think Boeing and GE Capital, to name two, have tremendous exposure to defaults?

Anit-Aging, the research field I'm most rooting for (perhaps rotting, while   waiting for), meets in Las Vegas, with a long list of exhibitors heavily weighted to the vitamin/food supplement side. Medically, research is centered on hormones, especially testosterone, while hyperbaric chambers had their fifteen minutes of fame when it was learned, some years ago, that Michael Jackson owned and used one.

Otherwise, the biggest event of the week is Internet World, in New York, rescheduled from October 1^st, with sections for ASP, BlueTooth, WiFi, Software, and more. The exhibitors will find the former flood of consumer-attendees are pretty much thinned and the analyst community less enthused. Anyone else think that the sponsor's claim of 900 exhbitors exceeds the number of "Internet" companies that survivored the last two years?

Earnings, by the way, will come from a few food and restaurant companies, like Interstate Bakeries, Heinz, and Darden, home builders Toll Brothers and Hovnanian, as well as Comverse Technology, Costco, Oracle, Ciena, and Adobe. Analyst briefings of the mid-quarter, semi-annual or annual variety involve Cendant, which already raised gudiance, underperfomer Merck, newly public MetLife, Chartered Semiconductor, HealthSouth, Qwest, Xlinx, JDSU, and the the aforementioned Nokia. Chartered Semi, which makes the chips for fabless chip companies, could have the most impact. In retail/apparel, the Street will largely neglect Jones Apparel and Timberland, though ya gotta wonder how the lengthy Indian Summer up north impacted Timberland's rugged boot sales. Farmers, I hear, can't even afford new heels, this year. Jones is a fine company, that's done well with recent acquistions but will have to buck reaction to November Retail Sales.

In sum, this week will be less busy than usual, with micro-events and the FOMC meeting garnering the most attention even as the NASDAQ 100 and S&P end of year rebalancing will dominate the research out of the Street--a guessing game, at best. And on a personal note, anyone who's seen the ads for Spirooli's, on CNBC, must have realized, as I did, just how bad the advertising landscape is: those kinds of ads usually run on also ran channels, way in the middle of the night. On the other hand, if you were thinking of buying me a Spirooli with the free Ginzu-type knives as a way to thank me for my input into your due diligence, you're too late. My buddy Mike already ordered it for me.

© Sandi Lynne 2001 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. Event-driven trading seeks to identify near-term catalysts that will move individual stocks or sectors. The discipline involves buying on a dip in advance of an event, and selling into the enthusiasm surrounding the event. Sandi or affiliates were long  IBM, NOK, INTC, HNZ, GE, and ADBE, though those positions do NOT represent a recommendation, and may have been bought at far lower prices and carry covered calls against the longs. We might even regret being long.

Given the muddle, it seems prudent to look at the schedule for what it might inspire or cause. The biggest day should be Friday, when the November Unemployment Report is released but that's not only a lagging indicator but a datapoint that often continues to worsen even as the economy provides glimmers of recovery. Monday, to turn the clock back to the beginning of the week, offers Construction Spending, Personal Income and Spending, Challenger, Christmas & Gray's Monthly Lay-off Announcements, The NAPM (National Purchasing Managers Index), the first reports of Vehicle Sales for November, and a speech from Alan Greenspan. Last week's New Homes Sales indicated that Construction Spending should have remained strong, especially with many areas of the country enjoying warmer than normal temps (Can you say seasonal adjustment?). Personal Income has been rising even as Spending has fallen a tad. If Unemployment is a lagging indicator, lay-offs probably stayed high but probably won't be as high as they were in October. We know Vehicle Sales couldn't have kept pace with the initial October zero financing rate but they should have remained strong. NAPM is the Index I hope rose, or at least stayed the same, even as I think we probably have another month to go before it ticks up. As for Greenspan, he spoke last week, as did many of his cohorts and, as long as Congress keeps dithering on the fiscal package and the data points remain week, it's reasonable to assume at least one other quarter point cut is coming on Decemeber 11^th, even if Alan doesn't say so Monday. The collapse of Enron, which left notes everywhere, all but assured a cut.

Tuesday's Weekly Retail Sales should be down from the week before because last week included Thanksgiving and Black Friday, when many workers were off. Christmas is still too far away for the procrastinators to get into gear. Wednesday brings the Non-Manufacturing Purchasing Managers Index, also known as the Service Index, and it would be nice to see this one improve, even as I fear it won't. Semiconductor Billings, out the same day, could reflect a seasonal uptick and reverse some of the damage done by Novellus' outlook, last week.

Thursday, November Chain Store Sales should be vastly better than October's were, even as Factory Orders may not fully reflect the thinning inventories of autos and trucks. Revised Productivity & Costs is a nonevent, even though it should be trimmed from last month's unexpected strength. By the time the market hears this interim report, it's already looking ahead to the final version.

With CFSB's tech conference the big trade event last week, this week there are mid-quarter updates from Cisco, Intel and Sun Microsystems, as well as Oracle OpenWorld and BEA Systems' developers' conference. Neither Home.net or 802.11 (WiFi) are big enough events to move the entire tech sector. Ya'd think Internet World Wireless West (Another related event) would be, but maybe not. Speakers from MOT, MSFT, INTC, IBM, and the like. were heard from last week. What could have happened since to change things much? Well, in the case of Oracle, it lost another key executive so the flutter it's devotees expected may not arrive. I gave up when Ray Lane left.

So, forget tech and media, and let's look at Pharma/Biotech: IBC sponsors Antibody Engineering, with a bunch of 4-letter biotechs that may need NAZ to hold up for them to perform. Target ID & Drug Discovery involves Stem Cells, Proteomics and bioEthics, which may get the biggest buzz after a group of researchers cloned an embryo. Metabolic Profiling involves obesity but the company with the most promising drug under development, Regeneron, isn't even involved in the conference. Lion Bioscience is, but it's big news was a collaboration with IBM, last week. You want to know all the players? Visit the new Premium Area and see how easy it is to view the week, or connect to the conference sponsors' sites. British Society for Immunology, and the Economist's Pharmaceuticals conference, as well as Prostrate Cancer Biology, and Hemotogy, offer some overlap and won't likely allow any of the companies involved to buck a downtrend, should one develop. For sheer exciiement, I suspect Biometrics & Security Tech (12/5) gets the nod, featuring a bunch of $20 stocks that were as low as $2 back in September. AHAH! You know which ones I mean, so you don't need me to spell it out.

Time was, Semicon Japan and CASBAA (Asia Cable & Satellite) would have stolen the week but I don't see it now. In the reverse, Interactive Energy would have been a non-event in the past but could be topic one, now that Enron's bankruptcy seems all but filed. If you think the fall-out has been factored into the markets--fheggedaboutdit! The worst is yet to come. Then be aware that Argentina has decided to convert deposits to dollars, so one of the biggest energy exporters has thrown another curve ball.

The sleeper event of the week could be Teen Power, thanks to fabulous debuts for recent hit movies and game players. Still, diya think there's a lot more upside, there?

In the end, I think the economic numbers and mid-quarter updates will hold their own against the biotech/med events and, regardless, the markets will head where they want. Wherever that is, it's likely to disappoint because investors spoiled by a fabulous rebound rally want big moves up, even as they prepare for some ugly end-of-year brokerage and mutual fund statements.

So, despite the disruptive year we're just finishing, the malls, this weekend, were the malls of the past. Retail outperformed in November but the slump in sales is about to begin, only to be relieved in the last ten days or less before Christmas, when consumers finally realize they're running out of time and start gift buying in a frenzy..

