Ellen Braitman chatted on AOL MarketTalk Monday, Dec. 4 at 3:30 p.m. EST.

SageMoola:

Good afternoon and welcome to MarketTalk, Ms. Braitman!

Ellen Braitman:

Good afternoon everyone. What a crazy period it's been.

Question:

With the Fed more likely to lower rates than raise them again, are old economy industrials (GE, DuPont) a good place to look for profits in 2001?

Ellen Braitman:

Investors are expecting, at the very least, that the Fed will move away from its view that inflation is a problem. It meets next on Dec. 19. What we're seeing is that investors, as the economy begins to slow, are more interested in companies that make consumer staples, and other companies that will do okay during a slowdown.

Question:

Do you think Microsoft will do good if it breaks up into two companies?

Ellen Braitman:

The stock has really been beaten up. And there's still uncertainty because all the court issues have yet to be resolved.

Question:

What are you thoughts on this never-ending presidential election saga, and it's effects on our markets?

Ellen Braitman:

As we know really well the markets don't like uncertainty. Some of the recent losses have been prompted by both uncertainty about the election, as well as the slowing economy. Some people say the markets won't be able to really climb back, or begin to climb back, until the election results are final.

Question:

Where is all the money that has been pulled out of the NASDAQ stocks?

Ellen Braitman:

There are tremendous amounts of money in cash, and that's both with individuals who have cash and with mutual fund managers.

Question:

Since the election has been taking center stage, we have not been paying much attention to the Middle East, and the unrest there, but not much has changed. What effect do you think it will have on the oil situation going forward?

Ellen Braitman:

We see the oil stocks getting a lot of play. A lot of that tends to track oil prices. But certainly when there's instability with oil, or rising oil prices, we see that hitting stocks. One other thing to watch there as we get into the winter, and we have oil prices that are higher than last winter, consumers are going to be spending a lot more for things like filling their gas tanks.

Ellen Braitman:

And people are already concerned about how strong the holiday season is going to be.

Question:

Where do you see fiber optics companies going?

Ellen Braitman:

We've seen the optical sector really beaten up. Companies like Nortel and Lucent have been issuing warnings. One analyst this morning, from ABN Amro, suggested buying optical stocks based on their trading weakness.

Question:

Is there something more than the lack of Fed action to reduce rates now that is affecting next year's corporate earnings? Could it be that the U.S. economy technology boom is itself waning with as much tech deployed as can be practically used at present.

Ellen Braitman:

That's a great point. One thing we have been starting to see is that companies themselves say that they will be spending less on capital expenditures.

Question:

What do you expect out of the retail sector this holiday season?

Ellen Braitman:

Many retailers have already had hard times and seen slower sales. We're seeing some retailers selling merchandise at a discount, and while that's good for consumers, it doesn't help the retailer's profitability.

Question:

Overall, what did last weeks various economic numbers tell us about the state of the economy?

Ellen Braitman:

A lot of recent data has been confirming that the pace of economic growth has been slowing. For example, on Nov. 29 the government revised its estimates of how quickly the economy grew during the third quarter.

Question:

What is your best analysis of tech?

Ellen Braitman:

We've seen valuations, that is, the price to earnings ratio of so many tech stocks come down. The big question is have they come down as far as they are going to, and what will it take for investors to jump back in and start buying.

Question:

What do you think the

Federal Open Market Committee

will do at the December meeting?

Ellen Braitman:

Many people think the Fed will at least move away from its view that inflation is a big risk to the economy. And it's expected that there will be rate cuts in the near future.

SageMoola:

Thank you very much for joining us today, Ms. Braitman!

Ellen Braitman:

Thanks everyone. This was really fun.