The Week ahead

Our Patriotic Duty

In the aftermath of an event that can not be described with words, our thoughts turn toward what will happen when the equities markets actually open. It is estimated that $250 million worth of high technology gear will need to be replaced by the firms assaulted on Tuesday. Software and hardware vendors report a surge in orders for disaster recovery equipment. Those who predict recession will eventually be proven wrong.

The week ahead will likely be volatile. Uncertainty makes markets upset and people tend to make irrational decisions under such circumstances. There are rumors that as a confidence building measure and a message to the terrorists the Federal Reserve will implement a rate cut when the markets re-open next week.

This weekend involved testing of data systems and emergency provisions for trading of stocks listed on the New York Stock Exchange, which is cut off by the New York disaster. If these tests succeed, the markets may open on Monday. The American Stock Exchange was devastated by the disaster and those equities will trade on other exchanges.

If you watch the European and Japanese markets, you should not assume a drop in our markets outside of the airline and insurance industries. The longer our markets are closed, the less fear and uncertainty. More patriotic shouts of "buy, buy" are showing up on message boards.

The week ahead will be an emotional challenge, but if there is a patriotic rate cut and more moves like Cisco's stock buyback, things will eventually be okay. Oracle Corporation topped earnings estimates with draconian cost cutting last quarter.

There needs to be signs of a real economic turnaround is what will finally lift the markets. There was plenty of uncertainty in the economy Tuesday morning. It is now a patriotic duty to go out and buy something. A stock, something that will help the economy and send a message to the cowardly terrorists.

We are Americans. We will be victorious. It is our freedom that built this economy. A hundred aircraft can not stop us.

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Shmuel Protter
investmenttool.com