Now, for the week, there are a number of BIG conferences for tech and biotech, along with Tuesday's BTM-UBS Warburg Chain Store Sales Index and Redbook Retail Sales for the week ending November 24^th, so you might expect any of those to most influence the market. The headline Tech event is owned by CFSB, for the number and profile of the players but, also, for the location, Scottsdale, Arizona, a beautiful and popular spot with the CEO's of America. As for which companies will be at CFSB, let's say, simply, everyone but IBM. Otherwise, there'll hardware, software, internet software, retail, and advertising, semiconductor equipment, communications--What the heck: e-mail me and I'll forward the schedule, if you must. Just remember, Reg FD has inspired many companies to post press releases before they present at these things, and NOK, ALA, SLR, & NVLS hold analyst meetings or mid-quarter updates. IBM won't be silent, this week, though, because it holds a Web Builder Developers' conference beginning Wednesday, and will join other big and small heavyweights at Enterprise Storage Strategies, beginning the same day.

But forget all that. The real story this week will be influenced by either Afghanistan or the end of the month. In Afghanistan, there's high expectation for bin Laden to be either captured or fried before the week is through--Fried, I might add, by US bombs or at his own or his associates hands, rather than be captured. A retired general on TV, this weekend, proposed the possibility that bin Laden's death would trigger the "next" wave of attacks on the U.S--such inevitable concurrent events planned for years ago, according to this general.

The end of the month, ya think, shouldn't be a big deal. After all, this isn't the end of the quarter. But think again. This is the last week of the year for stock swaps and positioning for tax management. Come December, there won't be 31 days left to trade and avoid a wash sale. Now, way back in September, I suggested taking advantage of post-9/11 depressed prices by buying LEAPs in losers, so you could later sell the higher priced stock bought earlier, and capture a tax loss without losing a chance at a stock's recovery. Of course, you meant to. Probably you didn't. Neither did a lot of other people. So this is the last week it can be done. To avoid the wash sale rule, investors can sell securities and buy "similar" securities or, they can sell a stock, and buy it back in 31 days, or buy the stock now, and sell the more expensive, losing shares 31 days from now. Either way, 31 days is the key to avoiding a wash sale, so this week is IT. Ironically, the unexpected result could be upside, rather than downside. Suppose an investor owns Nokia. Tough to swap it for "similar" shares because it so clearly outdistances its competitors. And, suppose, you're counting on Nokia's analyst meeting, this week, to give the stock the boost it needs to successfully surmount the $24--26 resistance area. You probably wouldn't want to sell, NOK, this week , but, rather, would pick up more, looking to sell at the end of the year the losing shares bought earlier in the year, when NOK was comfortably over $30. Or, suppose investors believe a "new" bull market has begun. Are they selling, here, or do they cost average here and sell their losers at higher prices, at the end of December? You get my point, which is that the week doesn't have to be a down week for investors to make their tax adjustments. It can even be an up week beyond what most expect. I ain't sayin' which I expect. I don't have a clue, though I'm still wiating for at least a mild pullback between now and the end of the year.

Since I won't handicap the markets, I will something else due Monday--the award for smallpox vaccine manufacture. The late favorites had the field narrowed to Merck, Baxter and Glaxo. Glaxo is a foreign company, so I don't see the U.S. awarding the contract there. This isn't a global stockpiling. BAX has been in the news about defective dialysis filters that resulted in deaths. MRK badly needs the contract. Major patents expired, the pipline won't be ready for approval for a couple of years. MRK gets my vote.

The nifty new sorts on the Premium Area make it really easy to locate and study this week's events and players, so I'm not gonna say anything more about DSLcon.Europe, Deutsche Banc Basic Industries, ISPcon Germany, 802.11 Planet, CIBC Israeli-Related Equities, SG Cowen's Global Healthcare (Paris), NASDAQ's Euro Tech or Lehman's Industrial Select. Merrill's Med Tech lost it's appeal since the group made big moves last week. BioTech Forum, Stockholm, is stuffed with presenters whose names I bet you can't pronounce--making it a limited trade since those unspeakables are not traded here, if they're even public. Tobacco & Healthcare, in New Orleans, isn't news--big Tobacco keeps winning in court, where awards to claimants have been non-existent to minimal.

Now that I've highlighted the whole week, let me remind everyone that the Economic Research Bureau met on Friday and is expected to declare the Recession, official, on Monday. That, combined with Tuesday's retail store sales reports will give conflicting signals. (Amazon and AOL both reported very strong online sales increases over the weekend.) The ERB is a backward looking report. Retail sales say more about the current mood of consumers, so Tuesday's Consumer Confidence numbers could carry the market up, until Thursday, when Preliminary 3Q GDP, Durable Goods, New Home Sales and the Help Wanted Index are released. Then, Friday, a couple of regional PMI's could show that corporations aren't feeling quite as loose with money as consumers. The markets have finished up a few weeks in a row. That doesn't mean it will in the next few weeks, and there's plenty for investors to chew on while they're doing some tax planning, this week. The coast is NOT clear, though neither is it as dangerous as it seemed just weeks ago.

© Sandi Lynne 2001 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. Event-driven trading seeks to identify near-term catalysts that will move individual stocks or sectors. The discipline involves buying on a dip in advance of an event, and selling into the enthusiasm surrounding the event. In a steeply falling market, targets identified might still rise, or at least, fall far less than the averages, overall. Sandi or affiliates were long IBM, NVLS & NOK, though those positions do NOT represent a recommendation or bullish bent and may have been bought at far lower prices and carry covered calls against the longs 

But enough about me! Wednesday the treasury market closes early, Thursday we're all off, then Friday both the treasury and equity markets close early. So don't expect me to tell you which way we're going for the coupla full days there'll be. Sure, everyone is just waiting for a pullback but holiday weeks aren't when they necessarily arrive--except sometimes. And if a pullback does materialize, you just know the talking heads will be telling you it won't matter because trading will be light. A coupla months ago we talked about event risk and now, as the Taliban beats what appears to be a hasty retreat, the risk is that goods news will arrive in a rat-a-tat-tat.

No surprise, Harry Potter opened REALLY big but, bear in mind, AOL is around the 13^th largest US company by revenue and, while I'm long and believe the merger with Warner will pay off, a big opening or two (Lord of the Rings) or three, (Oceans 11), just might keep AOL propped up but won't necessarily translate into blockbuster earnings. Bertelsman holds a put it can start excercising in January, and the short-sellers will be talking up the "cost." Let's also not forget that Harry opened on 7,000 screens, making comparisons to other movies moot since this was the widest opening, ever.

Speaking of which, Barbie Nutcracker debuts on Thanksgiving day. If Mattel spikes because of it, I won't be along for the ride. MAT's balance sheet is a mess, and worsened since Jill BVarad left.

Phillips and Conoco agreed to merge, this weekend, which will put the merged entity atop Royal Dutch as the largest. OPEC, of course, has been marginalized, thanks to buddies George Dubya and Vladimir, but a merger this size could just put some life back into the group. Of course, if oil is forced to $10 a barrel, as OPEC has threatened to get non-members to tow the line on production cuts, you'll all of a sudden be hearing a lot more about Argentina, and how OPEC bankrupted the country, much to the nasty ripple effects across the enitre Americas.

