Publish date:

daily12-19-99's DAILY BULLETIN

December 20, 1999

Market Data as of Close, 12/17/99:

o Dow Jones Industrial Average: 11,257.43 up 12.54, 0.11%

o Nasdaq Composite Index: 3,753.06 up 38.00, 1.02%

o S&P 500: 1,421.05 up 2.27, 0.16%

o TSC Internet: 1,113.09 down 10.54, -0.94%

o Russell 2000: 466.21 up 0.95, 0.20%

o 30-Year Treasury: 96 20/32 up 6/32, yield 6.377%

In Today's Bulletin:

o Editor's Letter: The Coming Week on TSC
o Weekend Report: 'Tis the Season of Awards
o The Coming Week: Fed Won't Move, but Its Bias May Move Markets
o The Coming Week in Europe: Dax Index Likely to See New Highs

Also on

Wrong! Rear Echelon Revelations: State of the Web: It's the People at the Top that Count

Using that criterion, Internet Capital Group looks like a winner to Cramer.

Jim Griffin: Top Heavy

Greenspan's policies have created an upside-down valuations pyramid.

IPOs: IPOs Taking the Holidays Off, but What a Year It's Been

The $70 billion raised this year in U.S. initial public offerings sets a record. Plus, a look ahead.

The Coming Week in Asia: The Coming Week in Asia: Macau Reverts to Chinese Rule

While the dice will continue to roll in Macau, in Tokyo this week, the bets are on the telecom industry.

Editor's Letter: The Coming Week on



Dave Kansas


12/19/99 7:17 PM ET

It's amazing how the Christmas-New Year's season has raced up on us. Pell-mell trading, including huge volumes, continues apace even as the final presents are purchased and the last holiday cards are sent.

We're planning to stick with you right through the egg nog season, providing the latest insights and most recent news as you sort through a couple of last-minute stock shopping ideas. From the raging B2Bs to the screaming

Red Hot stocks, we're trying to uncover the small facts that will enable you to make a smarter investment decision.

Given all the strange new names --







Red Hat




(AKAM) - Get Akamai Technologies, Inc. Report

-- it's not a surprise that we're working on figuring out a new way to gauge what's happening in the hottest areas of the stock market. One popular measure, the Red Hot Index, has helped keep tabs on the hot areas, but it's a measure that is a bit too narrow and, perhaps, not aptly named to tell the true story of new technology. This week on our

message boards we will begin a polling and message board process to add some new names to the index. These stocks have been Red Hot, but the name doesn't do justice to the radical technology changes these companies are driving. We'll be coming to you to help us expand and, potentially, rename the index as we begin the new millennium.

Reworking the so-called Red Hot Index is only one of several ways you are going to see

change as the new millennium/century/year arrives. We're not going to forget what got us to this point: unflinching devotion to quality, edgy commentary, scoops and analysis. But at the same time, we know there's so much more we can do. Don't hesitate to let me know if you've got some ideas for how we can kick off the new year. I can always be reached at .

Finally, as we get ready for a time with families and others, we at

family would like to thank all of you readers for a great year. We're learning and growing together, and without you we'd be nothing. We appreciate your ideas, support and constructive criticism. I can already taste the excitement of the new year!

L'Etoile du Nord

Dave Kansas


Weekend Report: 'Tis the Season of Awards


David Rheingold

Special to

12/19/99 7:38 PM ET

'Tis the season for awards. Fa la la la la la la la la.

You know the kind: the year-end awards honoring the best CEO, Internet start-up or foot fungus (or all three, if they happen to be the one and same). And with the end of the year, decade, century and millennium all coinciding, you can expect a whole lot more of such honoraria in the next few weeks.

