Pat Fitzgibbons Chats on AOL's MarketTalk, Nov. 27, 2000

Patrick M. Fitzgibbons chatted on AOL MarketTalk Monday, Nov. 20, 2000, at 3:30 p.m. EST. AOL's MarketTalk is produced by Sage Online (Keyword: MarketTalk).

SageMoola: Good afternoon and welcome to MarketTalk, Pat!

PFitzgibbo: Hi everybody, hope that everyone had plenty of turkey, yams and dressing!

Question: Yesterday GM said it expects November sales this year to be 4% to 7% below last year's. Ford and Chrysler are expected to perform similarly. Is there value in the sector at these levels, or do you expect further declines?

PFitzgibbo: While I can't comment on individual stocks, the major carmakers do seem to have a good deal going for them right now. However, if the economy takes a strong turn for the worse, I would watch out for those companies that have bet the ranch on those big, expensive SUVs

Question: Where does the Nasdaq go from here?

PFitzgibbo: Today, it doesn't look like it's going too far. Merrill Lynch, which does a pretty good job with these sorts of things, said in a note this morning that they see the Nasdaq at 3400-3500. That seems to make sense to me.

I think this is still a pretty darn strong economy.

Question: What did last week's economic reports tell us about the state of the economy?

PFitzgibbo: Last week there was actually very little direction given about the economy.

It will be more important to take a look at this week's large parcel of indicators.

If you'd like, I'd recommend you look at TheStreet.com's Economic Databank on our markets page for a really concise update on the indicators and on how the economy is looking.

Question: Some market strategists believe we are going into a recession. What are your thoughts on this?

PFitzgibbo: It doesn't look recessionary to me. The unemployment rate has remained low, and many of the most closely watched indicators still suggest that growth, while not at last year's pace, remains pretty strong.

Question: What effect does the weak euro have on the U.S. economy?

Pfitzgibbo: The weak euro definitely has an impact, as last quarter's earnings results displayed.

With a strong euro, the euro countries are in a much better position to buy U.S. goods.

Question: Do you think we have finally seen the bottom of the NASDAQ?

PFitzgibbo: It's kind of hard to say. I think we have seen the bottom, or near it, for the rest of this year, but next year, especially during the next earnings period, could bring its share of troubles.

Question: What is "breadth" in reference to the markets?

PFitzgibbo: Breadth is sort of an "Inside Baseball" type of comment that gives an idea of how the market is doing on a given day.

It measures the winners of the day vs. the losers. For example, right now the breadth on the NYSE is slightly positive, which you would expect on an up day: 1,592 winners to 1,245 losers.

Question: What are the possible ramifications of the violence in the Middle East on our oil and economic situation?

Pfitzgibbo: Political uncertainty is certainly something to keep an eye on.

And wars, no matter where they are and who they involve, are rarely good for the supply of oil.

If things get worse, expect supply to dry up and expect prices to rise.

Now, on a purely stock-related measure, that might not be too bad for the big oil companies -- their earnings could spike. But for the overall economy -- well, look out!

Question: In this market situation, where would be the best places for people to park their money?

PFitzgibbo: You need to decide what you want that money to do and how much risk you're willing to assume. There have been a lot of very strong companies whose stocks have been beaten down of late.

It might be worthwhile to do some research on them and see if they present buying opportunities. I can't help thinking there are more than a few of those out there.

SageMoola: Thank you very much for joining us today, Pat!

PFitzgibbo: Thanks very much and see you on TheStreet.com.

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