What is the true status of the economy?

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June 4th, 2001
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Morning Watch List
This section contains 6 stocks that are expected move in 1 to 5 days.
Click here for this morning's Watch List Stocks: http://www.realtimetraders.com/marketinfo/watchlist.asp Beyond The Numbers
What is the true status of the economy?
Latest economic reports have been somewhat mixed and confusing.
However, it is very clear the markets have very little tolerance to any
negative news. Friday morning markets declined in the early going after
the markets received news that the manufacturing sector may be heading
towards a recession. But, later in the session good old General Motors
rescued the markets with its latest sales data. GM said sales are ahead
of expectations and the company expects to deliver earnings in line with
previously stated expectations of $4.25 for the full year 2001 and $1.05 for
the second quarter.
While the Dow component's sales data is favorable for the markets,
RealTimeTraders analysts point out the sales for the month May is
misleading because GM' truck sales were up 10%, but car sales were
down 9%. Analysts believe the sharp jump in the truck sales could be
due to problems surrounding Ford Motors. According to Ford Motor
Company, sales for both truck and car sales have declined sharply.
On a positive note, analysts pointed out the fact employment data showed
some improvement is a positive for the overall market. Which suggests the
Federal Reserve's efforts to stimulate the economy may be starting to take
effect. As we stated in last Thursday's market analysis, we expect this
quarter's earnings warnings and job cut announcements to be below last
quarter. One other important fact that is worth noting is that the Federal
Reserve seems to still indicate there will be more rates cuts ahead to
further stimulate the economy.
Stocks to watch
Shares of Cisco have been steadily declining in the past few sessions, and
accelerated to the downside going into theclose Friday after the company's
recent 10Q filing said it does not see any improvement in capital spending in
the foreseeable future due to the continued economic slowdown. Cisco
Systems finished Friday's session lower by 41 cents and closed at $18.85,
which puts the week's net loss at 14.5%.
Sector Analysis
Semiconductor sector may stay rangebound
In the last two sessions we have seem the semiconductor index and
semiconductor related stocks rebound after finding some support. However,
we like to caution our readers that we do not expect this sector to move
higher until we start to see some signs of sequential growth. Despite all the
upgrades and positive comments from some of the leading brokerage firms,
we continue to believe its is more prudent to focus on the company
fundamentals than the so-called analysts ratings. Those who have been
following the semiconductor sector may recall that most of the companies in
this sector have continue to make negative comments about their near-term
earnings outlook. Given that the semiconductor index has some support
around the current level, it can be expected the sector may trade in a range
until we receive further news from some of the bellwether stocks. Note that
Intel is expected to give its mid quarter update during this week. We believe
Intel's update would definitely impact the sector as a whole. We will continue
to monitor the markets and alert our readers to any significant news that may
impact the markets in our breaking news section.
Economic Reports & Bond Markets
Friday the bond market almost gained another full point and closed near the
highs of the day. Given that this week markets will have very little in terms of
economic data and the fact the bonds gained almost 2 points in the past two
session might lead to some range bound trading or a pull back. Monday the
Challenger Layoff figures will be released at 10AM.
Market Breadth
Friday's NYSE advance/decline reading was 1810/1236 Vs.
Thursday's reading of1822/1236
Friday's Nasdaq advance/decline reading was 2166/1598 Vs.
Thursday's reading of 2258/1591
New Highs and New Lows
Friday's NYSE new high/lows was 104/23 Vs. Thursday's
reading of 110/22
Friday's Nasdaq new high/lows was 132/44 Vs. Thursday's
reading of 126/38
Important Market Moving News
Visit our Before The Bell page -Http://www.realtimetraders.com/sp/beforethebell.asp for the most important news that may effect your portfolio. This
page also provide information on stocks that are going to gap open
higher/lower and the reasons if any. We also alert traders to the
actively traded stocks before the bell.
Upgrades / Downgrades / Coverage Initiations
Click on the following link for today's upgrades.http://www.realtimetraders.com/marketinfo/g_minfo.asp?page=upgrades Click on the following link for today's downgrades.http://www.realtimetraders.com/marketinfo/g_minfo.asp?page=dngrades Click on the following link for today's new coverage initiationshttp://www.realtimetraders.com/marketinfo/g_minfo.asp?page=coverage Please remember that we will only be able to continue to offer our
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Some of Today's Key Earnings Releases
Click here for a complete list of today's earnings. http://www.realtimetraders.com/earnings/earnings.asp
Company Name Expected earnings Symbol

Bob Evans Farms 0.36 BOBE
Dycom Industries 0.26 DY
NaviSite -0.57 NAVI
Riverstone Networks -0.05 RSTN
Smithfield Foods 0.87 SFD
Standard Microsystems -0.09 SMSC

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