[Pluto-devel] A Rotating Market Is Likely During The Next One To Three Months

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NEWSLETTER
 
Wednesday, 
        December 5, 2001
 



 
 
 
 

Strategy - Global Equity

 
              Make-Cents
              MARKET REVIEW
              The market finally gave Monday's data its due Tuesday. 
              On Monday, the escalating Israeli-Palestinian conflict and the messy 
              unraveling of Enron sent the indexes lower, although midday losses 
              were trimmed by session's end. On Tuesday, investors seized the 
              previous afternoon's momentum and built a strong rally, sending 
              the DJIA and S&P higher by more than a percentage point and 
              lifting the Nasdaq Composite by 58 points, or a hefty 3%. The positive 
              data on Monday included an unprecedented 2.9% rise in October consumer 
              spending, a well-above consensus 1.9% increase in October construction 
              spending, and a November NAPM report that, at 44.5, was 2.5 points 
              above the consensus call. A handful of indicators do not a recovery 
              make, but investors appeared willing to believe yesterday that the 
              current downturn may not be as fierce as originally feared. On Tuesday, 
              technology shares led the market recovery, on the view that their 
              superior growth prospects validate a recommitment to this deeply 
              beaten down and only partly recovered sector. Semiconductors, however, 
              are more than partly recovered.
              for more Subscribe 
              here


              Bob Dickey
              MANAGING DIRECTOR RESEARCH
              for RBC Dain Rauscher Wessels

Sloppy is the pattern we expect for the market, 
              now that it has had a big move off the lows and is perched below 
              resistance for both the DJIA and Nasdaq. A rotating market is likely 
              during the next one to three months, where different groups take 
              their turns pulling back and rallying. The net effect could result 
              in a modest general market correction, in our opinion, but it could 
              also see more of a neutral consolidating range for the near term. 
              We believe the current rotation favors healthcare as one of the 
              leading market areas, at the expense of financial and tech areas, 
              in which many of the stocks are dipping to various degrees. We suggest 
              tilting your portfolio weightings in these directions in order to 
              take advantage of these trends for the next few months.
              for more Subscribe 
              here
 
 
 

Research News

 
              CSFB
              • 
               MOVERS 
              & SHAKERS
              U.S. stocks rose and closed strong on a light news day, led by Techs 
              (mainly Semis) and cyclicals, sending the Nasdaq to its first advance 
              in three days. Semis (SOX, +6.5%) and Networking rose sharply due 
              to upgrades and an advancing cyclical view, with Applied Materials 
              (AMAT, +8%), Novellus (NVLS, +11.3%), Maxim Integrated Products 
              (MXIM, 7.6%) and others climbed as another sell-side firm called 
              a bottom in the December quarter.

Economics 
              New Report: Corporate Bond Spread's Relevance to Stocks 
              Corporate bond spreads remain extraordinarily wide. Implied default 
              rates are consistent with an expected bout of deflation. How come? 
              Our new report, marries macro analysis with some of our proprietary 
              micro modeling of corporate bonds to come up with a simple analytical 
              framework that provides a range of answers and insights directly 
              relevant to stocks.

U.S. Credit 
              Strategy
              Enron Effects Unlikely to be Long-Lived
              Enron has sent jitters through credit markets, but we think that 
              the effects are likely to be localised and unlikely to be long-lived. 
              The widening of the bond roll was the major story last week for 
              the long end of both the US corporate and Treasury markets.
              for 
              more subscribe 
              here


              Argus Market Report
              • 
              MARKET REVIEW
              • Ratings 
              Change: Lowering rating on Compaq Computer to HOLD from BUY.
              • 
               
              Growth Stock: Reducing 12-month target price on BUY-rated NXTL to 
              $23.
              • 
               
              Value Stock: Lowering 2002 EPS estimates on BUY-rated W. 
              
              for 
              more subscribe 
              here


              RBC Dain Rauscher Wessels
              • 
              (SNPS) Synopsys, Inc. 
              Buy-Aggressive ; Price Target: $60.00
              ELECTRONIC DESIGN SOLUTIONS
              SYNOPSYS TO ACQUIRE AVANT! AS DOWNTURN SHAKES CONFIDENCE

*Synopsys plans 
              to acquire Avant! in an all-stock deal valued at $830 million, for 
              an immediate full IC design flow with additional complementary technology, 
              in a deal that will be significantly accretive to earnings.
              for 
              more subscribe 
              here
 
 
 
 
 

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