Trade Deficit Tuesday, oughtta be down. UM Consumer Sentiment, out Wednesday, and for November, oughtta be up. We managed to squeak past Halloween and Veteran's Day without another terrorist incident, and actually rallied after a plane crash, because the terrorists didn't do it.

If online retailers rally a bit, ignore them. The Internet Sales Tax moratorium was extended on Thursday, last week, though no one seemed to notice at the time.

Overseas Trade shows could cause a stir but only because so little will be happening stateside. Biomics billed as Europe's largest genomics and proteomics event is quite small. MacExpo, London isn't the tradeable event San Francisco or New York versions are. As if they had to prove that Thanksgiving is strictly an American holiday, the ECB will meet while everyone else is eating and watching football. A couple of Asian events could prompt comments from analysts about Storage Area Networks and other Component supplierrs. All noise to me.

Retail and apparel are the stars of the earnings show, with tech largely done, financials a coupla weeks away from restarting (Lehman reports real early.) A couple of food companies report, and I just can't wait for Hormel's to see if post-9/11 Spam sales shot up as Campbell's claims it's soup sales did. Toys 'R Us is one of the retail reporters but they're still getting their act together. Woolworth/Venator/Foot Locker is another, often providing a window into athletic shoe sales across the board.

Anyone who know Alan Abelson ought to have him check with his doctor. Last week he spoke nostalgically of the bull market of the 90's, bubble and all, this week he's plugging Iron Mountain. It's a fine company but it's got now earnings. Since when does Alan bull that? Or is it all bull, in the end?

If the Wall Street Journal runs it's usual Tuesday before Thanksgiving front page article saying Christmas sales are going to dissapoint--ignore it. Thanksgiving is early, placing an extra weekend for shopping after Turkey Day, and know I'm on the side of thinking Christmas shopping will be quite fine, even if it is off the records set for bull market and millennium years.

Finally, should we rally this week, watch for the headlines proclaiming the Bull is Back!. That's a sure signal that the bull is done. Thankfully, the WSJ Sunday edition, reprinted in newspapers around the country, including my local vocal, bears this headline (ALL puns intended.) "Despite Gains, Bull Market Isn't Here Yet." SO, if that's the WSJ take, maybe there is another week, short as it is, for the market to work off overbought by going nowhere, or even rising a little.

Obviously, I made it clear over the last two weeks that I thought this would be the week in which the bulls and bears duke it out for control, with the bears regaining some the leverage they've lost recently. On Thursday, XBOX, the Microsoft video game box will step into the ring against Sony Playstation2, a duet that will become a trio, on the 18^th, when GameCube debuts. If you're searching for a winner here, forget the named players, as well as Flextronics, the contract manufacturer assembling the XBOX, as well as Solectron, which won the right to warranty service--a black hole if ever there was one. Keep your eye on the game developers and retailers, because that's where consumers will designate the winner.

Likewise, Harry Potter, The Sorcerer's Stone will debut, on Friday, leading many to predict it will crush Monsters, Inc. Guess what? With $122M in sales in the first two weeks, they could be wrong. And maybe there's more room for both movies to succeed than there is for three major game players to but that doesn't mean the market opportunity isn't huge for all concerned. I think they'll all be very big winners, with XBOX the tag-along but only because there are so many fewer games available for X than the others. The sleeper? Hasbro, of course, which suddenly finds G.I.Joe gaining the kind of popularity that could have him sleeping next to Barbie, knocking Ken outta here. Doesn't hurt that Hasbro has the master license to Monsters. Yet, if you read my November commentary posted here, you already know my #1 pick of the month.

You would think the OPEC meeting in Vienna, on Wednesday, would be an important pivot for oil but, again, you might be wrong. With the International Energy Agency releasing Monthly Data, on Monday, a couple of NON-OPEC members refusing to comply with production cuts, and with global demand down, the edge might just go to the IEA statistics, not OPEC, especially since production cuts won't immediately effect either supplies in the system or those still in transit, on the high seas. (Haven't heard anyone recall a tanker because OPEC wanted supplies shrunk.) The oil already out of the ground becomes an inventory hang either way--and still, I happen to think the sector rallies this week, but only because so much else needs to breathe and settle down.

October Retail Sales are released Wednesday. With so much of consumption going to autos at zero financing, please stop believing the consumer has retrenched and the malls' holiday will be the worst on record. Last month, Consumer Credit rose by $3.2B, instead of following economists' forecast for a decline of $1.7B. With auto sales reaching record highs and few consumers paying cash, whaddaya think that means, if you think about it at all, which the forecasters apparently didn't. So you know I don't really give a hoot about October Retail Sales when I happen to think everyone who bought a new car, or even two, didn't then run out and buy new furniture and wardrobes. Betcha they didn't. But what they didn't do in October doesn't predict what they will this month or next. No, this Christmas might not look as good as Xmas 1999, but why compare to an extraordinary, end-of-millenium-top-of-the-market-bubble spike and then conclude the consumer is done? (Mel Karmazin said something similar about advertising at an investment conference this week, expressing his feeling that the dot.com bubble and other things drove advertising prices into a one-off spike that should be written off, just as companies usually write-off non-recurring charges and events.) Most Americans think of shopping as both therapeutic, their inalienable right, granted by some unnumbered clause in the Bill of Rights that the founding fathers, unfortunately, never got around to crafting.

About Business Inventories, expect inventories to have declined. Since manufacturing has fallen into the abyss, sales had to come from existing inventories.

Likewise, with COMDEX taking place this week, you'd think this was the EVENT OF THE YEAR. Fheggeddaboudit!. Comdex hasn't been much of anything, in years, and has become even less important post-Reg FD. I remember the good old days, when the dinners hosted by investment bankers during Comdex used to make stocks fly; time was you knew Goldman would be hosting Microsoft, Merrill the same for Compaq, and suddenly both stocks acted like everyone was hearing about them for the first time. Dem days is gone, Bubba. Maybe Treo, the 3-in-1 from Handspring would have caused a stir, if only they hadn't announced it weeks ago, and if only Nokia hadn't already introduced a phone that functions as an organizer, in Asia, a few weeks ago. Don't think Comdex is washed up? Well, then how come Key3Media (the new producer) is saying attendance may drop as much as 35-40%, while exhibitors have fallen, also. And how come Wit/Soundview, Goldman Sachs, and Merrill are holding tech investment conferences that are no where near Vegas? Heck, Merrill's isn't even in the U.S.

Please shut off CNBC and turn on any other network. If you do you'll learn that the signal event of the week is the Victoria's Secret primetime Fashion Show, on the 15^th, on ABC, at 9pm. Am I long Victoria's parent company, Intimate Brands? Should ice cream be served cold? But then, loyal readers know the VS fashion show has often caused a stir this column anticipated--including the live webcast from Cannes, last May, that few were able to log onto because the servers crashed.

Okay, the signal event isn't the Victoria's Secret fashion show if you're an options trader. That will be Options Expiry, on Friday, for which the real traders will have prepared by finishing their work on Wednesday and Thursday--leaving the retail investors and talking heads lost by Friday. And for all you index traders walking around in a fog, bear in mind that next month's expiry is not only a triple witch but an expiry impacted by rebalancing of the S&P and NAZ 100, not to mention retail tax-loss selling.

Did I mention the Yahoo and Immunex analysts meeting? Skip Yahoo, pay attention to IMNX because it's meeting coincides with the Rheumatology meeting, in San Francisco, and Enbrel is Immunex's production plagued blockbuster. Dya think Immunex has been working on ramping production? What was your answer to the question about serving ice cream hot or cold?