This weekend served up three more entries in the unrelenting barrage. First off,


Man of the Year went to

(AMZN) - Get, Inc. Report


Jeff Bezos


The 35-year-old Bezos becomes the fourth-youngest person in the magazine's history to receive the award, behind such luminaries as

Charles Lindbergh


Queen Elizabeth II


Martin Luther King



(C) - Get Citigroup Inc. Report

, meanwhile, was honored as

1999 Bank of the Year


International Financing Review

magazine in London. And in Las Vegas, an international panel of automotive journalists named the



Model T


Car of the Century


Coming next week:


Person of the Century


Elsewhere this weekend,


(WEN) - Get Wendy's Company Report

CEO and President

Gordon F. Teter

died Saturday at his home outside Columbus, Ohio. Teter, 56, died of natural causes, the company said.

In M&A news,



may launch a $2.4 billion takeover bid for


, a British oil exploration group, the British newspaper

Mail on Sunday



talks between





(MTC) - Get MMTec, Inc. Report

took place in London this weekend, a Swedish newspaper reported Saturday. The newspaper,

Dagens Industri

, reported that some sort of announcement was likely Monday.

Charles Schwab


and Australia's


will provide financial services in "the land down under" in a joint venture announced Sunday.


, the venerable London-based business news service that gets its share of unreturned calls and "no comments," itself said "no comment" Sunday to a report that it would likely float part of its electronic stockbroking unit next year. The

Sunday Times

in London reported that the company was considering selling 25% of the unit,


, on the



In the Papers


TheStreet Recommends

Los Angeles Times

acknowledges in a front-page note Sunday that it made a mistake in not disclosing a revenue-sharing arrangement with



from the profits of an October magazine devoted to the opening of the Staples Center. The newspaper, owned by

Times Mirror


, also published a list of its editorial principles.



Morgan Stanley Dean Witter


Mary Meeker

, whom it crowned "Queen of the Net" last year. She predicts more shake-ups and more money flowing into Internet stocks in the next year, and remains cautiously optimistic on

America Online





and Amazon.



(K) - Get Kellogg Company (K) Report

could become a takeover target if the company does not pull out of its rut, the latest issue of


speculates. Many observers see

Quaker Oats


as a possible match, the magazine says.

Digital photography poses a long-term threat to

Fuji Photo




reports, which is why some analysts tell the magazine a strategic alliance or joint venture with



would make sense.


National Transportation Safety Board

is taking a closer look at a near-disaster between a

US Airways


plane and a

United Airlines

(UAL) - Get United Airlines Holdings, Inc. Report

jet in Providence, R.I., earlier this month, the

Washington Post

reported Sunday. The US Airways crew refused to take off, averting a possible collision with the United aircraft, the



David Rheingold is a New York-based freelance writer. At the time of publication he held no positions in any of the stocks mentioned, although holdings can change at any time.

The Coming Week: Fed Won't Move, but Its Bias May Move Markets


Justin Lahart

Associate Editor

12/17/99 7:15 PM ET

For weeks now, Wall Streeters have said trading is on the verge of thinning out for the year. And for weeks now, they have been wrong. December is well on its way to being the biggest volume month in history.

Still, they're unabashed about saying that in the coming week, the slowdown is finally going to happen.

"I just don't think much is going to be going on," said Bob Basel, director of listed trading at

Salomon Smith Barney

. "It will start to wind down into the end of the year."

With Christmas and New Year's coming up, there are good reasons to think Basel is right. Even in normal times, the volume tends to taper off. This year, of course, there is the century date change, which will send many investors scuttling to the sides. Foreign investors, in particular, will likely leave the market until next year. There is even anecdotal evidence that officials from Japan's

Financial Supervisory Agency

informally told the heads of Tokyo firms to avoid nonessential trading in foreign assets from Dec. 22 to Jan. 7.

A relative lack of volume can make for a volatile market, so it could be a treacherous week for those who can't ride the currents well. To this mix, add the

Federal Open Market Committee's

meeting on Tuesday.

