File this one under "Hey, thanks for the insight"
National Bureau of Economic Research (NBER) willl declare over the next few days whether the U.S. economy is in a recession. Under the common economics definition -- two straight Qs of GDP contraction -- the U.S. isn't "officially" in a recession. (Imagine what an official recession must look like).

Weekly Numbers
Tomorrow will see the release of Existing Home Sales for October; The consensus is for 5.00 M. The Conference Board's November consumer confidence index is out the same day; Forecast is for an increase to 85.8 from 85.5 in October.

Wednesday, the Fed's Beige Book is out.

October durable goods orders are out on Thursday. (C:1.8%), as are Initial Unemployement Claims on 11/24 (C:430K) and the Help-Wanted Index for October. New Home Sales figurs will also be released (Oct C:850K)

Friday has Q3 GDP numbers. Consensus is -0.7%, rather than the previously reported 0.4% decline. Experts believe GDP will fall in the fourth quarter. Also on Friday, Chicago PMI for November (C:45.5)

Treasuries Tumble for Second Week as Fed Rate Cut Hopes Dimmed
Benchmark 10-year Treasury notes had their worst two weeks since 1982 as signs of an economic recovery dimmed expectations that the Federal Reserve will reduce interest rates for an 11th time this year. Investors also dumped Treasuries as they moved money into stocks and higher-yielding corporate bonds, betting that a return to economic growth will boost companies' profits. The declines in Treasuries trim months of gains, spurred by the Fed rate cuts, that had pushed the 10-year note's yield to a three-year low.

Closing Summary

Index	Last	Change	% Change
Dow Jones Industrial Avg.	9,959.71	+125.03	+1.27%
S&P 500	1,150.34	+13.31	+1.17%
Nasdaq Comp	Nasdaq 1903.20	+28.15	+1.50%
Russell 2000 Index	458.42	+6.11	+1.35%

Marines land
As many as 1,500 Marines landed in Afghanistan. They willbe coordinating with several hundred U.S. special-operations forces to further pursue bin Laden.

Holiday Retail Sales Off to a Modest Start
Steep Discounts Abound

Holiday retail sales in the U.S. got off to a modest start, with a host of bargains and new video-game consoles greeting consumers. Discounters continued to fare better than department stores. Holiday sales forecasts range from a 1% decline to a 4% increase.

Chains such as Kmart Corp. and K-B Toys opened as early as 5 a.m. this past Friday, offering morning customers up to 70 percent off some items today, the traditional start of the holiday shopping season. Executives at retailers ranging from Wal-Mart to Saks Fifth Avenue expect to offer deeper discounts on more items this year as they battle for sales. The average U.S. household's holiday budget will fall 7 percent from last year, to $1,564, according to an American Express Co. survey. (Bloomberg)

- HD Home Depot Faces The Hard Questions, and is expected to detail its slowing growth in a stock analysts' meeting this week. The depth of the giant retailer's slump could explain a lot.

- MSFT Microsoft Unveils eHome Division, which will make its official debut Monday, hopes to improve home technology and adapt PC technologies for consumer devices.

- EBAY eBay is launching a big holiday marketing campaign aimed at persuading consumers to shop on its Web site, including distributing an old-fashioned print catalog.

Birinyi Turns to Charts as His Willingness to Trade Increases

New York: Laszlo Birinyi, dubbed the ``reigning world's champion of stock pickers'' in 1999 by Louis Rukeyser of public television's Wall Street Week, will tell you that if you can't beat the technicians, you'd better join them.

That puts him in the company of people he eschewed five years ago with his 40-page booklet, ``The Failure of Technical Analysis.'' As a recent convert to a style of investing he used to deride, the 58-year-old Birinyi bought Goldman Sachs Group Inc. shares in September, sold them in October and purchased them again earlier this month.

``Having sat on a trading desk, I recognize short-term opportunities,'' said Birinyi, who emigrated to New York from Hungary in 1949. ``I want to take advantage of them and not leave it all on the table for my friends at Salomon or wherever.''

Embarrassed by errant buy-and-hold stock recommendations last year, Birinyi is convinced that to succeed in the stock market he must employ some methods of the so-called technicians, who trade based on patterns they can chart in a stock's price or trading volume, such as the current share price relative to its performance over the past 50 days. (Bloomberg)

JDSU : The move last week breaks the long term down trend, as it broke out over $10; Buy 1/3 here, then use a pullback to add to the position. Use a stop of $9.50

ADLAC : Adelphia Communications is the most recent addition to our buy list. The stock behaved well yesterday despite the general market weakness. Short term traders can look for a run to 24.75 - 26, longer term holders aim for the low to mid 30s. We saw increasing volume as the stock rallied, a positive sign.

Things That Warrant Attention On The Charts

  Liquidity Trim Tabs
"We now believe that as much as $45 billion from pension fund rebalancing is the likely source of the buying power fueling the market rally. The November 12 issue of Pensions & Investments reports that since September just 11 large pension funds have already pumped $10.3 billion into the stock market… as much as $90 billion in total is likely to flow into equities during the 4th quarter of 2001."

There are more interesting details at:
http://www.trimtabs.com/news/liquidity/latest.htm

This is a legitimate phase of a rally. It's called a Liquidity Phase. It's real, and there is precedent for it. How long can it last? Don't know precisely. In order to show convincing continuation, though, we will have to see a surge up through resistance levels on strong volume with good internals. If those things don't show up, anticipate a down move.

"Those whom the gods would destroy, they first make confident."

Buy GM, AT&T Corporate Bonds as Recovery Nears Consider recommending seling U.S. Treasuries and buying high quality Corporate's instead. Corporate bonds may be a better bet over Treasuries as the U.S. economy emerges from its slump.

Recent purchases of telecommunications bonds may foreshadow a trend on Wall Street. Deutsche Bank AG, Merrill Lynch & Co. and J.P. Morgan Chase & Co. are telling investors to boost their corporate holdings to get a jump on a rally as the economy begins to recover next year. ``You can look back to the experience of the economy coming out of previous recessions, and corporates tend to do well in the final period'' before an economic recovery begins, said Louise Purtle, corporate bond strategist at Deutsche Bank. (Bloomberg)

Grasping the nettle
The Economist

Nov 19th 2001

Telecommunications companies have been writing down the value of assets only recently acquired for billions of dollars. This is a painful move, but it signals a new, and healthy, realism.

RECENT days have brought more seemingly horrible news for the world's leading telecoms companies and their suppliers. In early November NTT DoCoMo, Japan's leading mobile operator and a pioneer of 3G technology, took a $2.15 billion write-off for its 15% stake in KPN, a Dutch phone group. Its move has since been followed by a steady procession of competitors, wiping billions from their balance sheets and causing them to report ghastly results. But the write-offs, though embarrassing admissions of over-exuberance in the acquisition sprees of recent years, are not entirely negative as indicators of the industry's health. With notable exceptions, the fact that telecoms companies are recognising the harsher reality of the post-dotcom bubble world, suggests that the industry might be entering a more stable phase.

--Barry Ritholtz
November 26, 2001

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