In volume, retailer's earnings will win the week's press release title. Okay, it won't, Comdex-related press releases will be more numerous but those will be fluff--retail earnings the real deal, with Wal-Mart, Home Depot, TJX, Kohl's, and Starbucks, just a few of the names set to confess. But for power and punch beyond anything COMDEX can deliver, there'll be earnings from Dell, Hewlett-Packard, and Applied Materials--visibility still cloudy beyond the current quarter.

In sum, while there'll be much to compete for the markets' attention, much that would normally set the tone and direction, truth is, the recent rally has covered a lot of ground. Whether we give back a bunch or merely tread water in a tight trading range, a rest is overdue. Should a decline worthy of that description arrive, don't panic. The Pit guys in Chicago don't need to bring stocks down more than a strike, in some cases two, but a debacle doesn't await. Not this week anyone. Not if all the security actually protects.

In sum, I'm expecting more upside, even as the recent rise defies my outlook for the economy--an outlook well supported by all the data released to date. On the other hand, I'll be trading as if this is the last really good week of the month, expecting that all November's gains will be made by the end of this week, with a correction in the offing at any moment starting next week. If that sounds a lot like the recommendations of officials to go on about your business as usual, but be very careful and very alert, and don't let your guard down, then you've got it right. The only groups I'm comfortable holding, beyond this week, are those best positioned to profit from the coming movie release schedule or video game player introductions--especially where overlap is probable, since I like two chances to win. If you want my number one pick of the month, then you really must skip over to the MONTHLY OUTLOOK because that's where it's posted.

© Sandi Lynne 2001 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. Event-driven trading seeks to identify near-term catalysts that will move individual stocks or sectors. The discipline involves buying on a dip in advance of an event, and selling into the enthusiasm surrounding the event. In a steeply falling market, targets identified might still rise, or at least, fall far less than the averages, overall. Sandi or affiliates were long Cisco & Dell, though those positions do NOT represent a recommendation or bullish bent and may have been bought at far lower prices and carry covered calls against the longs                                         

In sum, the recent rally should start correcting this week. However, I'm calling it a correction, of the pullback variety. Because informed fund investors don't send new money to mutual funds until after the funds' year closes, so as to avoid a tax bill for the entire year, money usually gets sent starting the first of November. By November 6, these fund flows have often shown up in higher stock prices as, by charter, most mutual fund managers must deploy the cash in their accounts. Traditionally, markets have suffered severe declines, in October, that were reversed as early as October 25^th, sometimes as late as November 9^th. While this year has been like no other, two months post-9/11, it seems prudent to expect the markets to return to a more seasonal pattern. While I'm not overlooking the likely barrage of earnings warnings ahead, I am acknowledging far easier year-on-year comparisons beginning the current quarter, and the probability that, while the economy won't recover in the 4^th Quarter, neither should it continue declining. In other words, I expect the normal seasonal uptick in business to result it what appears as an economy stabilizing. Given recent economic news, the markets will receive stabilization with appropriate enthusiasm, making a retest of the 9/21 lows between now and the end of the year an unlikely event. Unless terrorism successfully strikes again. Unless…. And that will be the "but" in every projection of a fulll-blown economic recovery. Meantime, should Congress pass a truly stimulative fiscal package, the pullback that starts this week could be very short-lived and very shallow.

© Sandi Lynne 2001 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. Event-driven trading seeks to identify near-term catalysts that will move individual stocks or sectors. The discipline involves buying on a dip in advance of an event, and selling into the enthusiasm surrounding the event. In a steeply falling market, targets identified might still rise, or at least, fall far less than the averages, overall. Sandi or affiliates were long TGT, MCD, though those positions do NOT represent a recommendation or bullish bent and may have been bought at far lower prices and carry covered calls against the longs.

October 22-26, 2001   Whimps Return to Hammer Out a Tax Stimulus Package    While Dubya, Rudy and everyone else has been exhorting Americans to go about their business as usual, and not to panic about the possibility of coming in contact with Anthrax, Members of the House of Representatives high-tailed it out last week. This week they return with the Fiscal/Tax Reduction package their number one priority. Since we're learning that interest rate reductions no longer excite anyone, the tax package has become the Great Economy's last hope. Regardless of any market action this week, a rally of enormous proportions could follow word of passage of a Congressional package. Never mind that I fear such a rally could lead to a near-term top. A humongous rally is something worth trading and will provide an opportunity to lighten up in advance of the next corrective pullback. Besides, Friday will also bring the final version of the University of Michigan's Consumer Sentiment Index for October and, I promise you, outside NY, the mood is still improving. While we're on Fridays, let us not forget that the DOJ and Microsoft are due to report back to the new judge on November 2, their deadline for mediation. Not a word, recently, about mediation, didya notice? Time was, Hampton Pearson, of CNBC would stand outside the hotel or office building where such talks were taking place and report on every tie and briefcase, every smile and frown, as interested parties arrived and departed. Not now: Washington is so busy with anthrax, military forays and press conferences, as well as Pentagon hero stories, even Ron (or "wRONg Insana," as the very astute Richard Lee's, @ 21forward.com refers to him, traveled to report from Washington. Why doncha mosey over there, already, tell Rich I sent you and ask for a trial.)

While we're on Microsoft, WindowsXP is making it's official debut on Thursday, October 25th which is, as far as I'm concerned, a non-event. Win2000 was the professional version and it's been out since spring without causing a deluge of orders--at least according to most of the makers who load it on hardware. WinXP is an operating system, not the OfficeXP app suite that was, also, debuted, earlier this year, and which met no avalanche of sales. The vast majority of desktop PC's around the world can't run WinXP because of lack or processor and RAM memory, so there'll be no '95 frenzy to buy the upgrade. For new PC buyers, makers have been loading WinXP for some weeks and, again, that hasn't made orders sizzle. Last, everyone familiar with MSFT's new releases knows earliest versions are buggy and will require frequent downloaded updates. Since WinXP is a consumer version born of Win2000, it's possible it will be less buggy than prior releases but, with so much uncertainty about future economics and job security, I think only people who planned on buying a new PC, anyway, will buy it after for WinXP. In other words, delayed purchasers will buy while others won't be inspired.

Monday morning might open to the upside, as well, to celebrate news of ground forces "exploring," shall we say, one of the Taliban's Afghan headquarters. Between the Monday military, maybe, success rally and Friday, anything can happen. You'll notice, of course, last Wednesday the markets declined after weeks of strong Wednesday rallies. So you oughtta bear in mind upwards of another one third of the S&P 500 reports this week. Many of the week's reporters will be members of the DOW, like American Express, 3M, ExxonMobil, but who cares? Analyst meetings for Brocade, Guidant, Eli Lilly, Safeway, Sears? Again, who cares? The markets are rising and falling, it seems to me, on emotion more than fundamentals, which mainly stink. (It certainly wasn't fundamentals based on earnings or data released that caused the many surges we've seen.) Even internet-only stocks didn't tank like splattered water balloons, last Friday, despite the fact that the moratorium on Internet Sales Taxes expired Sunday and hasn't been replaced, has barely been mentioned.