Nobody reckons that the FOMC will hike rates this time around -- it does not want to roil markets during the millennium change. There is, however, considerable uncertainty about what the bias statement, or policy directive, will be. The problem is that ever since the FOMC started announcing it, nobody, including the Fed, seems quite sure what the bias means. Does a bias to tighten it mean the bank merely has a predisposition to raise rates? Does it mean there will be a tightening at the next meaning? Is it a warning that there may, potentially, be an intermeeting move?

It's hoped that the FOMC is finally going to clear all this up.

"The great element of the next meeting is going to be

whether the Fed is going to decide what it means to be transparent," said Diane Swonk, deputy chief economist at

Bank One

. "You can see the fine line they're walking -- you don't want to lock yourself into a forecast for what you're going to do at the next meeting."

Though most economists expect that the Fed will move to a tightening bias, that's probably dependent on whether board members have finally come to a consensus on how they are going to use the bias, and what the bias means.

"It would be kind of weird to have a bias they couldn't agree on," said Bill Dudley, director of U.S. economic research at

Goldman Sachs


Past the bias confusion, the Fed will also want to be careful that the announcement that comes with their decision will not affect the markets. In a time of thin markets, the do not want to spark any selling, but neither do they want to give succor to the stock market. Though Chairman

Alan Greenspan

has made no bones about his belief that the market is overvalued, many credit a

speech he made Oct. 28, wherein he said rising market interest rates might be working to slow economic growth to a sustainable pace, with helping spark the late-year rally in equities.

"Greenspan's speech," said Dudley, "basically gave a green light to the financial markets."

The Coming Week in Europe: Dax Index Likely to See New Highs


Marc Young

German Correspondent

12/18/99 12:21 AM ET

BERLIN -- A highly unscientific


polling of preferred Christmas gifts here has revealed local children to be surprisingly precocious. Rather than the latest


toy or a



game console, these kids are hoping Santa Claus will bring them a well-balanced mix of German cyclical shares.

The request makes sense: The recovery of Europe's largest economy appears to be well underway, pushing up the shares of industrial and other growth-sensitive companies. Festively, the


stock index has hitched its reindeer a string of record highs in recent days.

While the kids have another week to wait before they see whether their requests made it to the North Pole, Continental and American investors appear impatient. That should all but insure the Dax is driven to new highs in the coming week as growth-sensitive stocks remain in demand.

On Friday, cyclical shares, underpinned by a healthy appetite for technology stocks, pushed the index to an all-time high of 6443, although the traders, perhaps in a hurry for a holiday eggnog, let it slip from that level at the close. For next week, investors appear poised to head toward the end of the year at a breakneck pace. The latest surge in momentum came from last week's


economic institute report on German business confidence, which hit a 1 1/2-year high, but as


reported back in

July, this has been long expected. (Point of interest: Since that story ran, the Dax has risen 19.2%.)

However, not to be shown up by stuffy old concerns, like machinery maker


and engineers




, telecom and tech companies should also make their presence felt next week. The





(VOD) - Get Vodafone Group Plc Sponsored ADR Report

drama will continue to play itself out and software house


looks set to continue its nosebleed ascent.

German investors likely won't be the only ones getting in on the action, however. France, the Continent's second-largest economy, has been steaming ahead for months and now that the country's Teutonic neighbors (and most important trading partners) are back on their feet, things should continue to improve.

On Friday, the French institute


said the country's gross domestic product should grow by 2.8% in 1999. "INSEE's forecasts suggest that total growth next year might be closer to 3.5% than 3.0%, although it is not making such a strong prediction formally at this stage," says

PaineWebber International

economist David Brickman.



's sampling did not cross national borders, the forecasts for better growth might imply that Parisian children won't be getting stockings stuffed with


. Instead, Pere Noel might load them up with cyclical presents, as well.

John J. Edwards III on MarketTalk

Monday, December 20

Chat with John J. Edwards III on AOL's MarketTalk at 3:30 p.m. EST.

MarketTalk is hosted by Sage Online. (Keyword: PF Live)

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