Dear Clients and Friends,
It's another ironically beautiful day here in New
York City, clear blue skies and temperatures in the upper 50's-lower 60's which
should help the rescue effort. Last night at 7PM, candles could be seen
throughout Manhattan in memorial, and American flags, ribbons, bandanna's and
T-shirts are much in evidence. Life in New York is returning to routine if
not to normal - schools were open for a second day without incident, traffic
levels are rising around the city, mail is delivered, garbage is being picked
up.
With little additional news to consider, we have
spent time reviewing the expectations of other fund managers and analysts
regarding Monday's stock market open. The consensus is that stocks could
fall as much as 10%, with airlines down as much as 50%, insurance stocks mixed
to lower, pharmaceutical and defense stocks higher. Expectations are for a
0.50% cut in the Fed Funds rate not later than October 2nd, the next Fed meeting
and quite possibly earlier. Corporate earnings for the quarter ending
December 31st, which most recently had been projected to fall modestly, may well
fall 15% according to Chuck Hill at First Call. The general advice is to
sell only if you have to and, as we have said in previous e-mails, we intend to
sell stocks only to meet immediate cash needs of our clients. We have been
in touch with quite a few of our clients via e-mail and phone this past week and
so far there is agreement that this is the best we can do for now.
As always, please contact us with individual
concerns and questions. We can be reached through the weekend by phone and
e-mail.