So pardon me if I don't weigh in on the many, uninspiring trade shows and conferences scheduled for this week. Truth is, the sleeper event of the week might just be ICSC's Fall Convention, starting Wednesday. It is for shopping center operators and, with one already announcing it has canceled all Halloween-related events, my bet is others will follow. The Net has been rife with warnings of another terrorist event arriving that day, with malls being prime targets. Then, if you know how shopping center leases read, mall operators often skim a share of revenue from tenants and, last we heard, store sales were down anywhere from a bit to a lot. Now, it should surprise no one that many mall operators happen to be REIT's, and that REIT's were just admitted to the S&P 500. So, ya knew the run REIT's have had was sure to end, and you know additional declines await, 'cause you must have noticed what's happened to Microsoft, Intel and Hewlett-Packard since they became DOW components. Can you say road kill? Not MSFT, ya say? How about down more than 50% from it's 1999 high.

Okay, I fibbed. I'll mention Anti-Cancer Drug Discovery because cancer is something we'd all like to find a cure for almost as badly as we'd like to find a cure for terrorists. And you'll remember that Novartis was really hot on word that Gleevec, it's hot cancer killer, was approved three weeks after application because the FDA found the trial results so compelling. Last week it filed another NDA to extend it's use. You'll also recall that ImClone was one of my faves at much lower prices. So maybe ya wanna take another look at BBH, if the markets decide to rally because, in addition to the companies already mentioned, others presenting include Millennium Pharma, Abgenix, AVI Biosciences, Celgene, Ceretek, Genta, Genzyme Molecular, HGSI, IDEC, Immunogen, Mederax, Protein Design Labs and Supergen. They aren't all members of the BBH but the sector often rises in unison.

As I posted, Apple put out a press release inviting fans to the unveiling of a revolutionary new digital device on Tuesday. Newton? Columbo? MP3? DVD? Wireless phone, organizer, writing tablet, MP3, DVD, housekeeper and laundress, combined? In my dreams, with none of the usual Apple spy sites "knowing" for sure, and no combo of sites offering a consensus. Anyone hear Altera, ADI, Logitech, MOT or other major component supplier say word about a new Apple contract? Perhaps a new Apple product a la MSFT--announced months or years before available. Keep your blood pressure down, even though Apple needs something non-PC and really consumer to put in those Cow stores they're now opening. (PUHLEEZE! I know GTW is the cow but I think opening retail outlets will turn into dung for Apple as well.)

In sum, up and down with the rally mode close to but not yet complete to the upside if UM and the tax package deliver, on Friday, as expected. A Microsoft settlement doesn't seem in the cards but, if ya think about it, a press release to that effect leads nowhere until a February court date, so that news won't have much lasting effect. However, should the rally extend, I don't expect it to endure until the end of the year without a fairly severe correction that reverses some of the move recent move. Mind you, I'm calling it a correction because market action indicates no one really has their heart in selling, right now. However, should business not improve by the end of the year, and should economic warnings continue arriving from the same pickle barrel at the end of the year, the markets will once again prove a decent wine gone to vinegar, and we'll speak as wistfully of the recent rally as we do of the one experienced last spring. Rent down own.

© Sandi Lynne 2001 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. Event-driven trading seeks to identify near-term catalysts that will move individual stocks or sectors. The discipline involves buying on a dip in advance of an event, and selling into the enthusiasm surrounding the event. In a steeply falling market, targets identified might still rise, or should, at least, fall far less than the averages, overall.

October 15-18, 2001    EARNINGS DOMINATE    On Wednesday, FOMC Chairman Alan Greenspan will answer questions before the Joint Economic committee, so expect others to tell you that this will be the highlight event of the week. And they have a point, because August Business Inventories, or September Industrial Production, Capacity Utilization, Housing Starts, and CPI are all but moot. The Treasury Budget for September, released Friday, will show a huge spending spree in the wake of 9/11, but that won't surprise. However, I think Greenspan likes the fact that the markets have recovered, knows that the market recovery is crucial for consumer confidence and, with consumption representing nearly two-thirds of GDP, Greenspan is NOT going to say anything to disturb signs of nascient confidence and, at any rate, won't say anything more transparent than he ever does. The Trade Deficit should show a huge fall NEXT month, after a week of grounded flights and Japan's announcement that their trade surplus fell 37%, but the August report set for this week doesn't matter, any more. So the Philadelphia Fed Survey, released Thursday, may wind up the economic datapoint with the best window into post-9/11 activity and, therefore, might carry the most punch. And that's considering, as well, a passel of Fed Presidents and Governors, besides Greenspan talking around the country on Tuesday, Wednesday and Thursday. Trust me, all the Fed officials have orders to help boost consumer confidence.

Earnings sweeps get under way, this week, and the post-release conference call outlooks are the key events of the week. Investors have largely written off the third quarter and will reward those companies that miss their numbers the least. Investors claim to have written off the 4^th quarter, as well, but hope is eternal: No one really wants to believe the current quarter is lost. The companies who blew the third quarter but claim to see improvement could fly--even if they trim numbers by a shade. Remember the lukewarm statements by John Chambers of Cisco, and Mike Dell of Dell Computer? That's all it would take for other companies to ignite the last booster for tech.

Regarding the past week's market action, I'm led to believe that the big money that got long 9/20-21 intends to keep the market levitated into Friday's Option Expiration. Beyond that, a pullback is in order. The market averages have made "V" shaped recoveries, recently, and that's the kind of action that gets corrected tout suite. The range of companies releasing earnings, this week, might just provide the dampening of enthusiasm that seems appropriate. Fannie Mae, Colgate Palmolive, and Johnson & Johnson aren't likely to disappoint but JP Morgan Chase probably will. Then, Intel, IBM, EMC, Texas Instruments, Ford, Citigroup, AOL, Sun Micro, Corning, Boeing, Microsoft, General Motors and perennial disappointer, Gillette, are all on the schedule. Channel checks reveal some inventory builds in a shift from "just in time, to just in case," which might have helped Intel make its numbers. IBM hasn't said much about it's quarter but the analysts have, lowering their numbers without company guidance, so maybe IBM delivers. But next quarter???? I'm long IBM a very long time and can't imagine they're the only tech company immune from a slowdown in IT spending. Most of the other companies have already spoken out. Other reporters include Merck, Lilly, BellSouth, Baxter and the one I expect to get a boost from it's earnings, Nokia, which I'm long.

The point is, so many companies are scheduled to report this week, the earnings news will drown out all else. Having said so, I won't spend much time on the busy show schedule except for a few meetings that stand out. Tops on the list is the Microprocessor Forum because investors believe that semiconductor and equipment companies will see the next upturn, first. IBM has already sent out a press release about it's new low-power chip that will shave 90% of battery drain in portable devices in sleep mode. Intel has announced a new way to package chips that will shrink chips to the same of a dime. While these breakthroughs sound great, and will attract ample press, IBM's chip is a year and half to two years away, while Intel's isn't expected to be ready for prime time until 2006-7. That's not something the media will emphasize but that's never stopped me.

World Gaming Congress used to be one of the most tradable events of the year but with tourism off a cliff, and Vegas Hotels, in particular, offering steep discounts, I'm afraid this one won't be as much fun, or as profitable as it's been in the past.

Credit Card Collections will put more pressure on Providian, MBNA and Capitol One Financial, all of which I panned weeks ago, near their peaks. NCO Group is one of the biggest collection agencies but they only get paid when they collect and rising defaults and unemployment brings to them more business with less chance of success. High Point, the semi-annual furniture show won't be as frivolous as it was in the past. Last week, I visited the Design Center, in Dania, Florida, for a sample sale. While the pieces on sale were from last season, conceived long before 9/11, red and blue accents were everywhere, hastily gathered to signify the changed mood of the country. Expect the colors of the flag, as well as typical American Country styles to dominate manufacturers' offerings. (And know that almost every analyst that covers the group thinks Furniture Brands is a buy. I don't happen to think so: new furniture is a luxury that's postponed in times of uncertainty.)

World Food Expo, in Chicago, will certainly highlight food safety, giving some testing and screening companies another lift. I don't splash in that pool of stocks. they're for the chat rooms not for investment. If you check last week's biggest percentage gainers you'll be as shocked as I was by the number of sub-$10 stocks that doubled last week.

Factory Automation, in Toronto, has often given a boost to Brooks Automation and Optimal Robotics but these have covered considerable group since 9/20. I expect them to rise a little more before topping but, then, that statement reflects my expectation for a pullback post-expiration.

The American Dental Association meets in Kansas City. While everyone else talks about pharmaceutical companies being "safe," defensive plays in uncertain times, I'm particularly impressed by the chart of Dentsply (XRAY) with a long-term chart that moves inexorably up. It ain't racey but it'll get you there by retirement.

The Optical Society of America meets in Long Beach, CA, where some breakthrough in moving more quickly,or fracturing, light could be announced but I don't foresee a rebound in business for awhile. Every telco keeps slashing CAPEX. Likewise, Laser Tech, meets in Jacksonville, FL, an event for semiconductor, medical and optics utilization. Cymer is a leader in the semi field but hasn't escaped, unscathed from the tech slowdown. FiberOptics Markets, in Newport, involves many of the telco suppliers that have crashed this year. A rise should be used to monetize positions. This group isn't about to recover until excess capacity gets used. LED: Light Emitting Diodes, in San Diego, concerns the group that makes the screens in cellphones, printers, answering machines, and monitors and TV's. Kopin used to fun to trade here but prices for end products are falling faster than manufacturing costs. The group's a good deal for consumers, not investors.

Appliance Manufacturers meet at AMCE, in Cincinnati. I like this group better than the furniture makers because replacement of a broken oven or washing machine doesn't wait. Additionally, for now, homebuilders have seen only a slight decline in sales. New or replacement, buyers might choose less expensive models but buy they will.

The Consumer Electronics Association meeting was supposed to boost Handspring, which is introducing a new Handheld. However, the new Nokia 5500 series of phones may have trumped HAND. The new NOK phones are specifically designed to look different and appeal to teens and others who can't imagine a minute of life without Instant Messaging capability. Smartly, NOK is targeting the group of consumers that doesn't stop spending, no matter what, while HAND is aimed at the corporate and adult markets. I prefer the bet NOK has made.

As always, drug development/medical/drug conferences mount a busy schedule. Proteomics, in Carlsbad, Ca, began over the weekend, with Sam Waksal, the CEO of Imclone invited to deliver the significant, keynote speech on Monday. I'd planned on trading IMCL for this event but the news of Bristol Meyer's investment in the company, a couple of weeks ago, sent IMCL where I thought it would get this week--into the neighborhood of $60. There's Chemical Technology for Drug Discovery, in Cherry Hill, Protein Kinases, a related event, in Newark, Oncology Research (Formerly Anti-Cancer), in London, MD&M (Medical Design and Manufacturing), in Minneapolis, then Gastroentorology, Reproductive Medicine, and Pediatricians, starting next Saturday. Can the companies involved rise above the news of Anthrax and Cipro prescriptions? Well, I told you a couple of weeks ago about the stand-up displays for anti-depressants appearing in non-psychiatrist doctors' offices and, by Friday, the WSJ did a story on the same subject. As always, I'd take the BBH for these events rather than play individual stocks. But only if NASDAQ continues showing strength. The drug stocks, themselves, despite relative "safety" thanks to reliable earnings, have made a nice recovery but often get sold as NAZ rises.

In sum, enjoy any further rise in stocks--Tech Stocks, particularly, because I believe their days are numbered. As we've seen since the markets reopened, on 9/17, Wednesday and Thursday have offered the biggest rise. With Options Expiry on Friday, a Wednesday rise could see open options closed, and a roll-out to future months, so the pattern could get broken, if others agree that a pullback is in order. And watch that Philly Fed Survey, for October, on Thursday--big region, current report. And don't be surprised if you suddenly see retailers take off. The 2.4% September decline in sales didn't seem so bad, given the all but lost week post-9/11. And start watching the charts of discounters and some of the biggest catalog retailers with a web presence. If the latest terrorist warnings making the rounds of e-mail chains are true, malls are a target. That ought to help catalog and internet retailers, especially brands like Eddie Bauer and Land's End that generate most of their sales from catalogs.

© Sandi Lynne, 2001 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. Event-driven trading seeks to identify near-term catalysts that will move individual stocks or sectors. The discipline involves buying on a dip in advance of an event, and selling into the enthusiasm surrounding the event. In a steeply falling market, targets identified might still rise, or at least, fall far less than the averages, overall. Sandi or affiliates were long INTC, IBM, SUNW, NOK, EMC and MRK, though those positions do NOT represent a recommendation or bullish bent and may have been bought at far lower prices and carry covered calls against the longs.

Sanity, of course, quickly returned because there's been a couple of things on mind which space and time forbid mentioning in recent weeks. First on my list, is the fact that the NYSE closes for Martin Luther King Day but not for Veteran's Day, which arrives next month. How much more appropriate is it to mention this oversight than when Monday's Columbus Day celebration provides yet another instance when there'll be stock trading without the treasury markets, which are closed? With the US military returned to active combat, and thousands of personnel stationed overseas to fight another war just begun, doesn't it seem more fitting for the NYSE to honor those serving, now, as well as those who've served in the past, by announcing that it's decided to close on Veteran's Day? (I singled out Martin Luther King Day because it was the most recently added NYSE holiday in a schedule largely confined to major National Holidays, like Christmas & New Years Days, Thanksgiving and July 4th.)

Second on my list of beefs is last week's additional half point cut in interest rates, because they probably won't have much more beneficial effect than the prior few had. While solicitations for new credit cards had slowed in recent months, the past two weeks have brought an unprecedented flood to my mailbox--31 last week, alone. The oddest mailing came from Fleet Bank, which sent me, unsolicited, a Titanium Visa card, offering a 1.9% balance transfer through the end of this year (three months, for those slow to wake up on Monday morning.) Instead of contacting the "activation" number on the card, I called the regular Fleet Visa number and asked how they came to break the law and send me a Visa card for which I didn't apply. (Read Regulation Z if you don't think it's illegal.) Well, I was told, back in 1998 I cancelled a mastercard they'd issued. Since I wasn't pleased with the mastercard, they took it upon themselves to "upgrade" me to a Titanium Visa. And there is that 1.9% balance transfer which I shouldn't resist. So what is their regular charge rate? I asked, curious but not tempted. 13.9%, I was told, even as Fed-set rates were set below 4% and sure to go lower the following day. Which they did, on October 2^nd, by another half percent.

Well, while I don't carry balances, the vast majority of credit card holders do, so the FOMC can cut rates all it wants and it's not going to help consumers one bit. Furthermore, as long as the FOMC remains in emergency cutting mode (100 bp in the past 30 days), consumers aren't going to feel more confident. Without confidence, consumers don't spend money, which the 67% of GDP represented by consumers desperately needs them to do. Consumers are also stock investors, through their mutual and retirement funds. When they're not confident, they won't be coaxed into investing in stocks. For the FOMC to begin to restore confidence, it must return to it's gradualist mode or stop cutting altogether. Furthermore, it must acknowledge that all the cuts in the world aren't going to trigger consumption as long as mortgage rates fail to fall in synch with lower FED target rates, and as long as credit card issuers choose to gouge revolving credit customers. Will mortgage and credit card issuers, on their own, bring consumer rates into line with the FED's target rates? The odds are slim to none.

At this point, fiscal policy, through cuts in taxes, has greater power to put money into consumers' pockets AND to spur equity investment. I spoke previously about how misguided I think it is to hand over billions to airline executives who didn't manage their businesses or money well in good times. And now, Congress is floating the concept of capital gains tax cuts. Many moons ago I spoke out against such a move, convinced that it would bring out a flood of sellers, sedning the markets lower. However, a capital gains tax change that cut the "long-term" holding period to six months, say, for all stock purchases made after 9/11, might bring about a wave of buying without encouraging long-term holders to clear out their portfolios. So, if Congress wants to help consumers and investors, it could do so with a payroll tax cut, along with a cut in the holding period. Furthermore, if it wants to spur capital investment by businesses, the best way is through a change in depreciation schedules, as well as tax credits for Capital Investment Otherwise, FOMC rate cuts will do nothing but encourage companies to turn to the credit markets to float low-rate bonds that raise money that will be used for stock buybacks rather than something productive.

As we saw, even when the equity markets were closed post-9/11, the economic calendar is likely to proceed without interruption. As mentioned, the bond market doesn't trade on Monday, in observance of Columbus Day, so don't expect any "flight to safety" guidance there when the markets open, though you might keep your eye on the gold index ($XAU), which didn't see a trade, on Friday, even as Newmont and other gold company stocks rose. Many of the data expected this week, like the Kansas City and Richmond Fed Manufacturing Surveys, cover September, which everyone has mostly written off. Ditto those comments for September Chain Store and Retail Sales, the latter of which includes restaurants and gas stations. We all know that a week of the month was spent in front of televisions broadcasting the tragedy's aftermath, exclusively. PPI is for September, a month when energy costs fell even though war hung on the horizon. You can't expect much clarity or guidance out of Greenspan, Poole, Broaddus or Meyer, all Fed officials who'll speak this week, on topics ranging from Monetary policy & transparency, to the tech bubble.

So the only announcements I'll be watching will come Thursday, and Friday, when, respectively, the Weekly Jobless Claims and the preliminary October University of Michigan Consumer Sentiment are released. Likewise, Wednesday offers the weekly Mortgage Applications numbers, as well as the ABC News/ Money Magazine Consumer Comfort Index, the latter of which might attract unusual notice now. Still, it's joblessness and UM's Sentiment index that will, in all likelihood, dwarf all else.

A continuing stream of earnings warnings will have more actual releases to compete with but, with investors having written off the last quarter, even these usually important announcements will be relegated to rear-view mirror watching, superceded by the data points mentioned above, which have a forward-looking, windshield advantage. First Data, Abbot Labs and Pepsico might deliver, while the rest, from GE to MOT & Yahoo, have largely previewed their numbers.

Now, I'll tell you about the shows, this week, as long as we all agree that everything is tentative as long as the US and it's allies are tossing bombs into, or skrimmaging on the ground of Afghanistan. For instance, the Emmy awards were cancelled, for the second time, shortly after the first bombing reports. (Okay, I'm not cynical enough to believe that the bombing was timed to cause just such a cancellation but ya gotta wonder what those "stars" were thinking when they planned their recent telethon and selected one of the biggest tax scofflaws in the history of the entertainment world, Willie Nelson, to close the show with a wobbly finale.) Be aware, though, that a bottled water trade show, held last week, saw only 3 exhibitors cancel and was attended by more visitors than expected. In other words, prior to Sunday's bombing, business was demonstrating signs of return to normalcy.

First up Tech: AFCOM, started Sunday, and features Data Centers, which puts the focus on storage and hosting companies (Hello, Exodus, which made an ignoble exodus, last week). Efforts to recover and restore data after the 9/11 atrocities placed the focus on member of this group and it hasn't done well despite splendid technological performance. Steve Ballmer, CEO of Microsoft, was the scheduled keynote at Gartner's ITxpo, in Orlando. This event will be repeated in the Spring, in San Diego, so take notes and save 'em for that show. EMC, Asia, and Semiconductor Manufacturing both meet this week. If you NEED to make a move here, ya gotta be gone long before next week's book-to-bill. I expect news out of the Asian event because analysts get to do hands-on channel checks, with less Reg FD interference, in a place where many of the world's big fabs are located. Later in the week, KES, Korea Electronics meets in Seoul. Still, you can't believe the news bill be good.

Las Vegas offers the CLEC Expo (competitive local exchange carriers), ASPcon and ISP con (Application Service Providers and Internet Service Providers), assuming the show goes on. Concurrent with these shows, IBM is running it's own Networking Solutions Show. Meanwhile, Telecom Business World, a conference that includes many of the same communications players meets in NY. Dallas offers Electronic Commerce World, while PDMA meets in Santa Clara. Interactive TV meets starting Tuesday, which might cause Liberate to sprint for a trade, though Scientific Atlanta has already said the set-top box business has fallen apart, and Motorola's earnings aren't likely to differ when it's General Instrument division is discussed. If any of these tech events excite you, you're living in the past, even though a second NASDAQ lift can be triggered at any moment if other high-profile execs step forward with comments similar to those made by John Chambers and Mike Dell, last week. Just remember, Cisco holds $18B in cash and liquifiable securities, which oughtta earn it 2 cents a share, even if operating earnings aren't that high. And neither Dell nor Chambers stepped in front of the next quarter to predict better or even stable business. While the markets took these executives' comments as terrific news, a more critical view thinks the resulting rise in tech stemmed from a very oversold market ready to bounce on any news that wasn't entirely negative.

Infrequent sector events include Tobacco Trade Fair, Hong Kong, and Aluminum, Europe, though the only trade likely is a value investor's grab for MO's dividend if the bombing spooks the market. Funeral Directors meet, in Orlando, and business is up after a slow 2000. Again, value investors may grab Service Corp or Hillenbrand but I don't have the taste for these trades. The East Coast Video Show brings together film and video distributors with retailers and the rental companies. Hollywood Video and Blockbuster both benefited during the recent post-tragedy news marathon but that doesn't mean it will continue.

NAREIT, for Real Estate Investment Trusts, meets in Chicago. This group started its usual run in late Winter and never looked back until recently. In the meantime, S&P decided to admit REITs to the indexes they created. Still, some mortgage REITs get hurt badly by falling interest rates. The hotel REITs have been damaged by the travel slowdown. Office REITs were feeling the pain of rising vacancies outside NY and Washington, where 9/11 spurred relocation demand. Survery research, known as CASRO, meets in Amelia Isalnd but most of these companies have preannounced. Their trade show divisions have cut back on events even as attendance at the events held falls off the prior highs. Then, with so many outlooks missing reality by a mile, companies are cutting back the number of "forecasts" they'll pay for.

Veterinarians meet in Chicago, where a Pet Industry show will also be held. (IAMS was bought by Proctor & Gamble, while JNJ and PFE have huge animal divisions. Hartz, the biggest pet product company isn't public.) while elsewhere, there are a number of Medical and Biotech events, CPhi, for pharmaceutical Chemicals, as well as Contract Services (for the pharma industry--think IMS, Quintiles and Professional Detailing) started over the weekend, in London. On Tuesday, Functional Genomics gets underway, with speakers from Gene Logic, CuraGen, Sangame, Millenium Pharmaceuticals, Aventis, AxCell Bio, and others. (Premium members will find the list by using the URL provided.) Late in the week, Genomics to Animal (some of which relates to the Veterinary meeting) and Human Genetics meet, the latter for a multi-track event that has me watching BBH, again.

And while the gloves are off, let's talk about the rescue package awarded the airlines which included $101M to Fedex, announced late Friday night. Excuse me! Fedex? Maybe I'm ignorant but how did Fedex suffer so badly? Did they have to refund the difference between the $24.95 overnight and $14.95 slower delivery? Are packages refusing to be shipped Fedex because they might be in danger? Are American businesses refusing to ship Fedex because they think their packages won't be safe? Can anyone help me understand?

As far as the airlines go, let me state flat out that the only airline I've ever owned is Southwest, which had 142 days of cash on hand when planes were grounded and, to date, has never laid off a single employee and doesn't intend to do so now. Yes, US Air, in particular, is still hurt by the shut down of Reagan Airport, it's hub. And yes, travelers will be slow to return to the skies. But instead of giving the money to the very executives who didn't know how to run profitable airlines in good times without overleveraging their companies' balance sheets, does anyone else agree that that the money should have been used to keep employees working and retrain them to make the skies safer? Anyone who's ever sat next to a pilot flying civilian has certainly learned a pilot senses a change of course at least a half hour before the crew makes an announcement. Pilots have extensive experience with complicated technology, like flight panels. Who better to be trained as the first wave of sky marshals, instead of dispatching them to the unemployment rolls? Or how about the ticket and gate agents, who are well versed in computer technology and would be highly motivated to protect their friends and their industry? Anyone who saw last week's 60 Minutes piece on the motley crews hired by private contractors to man the security screens certainly came away with the feeling that ANYONE would be better than those in charge before. Who better than highly motivated airline employees who are already trained to spot unusual behavior, who would be extraordinarily motivated to see the skies safe and travelers return?

Then, let's talk, a second, about the effort to freeze terrorist assets two weeks after the event: If your car had been stolen would you have waited two weeks to report it, to alert someone to stop and seize it if they saw it? Hello, wake-up why don't we!

Now, I know it's unpatriotic to say a word against our leaders. And I must admit, I'm glad they're waiting before the first strike, causing the highest level of anxiety in Afghanistan, keeping them guessing. And let's be honest, any willy nilly strike that kills civilians without grabbing terrorists will do nothing but inflame even more Anti-American unity in the Muslim world. So I won't name names, but you oughtta know that when a certain world leader steps to the podium to hold a press conference, the Dow immediately falls 30 points. By the time he's done, the Dow usually has lost 100 points. One can trade this intraday, during press conferences, by shorting the DIA, which has no uptick rule.

Since I'm in Southern Florida, and many readers aren't, it might help to know that things around here "feel" a lot more normal than I'm feeling. Today, (Sunday), the roads were crowded and strip mall parking lots were jammed. Home Depot wasn't as busy as it is some Sundays but it is football season, and the snowbirds first start arriving this week. Additionally, the area is sopping wet from the effects of recent tropical storms and you just can't plant while you're sinking into soil made mushy as quicksand. Likewise, you don't necessarily start projects when you're sweeping water out of the den.

For what it's worth, the parking lots at discount stores like Ross Stores and TJ Max are jammed, as are Best Buy, Linen & Things, Bed Bath & Beyond, Toys 'R Us, as well as the local movie theater. However, the crowded lots at stores don't necessarily translate into sales, as they do at restaurants. On that score, T.G.I.F. was jammed, while Outback Steakhouse was empty, despite a banner claiming "Kids Eat Free." PF Chang and Cheesecake Factory still report multi-hour waits on weekends. On the other hand, the three Southern Florida Rolls Royce/Bentley dealers, altogether, have sold a total of 2 cars, since August, which may say volumes about who has been hurt the worst, by the attacks and the market declines. Translation? Apparel discounters, as well as BJ Warehouse, Costco, Target and Wal-Mart may weather a consumer pullback better than other businesses. The latter holds a video conference, this week, though it's hard to find an analyst who hasn't already spoken positively about WMT. Regarding these groups, in general, Dain Rauscher holds a specialty restaurant/food conference, this week, in Texas, that includes companies like AppleBees and Darden, while Robbie Stephens holds a consumer conference, in NY, that includes food companies, like Krispy Kreme, as well as retailers, such as Pier One. Mid-day Friday, Ann Taylor took a hit on word that it had pulled out of the conference. All I can say is, I can't believe anyone's waiting for analysts to make comments based on what they learn at these conferences. Them days are over.

I feel differently about the Online Learning Conference. Not that I believe the analysts matter more, here, but I do believe companies are more seriously investigating video conferencing as an alternative to face-to faces, and that this niche will get a bigger portion of future IT spending than it would have pre-9/11.

Another anecdotal comment is about the proliferation of brochures for Prozac and Zoloft in non-psychiatric doctors' waiting rooms. As loyal readers know, I've had the misfortune to have been forced to see doctors, often, these last few months and can report that I've never seen as many posters and brochures for anti-depressants as I have the last two weeks. Specialists in arthritis, gastroenterology, gynecology and cardiology are now aboard, supplementing the many ads now seen in local newspapers for "Free Grieving and Trauma" seminars offered by hospitals. Nonetheless, I believe the drugs were bought with a vengeance, last week, in an end of quarter land grab that made sense, given how low prices had fallen. I don't think that action does anything but get reversed, this week.

And speaking of this week, I'm a bull on the next couple of days but remain a bear on the economy until next year. I think the markets will find a trading range that may include new lows, then mark time building a base until next spring. In so far as I expect the range to be quite large, there will be trading opportunities but nothing more lasting--unless the coming "war" is resolved swiftly and favorably. While I long had said the economy probably bottomed this past summer, 9/11 changed all that. Companies are first entering the season of earnings warnings, lay-off setting, IT budget allocating, and bonus awarding. I can't imagine any company feeling bullish--except one: The temporary staffing business. It's not impossible to imagine NY area insurance companies hiring, or using temporary workers to handle the surge in claims that will now start flooding their offices.

For the events that really count, this week, many will place the Tuesday FOMC meeting at the top of the list. Fheggeddaboudit! As Richard Lees, of 21forward.com has convinced me, and many others, the post-FOMC meeting announcements are mere "press releases" that often confirm what's already been done behind the scenes but, just as often, defy the moves truly being undertaken. If you want to know what the FOMC is really thinking and doing, you've got to watch the money supply, and get yourself a subscription to 21forward.com.

Most of the other economic data out this week covers August or, even when it covers September, will be accepted as much to be expected. Namely, dismal. (Though have you noticed the market rally when the data isn't as dismal as economists expect? Another case of market-centric despair being worse than what's going on in the "real" world, or a lagging indicator that will catch up?) Therefore, I'll be listening to Treasury Secretary O'Neill before the Senate, on Wednesday, and watching the numbers released by Mortgage Bankers the same day. Then, every Thursday, I'll be watching the Jobless Claims numbers, seeing how many of those announced lay-offs translate into intractably unemployed but willing workers.

On the earnings front, tech investors will focus on ATI Tech and Research in Motion, both on Wednesday. Others will listen more carefully to Walgreen